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Winterization of homes in Battle Creek, Michigan is something one needs to factor in when buying a foreclosure.
A vacant home properly prepared for winter will not experience damage.
It would be the same for anywhere in Michigan. If it is vacant, you need to find out if the house was winterized? The banks usually hire asset companies to do the winterization on homes, but it happens often during the winter that the bank reacquiring a home in the foreclosure process does not obtain possession until mid-winter.
With this occurring, there is a risk of the home not having been winterized before some of the plumbing was damaged by freezing conditions. When you are shopping for a foreclosure, either as a personal residence or an investment property, you need to factor in winterization of homes in Battle Creek, Michigan.
When a house is winterized by a service company, they place stickers on the sinks, water heater and commodes that indicate the date it was done. A usual rule of thumb is if the home was winterized in mid-October, it is a good bet that it was done before any heavy freeze. However, if you are not from the area, it is always a good idea to work with a local Realtor that is active in the market, as they will know usually when the first hard freeze hit that season in the area. Last year we did not get any hard freeze until late November, so a sticker dated November 15th was not a concern.
It is important to note that a winterization sticker on a home with a date does not mean that it is accurate, or that the home was properly winterized. Proper winterization of a home includes running water out of the lines, disconnecting the water meter, draining the water heater, pouring anti-freeze in the toilets, sink drains and traps, and many other points on a checklist.
Preparing a home for winter can require some advanced preparation work...
That is why it is always advisable to hire a home inspector, or acquire a home warranty if there is any uncertainty. Even in homes properly winterized, you can still have a plumbing leak in unexpected areas. I have been through many a home inspection to find pin-hole leaks shooting out when the water is turned on. I have also walked through homes that had exploded toilets, and ballooned and split pipes where a winterization crew came in after the plumbing froze up and winterized everything else, leaving the repairs for the new buyer.
So winterization of homes in Battle Creek Michigan is something to keep in mind as the weather gets colder, especially if you are looking at vacant property. For information about real estate in the Battle Creek area, visit my website at: http://www.michaeldelaware.comor give me a call at: 269-441-8182.
When it is time to negotiate on a foreclosure, there is no better advice that making sure you present a complete offer to that the seller will consider it. The seller in a foreclosure is the Bank, Mortgage Company and sometimes a Credit Union that seized possession of the property back from the prior owners when they defaulted on their loan.
Working with an experienced Realtor can give you an edge in the process.
A typical complete offer when bidding on a foreclosure includes a purchase contract, any required bank addendums, proof of funds (as in a cash offer) or proof of financing (as in a financed offer) and proof of an earnest deposit. When you have decided to place an offer, you may also want to know how long the property has been on the market and whether or not there is any other interest on the property from other buyers. For more information on this, check out this article I wrote on the subject.
This is where working with a Realtor can be very helpful, especially one that is representing you as a buyer. When a foreclosure has only been on the market a few days, it has been my experience that the seller usually is very reluctant to consider an extremely low offer.
As an example, let’s assume this foreclosure came on the market just a few days ago and the list price is $50,000. If you go in with a low offer of $25,000 you are likely to get an outright rejection or a counter offer that is the same as the listing price. So you have to take into account whether the home has been properly priced for the area, as Banks and Mortgage companies selling a foreclosure usually have done a thorough data collection from other Realtors and sometimes appraisers, and have a good idea on what the value is.
Most of the time they have it listed as a discounted property because they want to move it quickly to a sale. So going in super low in the early days of the listing is usually not going to get consideration, and if you really want to buy the home at that price you will most likely have to wait until they drop the price to a range where you offer would be considered.
The risk of course is that someone else will place a higher offer and buy the home before that happens. If you want to find out more about foreclosures in the Battle Creek area or Southwest Michigan, give me a call at: 269-441-8182. www.michaeldelaware.com.
Michael Delaware, second from the left, was part of a panel on 'BC Scene On Air' discussing the local Real Estate market
I currently serve as the President of the Board of the Battle Creek Area Association of REALTORS® for 2011. Last month, the CEO of the Board, myself and the President-Elect for 2012 were invited to a local Cable TV show called ‘Be Scene On Air’ to talk about the Battle Creek Real Estate market.
It was a fun show to be involved in, and having some experience with video creating and editing, I found it facinating. It was the first time I have ever done a cable or any type of TV show of this kind. I have been on radio shows before, but never in a Television studio filming, so it was a new experience.
It was easy to talk about the local market, as it is such a good time to buy for anyone wanting a home. The interest rates are low, prices of homes are low, and there is a lot of available homes to choose from. It makes for an exciting market. Being a local Realtor, it is always exciting to see new home buyers get into their first home using the great programs that are available right now.
I have included the video here below in for you to watch. It is a 1 hour long show, and the segment I am in is in the second half hour, so if you do not want to watch the entire show you can forward to that section.
Buying a HUD house in Battle Creek, Michigan requires that you follow an exact required procedure. The first thing you will need to have is a REALTOR that is licensed in the State you are buying the home in and he or she is registered with HUD through their brokerage.
Buying a HUD House in Battle Creek, Michigan
You will also need to have worked out ‘how’ you are going to buy the home before you attempt to place an offer. This means you will need either ‘proof of funds’ or ‘proof of financing’ in order to buy a home, and these need to be organized before you place an offer.
The reason for this is that once an offer is accepted, your REALTOR® is required to send a fully signed purchase agreement package to HUD within 48 hours and this needs to include your proof of funds or proof of financing. If this is not done, your offer can be cancelled and the home placed back on the market for sale to others.
