Seller Concessions Explained- Southeast Michigan Real Estate

Seller Concessions Explained- Southeast Michigan Real Estate

This is my attempt at a very simplified explanation of what seller concessions are.

Example: You want to buy the house you just looked at and want to make an offer of $200,000. You need $5000 in seller concessions (seller paying all or part of your closing costs). Your offer will be $205,000 asking the seller to pay $5000 in concessions. If you offer $200K and ask for $5K in concessions, your offer is really $195,000.

The seller isn’t really paying your closing costs- you are mortgaging them.

Sellers- you really aren’t paying those closing costs. The buyer is mortgaging them.

Buyers- sellers have a bottom line. They don’t tend to come down to that bottom line AND pay concessions. The concessions are rolled into the purchase price.

Sellers- don’t question the amount of the concessions. If the buyer’s loan officer is over charging them that is their business. You only need to be concerned about your bottom line.

Compliments of Jackie Hawley, Realtor of the JHawley and Associates Real Estate Team at ReMax Encore in Clarkston MI.

Cell: (248)736-6407

Jackie@JackieHawley.com

www.SearchMichiganMLSListings.com

Lower Straits Lake

www.OaklandCountyMichiganLakes.com

Waterford MI Lakefront Homes For Sale

Clarkston MI Lakefront Homes For Sale

White Lake/Highland MI Lakefront Homes For Sale

Lake Orion/Oxford/Addison MI Lakefront Homes For Sale

Lapeer MI Lakefront Homes For Sale

www.LakeOaklandHomes.com

www.MacedayLake.com

Sylvan and Otter Lake

www.LakeOrionLakeFrontRealEstate.com

For Sellers- www.JHawleyAndAssoc.com

For Sellers- www.AreaRealEstateExperts.com

www.ClarkstonMichiganRealEstate.com

www.MiRelocation.com

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Home Staging- Highjacked Term? Does it Help?

Home staging your Oakland County or Lapeer County MI home for sale.

At one time it was just part of a Realtor’s job to “stage” a home they were listing- at least in the North Oakland and Lapeer areas that I work in. In those days staging had a bit of a different meaning. I typically will tell a seller if they need to de-clutter, clean, paint, repair…. I have no taste, so I don’t normally suggest colors. I may suggest taking down some of your “art work” or removing bushes that are too big and too close to the house. This was called “staging.”

Now there is a whole new industry for home staging. Home Stagers have their own associations, training, certifications, etc. This is a “good thing.” Staging your Oakland County or Lapeer home MAY help you sell it faster and for more money. But since Home Staging has become its own industry, home stagers really don’t like Realtors calling what we do home staging.

It’s kind of like Kleenex which is a brand of tissue, but is used for all brands of tissue. Jacuzzi is a brand name that is used for all jetted tubs, and so on.

When it comes to the term home staging or home stager, certified home stagers think they own this term. Who had it first? Realtors used it long before home stagers were in existence. If you contact a Realtor who offers free home staging services, find out exactly what they are offering. Some may have a professional stager on their payroll. Some may just be coming in and suggesting ways to make  your home show better.

There’s nothing wrong with the second scenario; most houses in Oakland and Lapeer County will NOT benefit from professional home staging services. Some will. The first call should be to your Realtor who can help you determine if you need professional staging services or not.

www.SearchMichiganMLSListings.com

www.OaklandCountyMichiganLakes.com

www.ClarkstonMichiganRealEstate.com

www.JHawleyAndAssoc.com

www.AreaRealEstateExperts.com

www.LakeOaklandHomes.com

www.MacedayLake.com

www.LakeOrionLakeFrontRealEstate.com

Jackie Hawley, Realtor
ReMax Encore, Clarkston

cell: 248-736-6407

Jackie@JackieHawley.com

www.MiRelocation.com

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What Does BATVI Mean? Clarkston MI Real Estate

What Does BATVI Mean? Clarkston MI Real Estate

Simply- Buyer Agent To Verify Information.

This is also known as an ass covering, or in my opinion, a waste of precious space in the limited space allotted in the MLS.

