yhym.pamphlet
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Your Home Your Market
We appreciate the opportunity to provide you various information concerning real estate and real estate transaction. This was prepared exclusively for you. The following pages contain descriptions on maintaining value, Oakland County Market Analysis, mortgage options, title company checklist, marketing information, realtor interview questions, copies of required documents, etc.…
All of this information is provided to you as a tool to create transparency with the aspects of owning real estate.
Please call if you have any questions or would like a comparative analysis on your unique property.
Chelsea Smith586.383.1430
Scott Merian586.662.0006
Real Estate OneOffice 248.548.9100
Fax 248.399.942926236 Woodward AveRoyal Oak, MI 48067RealEstateOne.com
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Repairs that add valueNow whether you want to lease or sell there are repairs that will add value and selling power so your home will become more valuable to those many buyers.
Kitchens and bathrooms have always had, have, and will continue to have the highest return. Kitchens and bathrooms are the areas in a home where you can tell if the money has been well spent or not. They’re the most expensive areas of the home in terms of construction and they are where most people spend their time in the homes.
Basements also have a return. Finishing a basement is always a better addition to the homes but cleaning it up will increase the chances of getting the home sold at the right price. Many buyers will hesitate on a home if the basement has a musky or unclean appearance.
The basic repairs might add value but most certainly maintain the value of the home is refinishing wood floors, repairing or replacing roofs, gutters, and windows.
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Remodeling may be a labor of love, but it’s also an investment that can seriously boost the value of your home. Only by how much? Well, according to Remodeling magazine’s 2016 Cost vs. Value Report, you’ll recoup an average of 64% of what you paid for a renovation if you sell your home this year.
To arrive at these figures, Remodeling asked consultants in various markets to estimate the average cost for 30 home improvement projects, from adding a bathroom to replacing a roof. Then, they asked real estate agents nationwide to estimate the expected resale value of these renovations so that readers could compare their out-of-pocket costs to how much money they’d get back when it came time to sell their home.
So, what projects gets you the most bang for your home renovation buck? It may not be nearly as sexy (or fun!) as adding a chef’s kitchen or glam bathroom, but attic insulation gets the top spot. That’s right: Stuff some fiberglass insulation into the walls of a 35-by-30-foot attic, and you’ll pay an average of $1,268. But when you sell, you will rake in $116.90 for every $100. For you math-challenged out there, that’s a recoup of 116.9% of your costs. It’s the only home reno on this year’s report that redeems more money than you spend!
The next best-paying renovation on the list: manufactured stone veneer, offering a respectable 92.9% return.
Meanwhile—sorry, luxury tub fans—the home improvement project that reaps the worst ROI is the addition of a bathroom, at 56.2% (although the “added value” of an extra bathroom for anyone who’s ever had to wait their turn for one is, of course, priceless).
Take-home lesson? If you’re looking for a general rule of thumb, it’s that less is more: Lower-cost projects generally reap bigger returns, with four of the five projects that cost less than $5,000 ranking among the top five for money back when you sell.
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Check out the best (and worst) returns for home renovations in the two charts below, including how much you’ll pay and get back if you sell your home this
year.
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Preparing Your HomeExterior
o Repaint the front door and trim. Repaint the rest of the house, if needed.
o Move all garbage cans, extra building materials and gardening supplies, etc. that are in the garage or shed.
o Check gutters and/or roof for dry rot and leaks.
o Prune bushes and trees. Remove any dead trees and shrubs.
o Weed and maintain all planted areas.o Clear the patio, porch, or decks of all
small items, such as empty planters, charcoal, toys, etc. sweep all areas and walkways.
o Check all screens and windows. Repair or replace if appropriate.
o Replace worn, badly stained or personalized mats.
o Test all fences, gates, and latches. Repair or replace any weakened areas.
o Clean the swimming pool or hot tub, if appropriate.
o Check external structures, patio covers, gazebos, and sheds. Repair, repaint, or clean.
o Use driveway cleaner to remove oil stains from driveway and garage floor.
