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New Building Forecast for 2017 - Novi and Lyon Township in Top Ten

by The Jamey Kramer Group

New construction

The real estate market has hit 10-year highs in Southeast Michigan. This is news to celebrate for anyone buying or selling a home in the area. One of the main problems we see everywhere is the lack of enough inventory for more home buyers. If you are one of those buyers, have faith!

Here are some stats published by the Southeast Michigan Council of Governments (SEMCOG) on new home permits.

Last year, 9,925 new residential buildings were authorized last year, including single-family homes, condos, and apartments in the 9 counties surrounding Detroit. In addition, new construction is up 11 percent so far in 2017. This time last year, the increase was only 7 percent.

We had a healthy economy in 2016, with only a 5.2% average unemployment rate and a 2% growth rate in jobs overall in Michigan.

Low Inventory of Homes

The four county areas - Wayne, Oakland, Macomb, and Livingston - have had the lowest inventory of homes and been most active in the SEMCOG data. Meaning, more people are looking to buy and sell homes in these areas. Houses in many communities are spending an average of 35 or fewer days on the market.

Novi had 232 new single-family homes built there last year. One of the builders doing work in Novi is Toll Brothers, building in four different communities around the city.

Lyon Township had 312 new residential units in 2016 and more development is in the works. One project at Erwin’s Orchard may be starting up this year.

Other counties on the top 10 list for new construction according to SEMCOG:

  • Commerce Township - 266
  • Brownstown Township - 266
  • Shelby Township - 282
  • Rochester Hills - 372
  • Canton Township - 505
  • Macomb Township - 516
  • Ann Arbor - 545
  • Detroit - 1,098

According to the Home Builders Association of Michigan, 2017 is looking like the best year since 2006 if it continues the way it has. While this does not return us to pre-recession highs, it is a steady upward trend. The forecast is good through the fall, which means if you’re looking right now and haven’t found something, you should keep looking. There may be more housing available as the summer progresses.

The other thing to keep in mind is that, while there are more single family homes being built, the net gain of new condos being built is 44%. Condo living is actually very attractive for many buyers - with single floors and wide doorways and many amenities the single-family detached home doesn’t have.

Take Away

The new home forecast is looking great for 2017 as job market conditions continue to improve. New home construction looks like it will continue through the summer and fall in some of most sought-after areas in Metro Detroit.

If you are looking for a new house in Northville, Novi or the South Lyon areas, please give us a call. We would be honored to help.

248-348-7200

 

 

How to Know If You Have an Exceptional Buyer’s Agent

by The Jamey Kramer Group

Buyers agent

Buying a home is stressful. The prospect of moving is stressful - even when it’s exciting most of the time. Relocating from one state to another is super stressful. It always means a change and even when you’re making a change for the better, new homes and neighborhoods bring new challenges. The buying experience can bring new challenges even for families who have moved more than once.

You know what’s really stressful? It is a buyer’s agent who isn’t motivated. You may have experienced this if you’ve had an agent who showed up to open doors and write the offer, but that was about it. Maybe you didn’t know your agent could do more than that. An exceptional agent will take the stress out of finding a house and will make you feel like you have an ally in your move.  

It’s all up to the agent, of course. Some real estate schools will stress to buyer’s agents that they minimize their legal risks by being less involved. Some of them take that advice too much to heart and won’t even give much-needed advice.

Gone are the days when buyer’s agents were the information wardens on the real estate market. Technologies used with online sites like Trulia and Zillow have done away with that. Now most buyers have access to a lot more information about the homes on the market. It may leave you questioning whether you should employ a buyer’s agent. What it should make you question is whether your buyer’s agent is working for you.

Information

Trulia can’t make you an expert. Of course, a few night courses can’t make your agent an expert either. However, many agents have hundreds or thousands of deals under their belts. Their experience can be your greatest asset.