If you are buying a Clarkston MI short sale listing, beware of listings where the listing agent fills out the listing in a shoddy manner, such as wasting space in the comments, not filling out the remarks section at all, inaccurate listing information, etc. Remember, the listing agent is the person we are relying on to complete the short sale to the banks’ and seller’s approval. If he can’t fill out the listing, how successful will his short sale negotiations be?

If you are selling a Clarkston MI home, check your MLS sheet to make sure it is complete and accurate and all 25 photos included. The MLS is in place to sell your listing to the buyers’ agents. If I am going to show 5 houses to someone and 10 show up in the MLS search, I will not show the listings that are incomplete or indicate laziness on the part of the listing agent.

Often times BATVI gets replaced by CHP or EXP (price change or expired listing).

Jackie Hawley Keller Williams Realty, Clarkston
Jackie@JackieHawley.com

Cell: 248-736-6407

Marketing Your Clarkston MI Home

Choosing An Agent To Market Your Clarkston MI Home

Choosing A Buyer’s Agent

Search The MLS

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What Sets Me Apart From Other Southeast Michigan Listing Agents?

What Sets Me Apart From Other Southeast Michigan Listing Agents?

I’ve been showing houses quite a bit lately and have noticed some disturbing trends. Many of these trends are confined to foreclosure listings; or at least I thought the incomplete listings with no yard sign out front and no electricity on in the house was a foreclosure issue. Many of these foreclosure agents never even see the house, so I guess that can be their excuse. But other agents have been following suit. I guess in their minds good service is graded on a curve and as long as foreclosure agents behave like secretaries for the bank, most of the rest seem to fee the need to imitate.

I showed a house last night, after dark, and was surprised to find no electricity on in the house. I called the listing office and set the appointment with a member of the listing agent’s team. You would think she could have told me we would be looking with flash lights, and I would have thanked her and rescheduled for the weekend during the day.

I’m showing a house tomorrow to the same couple. When I pulled the aerial today I was pleasantly surprised to find it’s a lakefront home. The listing never mentioned that it’s on the water. Good for us on the buyer side, but not so good for the seller.

Non foreclosure agents are starting to fill both the agent remarks and buyer remarks on the MLS sheet with showing instructions and ass covering statements such as “buyer or buyer’s agent to verify taxes, sq. footage, etc.” Or BATVI – buyer agent to verify information. DUH! The MLS is supposed to “sell” the house- to entice buyer’s agents to show the listing.

Sometimes the agent remarks are left blank and even on occasion the public remarks are blank. I showed a house with central air that was not included in the MLS. I showed a house today with lake privileges and a subdivision beach and the water name search field was left blank. 20% of the lake front listings in this North Oakland County area also leave the water name search field blank so their listings won’t come up if I am searching for houses on a specific lake.

A while back I was showing houses on acreage and over a third of the listings left the acre search field blank. I’ve shown 2 houses in the past week or so where the listing agent missed a bathroom. And it goes on and on.

I don’t know what has happened to customer service. If a listing agent can’t/won’t fill out a listing completely, how are they going to handle the rest of the transaction? If the incomplete listing is a short sale will the listing agent be able to, or willing to, send everything the lien holders ask for in a timely fashion? I highly doubt it if they can’t even fill in a lake name or check the central air box.

As real estate agents we are dealing with hundreds of thousands of other people’s dollars and we should take that commitment seriously.

One thing I can promise is if you list your Southeast Michigan home with me, your listing will be completely and accurately filled out. You will have the maximum number of photos allowed and a virtual tour (unless your house is a pig sty- no need of scaring off buyers!). You will have a sign in your yard unless otherwise requested and if you don’t have the electricity turned on in the house you can find another agent. I list homes to sell and I sell them at the highest price possible. I will communicate with you throughout- from the time you sign the listing agreement until the sale closes.

I take my job seriously. We like to call ourselves professionals and should behave in a professional manner. Our listings are our face to the public and those listings should represent the home better than those on for sale by owner web sites.