Interior
o Chipped plaster and pant touched up and repaired.
o Leaky taps and toilets repaired.o Burned out light bulbs replaced.o Squeaky doors oiled.o Mirrors, fixtures, and taps cleaned and
polished.o Seals around tubs and basins in good repair.o Closets and cupboards neat and tidy.o All torn screens should be repaired or
replaced.o Avoid repainting the entire house unless
current colors are load or off beat.o While or light pastels are the easiest to work
with and they make your rooms look larger.o Countertops neat and polished.o Appliances cleaned.
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Preparing to Show Your Homeo Open all draperies and window shades during daylight hours.o Turn on all lights and replace bulbs with high wattage bulbs where needed.o Open windows one half hour before showing to circulate fresh air.o Open all doors between rooms to give an inviting feeling.o Place fresh flowers on kitchen table and/or in the living room.o If possible, bake cookies or bread to add in an inviting aroma.o Bathroom should sparkle and towels folded and toilet lid down.o Replace any items not included in the sale, or tab them appropriately with
“to be replaced with…” or “not included” signs.o Floors cleaned, garbage containers emptied.o Closets and cupboards neat and tidy...o Valuable property out of reach, out of sight, or locked away.o Pets absent or contained during showings.o Make beds and have clothes picked up.o Fireplace lit in cooler weather.o Air conditioner turned on in warm weather.o Appliances cleaned.
Help the buyers Mentally
“Move In”Review your work by “Acting” as the critical buyer. Start at the street, walk toward the house and then throughout the house analyzing each room. How does your house looked now? Are you ready for the most critical buyer?
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Questions You Must Ask Yourself1. Why are you moving?2. What is your time frame?3. What do you need out of your home?4. Can you buy a home without selling you current estate right away?5. Are there any serious problems with the house?6. What are other houses in the neighborhood selling for?7. What should potential buyers know about?8. Is there a trust, probate, bankruptcy or court order?9. Has there been a death, marriage, divorce or name change?10. Have any unrecorded or recently recorded deeds been executed since purchase?11. Does anyone else have an interest in the real estate (lease, land contract, private mortgage, and liens, State or Federal Tax Liens)?12. Are there recent mortgages (last 6 months)? 13. Has there ever been an equity line of credit?14. Have there been any contracted home improvements or repairs within the past year?15. Are you current on their mortgage payments?
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Do you want to sell or lease?
Based on this market and information you as homeowners need to decide whether or not you want to sell your home or lease it. Leasing is a great option if you can buy a home without needing the money from the sale. By leasing it will give you a monthly income and pay a part of your new mortgage.
If you don’t want to hassle with being a landlord you can hire a
property management company that will take care of many things with a small cut of the rent. However everything must be in top condition throughout the lease.
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Current Market PlaceSupply and demand is perhaps one of the most fundamental concepts of economics and the driving force to our homes value. Now I won’t bore you with an economics lesson so let’s make this quick. The supply is our home and the homes of every other neighbor that puts their home on a market. Now demand comes from everyone who is on the market for a home.
The Price is RightTiming is extremely im-
portant in the real estate market.
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Oakland County
There is a steady increase in sale prices and a decrease in the days to close. The overall prediction for 2016 is that the sale price will continue to increase to meet the demand of the interest rate national rise of half a percent. The time to close of an accepted offer will stay the same. The new TRID Laws that were placed in 2016 gives a target closing date of an accepted offer 45-60 days versus the previous 30-45 days.
Through the graph you see that the optimal time to get the most for your home and a quick sale happens between November and March. Then we see a decrease in home values and an increase on time to sell. There are more sellers on the market during the summer time and so buyers have their choice and more leverage on negotiations. This goes back to the concept of supply and demand.
Realistic Value v Emotional Value
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Your property has many values:
1. That of your tax assessor2. That of your lender3. That of your insurance company4. The value to you as an owner5. The value to the buyer (depending on their needs, their desires and their financial
resources)
The market will dictate the best obtainable price for your home based on:
1. The current financial conditions2. The current supply of homes on the market3. The current competition in the selling market
The competitive market analysis can help you select a price by:
1. Analyzing the properties currently on the market.2. Review the properties recently sold.3. Examining the properties that didn’t sell.4. Selecting the optimal price.
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Setting the Right Price
Realistic pricing will achieve maximum price in a reasonable time. Your profit desire is irrelevant; the market determines the price. The cost of improvements are almost always more than the added value. Houses that remain on the market for a long time become “market worn” and
do not get shown as often.