A diligent agent will also have up-to-date information on housing searches. Zillow is often not up-to-date and many times buyers have been disappointed to find their favorite homes aren’t on the market anymore. The right buyer’s agent will know his or her region and will listen to your needs closely. He or she will know things the Internet does not.

Besides this, buyer’s agents have their finger on the pulse of current market conditions. Your agent should be able to - gently - readjust your expectations if needed. He or she should also do his or her best to find a way to meet as many needs as possible within your budget. If you are stuck on one particular set of requirements, an attentive agent can help you see how your needs might be met with a different set of features than you had originally planned.

Negotiation

Buyers often underestimate how much time and energy it can take to successfully negotiate for themselves. A conscientious buyer’s agents will:

  • Prepare forms.
  • Help buyers locate good sources of loans.
  • Negotiate the terms of loans.
  • Work with your lender effectively.
  • Talk you through making an offer including often adding an addendum to provide protections you wouldn’t otherwise get.
  • Arrange and oversee inspections, including inspecting for things you might not think of like scoping the sewer line or testing for meth.
  • Help you understand HOA documents or title commitments.
  • Make sure you receive all the right documents or any additional documents they know, from experience, are necessary.
  • Represent your interests at closing. This often means coordinating between many different interests: the lender, the title company, and the sellers. If this is not coordinated efficiently, it can mean last-minute nightmares for buyers.

Personal

The best buyer’s agents are there for you. When it comes down to it, many people could do the jobs listed above. However, the ones who go out of their way to be there for you are the ones who will succeed because they will get your attention.

A good agent will know he or she has to be available to you after work hours and will answer your call or get back to you as soon as he or she can, even at night or on the weekends. He or she will suggest a strategy for making an offer but let you know it’s totally up to you how you want to proceed.

In addition, he or she can suggest how you would make needed repairs on the property and help you read your inspection results. And many great agents go out of their way in many ways: some of them prepare a dossier on schools and great places to eat for families who are new to the area. Some of them can use their connections to help people find jobs. Some of them offer to help you get out of your lease early by finding a new renter.

Take Away

It shouldn’t be a question in your mind whether you should employ a buyer’s agent. If you’re questioning it, maybe it’s time to find a new one because an exceptional buyer’s agent will make all the difference. Please call the Jamey Kramer Group today.

248-348-7200

 

How to Make a Cash Offer - Or Compete Without

by The Jamey Kramer Group

How to Make a Cash Offer - Or Compete Without

If you’ve been looking for a house this season, especially if you’re a first-time buyer, it’s rough going out there. A lot more people are looking for first homes than there are first homes to be had.

Many of the properties on the market are foreclosures, not especially ready to move into, and banks don’t have any emotional attachments to the homes they are trying to offload.

This all makes it a tough market. And that’s before we get into the dreaded cash offer buyers. You know what I mean: you’ve fallen in love with a house, you’ve got your offer ready to go, it’s a strong offer, and you’re very hopeful.

Then your realtor tells you there was a cash offer on the table and you figure your offer has no chance. Who is making all of these cash offers? And how can regular home buyers ever hope to compete?

Depending on what area you’re looking in if it’s an area experiencing fast growth or a lot of new construction, the cash offers most likely are made by investors. It could be your area is about to experience a facelift or it could be investors hoping to rent homes after a quick renovation. With a market on the upswing and interest rates predicted to rise, investors are also eager to take advantage of the situation.

So how on earth can a regular person come up with $100,000.00 plus in cash?

Of course, if you receive an inheritance or have equity from a previous home, real estate is a good investment and you can certainly put that cash into a cash offer. But most people in this position don’t have those things. Here are a couple of ideas:

  • Short-term borrowing. One thing you can do is borrow from a family member or close friend for a short-term loan. You can always obtain a mortgage on the house once you’re in possession and use it to repay your family.

  • There are ways to borrow short-term from your retirement accounts penalty-free. If you have an IRA, look into short-term borrowing and paying it back with the above-mentioned method.

