Real Estate Listing Myths 

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Large Agencies Sell Homes Faster – False.

10 years ago, this statement may have been true, but today there is no Data that shows that Large agencies sell homes any faster than smaller agencies, or even faster than For Sale By Owners, all, when on the MLS provide the exact same information to buyers.

Large Agencies have more buyers – False.

Less than 5% of all homes sales were purchased through the company which listed the home. This is a misconception held over from before Real Estate hit the Internet.

If an Agent tells you that they have buyers, simply invite them to bring you one and offer to pay them a buyer Agent Commission.

Real Estate Teams are more productive sellers – False.

Real Estate teams are very common today.  Fact most do not work as a team, they are simply groups of realtors who work under a common “Associate” Broker within an office, they do not work in the traditional definition of a “TEAM” to buy or sell homes.

Real Estate agencies will not show discounted/flat fee listings – False.

Buyer Agents don’t know if the listing side is discounted, the only commission information which is displayed in the listing, is for the buyer agent, which is based on the commission you chose.

Discounted Commission listings receive inferior service – False.

A full-service listing requires the discount listing agent to provide the same full service that any other Full Fee (6%) realtor provides, such as: Arrange Appointments, Accept/Present Offers, Advise on Offers, Assist with counter offers, Negotiate for seller.

Discounted Commission Real Estate Offices cannot survive – False.

Companies that manage expenses and keep overhead low, can significantly reduce commissions and still be profitable.  Large Real Estate companies are burdened with high overhead, such as Expensive Rent, office staff, and utilities, and therefore must charge higher commissions to pay the bills and keep the doors open, they rely on you to pay their expenses and bills.

Zillow is a Home Buying Site – False.

Zillow is a marketing site, less than 5% of the viewers of homes on Zillow are qualified buyers, approximately 80% of the homes you see listed on Zillow were initiated by an MLS listing and were automatically pushed out to Zillow.

Real Estate Listing Myths

Joseph Walter Realty

If you have a question about buying or selling your home, please reach out to Joseph Walter Realty at 248-294-7849 or via email: info@josephwalterrealty.com 

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

 

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Where deals fall Apart

 Joseph Walter Realty Blogs

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Why Deals Fall Through

Real estate has many moving pieces. You have sellers, buyers, a mortgage company, a title company, an appraiser, an inspector, a listing agent, a buyer’s agent, an insurance company plus any friends and family of the buyers or sellers.

Even after you have a signed purchase agreement, there can be a few bottlenecks that slows progress in the sale. Most often, these disruptions can be remedied with some coordination on all sides.

This depends on many factors and what side of the transaction you are on. This blog will focus on the sellers’ side. We will try to do it in order of the stages of the process to give an idea where you may see some of these issues.

There are points in the process of getting to the closing table where a problem can occur. This guide will help identify these points.

Where Deals Fall apart

Inspections

The inspector’s job is to look at the entire property to determine it’s condition along with the components.

Most buyers will hire a professional inspector only after offer is accepted. It’s a good idea to spend time prepping the property’s weaker points before putting it on the market. 

Unless selling a newly constructed home, the home will be used, and the inspector will look for any signs of wear and tear in the house. Do not be offended by this, it is their opinion on the home, and they work for the buyer to find blemishes. 

After the inspection, the report goes to the buyer and their agent for review. Depending on the outcome, there may be a new round of negotiations, or worst case, a withdrawal.

A deal may fall apart if all parties cannot agree on costs or there are too many variables in the inspection report deal with.

If the buyer withdraws within the due diligence period, the Earnest Money Deposit is returned to the buyer.

*As a note, if the property has a well or septic, there may be additional inspections needed, and again negotiations may happen, or the buyer walks away.

Appraisals

The market value of the home is important to both the buyer and bank when financing a loan. To ensure the value of the loan, it’s supported by an appraisal from a professional independent source.

If the appraisal comes in with a value at, or above the offer price, the deal can proceed.

If the appraisal comes in lower than the offer price, either negotiations will happen, or the seller will choose to walk away. Keep in mind that as the seller it could be more costly to wait, since an appraised value is quite accurate.

If the deal falls apart here, the Earnest Money Deposit is returned to the buyer (as long as it is within the contract terms).

If you are working with a listing agent, they can typically put together the comps they used to list the home and dispute the appraisal.

More on Home Valuation

Lenders

Starting at pre-approval or pre-qualification, and continuing all the way to closing. The lender will be with a buyer in nearly every phase. 

While a mortgage or loan is in process, there’s paperwork and verifications that are required. Along with the review of appraisal. As you can imagine, there could be many triggers for buyers to get denied a loan along the way.

Borrowers not providing the lender with all the required items; or taking too long, or going out and damaging credit before closing to name a few.

The EMD and who it goes to will be based on so many factors and will be negotiated when the financing can no longer go forward. The EMD can go to the seller or back to the buyer.

