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Tuesday, November 29, 2016

Don’t be afraid of winter if you want to sell your house.

Many would-be sellers mistakenly decide to take their houses off the market for the winter or to wait until spring to list. Doing so can actually cost cost them time and money.

According to a press release about a recent study by the real estate brokerage Redfin, the spring real estate season just barely nudged out the winter as the best time to be on the market. The Redfin report showed that 18.7 percent of spring listings received above the asking price while winter listings were close behind at 17.5 percent. What’s more, 48 percent of homes listed in the spring sold within 30 days; 46.2 percent of homes in the winter sold within that time frame.

Our local market makes things even better for sellers in winter because we have an on-going shortage of inventory on the market. So, while winter may be a period when there are fewer home shoppers out looking, there are fewer other houses on the market for your home to compete with for their attention. Not only that, but those who are out looking serious buyers and not the nosy neighbors and tire-kickers that are out there in the warmer months.

This time of year, little touches like having a fire going in the fireplace and leaving hot coco and cookies can also make the visit experience more pleasant for winter time visitors. You may also like leaving scented candles burning, but be very careful and very conservative with that. Too many or too much scent can actually be a turn off and some people are even allergic to the stronger scents. Even a little Holiday music playing softly in the background could help set a positive tone for the visit. Certainly and effort should always be made to make sure that lights are turned on, especially the porch lights, during these darker winter months. Don’t get hung up on the cost of burning a few lights when you are trying to sell a big ticket items like a house.

If you decorate for the holidays while your home is listed, you may have to tone it down a little this year and go for a traditional and tasteful look. Remember that not all potential visitors actually celebrate Christmas in a traditional Christian way. Perhaps you should also keep the blow up Grinch Who Stole Christmas in the garage this year. Make sure that any expensive presents are safely locked away during visits and not tempting visitors from under the Christmas tree. Finally, make sure that your decorations do not impede someone from walking through your house. They are there to hoping to buy a house and not to see how many Christmas do-dads you’ve collected over your lifetime.

Once we get past the holidays and into the deep winter, especially the snowy months, you will have to make some adjustments in your efforts. You’ll need to keep the snow cleared off
the driveway, the walks and porches and salt down any ice that may be on any of them.  A person who slips and falls while trying to get to your house is not likely to buy it. It’s OK to insist that visitors remove their shoes or boots in the winter; however, you should also make sure that there is a rug or mat at the front door to put snowy shoes on and a bench or chair that visitors can use to sit on and put their shoes or boots back on. It would be nice if there were a coat rack handy or if you’ve cleaned out the front coat closet, so that they have somewhere to put winter coats while looking at your home.

The fall and winter months are not a bad time to sell, just a different time, in terms of what you need to do to make the experience of visiting your home pleasant. It also requires more discipline from you and your family so that your own family’s winter wear and boots aren’t taking up all of the space in the front hall or mud room entrance. Remember also that, during the winter, your house is closed up odors, especially cooking odors linger. You can either tone down the odor level of your cooking or buy industrial size spray cans of Febreze and spray wash your house well ahead of the showing.

Call me for a visit and event more helpful tips about selling your home in winter.

Monday, November 21, 2016

Physicians Loans - Just the right prescription for a new doctor

Some time ago I wrote about a special program for newly minted doctors that allow them to get a
home loan right as they get out of med school. These special doctors’ loans are aimed at the interns who are completing their internships and about to launch into their careers. What makes them special is that they discount the huge student loan debt and start-up costs that doctors incur at the start of their career and focus instead on the fact that doctors have historically been good credit risks. So, these loans are extended to new doctors to allow them to buy their first home as they establish themselves in their new careers.

The doctors’ loan programs have been updated since I wrote that piece and there is a great update about the program at this site -

This is a great program for new doctors; and, remember that I can help you find that new home, if you are looking in the Southeastern Michigan areas of Oakland, Livingston and Macomb Counties. Give me a call or send a text or email and let’s find you a new home- doctor.

Norm Werner, Realtor
Cell: 248-763-2497

Friday, November 11, 2016

How does your house look naked?

This is the time of the year when your house is (or is about to be) sitting there naked. When the
leaves are off the trees and all of the landscaping plants that looked so beautiful earlier in the year have died, your house is sitting there in all of its naked beauty or ugliness. It’s time for a new curb appeal check and likely some maintenance that you didn’t see that it needed during the summer.

Even just cleaning up the leaves and debris that collects in yards in the fall can help; but, more than likely there is a lot of fall pruning and weeding that needs to be done, if you house is to look appealing in the buff. Visitor’s eyes will also be drawn more than ever to the front door and a door that is shabby and needs to be painted will have more negative impact than ever.

And, how about that driveway and walk? Now that they are out there by themselves, do they send the message that these are people who take good care of the property; or do they scream SLACKERS to the world? You never get another chance to form a first impression and that impression carried over to how the visitors look at the inside of the house. 