However, remember that not all offers are genuinely cash offers. It’s not everyone who has the funds in the bank, certified, and non-refundable earnest money to prove they have a cash offer. What this sometimes means is that the buyer’s offer is one without a financing contingency. Here are some ways to compete against cash offers:

  • Remember that a cash offer is often lower. They are looking for a bargain and to make a quick turn-around to sell or rent that house. Put your best foot forward in any way you can. You can ask your lender to write not only a pre-approval letter but include any financial information you are comfortable with them sharing that would make you a more attractive buyer. Have your lender go through as much of the loan process as you can without actually buying the house. Send the lender a preliminary title report, if you can. Fill out any condo or HOA questionnaires ahead of time. Then let the seller know you’ve done those things.

  • Shorten the loan approval time as much as you can by asking the lender for a quick appraisal, or ask for an appraisal in advance. If you’re working with a smaller lender, this can sometimes be done.

  • Do a quick inspection - in and out right away - and let the seller know you won’t be asking for repairs for anything minor. Or, even better, that the sale will not be contingent on the inspection.

  • Don’t try to get a deal. Now is not the time to bargain. Know your limits, yes, but be willing to put your best offer on the table up front. If you need time to amass a bigger down payment, that might just do the trick.

  • Find out what the seller needs or wants, in terms of time concerns, closing dates, title companies and more. To the best of your ability, give the seller what he wants.

  • Personalize your offer. It might not make a difference if you’re buying a bank foreclosure, but homes are emotional for people. If that older couple has the chance to sell to a young family wanting to raise their kids in that house rather than an investor who’s going to tear it down or remodel it right away, they might just take notice. In any case, a letter introducing yourself can’t hurt. It might be the one thing making you stand out if you don’t have 100K on hand.

Take Away

You might be able to think creatively about offering cash. Take a minute to look at the assets you have available to you. But you also might not need to offer cash in order to beat out a cash offer.

If you have any questions, please give us a call. We would be happy to help!

248-348-7200

Home Buying Is Harder Than Ever: 5 Tips to Keep From Going Crazy

by The Jamey Kramer Group

Home Buying Is Harder Than Ever

If you have been looking for a new home this spring, you know how fast homes are selling and how few homes there are. This makes for a lot of tension, especially for first-time home buyers, and more competition than we’ve seen in a decade.

Newly built homes did not come on the market as quickly in 2016 as was predicted. In addition, there is a shortage of entry-level homes. Some say this is because sellers are anxious to wait until market conditions are more stable and because inventory is low for the potential seller as well.

Inventory may start to fly even faster this spring for many reasons including:

  • With new technology, homes spend less time on the market than ever before. According to a Redfin report, new houses stayed on the market for an average 52 days in 2016. This was the lowest number since it started keeping track in 2009.
  • Millennial buyers are entering the housing market. The younger generation has started to grow up and want to buy homes. Many of these will be buyers for the first time. Look for advances in technology being driven by this generation. Many younger buyers want to streamline the process and be able to make an offer online.
  • Rising interest rates and better mortgage availability. While interest rates have risen from where they were at the end of 2016, the Trump presidency may mean a relaxation of the rules to make it easier for people to borrow.

5 Tips As You Start House Hunting

If you are one of those people who has decided to hop on the bandwagon this spring and is already frightened by the prospects of bidding wars and settling for half of what you wanted, take a moment to read these tips:

Make Sure You Have Your Offer in Hand

In other words, don’t go looking at a bunch of homes and wear yourself out if you’re not sure how much you can offer. Take the time to find out what your highest offer can be - with closing costs and taxes factored in - and stay firm in your mind with that number.

It’s like wedding dress shopping: you don’t want to fall in love with something above your budget. It’s best not to even look at something you can’t afford. Plus, once you do find “the one” you want to be able to make an offer right away.