This is where you make sure you keep all the information in writing and make sure you can fight for the EMD if needed.

More on Pre-Qualification and Pre-Approval

Buyers

The borrower can end the deal.

Sometimes a buyer just walks away. There are times when for reasons no one understands, after the expenses of inspection, appraisal and other costs are spent; the buyer just decides they no longer want the property.

This is when the EMD is usually given to the seller. When the mutual release or whatever form your state or board uses, is presented. The seller will be entitled EMD. Again, this can be a fight to get at times. All parties must agree as to where the EMD is going.

These are just a few examples of where and how deals fall apart. These examples are the ones most often dealt with in a real estate transaction. Real estate is a process, with legal documents and many parties. Navigating it is never the same.

Joseph Walter Realty

Service Coverage

If you have a question about buying or selling your home, please reach out to Joseph Walter Realtyat 248-294-7849 or via email: info@josephwalterrealty.com 

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

When Should I Start Title Work?

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What is a Real Estate Appraisal?

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What is an Appraisal?

If you have bought or sold your own personal residence, investment, or commercial property; you have probably dealt with the appraisal process.

Real estate appraisal, property valuation or land valuation is the process of developing an opinion of property value based on market statistics and property data

Appraisal reports form the basis for mortgage loans, settling estates and divorces, taxation, and so on.

As the seller or selling agent, even with the most up to date information, appraisals can come in with unexpected values.

Buyers cannot chose the appraisal company or the appraiser they use (I will not say that this is 100% of the time, but in most cases where a loan is involved, the buyer will be hands off and should remain hands off).

An appraisal is a safety net for the bank and the buyer. The bank needs to protect its loan with a piece of real estate at a specific loan to value.

Value

The location also plays a key role in valuation. However, since property cannot change location, it is often the upgrades or improvements to the home that can change its value.

Renegotiating the deal after the appraisal can be a struggle. Even through it was offered, the bank will not accept something lower and most of the time the buyer is not willing to come to the table with more money than the home is currently worth.

Buyers and their agents should also do their homework to make sure the offer they are submitting matches the value of homes in the area.

Sellers and listing agents should have comps ready to go in case the appraisal comes back lower than offer price.

You can submit these comps to the appraisal company to fight the appraisal. The more comparables shared, the higher the chance of an appraisal adjustment.

Although in my opinion there is a better chance at winning the lottery, than getting appraisers to adjust their report.

 

If you have a question about buying or selling your home, please reach out to Joseph Walter Realtyat 248-294-7849 or via email: info@josephwalterrealty.com 

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

Michigan Licensed Broker 6505431020
Ohio Licensed Broker 2020008974
Florida Licensed Broker BK3491231
Texas Licensed Broker 9010704
Arkansas Licensed Broker PB00090741
Georgia Licensed Broker 79028

More states 2021


3275 Martin Parkway, Ste. 125, Walled Lake, MI 48390

what is an appraisal

 

 

 

Home Valuation

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Establishing a Value For Your Real Estate

As a For Sale by Owner, how are you establishing the sale price of your home? Are you using Zillow? Listening to Uncle Joe? What process are you using to determine the value your home?

Establishing the sales price of your home is especially important to getting your home sold.

Valuation Tools

Free Valuation Sites

There are many FREE online tools and websites that offer “guestimates” on value, but many times they are not completely accurate.

Web estimates often times present comps that are outside the specific market. There are many factors at play when establishing a homes value.

Professional Valuation

Realtors

Most Realtors offer a home valuation. It is good to note that the majority of realtors are not licensed appraisers. Realtors give a generally close estimate to the market value of the home. 

Real estate professionals access active, pending and sold data from the MLS to refine property value. Finding comparable homes in the area and analyzing the differences between them.

Appraisers

An appraiser typical uses the MLS in the same way Realtors do for home valuation. The difference being, an appraiser is licensed for the sole purpose of valuation. They find more data and will inspect the home for maximum detail.

An appraisal is usually ordered by the buyer’s lender and has the power to cap your sales price.

Home Valuation Tips

Avoid Overpricing

Overpriced homes generally receive little to no showings and waste days on market, along with seller continued holding costs. Keep in mind that buyers will have full, detailed access to market activity through their agent.

Sell Quickly

Yes, days on market can negatively affect the value of the offers, Realtors know that high days on market is an indication to offer low. High Days on market can then produce offers that are “low-ball” since they see that you have been on the market for a while.

Get Help

As a For Sale by Owner we would suggest you call a Realtor or Broker. Pay them to run a report for you, do a full Comparative Market Analysis, or Broker Price Opinion. This could run you as little as $100 to as much as $300, but it is worth it.

For Sale by Owner can be a formidable task and there are many more moving pieces than expected. It can be frustrating and exciting at the same time. The goal may be to save hard-earned equity, but do not hesitate to seek a real estate professional’s assistance.