In the summertime, most people will be distracted and happy with a nice landscape display. They will love looking at the flowers and decorative bushes and trees that you may have, along with your well-manicured lawn. Good landscaping for your house,like good clothes on people, hides a lot of sins. In the fall and winter, they have no such distractions, so they just look for flaws in your naked house,

What can you do to help?
  • ·         Well, for one, make sure that your gutters are cleaned out and not overflowing with leaves and debris. Check your downspouts and downspout extensions, too.
  • ·         Power wash off the green algae that may have built up on the north side of your house.
  • ·         Power wash your deck, walkways and driveway and fill in any driveway cracks and make sure that it is sealed for the winter.
  • ·         Weed flower beds around the house and trim back your bushes. Rake the mulch to make sure that it looks good. If you have any leftover mulch add that to the beds as needed. 
  • ·         Paint that front door, if it needs it.Studies have shown that the impression that the front door makes is one of the strongest positives or negatives that visitors take away from a visit.
  • ·         Make sure that he front porch lighting looks good (or replace it) and make sure that it works. Dark front porches in the fall and winter are a big turn-off to agents and visitors alike.
  • ·         Take a look at the shutters, if you have them. If they are faded and shabby looking, paint or replace them.
  • ·         Check out the wood trim, if you have any, and make sure to replace any rotted boards and paint any trim that need it.

If these ideas all seem like you are just applying makeup to the house; well, that’s pretty much the idea. If you were standing there naked in front of someone, wouldn’t you at least want to have your best makeup on? 

Give your house its best chance to make a good first impression as it stands there naked in front of visitors.

Wednesday, November 9, 2016

Don’t let closing cost sink your home purchase…

According to the National Association of Realtors 2016 Profile of Home Buyers and Sellers - First-time buyers who financed their home typically financed 96 percent of their home compared to repeat buyers at 84 percent. The most difficult step in the home buying process was saving for a down payment, as cited by 13 percent of respondents. For 61 percent of buyers, the source of the down payment came from their savings.

Of buyers who said saving for a down payment was difficult, 49 percent of buyers reported that student loans made saving for a down payment difficult. Forty percent cited credit card debt, and 34 percent cited car loans as also making saving for a down payment difficult. Even so, buyers continue to see purchasing a home as a good financial investment.

What few people know is how many deals fell apart when the buyers, who were focused almost completely on the down payment, learn what the closing costs will be for the purchase. The buyers' closing costs can run 4-8% of the purchase price (sometimes more), depending upon the various fees, charges and points that the mortgage lender adds. In Michigan, things that are generally lumped into the term “closing costs” include any transfer taxes or fees that the state or local governmental bodies may levy, plus the cost of a title insurance policy. The local tax pro-ration for the balance of the summer and winter tax years is also levied, since Michigan taxes are paid ahead. It may also include the escrowed funds for upcoming tax bills and the cost of the first year’s homeowners’ insurance.

Even on a starter home in the $150,000 price range; covering the closing costs can mean an additional sum between $6,000 and $10,000 that the buyer has bring to the closing table. Many times that is the deal killer. Even worse is the fact that many buyers aren't adequately forewarned about these costs by their mortgage lender until they have already made an accepted offer and sunk money into things like the inspection and the mortgage application fee.  It is quite easy for the buyer to have between $500 to $1,000 sunk into the deal before he/she discovers that they can’t afford to pay the closing costs.

A good Realtor will usually advise the would-be buyer to make sure that they understand this aspect of the sale. Realtors will always require that buyers get a “pre-approval letter” from their lender before making an offer; however, most of those so-called pre-approval letters are really just pre-qualification letters that are based upon a very cursory look at the borrower by the lender.  Those pre-approval letters and the advice from the lender to the buyer seldom go into the detail of covering the closing costs.

Realtors advise buyers to try to get a Good Faith Estimate (GFE) from the lender before jumping into an offer. That GFE will detail all of the probable closing costs, based upon what the buyer has told the lender at that time. Some lenders require that you have an accepted offer in hand before they will take that step, but even they should be able to give the buyer a close enough ball-park estimate before the offer to allow them  to decide whether they can afford to make the offer or not.  The buyer should ask the lender at the time that they get a pre-approval letter for their best estimate on the closing costs.

The buyers’ Realtor can also advise on whether asking for a seller concession to help with closing costs makes sense for the sale.  Many times it is possible to ask for those concessions, if the seller is willing to make a full price offer, or close to it. Some loan types have restrictions on how much the seller can make in concessions to cover closing costs; so, buyers should coordinate that with their lender.

Some first time buyers get assistance from their parents on either the down payment or to help cover closing costs. That’s fine, but it must be documented as a gift and not a loan from them. The buyer will need a letter from the parents stating that it is a gift and may need further documentation from the parents to satisfy the mortgage underwriter.