Questions You Need Ask Before Selling
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o Do you still have a mortgage? Can your present loan be assumed? What are the rates and terms?
o How much earnest money deposit do you want?o Are you willing to pay any of the buyers closing costs? (Buyers
realtor, home inspection, home warranty, etc.…)o How much are you will to pay?o How soon can you give occupancy? o How can you help coordinate settlements on your house with your
buyer’s present home? (Mortgage, liens, etc.…)o What contingencies are you willing to accept? (Flood, extended
warranty, repairs, home inspection, etc.…) o What protection(s) do you want in the offer-to-purchase for yourself
and your buyer?o What current documents, plats, etc., do you have available for the
buyer to review?o What qualification method do you want to use to help define your
buyer’s financial qualifications? o How long after an acceptance of a contract, do they have to secure a
mortgage?o What financial arrangements do you need to make to coordinate the
closing of this home and the purchase of your next?o Are you prepared with proper state and federally mandated
disclosure forms?
Information about Your Home a Buyer May Request
1. Size of every room in your house?
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2. Construction3. Insulation?4. Annual property taxes: How Paid?5. Amenities?6. Deed restrictions?7. Inclusions with house?8. Present zoning?9. Exclusions from the sale?10. Type of heating and cooling?11. Annual costs?12. Warranties?13. Improvements?14. Lot size?
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Home MortgageTwo Key Benefits of Owning Real Estate
1. Real estate taxes are Deductible.2. Interest on a mortgage is tax deductible.
There are three key questions should ask themselves as they begin to go about the process of obtaining mortgage.
1. How long do I plan on living in the home?2. How much of a monthly payment can I afford?3. How much of a down payment do I have or want to use?
Different mortgages are offered for different needs!
What are the most common mortgages available?
1. 30 year Mortgage2. 15 year mortgage3. 1 and 3 year adjustable rate mortgage
30 Year Fixed Rate Loan
The interest rate does not vary over the life of the loan. It has equal monthly payments that include both principle and interest and is fully amortized to pay off in thirty years.
Advantages
1. Stable and predictable, the monthly payments and interest remain constant.2. No surprises!3. Helps you in budgeting.
Disadvantages
1. Interest rate is slightly higher, meaning slightly higher payments...
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2. Thirty ears is typically the longest period you can finance a home.
Best for buyers who demand stable payments; most appealing when rates are below 10%.
15 year fixed rate
Best for quickly building home equity and if you can afford the high monthly payment.
1 and 3 year adjustable rate mortgages
This mortgage provides a thirty year amortized adjustable rate after one or three years. There is typically an annual cap of 2% and a 6% life-time cap.
Advantages
1. Lower interest rate (at least initially) then for a fixed rate loan.2. Lower monthly payments, and lower income needed to qualify monthly,
initially.3. Advantageous if interest rates decline in the future.
Disadvantages
1. Interest rates are unpredictable.2. Monthly payments may vary.
Best obtaining a low initial rate for a set amount of years and then believe they will be selling the home.
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The first step if you’re considering purchasing a home is to get pre-approved
A rule of thumb for loan qualification.
Many lenders use the following percentages to determine loan eligibility:
Monthly housing costs (principal, interest, mortgage insurance, property taxes, association dues, plus homeowner’s insurance) may not exceed 28% of the borrower’s income.
$1,800/$7,000=25.7%
Rule of thumb: usually qualify for 2 ½ - 3 times gross income.
Total monthly debts (all of the above plus car payments, other loan payments, minimum payments on credit cards, alimony, child support, etc.) may not exceed 36% of the borrower’s gross monthly income.
$2,500/$7,000= 35.7%
If you are unsure about your credit status, many lenders will order a credit report before pre-approving you.)
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Some unique ways to shorten the time period and save interest on a mortgage.
Prepayment privilege
The age given a borrower to pay all or part of a debt prior to its maturity
30 yr. $150,000 6% interest $899 total monthly payment
If you made an extra $50 payment each month, the loan would pay off in 26.16 years (this saves your $25,654 compared to if you would have made the minimum payment).
BiSaver
This is a bi weekly payment plan.