Property Updates

If you have recently updated your home, the full value of the improvements may not be returned in equity. Many upgrades you perform on a home increase the desirability, but not the value. Desirability may differentiate you from comparable properties in person, but on paper they hold little weight. 

Be especially careful about hiring Family members or friends to sell your home, your home is one of your largest assets, go with a proven professional not a part time agent.

 

List Your Property

Service Coverage

 

Home Valuation

If you have a question about buying or selling your home, please reach out to Joseph Walter Realty at 248-294-7849 or via email: info@josephwalterrealty.com 

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

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For sale by Owner Versus Using Realtor

FSBO VS Realtor

When you decide to sell your home, you have 2 options. You can either sell it on your own as a For Sale By Owner, or use a professional Realtor. Each option has the main goal to get it sold, however the methods used by each may differ drastically. Below are comparisons of how typical real estate aspects are handled by both a for sale by owner and a standard realtor.

Pricing

FSBO

When selling on your own, you will decide on the price you want to sell your property. FSBO usually will do this by looking on FREE public websites like Zillow to determine value. These sites have information, but how relevant and accurate is unknown. FSBOs also use what their neighbors have sold for or what the neighbor’s current home is being sold for. Each home will have different square feet, updates, and condition of the property itself, which will affect value. Emotional value can lead to pricing the home wrong.

Realtor

Realtors have tools that can help define a value. They have access to all the relevant comps that have sold in the area. They know which can and cannot be used for your specific home. Realtors will also walk the property to review it and then compare back to the comps. Adjustments will be made for updates, condition, square feet, appliances and more. A Realtor does not have emotion when it comes to pricing. It is based on data and the home itself.

See more on Home Valuation Here

Forms

FSBO

All forms must be purchased. A Seller must provide certain documents to potential buyers to keep in compliance. Sometimes the sellers cannot get access to the documents needed. If a buyer without an agent wants to make an offer, one of the parties must seek out a purchase agreement that both sides agree on using. You should not use a FREE or general agreement.

Realtor

Realtor has access to all documents needed to put a home up for sale. From listing agreements to required documents that must be accessible by other Realtors. A Realtor also has a good purchase agreement that has been used many times.

Marketing

FSBO

When you are selling the property on your own, you must find the best ways to get it in front of potential buyers. There are several websites out there and social media that can be used. Some of these websites connect with others, but you will be doing the marketing one by one, setting up new profiles, logins, and listings. When you make changes, you will need to login to each one and update the information and/or photos. Social media is good, but like real estate websites, you will have to post to each individually.

Realtor

When a Realtor does the marketing, they use the MLS. The MLS is a portal for thousands of Realtors and real estate professionals to search and find homes for their clients. The MLS also connects to thousands of other websites automatically sending out information on listed homes to be seen by potential buyers. When changes are made on the MLS, they are updated on the 3rd party websites in seconds. Realtors also use social media to connect with potential buyers and other Realtors. There are many platforms and sub-groups within these platforms that Realtors use. One of the biggest tools Realtors use, is email (CRM) to get the listing in front of Realtors and clients. Realtors keep solid databases of contacts to be able to market to them in a click of a button.

Showing Houses

FSBO

Someone selling the home on their own will be taking all the calls on their own, setting up appointments, tracking the appointments, and then following up on the appointments. The FSBO must find ways to verify who is coming to see the home. How does a FSBO ensure that the people coming to their home, to go into their personal space, are Realtors with potential buyers and not just people wanting to wander through the home. FSBO also must provide access information to those who request to see the home. They provide lock boxes, leave the door open or stay to let the requested viewer in.

Realtors

A Realtor working to sell your home will monitor all showing requests. Realtors use technology and tools like ShowingTime to approve or reject showings based on the needs of their clients. Those who have access to request showings through this tool are licensed Realtors, allowing the Realtor and their client the safety of knowing that the person showing the home is legit. The tool also only allows lockbox codes once the showing is approved. Another tool Realtors use is electronic lockboxes. This adds another level of security, with being able to track access when it starts and ends. It also does not have the same code being used over and over. It uses the Realtors phone to connect with the box to get to the key. Realtors also get showing feedback from the showings that allow them to analyze the thoughts of the other Realtors and clients who have seen the property.

Offers

FSBO

When an offer comes in to a FSBO, the home seller must review the doc and understand it in its entirety. Many purchase agreements have legal terms and deadlines that can affect the outcome of the sale. FSBO must negotiate with a professional Realtor. Another part of the offer is the review of the buyer’s mortgage approval. If there is a cash offer, this can be another challenge when requesting the docs to show the buyer can close cash.