If You Can Make it a Cash Offer, Do it

You might not think you can make a cash offer, but if it’s just a short-term cash offer, it might be more doable. There are plenty of foreclosures still sitting, or coming, on the market that want cash offers.

This is not because these homes are unlivable, but might be because banks don’t want to turn on utilities and get inspections. If you can get a temporary cash offer together, and then get an inspection and mortgage right away afterward, you might just open a whole new sector of the market for yourself.

Seriously Consider How Much of a Fixer-upper You’re Willing to Put Up With

It’s no secret the homes going the fastest are move-in ready homes with all the best finishes. Even homes needing cosmetic help are going to go fast. Consider how much “finish” you truly need, or how much renovation you would be willing to do.

Broaden Your Horizons - Location, Price, Must-have’s

Were you really hoping for that 4th bedroom, but you know in the back of your mind you don’t need it? These are the points on the list it pays to be flexible with.

If you can give your realtor more room to work, you will see a lot more options. Maybe driving 20 extra minutes to work isn’t as big of a deal, or maybe you’re willing to sacrifice square footage in favor of being close to everything you love. There’s no harm in investigating those options during your search.

Stay Positive

Through it all, it doesn’t help to get too down. New homes are being built, and the Trump administration wants to make it easier for builders. And who knows? Maybe new potential sellers will see how great it is out there this spring and decide to go for it too.

Take Away

If you are ready to start house hunting, you just need to hone your priorities, keep an open mind, and keep looking. You will find something. And we want to do everything we can to make that happen! Please give us a call today.

248-348-7200

 

 

4 Tips for Buying a Flipped Home

by The Jamey Kramer Group

4 Tips for Buying a Flipped Home

With housing prices on the rise, investors are turning their attention to flipping homes. Home improvement stars like Chip and Joanna Gains from the HGTV show, “Fixer Upper,” make updating a home look easy.

However, completely renovating a home is anything but easy, cheap, or quick. One pitfall that some new homeowners are finding themselves in is a fixer upper disaster. The disaster is that the house they bought had hidden mechanical and structure issues that were covered up by a few cosmetic fixes. Dream homes can easily turn into a nightmare if one doesn’t know what to look for.

“Some flippers are turning historic homes into modern, hybrid treasures, but others are slapping cosmetic fixes on truly troubled properties, ignoring mechanical and structural issues. For more unsuspecting buyers, that move-in-ready dream home can quickly flip into a nightmare.” CNBC 

Buying a flipped home can be a great investment if you know what to look for and how to protect yourself. But if you are a new homeowner, you might not always know exactly what to look for.

Here are 4 tips to help you as you buy a flipped home:

#1: Work with a Trusted Realtor    

Whether you are a new homeowner or you are buying your retirement home, having the advice from an experienced and trusted realtor will be extremely beneficial. A realtor will be a great resource to know what “red flags” to look for when it comes to a home that has been flipped. Using their insights and their resources will help you avoid buying a covered up disaster.

#2: Do Your Homework

When you are interested in a home that has been flipped and new additions have been made, you need to do some homework. You want to check to make sure the flipper has done the following:

  • Used a licensed contractor
  • Upgrades passed full inspection
  • Permits on the properties and upgrades.
  • Make sure all upgrades passed full inspection.
  • Be certain the property has a certificate of occupancy

If a contractor did not obtain a permit for that addition that was put in the back, the city has legal right to ask you to remove the addition and not count it apart of your square footage. This is a huge pitfall you do not want to find yourself in.

#3: Hire a Home Inspector

When you are interested in a home, you have the right to ask to hire a home inspector. Your realtor can help give referrals to trusted inspectors. A home inspection can cost in the range of $400-$700. While this might feel hard to shell out this cost, it is a necessary expense, especially if you plan to buy a flipped home.

A home inspector is trained to look at all appliances, electrical, water heaters, plumbing, etc. If your home inspection shows problems with these areas, you can negotiate to have the issues fixed or void the original contract.In addition, have a professional termite and mold inspector come out if you suspect this could be a problem.

