April 1, 2021

Earnest Money Deposit

What is the Earnest Money Deposit?

The Earnest Money Deposit is also known as the EMD. A deposit is normally taken when you write an offer on a home. It is not required, but highly recommended. It is unlikely that your offer will get accepted without one. There is no set amount required. In my experience, a deposit is normally about 1% of your offer price. If your offer is cash, a higher one may be requested. If you are in a multiple offer situation, you may want to consider offering a higher amount showing your serious intentions. You may want to also offer a waiver to the claim of the EMD if you do not continue with the purchase to make your offer more desirable.  

 

 

Be knowledgeable of the risks involved with your deposit. You may lose the claim to your deposit if you do not follow through with your purchase. This should be explained to you when you write your offer. As a seller, you may also have claim to the buyer's earnest money deposit in certain instances.  Your Realtor can explain your options.

As a buyer, this deposit does get credited to your closing amount that you need to bring at closing time.  For example, if you need to bring $10,000 to closing, your $2,000 deposit will be a credit. You would therefore only need to bring $8,000 to closing.  If you deposit in a rare case is higher than your funds needed for closing, you will get a credit at closing as well.

Your earnest money deposit is required to be held in a "non-interest bearing" account until your closing occurs.  

Hope this explains what the earnest money deposit is when you are buying a home.

Feel free to reach our to me, or leave a comment with any comments or questions.

March 16, 2021

How Do I Bring My Money for a Closing?

As a buyer or a seller of a home, there is likely a chance that you will have to bring your required funds for closing. I often get asked this question as to how this needs to happen.

Funds for closing cannot be in cash.  They either need to be in a cashier/certified check or they will need to be wired to the title company.  Some title companies will require a wire transfer if funds are over a certain dollar amount.  A cashier/certified check, as well as a wire transfer, can normally be done through your bank for a nominal fee.  The check should be made out to the title company (you should get instructions on your closing documents).  If you are sending a wire, you will need to have the wiring instructions for the Title Company to give to your bank.

Be aware that this is the time that Fraudulent interceptors will try to change your wiring instructions and take all of your money!  If you are ever concerned about a change in wiring instructions just before closing, contact your Realtor or the Title Company directly.  It is better to be safe than sorry.  Once you wire funds, they most likely will not be able to be retrieved. This will cause a loss of your money and likely a cancellation of the closing.

You will more than likely receive your final number within a few days of closing. This should give you enough time to get your check or have your wire transferred. . You will want to allow enough time for the wire transfer to go through the federal reserve and then to the title company. If the closing does not occur, your wire is safe and can be refunded. As always, double check with your Realtor as to how this process occurs with your specific situation.

Being prepared will help with a successful and uneventful closing!

 

 

Feb. 24, 2021

What are Seller Concessions?

If you are buying or selling a home, you need to be familiar with what seller concessions are.  Seller concessions are a monetary allowance from the seller to the buyer to help with their closing costs.  A buyer will still have to supply their down payment contribution.  Each party has closing costs when the buy or sell a home.  Depending on the type of loan that the buyer is doing, there are limits as to how much a seller can contribute.  The contribution can be a percentage of the purchase price, or it can be a flat dollar amount.

Pros and Cons to the Buyer

As a buyer, seller concessions can help you buy your first home.  You will still need to contribute your down payment amount, but the seller can contribute to all or some of your closing costs.  This will help if you do not have all the funds available to buy your home.  It may also help alleviate spending all of your savings in case you need it to do repairs or updates to the home after you close.  It is also very important to make sure that your buyer's agent knows, so that the seller concessions can be written in the purchase agreement.

A con as a buyer asking for selling concessions is that some sellers do not understand them fully.  They may have this notion that they should not be helping a buyer buy their home.  A buyer should be able to afford to buy it on their own.  It also hurts a buyer in a busy seller's market.  Your competition may be better qualified because they may not need the seller concessions.  A seller may be more inclined to take an offer that does not cost them more to sell.