Realtor

A Realtor handles offers of real estate for a living. They have seen the various wording and versions of local real estate companies and knows what to look for regarding price, deadlines, and concessions. Purchase agreements seem like boiler plates, but they can come with some legal issues if one side fails to perform. If there are issues found after the bottom line, it can be difficult, if impossible to correct. A Realtor knows what to review to not have issues. Realtors are also professionals when it comes to reviewing approvals from mortgage companies. They know the right questions to ask the mortgage companies. If a cash offer comes in, the Realtor knows how to request and review the right documents to make sure the cash is available to close.

Post Offer

FSBO

After the bottom line of an offer the seller must make their home available and handle the inspection and appraisal, along with requested walk-throughs. Depending on the outcome of the inspection and appraisal more negotiations may happen to request a reduction of price or change to the terms of the purchase agreement. This can be difficult for a FSBO since they do not have access to comps and other current information or understand the write up of the inspection. It is much harder for a FSBO to argue appraisal valuation and the buyer’s agent will not help since they want the best pricing for the buyer. They do not work for seller.

Realtor

A Realtor will handle the inspection and appraisal. Your Realtor will review both the inspection and appraisal as it comes in. If there are additional negotiations, they will review the requests and make their opinions. Some buyer’s agents look to offer one price, knowing they will ask for a reduction after an inspection. Realtors also can review inspections to see if the requests are correct or just a way of getting a price reduction. A Realtor can help argue valuation if the appraisal comes in lower than the purchase price by proving comps that are recent and that match the subject property. A Realtor who prices the house right will have the information to back up value when an appraisal comes in lower than expected.

Closing

FSBO

When documents come in for the closing. A FSBO will need to look at all the costs and understand what is being charged to them and to the buyers. A closing statement has a lot of fees, commissions, payoffs, and taxes. If there are errors in items like commission, you will need to negotiate and work that out with the buyers Realtor. Doing this can delay or cause the closing to not happen.

Realtor

A Realtor knows how to review all closing documents from the closing statement, the title work, and all docs required to sign. A Realtor will make sure that all charges are to the right party in order to have a smooth closing. Any discrepancies the Realtor should have documentation to back it up, especially commission, which is part of the listing.

 

If you have a question about buying or selling your home, please reach out to Joseph Walter Realty at 248-294-7849 or via email at info@josephwalterrealty.com

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

 

For Sale by Owner and the Buyers Agent

Being a For Sale by Owner or FSBO, you will most likely still be dealing with a buyer’s agent. Many times, these buyer’s agent will seem as though they are there to help you, but THEY DO NOT REPRESENT YOU – THEY REPRESENT THE BUYER.

When you are selling a property or business on your own, be aware of the overly helpful buyer’s agent who has NO AGENCY AGREEMENT with you. They will present the offers on their forms and make all sorts of suggestions which will “HELP THE PROCESS ALONG” – most likely in their clients’ favor.

Read the purchase agreements all the way through and look for some of the following items:

  • OTHER ITEMS SECTION:
    • This is a section in almost all purchase agreements where custom requests are done, such as:
      • Seller to Pay XXX in Concessions
      • Seller to make all repairs from inspection
      • No EMD
      • EMD to be returned to buyer under all circumstances
    • Property Description Section:
      • Lists Appliances
      • Does it list other items you did not want to include
    • Taxes – make sure you are only paying for taxes on the days you are responsible.
    • Repairs – some purchase agreements have a section for inspection and municipal repairs and who pays them.

 

The buyer’s agent may also want to suggest you work with their title company. If your state allows, choose to do a split closing where you have a title company separate from theirs. Some states the seller picks the title company and other states the buyer does. There are also some states where an attorney is involved in all closings. You may want to reach out to a title company in your area to find out how your state does closings – you can call Inked Title who works nationally and someone can help provide information at 248-617-0004 or email info@inkedtitle.com

Do not feel pressured to use any services offered by the buyer’s agent.

(title company, home warranty, repair company, etc.)

 

Selling your home on your own has many moving pieces. Stay in control of your deal and stay in contact with the people you choose to provide services. A lawyer is always a good idea or a transaction coordinator to help review documents and get you to the closing with the greatest of ease.

A transaction coordinator is a licensed real estate professional who will charge a small fee or percentage of the sales price (much lower than the full service Realtor) to review docs, may help negotiate, and handle the process from offer to close to you getting paid.

If you have a question about buying or selling your home, please reach out to Joseph Walter Realty at 248-294-7849 or via email at info@josephwalterrealty.com

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

 

 

 

 

 

What is a VA Loan?

A VA loan is a mortgage loan in the United States guaranteed by the United States Department of Veterans Affairs (VA).

The basic intention of the VA home loan program is to supply home financing to eligible veterans. They also help veterans purchase properties with no down payment. A VA loan may be issued by qualified lenders.

Veteran Affairs (VA) does not originate loans, but sets the rules for who may qualify. They issue minimum guidelines and requirements for which mortgages may be offered while financially guaranteeing loans that qualify.