#4: Look for Damage

When you are looking at a home you want to buy, it is important to keep your eyes open for any possible problem. For example, look for water damage and old wiring in the attic and basement.

Another example is what happened to one young couple. When they were looking for a home, one house that they were interested in had hardwood floors were bowing. While they were not experts, it was something they noticed. It helped them to ask the necessary questions. Bowing wood floors can be a sign of moisture in the home. It clued them into asking more specific questions about flooding, leaking, and moisture in the basement.

Take Away

Buying a flipped home does not have to be a disaster. However, when a home buyer doesn’t work with an experienced realtor, do their homework by asking questions about the recent renovations, work with an inspector, and look for damage, they might find themselves in a scary situation.

If you are looking a buying a flipped home, the Jamey Kramer Group would love to help you. We want to make sure you love the home you buy on the first day, as well as, years later. We make it our job to help assist you so you do not fall into a home nightmare.

248-348-7200

2017 Real Estate Market Forecast

by The Jamey Kramer Group

Real Estate Marketing Forecast

This year is going to be a hot one - housing-wise. We’ve already had a streak of spring-like weather in many parts of Michigan. We hear the trend will continue. Another trend from 2016 is also going to continue and become more pronounced: the increase in home buyers. Like it or not, if you’re a millennial, you and many of your peers are going to be competing for the same homes.

Rising Rent

Rent costs are continuing to rise. Rising investment in real estate, rising home prices, tighter standards for landlords, higher taxes, and increasing insurance rates are some of the main reasons this is happening.

Landlords are paying more, and houses are becoming more valuable. We’re going to see that reflected in rental prices in most of the markets. Because of this, millennials who have been renting are at the tipping point. A mortgage payment for a modest home is now the same or cheaper than what they’ve been paying on rent.

Low Inventory

The low inventory trend is a growing one. Home sales were almost flat compared to last December, only increasing 0.5 percent. While inventory posted its largest year-over-year decline since April 2013, it has fallen 12.7 percent. That means that now is the time to list your home. There’s low seller competition. Homes are selling more quickly and more often at asking price. Plus, those buyers reluctant to purchase in December are starting to look again. A record sales month in November meant the inventory was at a low point. We should see a rise in inventory as the year progresses.

Home Prices

The national median home sale price rose 4.7 percent to $267,600 in December. This marks the kind of steady growth we’re going to see continue in 2017. Soon, we will see housing prices rise to near the pre-recession mark. For sellers, this may be the boon they’ve been waiting for. They could actually recoup any home value that was lost during the recession. If you are thinking about selling, make sure you work with an agent to accurately price your home based on the market.

While prices are rising, and that’s good for sellers, affordability is at its peak right now. It has been steadily around the 60-65% mark. It’s been predicted to drop slightly as 2017 continues but still remain at the top of the 50% mark. So, first-time home buyers, take note! You are certainly getting into a competitive market right now, but it’s never been a better time. If you’ve been thinking about looking, start sooner rather than later.

Mortgage Rates

Mortgage rates will probably rise slightly this year as well. They’re not predicted to rise over the 5% mark, but they will go higher than in 2016. Some experts believe they won’t rise quite as much as predicted, as 2016 rates were predicted to rise higher than they did.

Take Away

2017 is looking like a great year for buyers and sellers. If you’re going to sell, now’s the time to sell. If you’re going to buy, now’s the time to start looking! Mortgage rates, inventory, and home affordability are all at their most ideal. If you have any questions, give us a call. We’d be glad to help.

248-348-7200

Costs for Selling Your House - What You Need to Know

by The Jamey Kramer Group

Costs for Selling Your House

There is no shame in wanting the best deal you can get for your house. After all, you’ve probably spent a chunk of your life in it, not to mention a chunk of change and some blood, sweat, and tears. Many sellers who are ready to move on have understandable dreams for what they will do with the proceeds of their sale. You might even be hoping for a little extra for a weekend getaway once this is all over.