Pros and Cons to the Seller

As a seller, you at least want to know what they are.  You home may be sitting stagnant with no offers coming in.  Do not focus on helping the buyer with giving them concessions.  Just concentrate on your bottom line net that you will be getting.  If your net price is acceptable, help the buyer with the closing costs and get the deal to work.  Isn't that your ultimate goal?  To sell the house?  Another option is the buyer can offer a little more on the purchase price to compensate for the concessions.  For example, if the buyer needs $2,000 in seller concesssions, have them offer $2,000 more on their offer price.  As long as the home will still appraise for the higher offer amount, this will help to compensate for the extra expense.

A con to the seller is obvious that this seller concession will be an extra expense to the seller.  It will be a deduction at closing and added to your selling costs.  Still, if the bottom line is ok, try and get the deal to work.

Comments or questions welcomed!  If you are looking for a residential Realtor in Southeastern Michigan, I would be happy to help!

 

Jan. 21, 2021

Selling Your Condo? Do You Have Your Status Letter?

Selling Your Condo? Do You Know What a Condo Status Letter Is?

Are you planning on selling your condo?  Did you know that you will have to order a Condo Status Letter from your Homeowner's Association or Management Company?

One of your closing fees as a condo owner is for a Condo Status Letter.  A Condo Status Letter is a letter from the Condo Association or Management Company stating that the status of your condo dues are in good standing.

Why do you need a status letter?  The Title Company will need this Status Letter as proof because they are issuing a title insurance policy to the new owner.  The policy insures that the condo has clear title and is free from liens.  If you are in arrears in your association dues, your association can put a lien on your condo.

Can I just provide proof of payment for my dues?  The title company will not accept any proof of payment or receipt.  They will require the Condo Status Letter from the Association or Management Company.  The fees from this Status Letter is also another revenue stream for the Association or Management Company.  

How much does a Condo Status Letter cost?  There is no set cost for a Condo Status Letter.  I have seen them range from $0 for a small self-managed associated to $350.  It all depends on the Association or Management Company.  This is a set fee and not negotiable.

Keep in mind that you should order the Condo Status Letter close to your closing date.  The Status Letter needs to be current with your payment.  If you pay monthly, for example, you must close in that month of the Status Letter.  If your closing extends into the next month, an updated status letter will be required.  Of course, resulting in another fee.  You will also want to keep in mind that you don't want to order the Status Letter too close to closing.  If you don't allow enough time for the Association or Management Company to prepare the letter (sometimes they only do them on certain days), you may have to pay a rush fee.

These fees will more than likely be on your closing statements as a cost, however, they could be required to be paid out of pocket before closing.

In closing, if you are planning on selling your condo, a call to your Association or Management Company as to the cost of a Status Letter, and the time frame needed to have it for closing, is a good idea!

 

Helping with your real estate needs in Southern Michigan - Kelly Dix, Residential Realtor

www.kellydixrealtor.com kellydixrealestate@gmail.com 586-899-6666

Sept. 22, 2020

What Does Pending Mean?

What Does It Mean When a Property is Pending???

When buyers are looking at houses for sale, they sometimes come across a property for sale that is marked pending.  What does it really mean when a property is pending?

When a property is pending, it means that the seller and the buyer have actually signed a contract to buy and sell the house.  Most purchase agreements state that the property needs to be marked pending, and the seller will not continue to show the property to potential buyers.  This will protect the buyer because it locks up the property for sale and, no one else can view it.  However, some contracts do state that the seller can still hold the property open for showings until after the home inspection contingency has been met.  The buyer and the seller are still in a binding contract, but this will protect the seller in a busy market in case the buyer decides to not buy the home after they have done their private home inspection.  The seller cannot sign any other offers when they have already signed one, but they can continue to show the home as well as take back up offers.  They just can't sign any until they are released from the initial contract.  During this period, sellers can mark their property continue to show for back up offers.  

Buyers will also ask if they could offer better terms for the seller to accept?  The answer is almost no.  A buyer can offer better terms than the initial offer, however, it can only be a back up offer, and only signed by the seller if the initial offer falls through.  An advantage to doing this as a seller does put pressure on the current buyer.  The buyer may not be able to try to negotiate after their private home inspection.  The seller would probably not be willing to do any negotiations in regards to price or repairs knowing that there are other offers as back ups.  The caveat could be that by the time the seller gets to the back up offers, they are no longer valid.  Trust your real estate agent in how you should handle every situation.  They have property experienced it before.