When you are selling your home, whether it is For Sale by Owner or traditionally with a real estate agent/Realtor, you will have to understand the offers presented to you and the financing they have been approved for.

Each type of financing can be different, and each have their pros and cons.

Who Can Get a VA Loan?

The program is for American veterans, military members currently serving in the U.S. military, reservists and select surviving spouses (provided they do not remarry) and can be used to purchase single-family homes, condominiums, multi-unit properties, manufactured homes and new construction.

VA Loan Benefits

The VA loan allows veterans 103.3 percent financing without private mortgage insurance (PMI) or a 20 percent second mortgage and up to $6,000 for energy efficient improvements.

A VA funding fee of 0 to 3.3% of the loan amount is paid to the VA; this fee may also be financed, and some may qualify for an exemption.

In a purchase, veterans may borrow up to 103.3% of the sales price or reasonable value of the home, whichever is less.

Since there is no monthly PMI, more of the mortgage payment goes directly towards qualifying for the loan amount, allowing for larger loans with the same payment.

In a refinance, where a new VA loan is created, veterans may borrow up to 100% of a property’s reasonable value, where allowed by state laws.

VA loans allow veterans to qualify for loan amounts larger than traditional Fannie Mae / conforming loans.

Standard VA guidelines state that the VA will insure a mortgage where the monthly payment of the loan is up to 41% of the gross monthly income vs. 28% for a conforming loan assuming the veteran has no monthly bills, although there is no hard limit to the DTI for a VA home loan.

Veterans have been known to be approved with a DTI of up to 80%, if there are other factors that strengthen their loan application. These factors include a low Loan-To-Value (LTV), sufficient residual income, additional income received but not used to qualify for the loan, good credit, etc.

Let me break down the pros and cons of this type of loan. This will allow you to get some insight on how the borrower was approved and what guidelines they will be facing.

VA Loan Pros and Cons

Pros

No down payment

This is the most significant benefit. Qualified borrowers can borrow as much as a lender is willing to lend, all without needing a down payment.

FHA loans typically require a 3.5 percent minimum down payment, and for many conventional loans it is a 5 percent minimum.

On a $175,000 home purchase, that is a $6,125 down payment for FHA and a $8,750 for conventional.

No private mortgage insurance (PMI)

Usually required for conventional borrowers who cannot put down at least 20 percent. FHA borrowers have mortgage insurance that is at the time of purchase and another that is paid monthly.

PMI typically disappears once you have about 20 percent equity in your home. There is no PMI on a VA loan.

Higher allowable DTI ratio

Lenders will look at the ratio of your total monthly income to your total monthly expenses. The VA typically wants to see a debt-to-income ratio of 41 percent or less. That benchmark is higher than what you would see on conventional and even FHA loans.

It is possible for qualified borrowers with a DTI ratio greater than 41 percent to still secure VA financing.

No prepayment penalty

VA loans can be paid off early with no prepayment penalties.

Refinance options

The VA home loan program has a pair of refinance loans that can help qualified buyers lower their monthly payments or get cash back from their equity.

The Streamline refinance, also known as the Interest Rate Reduction Refinance Loan (IRRRL), is for homeowners with existing VA loans.

The VA Cash-Out Refinance allows VA and non-VA homeowners to refinance and get cash at closing to pay down debt or take care of other needs.

Refinancing may result in higher finance charges over the life of the loan.

Flexibility with bankruptcy and foreclosure

Some borrowers who qualify can be eligible for a VA home loan two years after a bankruptcy or foreclosure. The wait can be much longer for different loan types.

Cons

not for everyone

The VA loan program is a benefit you must earn, which makes it relatively rare to obtain compared to other loan products. VA home loans are only available to eligible service members who have served their country in the United States military. Spouses of veterans who have died in the line of duty or because of a service-related disability may also be eligible.

VA Funding Fee

All VA loans come with a mandatory VA Funding Fee charged by the VA. This fee goes directly to the agency and helps keep the VA home loan program running for future generations.

It is a cost you can finance into the loan, and borrowers with service-connected disabilities are exempt from paying the fee. But this is not something you will pay on a conventional loan or FHA loan.

You can learn more about how much the VA Funding Fee is, who pays what and who is eligible for a refund.

VA Loans are provided For primary residences

This is not a loan program you can use to purchase a second home or an investment property.

Sellers are not always on board

Some home sellers are not open to receiving offers from VA borrowers. A lot of this undoubtedly has to do with some of the myths and misconceptions surrounding VA loans.

 

The information here is provided for informational purposes. The writer is not a mortgage or financing professional. It is always best to discuss financing matters with a mortgage or financing professional.

 

If you have a question about buying or selling your home, please reach out to Joseph Walter Realtyat 248-294-7849 or via email: info@josephwalterrealty.com 

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

Michigan Licensed Broker 6505431020
Ohio Licensed Broker 2020008974
Florida Licensed Broker BK3491231
Texas Licensed Broker 9010704
Arkansas Licensed Broker PB00090741
Georgia Licensed Broker 79028

More states 2021


3275 Martin Parkway, Ste. 125, Walled Lake, MI 48390

What Is An EMD?