Why You Should Choose Jackie Hawley To Sell You Home

Marketing Your Southeast Michigan Home

Preparing Your Southeast Michigan Home For Sale

Home Evaluation (CMA)

Jackie Hawley, Realtor
Keller Williams Realty, Clarkston
Cell: (248) 736-6407

Jackie@JackieHawley.com

www.MiRelocation.com

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The Buyer is Asking You to Pay for the Well and Septic Inspection. Why Would You Refuse?

I was talking to a couple of agents at the office yesterday and one of them was complaining about our purchase agreement asking for the seller to pay for the well and septic inspection (if the house is on well and/or septic). He was saying that perfectly good offers were getting countered because of this one item.

He has a couple of options- he can cross out seller and hand write in buyer and have it initialed, or he can cross out the whole paragraph and the buyer can make it part of his general home inspection.

Another agent wanted to know why he would want that removed; after all he is working for the buyer and the seller should have to prove their well and septic worked properly and the water clean. Like supplying clean title.

I ask- As a buyer’s agent why would you put the seller in charge of ANY of your inspections?

“Back in the day” many of the purchase agreements asked for septic inspections to be performed by the county. Oakland County used to send out a sanitarian, who would walk out to where he thought the septic field was, sniff the air, and approve the septic. That’s not really much of an exaggeration. The point is, there is no hard and fast rule as to what constitutes a well and septic inspection. And most purchase agreements that have pre-printed that the seller is to supply a satisfactory well and septic inspection don’t specify exactly what they want done and what constitutes satisfactory. Just a sniff test? A dye test? Open the tank and take core sample from the field?

And the water…. Who is collecting if the seller is having it done? What lab? Are the including arsenic and lead? Do you even care if the water is tested? Because no matter what the purchase agreement states, you REALLY are paying for that well and septic inspection. Sellers have a bottom line and any costs you ask them to cover will be factored into the sale price. So really you are still paying, but giving up the power to have any say in how those inspections are performed and who is performing them.

Sellers- If you get an offer asking you to pay for the well and septic inspection DO NOT COUNTER that condition. In the whole scheme of things, the couple hundred dollars a well and septic inspection costs is nothing. Let the buyer’s agent “save” them $200 or $300.  I’m not suggesting you would cheat and send distilled water to a lab, but if you hire a home inspector to collect the water and take it to the lab you have control. We don’t know the buyer’s inspector. We don’t know how long that water sample might roll around in his trunk. Also, if you’re paying, a dye test for the septic is sufficient. It’s what is required by FHA, but doesn’t tell you the condition of the field or tank. It just means it’s working.

I don’t know why brokers pre-print contingencies in their purchase agreements. Everything is negotiable. There are no standards, and old customs have been changing to reflect the high percentage of foreclosure and short sale listings. It’s presumptuous to assume in advance how ALL buyers want to negotiate their home purchase.

photo from Flickr and Soil Science

Seller concessions for dummies

Home sellers- check your listing (MLS sheet)

Seller- you accepted an offer- now what?

Is the appraisal for the buyers protection?

Oakland and Lapeer County Home Seller- The Closing is Set- What To Do Now?

Getting Your Oakland or Lapeer County Home Ready for Sale? I Have Coupons That May Help

Oakland and Lapeer County MI Home Seller- What to Expect on the Listing Appointment

Could Incomplete MLS Listings Be To Blame For Bad Appraisals?

Jackie Hawley
Keller Willliams Realty, Clarkston MI

Jackie@JackieHawley.com
Cell: (248)736-6407

www.MiRelocation.com

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Does the Buyer Have a Right to a Home Inspection? Commonly Asked Questions Regarding Clarkston MI Real Estate

Does the Buyer Have a Right to a Home Inspection?

No.

You have the right to bear arms, you have the right to free speech and assembly… There is no right to a home inspection in a real estate transaction. There is, however, a legal obligation to live up to the terms of the fully executed purchase agreement (not a lawyer).

