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Archive for April, 2011

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)
  • $295 file retention fee to ReMax Encore
  • 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?

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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