In many ways, earnest money can be considered a deposit on a home, an escrow deposit, or good faith money.

An EMD or Earnest Money Deposit is a deposit made to seller that represents a buyer’s good faith when buying a home.

The earnest money deposit gives the buyer extra time to secure financing and conduct the title search, property appraisal, and inspections before closing.

The amount of the EMD is up to the buyer. Normal EMD amounts are around 1% or 2%, but in particularly good markets, the EMD can be as high as 5% to 10%.

Why Is An EMD Important?

The earnest money deposit ensures that the buyer is serious about the purchase of a property and not “SHOPPING AROUND” while taking properties off the market. The EMD will be credited on the closing statements.

Sellers should look at the EMD as the strength indicator in the offer.

For example, if someone offers $500 EMD on a $500,000 home, the seller will feel as though the buyer is not serious. The seller may also feel it is not an amount worth taking the house off the market for.

If a small EMD is part of the purchase agreement, you will want to investigate further with the mortgage lender and if cash deal, proof of funds.

When there are multiple offers, every detail is important, including the amount of EMD placed to secure the property. You want to make the listing agent and seller see your deal as the best opportunity to get to the closing table.

Who holds the EMD?

The EMD will be placed with a broker, a title company, or a lawyer to hold while the real estate transaction is processing.

The escrow holder will vary, depending on the instructions for sale or the negotiated place between buyer and the seller.

EMD Loss

The buyer can be granted EMD back if situations like the following occur:

Bad Inspection

At times, the seller will negotiate or work out the issues with the inspection, but when both sides cannot agree, the EMD can be released back to buyer and deal mutually released.

Property Does Not Appraise

Markets change and properties may not appraise for the agreed upon price. Like the inspection, if both sides cannot come to terms, the EMD is released back to buyer and deal mutually released

Misrepresentation By The Seller

The property should have a seller disclosure, 100% completed by the seller. If there is something that is misrepresented, on purpose or by accident, the parties can find a way to fix the situation or mutually release property and EMD returned to the buyer.

Mortgage Cannot Be Approved

Approvals are not guaranteeing that the deal will close. There are many other factors that come into play after the purchase agreement is signed and the deal processes. If the lender ends up stating the buyer cannot continue, the EMD is returned and property mutually released.

EMD Disputes

In the case where the EMD is being disputed, you will need to review the purchase agreement to decide how to proceed – some purchase agreements have built in mediation or arbitration clauses.

You can contact the other broker, use the local real estate board, or in extreme situations, you may need to use an attorney to get the EMD released.

Both the buyer and the seller can try to claim the EMD. Therefore, having contingencies in the purchase agreement and everything in writing as the real estate deal progresses. Besides everything in writing, you will want to make sure all parties sign any changes or addendums.

Here are some situations where the seller has the right to request the EMD be provided to them:

Buyer gets cold feet and wants out:

Just because the buyer gets cold feet or decides the home is not what they wanted; does not mean they get their EMD back. The seller has taken the home off the market and accepted the EMD as good faith that the buyer wanted the home.

Both the buyer and seller will need to review the PA for deadlines agreed upon. If the buyer fails to perform, the seller is entitled to the PA.

Buyer cannot perform or close by a specific date:

If the buyer cannot perform by the contract date, the seller can request the EMD be sent them.

Buyer did not provide accurate information:

When the buyer provides documentation to the lender, and it is later found out to be untruthful and the mortgage declined, this is not the same as being denied the loan.

These are just a handful of reasons as to why a seller may have rights to the EMD. Both the buyers Realtor and Listing Realtor should have protections in place for their client.

Summary

Besides everything in writing, you will want to make sure all parties sign any changes or addendums.

Writing up a purchase agreement has more than a price to offer a seller. Realtors are professionals at making sure your offer is written to secure your interests and protect you.

Listen to the Realtors advice when they are working on your deal. They do this every day. Although, the Realtor does work for you, and in the end will submit the offer how you feel comfortable, they are the best resource for making deals happen.

 

 

 

If you have a question about buying or selling your home, please reach out to Joseph Walter Realtyat 248-294-7849 or via email: info@josephwalterrealty.com 

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

Michigan Licensed Broker 6505431020
Ohio Licensed Broker 2020008974
Florida Licensed Broker BK3491231
Texas Licensed Broker 9010704
Arkansas Licensed Broker PB00090741
Georgia Licensed Broker 79028

More states 2021


3275 Martin Parkway, Ste. 125, Walled Lake, MI 48390

MLS Only Listings

As a For Sale by Owner, you will get inundated with Realtors wanting to help list your home for sale. This is a natural course of business (if you use a flat fee service to get on MLS – the Realtors cannot solicit you reducing calls, emails and texts – visit www.fsbomadeeasy.com for more info). As you are selling the home on your own, it does not hurt to interview some of the Realtors in case you need some help in the future. This will save you time and weed out those you may want to use and those you will not use.