 

For more quick tips, please subscribe to my channel or reach out to me.  I work in Southeastern Michigan in Residential Real Estate Homes and Condos.  

Aug. 26, 2020

Yarmouth Commons Clinton Township Michigan

Yarmouth Commons Condo Drive Through

Yarmouth Commons is a condo complex in Clinton Township, Michigan.  It is located East of Garfield and between Clinton River Road and 17 Mile Road.  

There are 176 units, and they are currently managed by the Kramer Triad Management Group.

These units were built in the early to mid 1970s.

Most of these units are townhouse style with the bedrooms on the second level, but there are a few that are upper and lower units as well.  They also include basements and garages.

Currently the monthly association fee is $291 a month.  It does include the water, gas, snow and trash removal, grass cutting and outside maintenance.

Pet owners will be happy to know that this condo complex will allow pets with some restrictions.

If you have children, Yarmouth Commons is located in the Chippewa Valley School District.

If you plan to finance a purchase in this complex, you will have to purchase with a conventional loan or buy with cash.  Currently the complex is not approved for FHA mortgages.

In the past 12 months, these units have been selling in the range of $66,000-$130,000.

Nearby there are plenty of restaurants, fast food places, places to buy groceries and local shopping stops.

If you are a golfer, the Fern Hill Golf Course in right across Clinton River Road. 

You are also in very close vicinity to the Township Offices, Public Library, Parks, Dog Park, Senior Activity Center and a sledding hill in the winter!

Henry Ford Macomb and McLaren Hospital are also very close by.

The complex features a clubhouse, in-ground swimming pool and tennis court (needs some maintenance).

I personally enjoy the Cap Cod/Eastern Coastal feel of this complex.

 

 

If you need any further information about this complex, please reach out to me.  If you are looking to buy or sell a condo in Clinton Township, Michigan, I can help.

 

June 20, 2020

What Not to Do When Buying a House

What Not to Do When Buying a House?

Some tips from me with how to help you be a stronger buyer when you are out looking at homes.  There are many other factors involved in the buying process, but here are 5 big ones that are pretty common.

 

June 16, 2020

Multiple Offer Incentives When Buying A Home

Depending on the market you are in, you may be competing with other buyers on the home that you want.  This usually happens in a seller's market when there are not a lot of homes for sale.  During this time, usually the "dud" homes that have been on the market awhile will still sit and need price reductions.  On the contrary, the new listing that hits the market is "fresh meat" for all the qualified buyers who are home shopping.  When it is a busy buyer market, there are more buyers than sellers.  What do you think happens to the 9 of the 10 buyers who lost their bid in a multiple offer situation and they find another new home on the market in their potential area?  You guessed it!  It is another multiple offer situation! Only one buyer can get their offer accepted.

If you find yourself buying during this time, you want to help yourself become the best buyer out there that you can be.  Here are 15 tips to make you a more attractive buyer:

 

  1. Offer Cash-Can you borrow money from somewhere?
  2. Have your loan fully underwritten by your lender.  Make sure that your buyer's agent knows it and have it in your pre-approval letter as well.
  3. Work with a local lender.
  4. Offer to waive your private home inspection.  Only do this if you feel very comfortable handling any home issues after you purchase it.  This is usually a contingency that will protect the buyer after inspecting the home.  You may be taking an expensive risk.
  5. Offer to pay for some of the seller's closing costs.  Typical closing costs that may be an option to pay for could be seller title work, seller transfer tax or waiving the tax prorations.  Be sure that your lender will allow for these added costs in your loan approval.
  6. Submit a "We Love Your Home Letter" describing the material/factual things that you love about their home while avoiding the violation of any Fair Housing Discrimination Laws.  Some seller agents may not submit these to the seller per their listing agreements.
  7. If the seller needs occupancy time, offer low or free occupancy rates.
  8. Submit a high Earnest Money Deposit.
  9. Offer a forfeiture provision on your Earnest Money Deposit, regardless of the reason, if you withdraw your offer.
  10. Submit a price acceleration clause with your offer.  For example, offer to increase your offer $1,000 over highest offer up to a certain offer amount.  Be prepared to show proof of funds for the additional amount.
  11. Offer to pay a certain dollar amount over appraised value, and up to a certain dollar amount, if home does not appraise for offer price.  Be prepared to show proof of funds for the additional amount.
  12. Reiterate your financial strength; high Earnest Money Deposit, High Down Payment, Fully Underwritten File.
  13. See if lender will Waive Appraisal.
  14. Have Lender contact the listing agent directly to assure their confidence in the loan approval before the decision is made.
  15. Work with a well-know Real Estate Agent.  Although the offer decision is ultimately made by the seller, listing agents are more willing to work with an agent that they know and can get the job done.