It is possible to get FHA loans with as little as 5% down and some VA and RD loans can be done with zero down. That would allow the home buyer to shift the money that they may have saved for the down payment and use it for their closing costs.  Buyers should check with their lenders to see if they support those types of loans and if they might qualify for them.  The Realtor should be able to tell them is they are in an area that qualifies for Rural Development loans.  First time buyers who are veterans should definitely check to see if they are covered by VA benefits.

In Michigan there is also a first time home buyer’s Down Payment Assistance (DPA) program through MSHDA (Michigan State Housing Development Authority).  This program is for first time buyers and required that the loan be an FHA, VA or RD (Rural Development) loan. The program allows up to $7,500 in down payment assistance which can be applied against the down payment and the closing costs.

The bottom line here is that buyers need to be aware of the potential closing costs on any home purchase and should look into the options that they have to try to cover those costs. Being aware of, and saving for, those costs is just as important as saving for the down payment.  Don’t let those closing costs sink your home purchase.

Sunday, November 6, 2016

Well, it was good enough for us…

As a Realtor, I hear that line a lot; especially when discussing the potential sale of their home with older sellers. Many older people with who I deal have lived in their homes for decades. Those homes were built in the 60’s, 70’s or 80’s and were probably state of the art at the time; or, at least, they represented the styles and tastes of the times in which they were built. Unfortunately, many of the would-be sellers never saw any need to change anything about their homes. If it didn’t break or wear out, “why change it?” seems to be their mantra.

So, when I come along and try to offer my advice on things that need to be updated in order to make the house more sale able, I get the retort, “It was good enough for us all of these years, so it should be good enough for buyers.”

No. No, it isn’t good enough for potential buyers. You are asking them to pay good money for something that is out of date, or on its last legs, that you have grown accustomed to putting up with and accepting. You have become “nose dead” to the odors from your house that arise out of outdated styles and worn out appliances and tired infrastructure. Well, it was good enough for us…

Those little maintenance items that you ignored and walked past all of these years now draw the attention of visitors and they evaluate your house against others that they visit. The woulda, coulda, shoulda’s of things left undone in your home pile up in their minds and the long list of expenses to fix those issues detracts of its perceived value. Well, it was good enough for us…

The things that, in your mind anyway, are “easy fixes” may look daunting to the would-be buyer who is not handy and doesn’t have the time to tackle your “honey-do list”. Some things are not even fix-able - the architectural style that is no longer in favor is usually the biggest. Some things loom as huge and costly update jobs – replacing the dated kitchen and baths. And some just raise further questions about what else may be wrong with the house, due to deferred or lack of maintenance – missing plug or switch covers, broken or missing cabinet pulls or perhaps a rusty and dirty old furnace or water heater. Water stains on the ceilings that you never got around to repainting will raise questions and concerns. Well, it was good enough for us…

When owners dig in there heals with that line as their defense against taking any of my

suggestions and doing the things that need to be done, I know that we are in for a long listing, if I even take it. The same owners will usually resist making the price concessions at the front-end that need to be made to sell their property in its “As Is” condition. They usually also resist the advice that feedback from showings provide, which invariably confirms what I’ve told them to begin with – that “the house needs too much work and is overpriced.” Well, they continue to say, it was good enough for us…

Most of the time, though usually months (sometimes years) later they finally give up and drop the p[rice to where it needs to be to sell what is a “project house.” Unfortunately for me they may not do that while I have it listed. They will make one (or more) agent moves, convinced that I’m just not trying hard enough to sell their home – or the next agent or the agent after that. Surely it can’t be their home; because, after all, Well, it was good enough for us…

Sometimes an intervention by children or perhaps a trusted friend will help them see that what I’ve been telling them and what the market has been telling them is the truth. They normally will have been through the denial phase and perhaps cycled through the anger phase (usually anger directed at their agent) and are ready for the acceptance phase. They are ready to say, OK, I hear you; but, Well it was good enough for us…

Hopefully, you can avoid the delay and the pain and anguish of having to go through this when it comes time to sell your house. The key is not to let yourself become complainant about things in your home – not to become nose dead to the things that need fixing or updating. You can watch TV shows on the HGTV channel that will show you want’s trending in home style and d├ęcor in various parts of the country; however, those tend to be set in areas of the country that may not reflect trends in the heartland.

A better way is to establish a relationship with a local Realtor and invite them in from time to time to give you feedback on your house and what needs to be done to make it more marketable. Of course, they are going to do so in hopes that you will use them when you do list, and that’s a reasonable expectation. The key it to listen to what they tell you; then make a list of update and repair projects and work down that list.