Here are some of the best questions to ask when interviewing potential agents – some obvious and some not so obvious.

  • Are you licensed in this state?
    • You will want to make sure the Realtor has a current and valid license. There are state sites that can also help you verify their credentials.

 

  • How long have you been a Realtor?
    • The length of time someone has been in the real estate industry is important. Realtors who have spent time in real estate have been through the various markets and understand how to adjust to accomplish the goals of selling the homes they represent.
    • A newer Realtor does not always mean they cannot help you.
    • Many new Realtors, who are professionals, have done their research and can be as productive as a seasoned pro. As you ask follow up questions, you will get a feeling where both the seasoned Realtors and new Realtors fit in your needs to sell your home.
    • A good follow up question to this is “are you a full time or part time Realtor?”
      • You may get a Realtor in business for 20 years who is part time, and you may get a Realtor who is new and full time. This is where your gut feeling, and additional questions come into play.
    • Are you part of a team or will you be the Realtor I am working with?
      • There is no wrong answer to this question, but you will want to know who will be handling the process of your home and who you should speak with. Communication is key.
      • A team does not mean you will get more help, just simply means they are part of a group of Realtors under someone else.

 

  • What MLS board are you currently with?
    • There are many MLS boards. You will want to make sure that the Realtor is part of the board for the area your home is located.
    • There are usually major MLS boards and smaller, region specific boards. Both can be useful, but make sure you get maximum exposure.
  • Can I get referrals?
    • Realtors typically have past clients happy to give them a glowing review. Much like online reviews, they do not always reflect how good or bad something is.
    • If the Realtor is reluctant to provide referrals is when there is red flag.
  • What are your average listing Days on Market (DOM)?
    • This number will vary depending on the time of year and the type of market we are in – buyers or sellers.
    • High days on market is not good but ask for them to explain.
    • If they seem way too low, ask how they can sell so quick for every property. Also ask how many sales they have had. They could have very few deals, which would give them a low average days on market number.
  • Have you sold a home in my neighborhood?
    • Some Realtors specialize in geographic markets. Many times, you will get a “NO” to this answer but does not mean they are not the right person for the job. Follow up with, “have you sold homes in this area?”. This will allow them to explain their market and what they have sold that compares to your neighborhood.
  • Have you sold any homes in the price range of my home?
    • Like the geographic area question, many Realtors specialize in price ranges they can acquire buyers or know how to market them.
  • How do you plan on marketing my home?
    • Like many of the other questions, you may feel as if there is a template of answers from all Realtors.
      • “We have social media” – everyone does
      • “We have email marketing campaigns” – everyone does
      • “We have buyers already” – watch out for this answer. Most people lure sellers with their “IN HOUSE” buyers who then decide on a different home after you sign the agreement.
      • “We have a database of people we market to”
      • “We will host open houses” – this is for them to collect buyer’s info more than to sell your home.
      • “We will do your photos and drone work” – everyone does
    • Realtors all have the same access to all the same tools. It is a good question to ask, but the boiler plate answers provided will not be able to help you decide if their marketing plan is different. Fancy flyers and listing presentations are for you, not how they will market your home.
  • How much will you charge to list my home?
    • The Realtor may tell you that it will be 6% – 3% for the listing side and 3% for the buyers agent side and that is typical – yes it is typical or industry standard, but YOU AND YOU ALONE WILL BE THE DECIDER OF WHAT YOU CHOOSE TO PAY.
    • Do not get drawn into the Realtors who say “NO ONE WILL SHOW YOUR HOME FOR LESS” – this statement alone is breaking so many rules.
    • Tell the Realtor what you would like or were thinking of paying both sides. You are the client, and it is YOUR EQUITY THE FEES ARE COMING OUT OF.
    • Never sign up with a Realtor pressuring you for fees. You are using your home to provide revenue for them. If they are high pressure to sell you as their listing agent, they may be high pressure through whole process. You must feel comfortable with all aspects of the Realtor.

