Category Archives: Seller Information

Normal Real Estate Slowdown Entering September

Buyer Information, Current Lansing Area Sales Statistics, Seller Information

The current inventory of homes (770) is more than double the 353 homes available to buyers in April. This increase occurs at this time every year and does not indicate a change in the current seller’s market.

Historically low interest rates, currently at 2.87%, continue to offset the increased cost of purchasing a home with properly priced homes continuing to sell quickly, and with multiple offers.

Why the increased inventory?
Each spring the inventory includes a large number of properties that for a variety of reasons didn’t sell the previous year.  A home in poor condition or lacking a second bath may be passed over by buyers willing to wait until something better comes along. Obviously, an unappealing home is not going to easily sell as a growing number of more attractive homes become available.

Then there’s the reduced number of buyers.  As of August 30, 1,022 homes have accepted offers or are pending a closing.  Also, 5,255 homes have closed since the beginning of the year. This adds up to 6,277 buyers who are no longer searching for a home. Add to that figure the families involved with back-to-school activities who may need to postpone home shopping until next spring.

This is good news for September buyers still in the hunt.  Increased inventory plus reduced competition may provide an opportunity to acquire their home of choice.

 

Is Lansing area Housing Becoming Overvalued?

Market Update, Seller Information

Home values in the Lansing area have risen by more than 12% over the past year.
This means, a home that sold for $250,000 a year ago would likely sell for $280,500 today.

This rapid rise in prices has many buyers and homeowners wondering if the housing market is becoming overvalued.

Is there a housing crash on the horizon?
This is not the first time the real estate market was considered to be overvalued. Home values escalated in 2002 through 2006, just before the nationwide housing market collapse.

Things are different in today’s market. During the last housing bubble, there was a huge surge in new home construction and extremely lax mortgage-lending standards.

In the current market, there an ongoing shortage of homes for sale across the mid-Michigan area. Instead of having too many houses on the market, we currently have a situation where the number of available properties falls well below the demand. This is the number-one reason why prices have risen so sharply over the past year or two.

Even though buyers continue to pay above asking price, that does not necessarily mean a crash is on the way. The ongoing problem with supply and demand will continue to force home values upward in the foreseeable future.

If real estate home values continue to climb, there could eventually be a decline in home sales due to many buyers being priced out of the market.  In addition, buyers may reconsider purchasing a home. Buyers worry that they will overpay for a home, only to see prices drop over the next few years. This can lead to a homeowner being “upside down” or underwater in the mortgage loan.

No one can predict future real estate or economic trends with complete accuracy.  So, home buyers simply have to think long term, when buying a home. Houses tend to gain value over the long term. That is what makes real estate one of the best investments over time.

 

Are Sellers Required to Make Repairs

Buyer Information, Seller Information

Typically, buyers include a home inspection contingency in their purchase offer that allows them to ask the sellers for repairs and opt out of the contract if the seller refuses. The seller can respond in several ways.Picture1

  • They can readily agree to fix the problem, no matter how expensive.
  • They can agree to fix any problem that’s a safety or potential legal issues, such as mold or radon remediation, but decline minor repairs such as filling in and painting over picture hanger holes in the wall.
  • They can refuse to fix anything, but risk losing the buyer. For safety or code issues, they’ll have to declare the problem on subsequent seller’s disclosures, which could impact the home’s value to future buyers.
  • They can offer to lower the price of the home to cover the cost of the repair for the buyer or offer a closing credit to the buyer to pay for the repair without lowering the price of the home. That way the buyer can complete the repair to their liking.
  • They can ask the buyer to meet them halfway, such as paying more for the home if the seller repairs something major, or replaces the roof.
  • They can ask the buyer to waive additional repair requests if the seller will fix the worst or most expensive problem.

Sellers should know that FHA, VA and other government-guaranteed loans have stricter requirements for home safety and that some repairs are mandatory for the buyer’s loan to close.

Should You Put Your Home on the Market in Winter?

Market Update, Seller Information

If you are a home seller, you may be wondering whether to put your home on the market  during the winter months or wait for spring 2021.  There are arguments for both sides, but the National Association of REALTORS® predicts that this “will be one of the best winter sales years ever.”

6900083.largeThere is currently a perfect storm of low mortgage interest rates, low housing inventory, and a pandemic that’s causing many homebuyers to work from home and virtually school their children. They’re rethinking how and where they want to live. Since most homebuyers purchase homes to secure more living space, that’s true now more than ever.

Buyers are looking for advantages because low inventories and rising prices favor sellers.  Many will look at homes in the winter because the interest rates on the 30-year fixed-rate are below three percent for those with good credit. There’s less competition from other buyers, which means they may actually win in a bidding war.

The inventory of homes is historically low and housing demand is likely to increase now that a COVID-19 vaccine is on the horizon.  Homebuyers should prepare for what could possibly be the most competitive spring homebuying season in years.