Reality Check: it actually takes money to sell a house when it’s all said and done. Consider a few factors:

Will I save money selling my house myself?

It sounds alluring. Snap a few pictures, post online, set up a sign out front, and you’re done, right? There are a few things potential sellers don’t realize:

  • The often-quoted 6% commission fee - roughly amounting to $15,000 for a $250,000 sale - gets divided several times before your agent sees any of it. That commission gets split first between the buyer’s agent’s brokerage and the seller’s, then the brokerages take their cuts and the remaining amount goes to your agent. In addition, please remember: your agent probably doesn’t receive a salary, so whatever time he or she has spent getting your home ready, plus photographs, signs, and listing costs comes out of that commission. If your house doesn’t sell, your agent doesn’t see a penny.
  • Speaking of agents: consider the hassle of not only keeping your house clean and staged, but managing calls, arranging showings, professional photography, hosting open houses, setting up legal representation for paperwork, and negotiating. Add to that the legal protection and access to the MLS agents have. It’s possible it may save you a little bit of money - probably not much in the end - to represent yourself, but is it worth sacrificing your sanity? After all, it is a real estate agent’s full-time job to sell your house.
  • Over 93% of active buyers have a real estate agent representing them according to realtor.com. In order to even attract them with your home, if you’re selling “by owner,” you have to pay the buyer’s agent’s brokerage fee anyway.

Do I need to do repairs to my home?

Do you need to fill every single nail hole? Probably not. However, if you haven’t completed needed home repairs, they may be caught in the home inspection stage and leave potential buyers wary of what else they will find if they buy your house. If you know you have major repairs to do, it’s better to be up front about it. A real estate agent is your best friend in this game, keeping your expectations realistic.

Will I have to pay closing costs? What About Taxes?

Buyers do end up paying more in closing costs, but as a seller you should expect to pay an additional 2% of your home’s price for this. Closing costs include transfer taxes, escrow expenses, and notary fees. You will be paying any outstanding property taxes you owe and your prorated share of utility payments plus the remainder of your mortgage. You also may have to pay a capital gains tax if the value of your home has appreciated since you bought it.

Take Away

If you are contemplating selling this year, you may want to take a breath and keep in mind all those hidden fees you don’t think about while you’re dreaming of sandy beaches. It’s best to go into this process knowing what you’re facing - even in a seller’s market.

If you are ready to put your house on the market, please give us a call. We would be honored to help.

248-348-7200

Top 4 House Architectural Styles

by The Jamey Kramer Group

House Architectural Styles

Do you know what a Cape Cod style home looks like? Yes? What about a Tudor or a bungalow style? Do you ever get overwhelmed by the descriptions of architectural styles in real estate listings and wonder why they matter? Why do some people refer to a one-story home as a ranch style and others may call it a cottage?   

Why Style Matters

"What is style? Every flower has it; every individual worthy the name has it in some degree, no matter how much sandpaper may have done for him. It is a free product, a byproduct, the result of an organic working out of a project in character and in one state of feeling....A style is some form of spiritual constipation."Frank Lloyd Wright (1867-1959)

In more general and less poetic terms, most houses can be classified into categories based on a number factors:

  • Roof shape and pitch
  • Building size and number of stories
  • Window size, shape, and placement
  • Door shape and placement
  • Decorative details such as brackets and cornice trim
  • Structural details such as arches, columns, and porches
  • Construction materials such as brick, stucco, adobe, or wood
  • Footprint and floor plan
  • Historic period

It’s possible that no two experts will agree on the style of your home, particularly if it’s a new construction. For the last two decades, many new homes are being built in a neo-eclectic style, marrying features from different types of architecture. To make matters more confusing, many older homes have renovated interiors that don’t match the outside. For example, the modern kitchens or great rooms in Victorian houses.