In a biweekly payment plan, a borrower makes 26 payments in a year to the lender as opposed to 12 monthly payments in a conventional loan. Each payment is, however, only half the size of the regular monthly payment. In other words, the borrower is making one extra payment each year.
30 year loans are generally reduced by 8 to 9 years.
15 year loans are generally reduced by 2-3 years.
You can do it yourself for FREE!
Popular with some individuals who get paid every other week. (These provisions are not standard for every mortgage loan, please contact your lender.)
Points
Point equals one percent of your mortgage. You have the option of paying the lender points to obtain a slightly lower interest rate.
$200,000 loan x 1 % point = $2,000 payment
Popular reasons to refinance in the current market conditions
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1. Take advantage of low interest rates (i.e. lowering your payment or reducing the amount of years you have left on your mortgage.)
2. Convert from adjustable rate mortgage into fixed mortgage.
What programs are available to refinance; if I owe more than my house is worth.
Homeowner Affordability and Stability Plan.The plans allow you to refinance and take advantage of the low interest rate environment. Even if you owe up to 125% of the appraised value.First thing is to see if your loan is owned by Fannie Mae or Freddie Mac.
Check: http://www.fanniemae.com/loanloookup/orhttps://www.freddiemac.com/corporate/
Another Refinance Program
FHA Streamline finance, does not require an appraisal.
Eliminating Mortgage Costs
Depending you are your mortgage program and scenario, some lender offer a no cost refinance or no-closing costs on a purchase loan.
You pay a slightly higher interest rate but have no closing costs. You should ask if this option is available and compare the interest rate vs. if you pay closing costs.
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Credit3 Credit Bureaus, Experian, Equifax, and Transunion
Make sure your credit file is accurate. Credit files are maintained by three major bureaus (Experian, Equifax, and Transunion.) You can request a copy of your credit report by contacting one of these agencies. Better yet, you can use the web site established by the Federal Trade Commission to get all three for FREE each year.
www.annualcreditreport.com
Equifax Credit Information Service, Inc. TransUnion Experian
P.O. Box 740256Atlanta, GA 30374
1-800-685-1111www.Equifax.com
P.O. Box 2000Chester, PA 19022
1-800-888-4213www.TransUnion.com
P.O. Box 9701Allen, TX 750131-888-397-3742
www.Experian.comDisputing incorrect information: To challenge incorrect or outdated information, each bureau has an online dispute process.
What’s in your Credit Score?
35% is Payment History30% Amounts Owed15% is Length of Credit History10% is Types of Credit Used
National average credit score is 692
Generally in today’s mortgage market, you need a minimum credit score of 640 for mortgage programs.
Should I close credit cards that I do not use? Yes or No.
Depends, but in scenario above the answer is no.
Loan Process21
What’s next?
Within a few days, you will be receiving a government required form entitled “Truth in Lending.” Please be aware that government guidelines determine the calculations shown that the rate shown is your estimated annual percentage rate (APR) – the interest rate on your loan. Please keep in mind that this initial form is only an estimate. Changes to your loan program, amount, closing date, etc.…, will affect your final document.
Typically, within two days of application, your loan is submitted for approval through a computerized underwriting system. Either Desktop Underwriting (DU) or Loan Prospector (LP) will approve your loan. If your loan does not meet approval, you will hear from me with your alternative financing options.
During this period, the Lender will be working to verify all information that you provided at the time of application, such as employment, income, deposits, etc.… this provides the underwriting with clean and concise information.
The lender will have done a pre-underwriting review and any documents needed before underwrite will be requested from you. Please provide within 48 hours.
An appraisal will be requested on the home you are purchasing or refinancing. An appraisal is required to support the value of the property or purchase price. A professional appraisal agent will be in contact with the appropriate party to arrange for the appraisal to be performed. Please be aware that this is not a contractor’s inspection. If you desire to have a home inspection, your lender will be happy to refer you to a quality individual.
Once we have received all of the required documentation, your loan request will be submitted to an underwriter for final approval. Upon review of your file, additional information may be requested. Please provided this information within 48 hours so that your lender will be able to proceed to the best part of the loan process – closing.