Easy DIY Home Updates that Actually Add Home Value

Seller Information

If you’ve considered updates to your home, you may have wondered, if these updates actually add value to the home? There are a number of factors to consider when you are thinking about DIY home updates.

paint

Most homeowners consider DIY home updates because the expense of hiring a professional outweighs how much the update will actually improve the value of the home. Doing it yourself will take time and energy, but will cost substantially less. However, it’s important to go through the steps carefully and use the right materials, so the end result is what you want.

Choosing the right project is also important. Some DIY home updates will be more valuable than others. When choosing DIY home projects to improve the value of your home, consider the following:

  • Start by considering functional problems; lights that don’t work, drawers that don’t open, loose floorboards etc. Fixing these problems will show that your home is well-kept and will eliminate factors that detract from its value.
  • Consider aesthetic problems next; scratches, holes, damages, dirt, mold or outdated looks. These fixes will also eliminate factors that detract from your home’s value.
  • Balance costs against benefits: how much time, energy, and materials will the project take, and how much of an impact will this really have on home buyers?
  • How complex is the project? The more complex a DIY project is, the most likely it won’t go as planned. A badly executed DIY project can take away from your home’s value, so consider these projects carefully.

With these things in mind, you’ll be able to pick out the DIY home updates that will actually add value to your home. Remember that you can add value to your home by removing problems as well as adding benefits. Let’s take a closer look at the DIY home updates that actually add home value.

DIY Home Updates That Actually Add Home Value

Paint
Fresh paint is one of the most common and most valuable DIY updates that will add value to your home. Fresh paint in a neutral color makes your home look clean, new, well-kept and modern. This adds to an overall positive experience as prospective homebuyers tour your home. Fresh paint also eliminates factors that can quickly detract from your home and distract from its most valuable elements. When considering this DIY update, consider where it will make the most impact. Which room or rooms would benefit most from new paint? These rooms will probably have scratches or scuffs, or the current paint color isn’t very appealing.

New Door
A new door is one of the most valuable home updates you can make, yielding about an 80% return on investment. Your front door not only contributes to a buyer’s first impression of your home, but also contributes to a buyer’s feeling of security and safety. If you’re not confident in your ability to install the door yourself, consider working with a professional.

Power Wash Siding
Brand new siding will yield about a 73% return, however you don’t need to completely replace your siding to improve the value of your home. If your siding doesn’t have obvious damages, like cracks or holes, a thorough cleaning can make your home siding look like new. This DIY update will actually add home value because it contributes to the first impression buyer’s get from your home, curb appeal, and your home will look modern and updated. This DIY project is also easy and doesn’t require special experience. You’ll just need to block out an afternoon, rent a power washer, and get started.

Cleaning Shower and Tub
Bathtubs and showers inevitably accumulate mold and mildew. But you don’t need to completely redo your bathroom to update the look of your shower or tub. You can even thoroughly clean your bathroom with items that you probably already have around the house, such as kitchen sponges, rags, used toothbrushes, regular dish soap, white vinegar and baking soda. This lightly abrasive solution is safe to use on your shower or tub, and will break up mold, mildew and stuck-on gunk.

Refinish Countertops
Outdated or damaged countertops will detract from the value of your kitchen faster than just about anything. This DIY home update will add value to your home by making your kitchen look clean and modern. There are several ways to update your kitchen yourself.
Remember to go through these steps carefully and follow all the directions.

New Light Fixtures
Outdated light fixtures can quickly transport your home back in time and detract from the value. Light that is overly harsh or distorts colors can also detract from a good home-viewing experience. Update your fixtures to make them modern and use reflective surfaces to create softness. Use the right type of bulbs as well as the right fixtures and placement to show your home off in the best possible light.

Give yourself plenty of time to make these DIY home updates and you can significantly improve the value of your home. Consider which updates will be most impactful, and consider your time, energy, materials and skills as well. This will ensure that you get the most out of your time and effort when you’re ready to sell.

 

What Post-Covid Buyers are Seeking in Their Next Home

Buyer Information, Market Update, Seller Information

houseDo homebuyers want the same things in their next home as they did before the COVID pandemic?  In some ways, yes, and in others, no. According to the latest summer Realtor.com survey, post-COVID homebuyers are willing to spend more money on a home; have saved more money toward a down payment as they sheltered in place;  and plan to buy a home sooner than they did in the spring of 2020.

A greater majority of homebuyers surveyed also said they want a three-bedroom home, with two bathrooms, an updated kitchen, and a garage. In a comparison of surveys conducted in both the spring and summer, a notable share of homebuyers wanting move-in ready homes has gone up 10 percent and six percent more buyers are willing to take on longer commutes to get the home they want. In addition, low mortgage interest rates, combined with additional personal savings, are making conditions attractive for them to buy a larger home in a nicer neighborhood.