 

  • What price do you think my home should be listed for?
    • A Realtor coming to get you to list your home should have done a comparable market analysis giving them a rough idea of your home listing price.
    • When they arrived at the home, they should have requested a tour of the home to verify some things that will affect the comparable market analysis
    • As you interview several Realtors, you will start to see numbers close to each other.
    • WATCH OUT FOR ABOVE MARKET NUMBERS OR REALTORS WHO AGREE TO ALL YOUR PRICING (sometimes you may be right on with value but watch out for those too agreeable – have them show their valuation on paper).
      • Realtors will come in with high numbers to get you to list with them, only to come back soon after for a price reduction.
    • How much will I get at close at the price you suggest?
      • Realtors should be able to provide NET SHEETS to give a rough estimate of your proceeds at close. You may need to provide some info to help fill in some costs.
      • Realtors should provide multiple NET SHEETS to show what you would get at different offer prices.
    • Once my home is listed, what happens?
      • Find out what you need to do to prepare home to get listed
      • Find out when the sign and lock box will be installed
      • Find out when the photos and drone video will be done
      • Find out when the first open house will be
      • Find out what the process is when you get an offer
    • How do I contact you if you list my house and when are you available?
      • Make sure you have easy access to the Realtor listing your home
        • Phone/Text
        • Office Line
        • Email
      • There will be many moving pieces and people coming and going into your home. You do not want an absent Realtor.

There seem to be many questions to ask when you are interviewing a Realtor. On paper it seems drawn out, but you will find in natural conversation many of the questions above will happen. We just provide a guide and insight on what to look for when interviewing potential listing Realtors.

If you have a question about buying or selling your home, please reach out to Joseph Walter Realty at 248-294-7849 or via email at info@josephwalterrealty.com

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.

A Realtor is a powerful tool to use when you are selling (or buying) a home. For a For Sale by Owner, there is a hope there will be no need for a LISTING REALTOR. Saving the commission on one side of the deal by not having a listing realtor can be a significant savings (generally around 3% of the home sales price), but what happens when your home does not sell and sits on the market. When should you get a Realtor involved?

On the MLS, there is a counter called DAYS ON MARKET (DOM). This shows the other Realtors how long a home has been listed. The higher the number of Days of Market, the more likely the offers will not be what you were hoping for. A home sitting on the market is usually priced wrong, the condition of the home is not what buyers are looking for, or location is not where people are looking. Two of the three of these is curable, but which one is it?

As a home sits on the market, there are costs associated with it. These are the holding costs. The costs typically include – utilities, taxes, insurance, maintenance, and mortgage. They add up as time passes reducing your potential profit on the home. Since most mortgage payments go toward interest, you are paying out money, you will not get back. The same is true with all holding costs.

Many For Sale by Owners drop pricing thinking that is the solution. It could be but dropping the price without understanding the market may in fact hurt you. There could be another solution that could get you your price, so randomly dropping the price may not help get a buyer to make an offer. The real estate market is a funny beast. If you understand it, research it, it can be tamed and understood. It just takes the right person or company at times to assist.

We could go on and on about the different aspects of why your home is not selling, but the main question we need to answer is when you should get a Realtor involved. The best answer to this is – when the costs and time outweigh the savings on your home.

Typically you are told that Realtors charge 6% to sell your home (this is not always the fact, but it’s a on-average commission with 3% on each side of the deal – but the seller is always in charge of deciding the commission). The listing Realtor on a deal of $200,000 would be earning $6,000. This $6,000 would have been your savings if you would have sold it on your own. Let’s look at the costs for a home sitting on the market for 3 months:

                Holding Costs for 3 months:

  • Mortgage: $1400 x 3
  • Taxes: $300 x 3
  • Insurance: $100 x 3
  • Maintenance: $100 x 3
  • Utilities: $150 x 3
    • TOTAL: $6150

As you can see it would cost just over $6,000 to have your house sit on the market for three months without selling. This is 3% of your home cost already. Now after three months, you decide to get a Realtor involved. You will now be adding 3% of the Realtor cost, plus the holding costs for another 1 to 3 months (depending on when a purchase agreement is signed and closing happens – closings are usually 30 – 45 days after a purchase agreement is signed).

Your costs to sell the home are now 2 ½ to 3 times what it would have cost to have a Realtor involved, along with time you put in showing the house and maintaining the house while you were selling it For Sale by Owner. Time is valuable.

 This information is not to scare you into running out and hiring a Realtor from day 1. This information is to let you understand that you may need to get a Realtor involved to help sell your home and reduce the holding costs and time on the market. For many For Sale by Owners, mentally they are so against using a Realtor and pride takes over causing them to accumulate holding costs, make bad pricing decisions or put too much money back into the home they will not get out (updating home).

The main goal with or without a Realtor is to get your home sold either as a For Sale by Owner or with a Realtor. Both information and professionals are powerful tools.

If you have a question about buying or selling your home, please reach out to Joseph Walter Realty at 248-294-7849 or via email at info@josephwalterrealty.com

Thank you,

Scott Fader and Gary Brincat
Joseph Walter Realty

Joseph Walter Realty is a veteran owned company located in Michigan. Scott Fader and Gary Brincat are two of Michigan’s multi-million-dollar top producers. They have been working in real estate as brokers, Realtors, investors, property managers and real estate company owners for over 20 years. Together they would like to share their experiences, knowledge, success and failures to help buyers, sellers, Realtors, brokers and anyone else in the real estate and business, so that together we can grow as a community.