When your loan has been approved and all conditions (it’s requested by the underwriter) have been cleared, you will be contacted to determine a convenient
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time to close your loan. If you are purchasing a home. The seller’s schedule must be accommodated in regard to scheduling your closing.
One your closing has been scheduled, you will be required to obtain one year of homeowner’s insurance on the property with a paid receipt. Your insurance agent may require a few days to prepare your policy, so please obtain your insurance as soon as possible and notify your lender of your choice of company and agent.
A day or two prior to closing, your lender will notify you of the amount of money that will need to bring to closing (a cashier’s check made payable to yourself (you will sign it over the title company at closing). In rare instances, this information may be delayed based on availability of information from third parties (Title Company, real estate Company, insurance agent); however, your lender will work to ensure that you receive all information as soon as possible – usually within 24 hours prior to your closing.
On the day of your closing, you will need to bring your cashier’s check for the correct sum, your driver’s license or other picture identification, Homeowners insurance with a paid receipt ( only on purchases) and a flexible writing hand – you’ll be signing many papers! Your closing will be conducted by a closing professional at the title company, who will explain each document to you.
Things to avoid and key points when in the process of obtaining a mortgage:
Avoid moving money around or starting new accounts, any large deposits on your asset statements will need to be sourced with documentation.
There is a distinct process for documenting gift funds for the down payment. (please consult Loan Officer)
Avoid opening up new debt accounts (i.e. credit cards, car loans, etc.) If your home is currently in a trust, please advise us immediately
Should I Payoff My Mortgage Early?
Two schools of thought on this topic.
1. Your investments are yielding a greater return when you’re paying on your mortgage.
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2. Pay it off. The satisfaction of being Mortgage Debt Free.
The Family Home Loan Experience
Concierge Formwhat to expect letter
Donation made in your nameThree minute video of Mortgage Process
List of Top Service providersreceive a special gift
Should I refinancing my home?
What interest rate you’re paying vs. current interest rate?How much are the closing costs?What is your break-even point?
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Typical Documents Needed:1. Last two years Federal Income Tax
Returns (including all schedules and W2’s)2. Last 30 days paystubs (consecutive)3. Copy of Homeowners insurance
(declaration page)4. Last two months Bank and Asset account
statements (i.e. 401k, mutual funds, savings, etc. statement needs to show name, account number and date covered, (downloading bank statements are preferable over screen shots, including all pages if says 1 of 4 need all 4)
5. Current mortgage statement6. Copy of drivers license’s
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Where Buyers Find their HomesA recent survey conducted by the National Association of Realtors illustrates where buyers find their homes.
Internet Real Estate Agent For Sale Sign Builder Friend
Print Ad Knew Seller Other
Ads don’t sell homes People Do!
However Ads do reach more people!
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Reaching More BuyersExtensive network provides the most marketing exposure for your
home, making the difference in the time it takes to sell and the amount you net from the transaction.
Marketing to the World
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Multiple Listing Services
Large Natoinal Web Exposure
State's Most Viewed Broker Website
Largest Home Marketing Budget
Innovative Buyer Financing and Incentive Program
Social Networking
Largest Corp. transfer dept.
Company-wide Open Houses
Demographic Marketing
Office Networking Promotions
Largest Past Customer Base
Recognizable Lawn Signs
Direct Mail Promotion
YouTube
Mobile AppMarket
Research
Every sales associate has access to the Multiple Listing Service and can search the same database and show the same homes… Having an extensive internet network that provides the most marketing exposure for your home.
Making the difference in the time it takes to sell and the amount you net.
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What Happens After the Contract is signed
There are many details to resolve before the sale can close.
1. Inspections must be completed.a. House Inspectionb. Radon Inspectionc. Pest Inspection
2. Buyers must obtain a mortgage.The buyer should be pre-approved and have the first steps completed before looking for a house. Now the buyer must finalize that process.
3. House will be appraised by the lending institution on behalf of the buyer.
4. Make arrangements for interim housing, if necessary.5. Title Insurance Survey and Deed must be ordered by the
seller.6. All Contingencies must be removed.7. Closing and occupancy date established.8. Make arrangements for movers.9. Switch utilities and pay off final bills.10. Sign final papers.11. Surrender keys to buyer.