All of these factors trend in different directions over time. Ideally, no style is better than another, but there are several styles - and one in particular - that continue to be the most popular for the last few years.

Craftsman

The Frank Lloyd Wright quote above is particularly apropos because this style of architecture comes out of the Arts and Crafts movement of the mid-twentieth century, of which he was a big part. Craftsman style homes are all about boxy interiors with deeply overhanging eaves and crafted details inside and outside. Many of these homes have their decorative art built right in in the form of simple, but elegant woodwork. An original Craftsman style home will have been built in the late 1890s until the mid-1900s, but many new homes are being built with a Craftsman aesthetic in mind.

Ranch

Most people understand that a ranch home means one story. These don’t generally reach their full glory here in Michigan, but are very popular in the Southwest and California - where you can find some truly sprawling one-level homes. These were built and made popular in the 1950s and 60s.

Southern Style

This style isn’t only popular in the Southern parts of the U.S., but you can certainly find some beautiful examples there, often with large wrap-around porches, columns, high ceilings and tons of windows. These homes share some architectural details of Victorian style homes. They are often, but not always, two stories.

Traditional

This term can encompass so many different variations that it’s hard to pin it down. Generally, a traditional home will have a balanced look - with windows on either side of the front door and a row of windows along the top story. It may have columns in a neo-classical style or it may not. What ties these styles together is their timeless appeal.

Take Away

When it comes time to start looking for a house, don’t be intimidated by the term style. It is, after all, what you make of it. Have fun finding out what you do and don’t like. Please give us a call when you are ready. We would be honored to help you find your dream home.

248-348-7200

Two Obstacles for First Time Home Buyers

by The Jamey Kramer Group

Winter is not usually the time most people are looking for a new home. The weather makes going out more complicated, not to mention keeping a house clean to show it, and most people don’t even want to think about moving in the winter.

First-time home buyers are feeling the pain especially - and that’s roughly half of the market. Chances are if you are a first-time home buyer reading this, you are exhausted by the search and demoralized by the competition.

You might even be one of the millions of Americans hoping to rely on a Federal Housing Administration loan and have recently been troubled by the Trump administration putting a freeze on the potential premium cut Obama had attempted to put in place. However, now could be a good time to keep looking.

FHA Loan Premium Cut

Millions of homeowners have received loans backed by the Federal Housing Authority, which offers loans to borrowers with lower credit scores or who don’t have a large down-payment. In 2015, 1.1 million borrowers obtained an FHA loan, which are often available for interest rates as low as 3.5%.

Borrowers pay an insurance premium to cover FHA’s losses in the event of insured loans becoming delinquent. The insurance premiums go to the FHA’s Mutual Mortgage Insurance Fund, and they are what the outgoing Obama administration had attempted to cut to help FHA homeowners in 2017.

The Trump administration has put a halt on all pending policies enacted by Obama’s administration in its final days, which includes this measure that would have saved homeowners an average of $500 this year.

The Good News

The good news is that, in the grand scheme of things, $500 isn’t going to make or break your decision to buy a home. The FHA isn’t the only institution willing to offer mortgages at lower interest rates, either.

The other interesting thing is that, while interest rates rose in the weeks leading up to President Trump’s inauguration and experts say they will continue to rise in 2017, interest rates are down right now. The average rate of a 30-year fixed mortgage, Freddie Mac reported Thursday, is 4.09% down from 4.12% last week. As a result, right now is a good window to think about using if you’re ready to apply for a mortgage.

Saving For a Down Payment

The enormous obstacle for most homeowners - or would-be homeowners - right now is a down payment. It’s the reason the FHA loans can be so helpful in getting a family otherwise unable to save that much into a home. In fact, saving 20% of a down-payment is two-thirds of the average household income in this country. The fact is, housing prices are rising and income levels are not.

