What happens when I put in an offer on a Metro Detroit foreclosure?

When buying a Metro Detroit foreclosure you will see that the buying process is a little different. Many times when buying a Metro Detroit foreclosure the offer process takes longer.  Banks are busy with all the foreclosures and they are short of help.  Plus they work from 9 to 5.

 When you put in a purchase offer to a homeowner, sometimes the buyer, the sellers, and the agents are talking late at night to come to agreement.  With foreclosures that doesn't happen.  If you put in a purchase offer at 5 pm on a Michigan foreclosure it is not going to looked at until the next day or later.  If you put in an offer on the weekend it is not going to be looked at until Monday or later.

 One of the biggest games that is going on with foreclosures is that the selling agent many times is coming back and saying that they have multiple offers.  I hear that too many times to believe it all the time.  Unfortunately it is impossible to tell you whether the seller agent actually has another offer.  Sometimes they do, sometimes they don't.

What they tell us to tell you is to "give your highest and best offer"   So if you want this Metro Detroit foreclosure you have to decide whether you want to put in a higher offer or whether you want to stick with your current offer.

Highest and best offer means that you are in a bidding war for the property.  So you the Michigan home buyer has to decide whether you think the selling agent is just trying to get a higher price.  Or are there truly more offers on the table.

• Ø Do you really want the Metro Detroit foreclosure?
• Ø Do you want to stay at the price you have offered?
• Ø Do you want to offer full price to make sure you get the home?
• Ø Do you want to offer a little more? 

Sometimes the first offer falls apart and they call us to see if you the buyer are still interested in the foreclosure.

 For more on Metro Detroit foreclosures, Buying Michigan foreclosures, and Michigan home buyers tips feel free to check the categories on the side of the page or go to my other website Livonia real estate, Wayne County real estate, and Oakland County real estate to search Michigan homes for sale.

 When you buy or refinance a Metro Detroit Michigan home and get a Michigan mortgage you are usually required to pay for a mortgage.  The lender wants to know whether the collateral (the home your are buying) is worth loaning against.

But an appraisal doesn't really cover the little things.  An appraiser doesn't care if the house is freshly painted, or has new carpet, or a new roof.  The appraiser does not care about all the little touches and upgrades you put into your Metro Detroit Home.  

Don't believe many of those things like tile, cement block windows, or built in bar, or  type of counter tops really add appraisal value.  Sure it adds to homeowner value in terms of buyers and sellers value.  But to a bank and appraiser little updates like garage organizers add little or no value.  The additions and subtractions on an appraisers sheet are usually things like sq footage, number of bathrooms, bedrooms, how many car garage, finished or unfinished basement, quality of construction, condition, actual age, heating/cooling, porch/patio/deck, energy efficiency items, functional utility.

Appraisers will compare your house to another Metro Detroit house  within a square mile that has sold within the last six months.  Sure that one might be a four bedroom and one car garage where your Michigan home is a three bedroom and two car garage.  The appraiser does additions and subtractions to make the homes equal. So he can figure out the estimated value of the home based on recent sold homes that are similar in style and are in the general area.  

Now days if an appraiser would state that this house is worth more because it has tile over carpet or new paint versus a house that needs paint will raise scrunity with lenders.  They will give value additions to a very superior house will lots of updates but one room with crown molding most likely won't make the appraiser additions and subtractions. 

That is why your Metro Detroit home may appraise for the same amount as the dump down the street that just sold.  They may both have 3 bedrooms, 1700 sq ft, 2 car garages, finished basement.  It is hard for an appraiser to justify a huge value difference on little upgrades.

Sure your Metro Detroit Michigan home will sell quicker and for more money but appraisal wise they look at the big items.  For more on Michigan mortgages or Metro Detroit Michigan home buyers tips go to the categories on the side. 

My little laugh of the day is:

A little old lady that was 104 years old was asked by a reporter what she liked best about being 104 years old.   She replied "no peer pressure"

Canton is a great place to live.   Whether you are young or old, single or with a family Canton Michigan has different styles of homes for every lifestyle.

Canton Police 

Based on statistics reported to the Federal Bureau of Investigation, Canton was the nation's 20th safest municipality during 2003, 2004, 2005, and 2006. The designation is based on crime statistics in six categories: murder, rape, robbery, aggravated assault, burglary, and auto theft.

Canton Restaurants
Canton has restaurants scattered throughout the city From Rose's Italian Restaurant to the 3 Brother's Polish restaurant to Mexican Fiesta.  There is just about every ethnic restaurant and food imaginable.  Many Restaurants are along Ford Rd.

Canton Schools
Canton Township is primarily served by the Plymouth-Canton Community Schools.  Though there are areas served by Wayne-Westland Schools (Walker-Winter Elementary) and Van Buren Schools.

Canton Shopping
Canton is 30 minutes from Briarwood Mall, 20 minutes from 12 Oaks Mall, and 10 minutes from Laurel Park Place (mall).  Canton has many big box stores like Meijer, Jc Penny, Target, Home Depot, Lowes, Ikea, and Walmart along Ford Rd.  There are many stores all along Ford Rd to get what ever you need

Negative amortization loans are also called pic-a-payment loans, option arm loans, option payment loans or smart loans.

The bank or lenders offers a loan at a very low introductory rate.  For years option arms were at 1% or 1.99% introductory rate.  Depending on the bank the introductory rate lasted from 1 to 3 years.  But here is the catch the 1% is not the real rate.  That is just an introductory rate.  The actual rate is much higher.  Usually the actual rate is higher than a 30 year fixed rate.  So a 1% introductory rate option arm may have an actual rate of 7%.

So how an option arm works is that you have 4 choices each month you make a payment.  You make the low introductory rate (1%) payment, or a interest only payment (7%), or a 15 year payment (7%), or a 30 year rate payment (7%).

If you make the 1% payment the other 7% -1% = 6% goes on the back of the mortgage.  So if you have a $400,000 loan and you pay the minimum payment of 1% for the whole year you only pay $4000 in interest for the year.  The other 6% gets added to the back of the loan.  So now the borrower owes $420,000.  That is why they call it a negative amortization loan.

The problem with the option arem loan or negative amortization loan is that many loan officers never fully explained the loan.  It was sold as an inexpensive loan.  Many times borrowers bought Metro Detroit homes that they really could not afford.  They were banking on the Metro Detroit Michigan homes appreciating more that the balance that was being added on the back of the loan.  When Metro Detroit home prices fell it had disastrous results for many homeowners in Michigan and many home across the country.

One more thing that is did not discuss is that the actual rate is not a fixed rate.  It is a variable rate that is based on a variety of different indexes depending on the bank that offered it.  So your payment or the amount added to the back of the loan could go up or down.

So if you are thinking of buying a Metro Detroit home and a loan officer offers you a Option arm so you can afford it.   Run, if you can't afford a 30 year fixed rate you can't afford that Metro Detroit home.  Be a smart home buyer.  Don't buy more home than you can afford in monthly payments