The offer to purchase will either be contingent on a home inspection or it won’t. If the offer isn’t subject to a home inspection, then the seller doesn’t have to let the buyer inspect. In fact, the seller shouldn’t let the buyer inspect. Sometimes a buyer will waive the inspection contingency to make their offer stronger. But those terms should be spelled out in the purchase agreement.

For Sellers

For Buyers

Search the MLS

What is a Home Warranty and Who Pays for it?

What Happens if the Appraisal is Low?

More About Home Inspections

Jackie Hawley
Keller Williams Realty, Clarkston MI
cell: (248)736-6407
email: Jackie@JackieHawley.com or Jackie@MiRelocation.com

www.Mirelocation.com

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Clarkston MI- Are Final Water Bills Settled At Close or Possession?

Clarkston MI- Are Final Water Bills Settled At Close or Possession?

The question above, or variations of it, was a search term that was used a few times to find my seller blog this week. It’s a good question. After selling real estate for a while it’s easy to forget that most sellers only go through this every few years at most and often times as long as 10, 15 or 20 years since the previous real estate transaction.

The correct technical answer is- whatever is written in the purchase agreement.

Typically any past due bill will be paid at close and if there is any possession after closing, then there is a dollar amount escrowed until the seller moves out and a final water bill issued. The bill is paid out of the escrowed money and the rest returned to the seller. If there is no possession we try to get a final water bill for the closing and it’s paid from the proceeds. If that doesn’t happen for some reason, money will be escrowed until the final reading.

Jackie Hawley
Keller Williams Realty, Clarkston
cell: (248)736-6407
email: Jackie@JackieHawley.com

Seller Concessions for Dummies

How I Market My Listings

What to Expect on the Listing Appointment

What Costs are the Seller Responsible For?

What Happens if the Appraisal is Low?

Why are the Buyer and I Both Paying for Title Insurance?

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What Is A Home Warranty And Who Pays For It?

What Is A Home Warranty And Who Pays For It?

I was going over an offer to purchase with one of my sellers recently and one of the things the buyer was asking for was for the seller to supply a 1 year home warranty. The seller asked if this meant she was responsible for any repairs in the house for the next year. And her question is quite common; I’d say 7 out of 10 sellers ask that same question.

So to the first part of the question- What is a home warranty? Basically a home warranty is an insurance policy that covers the house for 1 plus year after closing. Policies vary in costs; the one our office endorses starts at $375 for a 1 year policy with a $100 deductible. They tend to cover things such as heating systems, water heater, appliances, well pump, plumbing and such. Now this doesn’t mean if the furnace breaks you get a new furnace for a hundred dollars. They may pay a large chunk of it- there are limitations, $ caps, conditions.

Basically it’s an insurance policy, and you need to read everything before you fix or call in a problem. Follow their rules to a T and everything should go smoothly. Sometimes they end up being just a waste of money. Sometimes you end up saving a lot of money. Some would say that $375 is cheap peace of mind.

Who pays? That depends on how it is written in the purchase agreement. It can be part of the negotiation process just like asking for appliances, possession, price, etc. The seller usually has a bottom line in mind and should factor the cost of the home warranty right along with seller concessions, offer price, etc.

If a buyer wants to purchase their own home warranty they don’t need to make it a part of the offer to purchase. Their agent should be able to hook them up with a good warranty company.

Jackie Hawley
Keller Williams Realty, Clarkston
cell: (248)736-6407
email: Jackie@JackieHawley.com

Seller Concessions for Dummies

How I Market My Listings

What to Expect on the Listing Appointment

What Costs are the Seller Responsible For?

What Happens if the Appraisal is Low?

Why are the Buyer and I Both Paying for Title Insurance?

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What Real Estate Costs are the Oakland County Seller Responsible For?

What Real Estate Costs are the Oakland County Seller Responsible For?

This is a common question I get when a person is considering selling their Oakland County MI home. First let me explain that most everything is negotiable; the purpose of this post is to address what is customary for the Oakland County and Lapeer County areas.

