Detroit Real Estate

Here is what happens after you put your offer in on a Northville home.

This will give you a general idea of what happens between the offer and closing table.  Hopefully it will prepare you on what to do next in the process. 

 It doesn't matter whether it is Northville real estate, a Farmington Hills condo, a West Bloomfield lake front home, or a Dearborn home the process is usually the same.  Of course this is just a general timeline.   The key to the process is rush and get your things done, then have patience with the others getting their part done, then rush around to get your part done again.  Then patience again.  

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I just closed a deal yesterday with a buyer that started their search for Oakland County Lakefront homes.  The young man wanted a home on a Oakland County lake near Commerce.  But after looking at homes for a while and then doing some soul searching he ending up buying a Canton Michigan home.

This isn't unusual in our line of business.  Many times home buyers have a dream of the perfect home in their head.  Then as they start looking they realize that maybe the dream home is not the real home they need.  That what they want is not practical or not what they are really needing.

Sometimes the home buyer changes their criteria.  Sometimes they stumble onto a home that does not fit their criteria, but they love it.  It happens all the time.  So if you are not finding the home you want expand your criteria a little.  Change your search information sometimes it will pop up a home that you love. So whether you want a Oakland County waterfront home or a Canton colonial you sometimes have to be flexible.  Because usually no house has everything you want.  The famous line we hear a lot as Metro Detroit Realtors is " if only we could take this from this house and put it with that other house."  Unfortunately we can't.

Good luck on your home search

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My quote of the day:

If nothing ever changed, there'd be no butterflies.

FHA said it is trying to better position itself to "manage its risk while continuing to support the nation's housing market".  One widely speculated change wasn't made -- the increase of the FHA minimum down payment.

Here are the new FHA rules coming on April 5, 2010. 

Home buyer's can still buy with just 3.5 percent down.  However, there are 2 major changes that you must be aware of and will be effective for any case number assigned starting April 5th, 2010.

1.   An increase in Upfront MIP from 1.75 percent to 2.25 percent

2.   A reduction in maximum seller contributions from 6 percent to 3 percent.

Russ Ravary your Livonia real estate agent

When you buy a house one of the goals you should have is too pay it off.  Yes I think that should be your goal.  Too many Michigan home owners right now are paying the price for using their house as a bank. 

 Homeowners used the house to pay off credit cards, take trips, pay off college education, pay for weddings, pay for cars.  Houses were being used as a bank.  I know one guy that built a house 18 years ago for $180,000.  He had a $120,000 mortgage on it.  By the time he lost it he had run up the mortgage up to $330,000.  He couldn't afford the payment anymore.  He lived off the house.  He let it go into foreclosure.  Now he is 53 years old with no house and won't be able to buy a house until 55 years old.

Sad.  He will be living in an apartment or have a mortgage payment when he is retired.  Having a mortgage payment when you are retired is not what you want to do.  I think all the financial planners that spout that garbage are stupid. 

Less debt is better!  Having no mortgage is the way to go.  So it pays to pay off your mortgage early.  So make it your plan to pay off your mortgage.

So my thoughts are:

1. pay your payments on time
2. don't take out home equity loans
3. Don't use your home as a bank
4. If you have extra money put some extra on your house each month or year.

Again these are just my thoughts.  It's your house and whatever you do is fine.

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Here is why the bank took a lower cash offer over your offer on the West Bloomfield home. 

Cash deals are usually king.  The banks will usually take the cash offer over a mortgage offer. 

Banks prefer cash deals for these reasons:

• cash deals can close within a month.  They close quicker than mortgage deals that take 30 to 60 days..
• cash deals don't require an appraisal.  There is no chance that the deal will fall apart because the house didn't appraise.
• cash deals don't have a mortgage.  The deal can't fall thru because of mortgage problems such as debt ratios, and underwriting issues.
• cash deals don't depend on the buyer having a job.  If the buyer loses their job on a mortgage deal the deal is dead.  With cash deals it can still close.
• cash deals have already proved they have the money.  When you put in a cash offer you must get a proof of funds letter.  The letter comes from your bank and states that you have a certain amount of money in your account. 
• cash deals will be accepted when there are repairs that will need to be completed for a FHA loan, VA loan, or a conventional loan.  
• cash deals don't have an out. If you don't close with a cash deal you lose your money.  If you have a mortgage you can get your deposit back if the house doesn't appraise or if the mortgage doesn't go through.

Many times banks will take a lower cash offer over a mortgage offer.  It just depends how big of a difference there is.  I lost a deal on a piece of Livonia real estate on a cash offer.  The list price on the Livonia ranch was $61,000.  My clients bid $81,000.  The bank accepted an offer of $55,000.

That was a $26,000 difference.

I hope this explains why the bank took a lower cash offer on the West Bloomfield real estate you loved.  So if you can afford it,  bid cash. 

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Russ Ravary your Livonia real estate serving Oakland and Wayne County real estate