I advise clients all the time that they need to be planning and making update investments in their homes all the time – something every year and something major (kitchens or baths) every five years. Of course they also need to stay on top of maintenance and not let things slide to where they become used to the broken or worn out things being as they are; this should include looking to see if it is time to replace that old furnace that is still the original or the hot water heater that’s looking a little rusty and shabby.  

One of the simplest things to keep up with are changing color palettes. Tastes in interior and exterior colors change every few years and homeowners should keep abreast of the latest trends and see if the new colors would work in their home. Just committing to a new paint scheme will force you to also take care of those little items that you’ve been putting off, like that missing or broken electrical cover. You should also look at things like new lighting, new area rugs and other things that go along with a new and fresh look.

So, if you live in my area and have been thinking about retiring and moving on or just think it’s time to move up to  a bigger and better house, give me a call. I’ll visit and give you my feedback about what the house may need in order to sell on today’s market. When I give you the list of things that I think need to be fixed or updated; please don’t say to me, Well it was good enough for us…

Tuesday, November 1, 2016

But where would I go?

That’s the big question. A recent Redfin survey found Forty-five percent of more than 1,700 home owners say they are planning to sell, but the majority of them aren’t sure when they will list. Concern over finding a replacement home is the top reason for their indecision.
Many of those would-be sellers want to upgrade their home, but are concerned that they won’t be able to find what they want. Many others are in the Baby Boomer generation and are ready to downsize, but they have similar concerns.

The issue of home owners synchronizing a sell and a buy has been around forever; however, recently the “tight” market, with lower than historically normal inventory as exacerbated this issue. Add to that the uncertainty of new mortgage requirements that when into effect in 2014 and it’s no wonder that confusion and concern reign.

The new mortgage rules were created by the Consumer Financial Protection Bureau and were mandated under the Dodd-Frank Act to ban many of the practices that led to the housing bubble burst in 2008. The mortgage process has become much more cumbersome and has stretched out the timetable between the acceptance of an offer and the closing by 15-30 days.

The slow recovery from the “Great Recession” has added to the problem by helping to stall out certain price bands in the real estate spectrum. The low-end of the market (starter homes, perhaps up to $200K) has been robust, due in part to the pent up demand for starter homes following the recession. The issue has been in the middle of the market, from $200K to $400K, which is historically the “move-up” market. Lack of certainty about the future and a lack of inventory of even larger homes has caused this segment to stall on their normal move-up plans. As they have stood pat in their homes they have caused an inventory shortage problem for the buyers right below then who would otherwise be looking to move up from their starter homes.

A good deal of the problem above the mid-market has been caused by Baby boomers, sitting on their McMansions (in the $400-600K range) well past when they were expected to retire and downsize. Many have discovered that they didn’t plan and save well enough to retire, so they are holding off those retirements. Others had such leveraged positions in their McMansions that they now discover that they can't get out from under them and have enough left to buy that retirement home that they has dreamed about. Still others are OK on their current home, but just don’t see clearly where they would move to if they downsized. The overall effect has been to stall out that move-up segment of the market due to a lack of inventory from these reluctant Baby Boomer sellers.

The home building industry also contributed to the problem by almost going dormant during the recession. Many sold off their lot inventories and quite a few failed or got out of the business. Those who rode out the bad time have discovered that so many workers got out of the building trades industry that there is now a shortage (severe in some areas) of skilled construction workers. What that has resulted in is a building industry that has been unable to fill in the space left by the inventory shortage, especially in the downsizing price bands that the Baby Boomers are looking into. Pretty much across the board, from single family homes to condos to apartments; there is a shortage of new builds, when compared to the market demand.

So what’s the would-be downsizing buyer or the move-up buyer to do? Where would they go? The key in this market, more than ever, is to be working with a good Realtor®. There are places out there for you. They are just harder to find and many of them will require some compromise on your part. Buyers in those classifications often come with long lists of “must haves”. Many of those expectations may not be realistic with in the constraints of other criteria. Sometimes those must have lists form the basis for buyers searches on Zillow or other real estate sites and they miss many homes that might have worked. That’s why they need a Realtor

A good Realtor will work with you and will do the necessary vetting of potential properties to find you a few good candidates. He/she will also figure out which of your criteria are really “must haves” and which are “nice to haves”. He/she will insist that you go see some houses that don’t seem to fit all of your criteria, because they know that a home with enough positive selling points will overcome a few objections. They will also be able to point out the other, “life-style” issue about a particular area that may help you overlook a few things that need to be changed later. Good Realtors don’t interject themselves into the buying decisions; they just make the choices while looking better and the process of buying easier and smoother.

So the best answer to the question, “Where would I go?’ is to start by gong and finding yourself a good Realtor first. You’ll be glad you did. You’ll find the right new home faster and get through the buying process easier with a Realtor as your guide. Your new home is waiting out there and your Realtor will help you find it.