Costs to the seller:

• commission (I normally charge 6%)
• transfer tax (.75%)
• revenue stamps ($1.10 per $1000)
• title insurance (depends on the sale price)
• misc. costs such as wiring fees, recording fees and I usually estimate on the high side at $500 but is probably closer to $100 on most transaction

If you currently have a mortgage on the house that will have to be paid out of your proceeds. Taxes are usually prorated to the date of closing and if you are current on your taxes you will probably get some back. Homeowner association dues is usually prorated to the date of closing. Water and sewer bill (if applicable) are paid at closing.

If there is possession $200 or $300 is usually escrowed at closing to cover any water/sewer charges for the time you live in the house as a tenant after closing. You will normally pay the new owner’s house payment for the time you stay after closing. So you agree on 45 days possession after closing, we will typically escrow 45 days of the new owner’s mortgage and you pay for the days you stay.

These costs are for a normal sale- not short sale or land contract sale.

For more information about selling your Oakland County or Lapeer County MI home please don’t hesitate to contact me.

Jackie Hawley
cell: (248)736-6407
email: Jackie@JackieHawley.com
www.MiRelocation.com

For Sellers

Seller Concessions for Dummies

Why are Both Buyer and Seller Paying for Title Work?

For the Non Distressed Seller (normal sale)

 

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What Happens if the Appraisal is Low?

What Happens if the Appraisal is Low?

Low appraisals (appraised value coming in lower than the agreed upon sale price) are becoming more common and will probably remain a problem for quite awhile to come. There are many reasons why appraisals can come in low, and it is usually NOT because the buyer was prepared to “over pay” for the house.

I used to define the word “appraisal” as an opinion of value. Back in the day the loan officer got to choose the appraiser; an appraiser on that lender’s approved list of appraisers. Most of the time a local appraiser was used, and appraisals were usually pretty accurate. In fact- contrary to recent pundit opinion- many appraisals tended to come in lower than they should have. Most of the time, the appraiser would justify the sale price, even if the buyer was buying the house at a bargain price.

Today I define the word “appraisal” as an opinion of value derived from data that fits a particular lender’s criteria. Also, because of fairly recent legislation (over the past couple years) the choice of the appraiser is taken away from the lender, and I have been seeing a lot of out of the area appraisers on my listings and when representing the buyer. On a recent purchase my buyers ended up paying for 2 appraisals- both licensed appraisers, both appraisals were within a week of each other- one came in at $300,000 and one came in at $362,000.

Buyers and sellers both want the house to appraise. Buyers are represented now ‘days, and their agent should advise them if they are over paying. Buyers are more savvy and educated than in the past, and by the time they make an offer they know what a house is worth. But the appraisal is usually needed to obtain a mortgage.

So what happens when the appraisal comes in low?

• The seller can come down in price to match the appraised value
• The buyer can pony up the difference
• The buyer and seller can settle somewhere in between
• The buyer can back out and the house go back on the market

The above scenarios assume the purchase agreement stipulates the house must appraise for at least the sale price. The purchase agreement I use lets the appraised value become part of the negotiations. For example the buyer may offer to pay $200,000 for a house but is contingent on the appraiser coming in no lower than $190,000. This can be very useful in a multiple offer situation.

There is no law that forces a seller to come down in price, just like there’s no law that forces the buyer to go through with the purchase if the appraisal is low. Some sellers can’t come down any farther and sometimes the buyer just isn’t able to pay the difference. This can be a real problem when seller concessions are needed.

Bottom line is: appraisals come in low way too often and there is no right or wrong way to resolve the problem. BUT don’t assume the seller will automatically come down in price because a third party doesn’t agree with the buyer or seller on the value of the home.

Could Imcomplete MLS Listings Be To Blame for Low Appraisals?

Is The Appraisal for the Buyer’s Protection?

Why Are Appraisers Calling This a Declining Market? Prices are Up and Inventory is Low

Price Per Square Foot DOES Determine “Value”

The Nuts and Bolts of Selling Your Southeast MI Home (non distressed seller)

For the Southeast MI Seller

Jackie Hawley
Keller Williams Realty
cell: (248)736-6407
Jackie@JackieHawley.com
www.MiRelocation.com

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