Hope this helps with your home buying plans and gets you one step ahead!  If you are looking for a Realtor in Southeastern Michigan, please reach out.  I am willing to answer any of your questions.

Kelly Dix, Real Estate One, kellydixrealestate@gmail.com 586-899-6666 www.kellydixrealtor.com

June 2, 2020

Pre Approval Letter

What Do I Need to Prove I Can Buy a House?

You will need a Pre-Qualification Letter, Pre-Approval Letter or Proof of Funds Letter when you buy a house!  Do you know which one works for you?

Buying a home is certainly one of the most rewarding experiences you can have.  It is also one of the most challenging.  If you are buying for the first time, the process may seem overwhelming.  Even if you have been through it before.  It is an emotional time filled with difficult choices and decisions.  The process may have also changed since you last bought a home.  Every home purchase is different and will have its challenges.

A Pre-Qualification means that a lender has evaluated your creditworthiness and has decided that you probably will be eligible for a loan up to a certain amount.  It's usually just an approximation.  It's usually only based on the brief information that you verbally give to the lender.  It may not always consider your other financial situations that may be attributed to you.  It is merely a financial snapshot that gives you an idea of the mortgage that you might qualify for.

A Pre-Approval is much better and the real deal.  It is a statement from the lender that you qualify for a specific mortgage amount based on an underwriter's review of all of your financial information; credit report, pay stubs, bank statements, salary, assets, obligations.

A Pre-Approval should mean that your loan is contingent only upon the appraisal of your home and final approval.

In most cases, cash will usually win, but a Pre-Approval is the next best thing!  With a cash offer, you should have some type of proof of your cash funds available when you start looking for a home.  It will be imperative if you want to write an offer.

Most of the time, the seller will not wait for you to get your pre-approval or proof of funds.  If there is another buyer that is already prepared, they will take the other offer!

 

 

 

Pre-Approval Checklist (generally)

Income Statements-Pay Stubs, W2s, Profit and Loss Statements, Tax Returns (2 years normally), Social Security/Disability Income, Bank Statements (2 months normally), Retirement Statements, Valid Driver's License/State Identification.  If applicable, Divorce Decree, Bankruptcy Documents, Foreclosure Documents, Alimony.

Common Buyer Closing Costs (refer to Purchase Agreement)

Down Payment, Loan Origination Fees, Points/Discount Fees, Home Inspection, Home Appraisal, Credit Report, Private Mortgage Insurance (if putting less than 20% down payment), Escrow (homeowner's insurance and property taxes), title insurance, deed recording, property tax prorations, real estate fees.

If you want to learn more about the buying process, please let me know.  Being prepared helps to make you a better buyer.

 

April 25, 2020

Crawl Space Foundation

Crawl Space Foundation

Is your home built on a crawl space?  When was the last time you checked it?  Springtime in Michigan is the perfect time for crawl spaces to gather water and critters.  It might be a wise idea to head in there and check it out.  The following quick video gives you some quick tips to be your own "house detective".  You can decide if any problems you find can be easily repaired or if you have to call in a professional.

When you have to sell, a buyer will most likely be doing an inspection in your crawl space.  Wouldn't you rather find out any problems now that you can take care of before a deal falls apart?

 

Remember to like my video and subscribe to my channel for future real estate tips.  I am a residential real estate agent working in Southeastern Michgan.  #crawlspace #kellydixrealtor #kellydix #realetate

www.kellydixrealtor.com