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What Happens After You Sell1. Keep copies of all paperwork related to the closing and
settlement. Although it might be tempting to shred the paperwork or put it in storage, you’ll want to have it handy for April 15. When you file your taxes, you’ll need documentation for the expenses and proceeds of the sale. And after you file your return, you’ll want to keep the paperwork in case you’re audited.
2. Keep proof of improvements and prior purchases. This is for tax purposes, too. The IRS allows you to add the cost of improvements to your home’s cost basis during the time you own the home, which is nice if you have a sizable capital gain. But to use this tax provision, you need to keep receipts for everything you spent on home improvement.
3. Stay on top of tax laws. Because tax laws constantly change, you’ll want to keep current to avoid losing money.
4. Put your proceeds in a money market fund. If you sell and then don’t immediately buy, you’ll need a safe place to put your money. A money market mutual fund offers safety, a reasonable rate of return, daily access to your money and check-writing privileges.
5. Choose your next home carefully. Scope out a variety of areas and housing options that meet your family’s needs.
6. Don’t feel pressured to buy. Take your time purchasing your next home; rent for a while if you’d like extra time or want to try an area out first before buying.
7. Reevaluate your personal finances. If your situation changes before you buy another house – you get a promotion, have a baby, and go through a divorce – you’ll need to rethink your finances and how much you can afford to pay for your new house.
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8. Think about what you need from an agent to help you buy. Carefully consider whether the agent who helped sell your house can meet your needs when you’re buying. Buying and selling require different skills. And, if you’re moving to a new area, you may want someone familiar with the area.
9. Think through your next down payment. Brown and Tyson recommend putting at least 20 percent down on your next house in order to qualify for the best mortgage programs. If you can afford more than 20 percent, consider whether it’s better to put that money in the down payment or to invest the money elsewhere.
10. Remember to send change-of-address notices. The U.S. Postal Service recommends you complete your change of address 30 days before you move
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Do You Need a Realtor?Buying and selling property involves extensive marketing, negotiating,
paperwork, and market knowledge.
It is also difficult to stay current of state and federal regulations regarding property transactions as they are frequently changed. Agents also assume the security risks of dealing with strangers. Agents are trained to avoid security problems in ways the average homeowner is not.
Licensed agents have the best access to serious, financially qualified buyers. They can also handle the negotiations, the paperwork, and contracts for you. Licensed agents receive extensive training that can make the difference between a completed transaction and one that between a completed transaction and one that falls apart before closing. Could you handle a problem such as a home inspector’s suggested repairs or a cloud on the title? These are just two of many things that can derail a transaction without skillful handling.
Real estate agents or brokers are generally paid through the sales commission paid by the seller when a transaction closes. Agents will incur the costs of marketing your home as part of that fee. Agents are members of the National Association of Realtors®, and have earned the right to be called Realtors®.
This means they subscribe to a strict code of ethics and maintain a higher level of knowledge in property transactions. They are obligated and committed to handling your business with thoroughness, integrity, and confidentiality.
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Setting the FeeThe brokerage fee is divided into two parts – the listing fee and the selling fee. The chart below helps you determine the percentages for the listing and selling brokers.
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Listing Compensation3-4%
Selling Compensation4-5%
Provide a market analysisDefine the most likely target buyersCreate a Marketing plan for your homeInternet marketing distributionPromote the home to the brokerage communityTarget local and metro media promotionFollow up with all property inquiresReview activity results and adjust marketing planNegotiate any offers on your behalfManage the closing process and post closing needsRemain a trusted advisor
Help the buyer define their home requirementsProvide home and area information to the buyerIntroduce the buyer to your homeNegotiate on behalf of the buyerFacilitate the buyer's financing needsManage the closing process and post closing needsRemain a trusted advisor
Realtor Interview Questions1. Are you a member of the National Association of Realtors?
REALTORS® must abide by the NAR’s code of ethics. In addition, each state’s real estate license requires continuing education for agents.
2. How many sales did you complete last year?3. In what price range do you sell most of your homes?4. What was the average difference between sales price and list price?
While this depends on your local market conditions, a REALTOR® who often sells homes well below list price may not be advising sellers to price their homes correctly or may be inadequately marketing homes.
5. What is your marketing plan for my home? How many websites will include information about my home? Where will you look for buyers?