Six percent fewer homebuyers plan to put more earnest money down, plan to offer above listing price, or offer all cash. Three percent plan to put down more than a 20 percent down-payment.

The trend in these numbers appears to point toward less willingness on the part of homebuyers to compromise on what they want. They may spend more for a home, but plan to preserve as much cash as possible. Homebuyers may be planning to stay in their next homes for a longer period.

Governor Eliminates Remaining Real Estate Limitations

Buyer Information, Seller Information

Today, Governor  Whitmer removed most of the restrictions that real estate brokerages and clients have been operating under.  Effective immediately, the following real estate activity is now permitted:

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

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

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

Today’s order also makes clear that real estate offices that are open for business must continue to follow the Governor’s workplace rules contained in an earlier order.  The rules for offices cover written policies that must be put in place, day-to-day safety measures, as well as procedures to be followed in the event of possible Covid-19 exposure.

Delayed…but Homes Sales are Back to Normal

Buyer Information, Seller Information
Pent-up demand for housing  has created a brisk late spring market.

Stay-at-home orders and the highest unemployment in recent memory, postponed the typical fast paced spring sales market for six weeks.  Since restrictions were lifted on May 7th, real estate transactions have resumed with new listings attracting multiple offers as they have in previous non-pandemic years.

Reduced Inventory

The inventory of homes is currently lower than normal because the lockdown made it impractical for sellers to list while buyers were unable to physically visit homes. In addition, some sellers have postponed listing to avoid having strangers walking through their homes during a public health disaster.

Multiple offers are common again

With more buyers competing for a very limited supply of properties, modestly priced homes below $200,000 are receiving competitive offers exceeding the asking price by an average of 10%.  More expensive properties sitting on the market longer.  This is consistent with previous years, so it’s safe to say that the real estate market is healthy and home values will continue to climb.

Favorable Mortgage Rates are Encouraging Buyers

In spite of economic uncertainty, mortgage rates are at an historic low of 3.24%.  This translates to a 30 year mortgage based on $4.35/month for each $1000 of borrowed money.  These low rates make it affordable for many buyers to offer above the asking price
when and additional $10,000 will mean only an additional $43.50 in the monthly payment.

What if you offer more than the home is worth?  Your lender is a partner in this investment.  He will hire an appraiser to determine if the property is worth the purchase price.  If the home doesn’t “appraise” you can either re-negotiate the price or walk away.

 

The Business Of Selling Homes Goes On…Safely

Buyer Information, Seller Information

Buyers always need to buy and some homeowners always need to sell. Thus, even during  the COVID-19 emergency, real estate transactions are moving forward.

Workers in the Michigan real-estate industry including agents, appraisers, brokers, inspectors, surveyors, and registers of deeds have resumed normal activities.

New Guidelines for Buying and Selling

BHHSTomie Raines Realtors® are dedicated to taking steps to reduce the spread of the virus while continuing to work with buyers and sellers.

Showings, inspections, appraisals, photography, or final walk-throughs are performed by appointment and must be limited to no more than four people on the premises at any one time.  All participants must continue to maintain proper distancing.

Showings may only be arranged for owner-occupied homes, vacant homes, vacant land, commercial property, and industrial property.  Rental properties can only be visited if vacant and having been thoroughly cleaned.

Showing Precautions

stopRequired Form.  All persons visiting the home are required to sign a form stating that during the last 14 days, neither they nor any members of their household have been exposed to, diagnosed with or quarantined as a result of COVID-19 or have experienced a fever, cough, shortness of breath or other cold or flu-like symptoms.  These forms are kept on file and can be made available to a seller upon request.

Seller are to prepare home for safe showings.  Sellers are expected to turn on all lights and leave closet doors, cabinet doors and kitchen draws open for viewing. This  makes it easier for buyers and their agents to view the home without touching light switches or surfaces and possibly contaminating them.

Buyer’s agents are providing buyers with shoe coverings, masks, hand sanitizer and/or disinfectant wipes for each home visit and disposing of these materials when leaving the home.

Purchase offers and paperwork

Before the pandemic, buyers wishing to make an offer would meet at the agent’s office to discuss and sign the purchase offer.  Now, all meetings and paperwork are electronically done from home.  The  BHHSTomie Raines agent initiates a ZOOM meeting for a face to face discussion and all paperwork is filled in and signed online…with no physical contract.

Even the earnest money, a good faith deposit needed to create a valid contract, can be digitally transferred  through ACH (Automated Clearing House) into our escrow account.

COVID-19 and the coronavirus pandemic has forced the real estate industry to rethink almost every aspect of this business — new showing rules,  online meetings,  and closing deals remotely, but always prioritizing safety and service over sales.