According to a CNN Money article, the average house costs $192,500. Twenty percent of that price is $38,500, which isn’t a number the average family can come up with in a year - or even two or three years.

The good news here is that, while housing shortages are a reality for first-time home buyers in all parts of the country, the places where this has reached a crisis level are relatively few.

In Michigan, and other states in this region, the percentage of your annual income needed for that down payment is still relatively low - around 50% - as compared with some cities in California and on the East Coast - which are at closer to 100% or more than the average annual income.

Take Away

First time home buying has obstacles. We here at the Jamey Kramer Group understand all too well what you’re facing. We’re here for you every step of the way. Please give us a call today.

248-348-7200



 

Top 5 Home Remodeling Projects in 2017

by The Jamey Kramer Group

House with manufactured stone veneer

Are you thinking about selling your home this year and wonder how to best to recoup your investments toward higher curb appeal?

It’s no secret that homeowners looking to sell their homes sometimes have trouble. Their houses sit on the market for weeks and it seems inexplicable. When you are ready to sell, you want to sell fast. It puts you in a much better position to bargain from in finding that next home and, of course, puts that down payment in your pocket.

How do you get from here to there, so to speak? Any good realtor will make sure you have great pictures and provide guidance about how best to de-clutter and freshen your space for prospective buyers.

However, you might be thinking beyond cleaning and packing those family pictures away. Does your kitchen need an update? How about your HVAC? It might surprise you which projects will bring the highest return on investment, and which won’t.

Top 5 Highest Return Remodeling Projects

According to 2017 Remodeling’s Cost vs Value report for Michigan, most home remodeling projects are going to get you less of a return on your investment than last year. That means you need to be strategic about which things you choose if you are simply remodeling in order to sell faster.

Of course, every good homeowner thinks about what will add value when doing any project, but choosing something for your own sake is a very different decision process. Make sure you know why you are remodeling before you start.

According to the national data, here are the top 5 in order of percentage of return:

1. Fiberglass Attic Insulation

This is not a very visual or sexy addition to your home, but it’s understandable for this region - and especially if you are trying to sell in the winter months.

Although the return is down from 2016, adding fiberglass attic insulation is still at the top of the list. In this region, the return on investment is about 79.3% - significantly lower than the national average of 107.7%. However, it is still something to consider as it will lower your energy bills right away and give you some concrete data to show a prospective buyer.

2. Manufactured Stone Veneer

This is the one remodel which is actually up, in terms of returns, from 2016. It’s not hard to see why. According to Remodeling, stone adds to a home’s perceived value - whether it’s adding curb appeal to the front of your home or wrapping a dated fireplace.

In terms of design trend, stone lends that contemporary timeless feel that excites many buyers. If you are wary of this large or seemingly unnecessary expense, be reassured it’s very likely to get you a large return. 78.5%, according to the data.

3. Steel Entry Door Replacement

New entry doors are a great return on investment across the board. Although this one is down from last year, at 77.4%, it’s still at the top of the list. Even a new coat of paint can help with resale, but if you make one small investment to pack the most punch, this is it.

4. Fiberglass Entry Door Replacement

Only slightly less of a return for a lower price, a new fiberglass entry door - at a 74.2% return - might be the perfect thing to snag that perfect buyer.

5. Minor Kitchen Remodel

Is your dated kitchen making you nervous? You might be suffering from the same misconception as many buyers who walk into a home with a dated kitchen. According to U.S. News and World Report, when buyers walk into a dated kitchen, they think they’re going to have to spend $40-50,000.

For a savvy homeowner willing to do some work him or herself, the average cost according to the 2017 Remodeling’s Cost vs Value’s report is actually much lower at $21,303. Even a few minor improvements could recoup what you need - 72% of your investment - at a fraction of that cost.

Take Away

If you’re thinking about selling your home in the future and you want the best return on investment - consider one of these small projects this year. If you are ready, please give our office a call. We would be honored to help!

248-348-7200

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