6. Do you have advice for me about the condition of my home? Do you have expertise as a home stager or do you recommend that I hire a professional stager?
7. Can you recommend contractors and moving companies?8. How often should I expect to hear from you when my home is on the
market?9. Will you provide me with regular feedback and updates about
potential buyers?
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Realtor Document ListsSellers Disclosure Exclusive Rights to Sell
Exclusive Rights to Lease Agency Disclosure
Real comp Profile Sheet MI Real Source Profile Sheet
Sellers Disclosure Forms Short Sale
Lead Paint disclosure Forms Short Sale
Lease Forms Acknowledgement Winterizing Form
Homewarrenty Contract or Waiver Title Company Payoff Request Form
Title Company Association Dues Letter if Applicable Report to IRS Form
Old Title Policy with Certificate of Credit Showing Instructions Form
Advertising Form Copy to PRD for Home
Prepare to give all information.
Sellers Disclosure for example doesn’t just inform the buyer the condition of the home but protects the seller from being responsible from any unknown problems.
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Protect Yourself and Your Family
1. Ask qualifying questions over the phone before inviting a stranger in. - When do you need to be moved into a new home?- Do you have a home to sell?- Why are you moving: marriage, divorce, Eviction, etc.?- What financial resources do you have in place?
2. Never allow anyone in who has simply knocked on your door.3. Always have a potential buyer make a specific appointment.4. Always get a name home, cell, and work number so you can verify identity.5. Call them back at their number to confirm appointment to verify numbers.6. Always ask to see ID when they arrive for the viewing.7. Get a license plate number and car description if possible.8. Always let someone else know about the appointment Date, time, etc.9. Have all of the lights on prior to the showing to avoid fumbling in the dark.10.During a showing, always follow your prospective buyer into a room; never lead
yourself into being trapped in a room or basement.11.Keep a written log of all calls and appointments.12.Open house can leave you vulnerable. Try to keep an appointment only schedule.13.If you feel the need to have an open house, always do it with a partner.14.Only one buyer should be shown the house at a time. If another buyer shows up,
please ask them to wait until the previous buyer is finished before letting them in. If they are serious, they will understand.
15.Never argue or debate with anyone. Escalated emotions can lead to danger or poor negotiating.
16.Avoid conversation about your personal circumstances; divorce, planned vacations, spouse availability, etc.
17.If you have pets, put them away prior to inviting the strangers in.18.Put away all valuables; jewelry, guns, money, etc.19.Instruct kids to never open the door or address questions.
Never allow anyone into your home without first being in possession of a mortgage pre-approval letter or proof of funds if claiming to be a cash buyer. Those who wish you harm will find an easier target. Selling your home should be a pleasant and satisfying experience. If it doesn’t look or feel right, cancel or postpone until you are fully comfortable with that person. An excuse to a stranger is better than having to apologize to a loved one!
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Law Says Sellers Must DiscloseBy Law, What Sellers Must Disclose
Governor John Engler signed sellers and agency disclosure into Law July 12, 1993 at the Michigan Association of REALTORS® Summer Meetings on Mackinac Island (see Legal Lines for information on agency disclosure). The seller’s disclosure law, now known as Act 92, Public acts of 1993, was effective January 8, 1994. Mandatory seller’s property condition disclosure is required of all sellers, whether they are working with a licensed real estate agent or selling their home on their own.
The law applies to the transfer of any interest in real estate consisting of not less than one more than four residential dwelling units, whether by sale, exchange, installment land contract, lease with an option to purchase, any other option to purchase, or ground lease coupled with proposed improvements by the purchaser or tenant, or transfer of stock or an interest in a residential cooperative.
The written disclosure statement is required to be delivered to the prospective transferee within the following time limits: in the case of sale, before the transferor executes a binding purchase agreement with the prospective transferee; in the case of a transfer by an installment sale contract when a binding purchase agreement has not executed, or in the case of a lease together with an option to purchase or a ground lease coupled with improvements by the tenant, before the transferor executes the installment sales contract with the prospective transferee.
If any disclosure or amendment of any disclosure is delivered after a binding purchase agreement has been executed, the purchase agreement can be terminated by delivering written notice of termination to the transferor or his/her agent within 72 hours after delivery of the disclosure statement to the prospective transferee if the
disclosure statement was delivered to the prospective transferee in person, or no later than 120 hours if the disclosure statement was delivered by registered mail. A transferee’s right to terminate the purchase agreement expires upon the transfer of the subject property or by deed or installment sales contract.
For additional information concerning Lead-Based Paint and Lead-Based Paint Hazards Disclosure.
Why Mandatory Disclosure?
Mandatory seller’s property condition disclosure is in everyone’s best interest. Sellers benefit because by focusing on the condition of their property, they are less likely to overlook a defect or material fact, for which they could later be held liable. Also, this procedure serves as a checklist for buyers, so their concerns about the property’s condition are addressed on the spot. And that may even help speed up the sale.
Standardized disclosures place liability for alleged misrepresentation about the condition of the property more squarely on the seller’s shoulders.
Sellers are better protected against claims from unhappy buyers when the sellers have disclosed the condition of the property to a buyer. The law shifts the burden to the buyers to ask questions when they have been notified of a defect. Michigan now has a much more level playing field between seller, buyer and REALTOR®.
The REALTORS® Obligation
While the use of property condition disclosure forms does require sellers to disclose information about their home, real estate licensees are still obligated to perform all the duties that are required under state and Federal laws and regulations and the strict REALTOR® Code of Ethics.
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Lead Based PaintMany houses and apartments build before 1978 have paint that contains lead (called lead-based paint). Lead from paint chips and dust can pose serious health hazards if not taken care of properly.
The Residential Lead-Based Hazard Act of 1992 (42 U.S.C. 4852D) went into effect in 1996. This law requires that individuals receive certain information before renting, buying or renovating pre-1978 housing.
Even Purchaser of any interest in residential real estate on which a residential dwelling was build prior to 1978 is notified that such property may present exposure to lead from lead-based paint that may place young children at risk of developing lead poisoning. Lead poisoning in young children may produce permanent neurological damage, including learning disabilities, reduced intelligence quotient, behavioral problems, and impaired memory, Lead poisoning also poses a particular risk to pregnant women. The Seller of any interest in residential property is required to provide the Buyer with any information on lead-based paint hazards from risk assessments or inspections in the Seller’s possession and notify the Buyer of any known lead-based paint hazards. A risk assessment or inspection for possible lead-based paint hazards is recommended prior to purchase.
Checking Your Home for Lead
You can get your home checked for lead hazards in one or two ways, or both.
o A Paint inspection tells you the lead content of every painted surface in your home. It will not tell you whether the paint is a hazard or how you should deal with it.
o A risk assessment tells you if there are any sources of serious lead exposure (such as peeling paint and lead dust). It tells you what actions to take to address the hazards.
Have qualified professionals do the work. Trained professionals use a range of methods when checking your home including:
o Visual inspection of paint condition and location.
o Lab Tests of paint samples.o Surface dust tests.o A portable x-ray fluorescence
machine.
Home test kits for lead are available, but the federal government is still testing their reliability. These tests should not be the only method used before doing renovations or to assure safety.
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What you can do to protect your familyIf you suspect that your house has lead hazards, you can take some immediate steps to reduce your family’s risk:
o If you rent, notify your landlord of peeling or chipping paint.o Clean up paint chips immediately.o Clean floors, window frames, window sills, and other surfaces
weekly. (Use a mop or sponge with warm water and general all-purpose cleaner or cleaner made specifically for lean. Remember: Never mix ammonia and bleach products together since they form a dangerous gas.)
o Thoroughly rinse sponges and mop heads after cleaning dirty or dusty areas.
o Wash children’s hands often, especially before they eat and before nap time and bed time.
o Keep play areas clean. Wash bottles, pacifiers, toys, and stuffed animals regularly.
o Keep children from chewing window sills or other painted surfaces.
o Clean or remove shoes before entering your home to avoid tracking in lead from soil.
o Make sure children eat nutritious, lo-fat meals high in iron and calcium, such as spinach and low-fat dairy products. Children with good diets absorb less lead.
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Please ContactChelsea Smith
586.383.1430
Scott Merian
586.662.0006
Real Estate One
26236 Woodward Ave
Royal Oak, MI 48067
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