Buying a HUD house in Battle Creek, Michigan or anywhere also requires an earnest deposit. According to the new HUD rules as of 2010 require the funds to be certified funds from a bank payable to HUD. This amount is $500 for offers up to $49,999 and $1000 for those above $50,000. The amount cannot be larger or smaller, even if you want to place a larger earnest deposit down.
Buying a HUD house in Battle Creek, Michigan also means that you must examine the bidding period for the house. HUD has a defined period for ‘Owner Occupant’ bids only, which is usually when the home first comes on the market. During this time period, only those that are going to actually live in and occupy the house for 12 months can bid on the home, and investors cannot.
The investor bidding period is called the ‘All bidders’ period. During this time owner occupant bidders and investor bidders can bid on the home, and the bidding closes out daily. For more information about buying a HUD house in Battle Creek, Michigan, give me a call at: 269-441-8182 or contact me through my website at: www.michaeldelaware.com.
Buying a home is an exciting process, and it is one of the most important purchases many people will make in their lifetimes. Knowing how to buy a home, and avoid costly mistakes is important to being successful. One common mistake I see occurs when a buyer gets pre-approved for a loan. They have a good job, and income level, and meet with a lender and are told they are pre-approved for up to a certain amount.
Then, without consulting with their lender, they decide to shop for homes in a radically lower price range, and later find out
Buying a home is an exciting adventure!
that they bought too low and the closing costs are now too high for their available cash on hand. Thus they either must bring more funds to closing to make it happen, or lose the deal. Sometimes the lender cannot go below a certain loan amount with certain programs such as FHA, as it costs the lenders company more in fees than they make on the loan.
So an important lesson in all of this is to stay in good communication with your lender if you change your mind on what you discussed with them originally. Sometimes a lower purchase price doesn’t always result in a lower house payment in the long run either. Taxes can vary, and so can insurance, so you might get a lower purchase price, but find you have a higher house payment that you were hoping for.
So there is a lot of details like this that need to be factored in. Other mistakes I have seen made are to forget about the impact of property taxes, insurance and closing costs in a loan. Other mistakes include failing to factor in lender required inspections such as a termite inspection, or well and septic.
I put the following video together to cover some more of these points. If you would like to find out more information on buying a home in the Southwest Michigan area, give me a call at: (269) 441-8182 or visit my website and send me a message by clicking on ‘Contact Michael’ at the link on top of the home page.
As a Realtor in an market like many others across the country, I have helped buyers successfully negotiate and buy foreclosures from a bank. Having some insight into the process is always helpful to new investors and first time homebuyers, so that they can understand what is happening once their offer is submitted. See my other blog post on this as well.
Knowing what to expect in negotiating is essential to success as a buyer.
Some of the key things I have learned over the years is that a mortgage company or bank selling a foreclosure will usually have an intermediary company or division of their company that oversees the negotiating process. This organization is typically referred to as the ‘asset management’ company, or some similar name.
The asset management company will hire a local Realtor in the market area to list the property for sale. Before the listing occurs, there is usually a research and evaluation period that the asset management company covers on each given property. During this period, they are conducting an investigation with independent Realtors in the market area to determine a value. Once the research is completed, they submit to the listing agent an listing agreement that includes a price to list it at.
When offers come in on the property, no matter if it is a full price offer, or lower offer, they are countered by the asset management company. If it is a low offer, the counter will usually be in another price they will consider. If it is a full price offer, they will counter with requesting a higher down payment or earnest deposit, or a shorter closing time, etc. Fannie Mae properties for example will often include a deed restriction in their counter, stating that the deed will be recorded restricting you from selling the home to someone else within 3 months of the closing.
There are a lot of aspects to this process, but if you are looking for a Realtor that has experience with this in the Battle Creek market area, give me a call at: 269-441-8182 or contact me through my website at: www.michaeldelaware.com.
I have sold a lot of foreclosed homes in recent years, and it never ceases to amaze me when I encounter common myths about the process. I sometimes wonder who are the people that invent these things? Some of them are seemingly unbelievable, and others are just misunderstandings.
There are common myths about buying foreclosures.
Some of the common myths are that the bank will accept and negotiate an unsupported verbal offer. For example: I show a home to someone, and they like it and then the man walks over to me and puts his hands on his belt and says “Tell them I will offer $_____, and let me know what they say…” I inform him that we must put it in writing to get consideration, and he responds with “Give it to them verbal and let me know”. Sometimes I can talk sense into them, and sometimes it goes no where.
I have covered in many other blog posts on this subject, but simply put: a seller of a foreclosure property will only review written offers, and those offer have to be supported with evidence. The evidence is ‘proof of funds’ for cash offers, and ‘proof of financing’ for financed offers, and there must be evidence of an earnest deposit collected by the Realtor.
There are other myths as well, such as being allowed to move in, and make repairs before closing. Myths about the bank ‘letting you take over payments’ and ‘banks remodeling a discounted property’, etc. I covered seven of the most common ones in a video, which I have included here.
Foreclosures purchasing follows some very basic rules, and many of them are consistent from bank to bank, mortgage company to mortgage company. If you do not follow their rules, you do no get the house. It is as simple as that.
If you are interested in finding out how to buy a foreclosure, and getting approved for a loan, give me a call at: 269-441-8182 or contact me through my website at: www.michaeldelaware.com.
A multiple offer situation is when there is more than one offer in on a given property by multiple parties. Frequently when trying to acquire a foreclosure in Battle Creek, one encounters the multiple offer situation. The bank or mortgage company selling the home recieves more than one offer in a short period of time. They respond to all parties that they must submit their ‘highest and best’ offer, and it is implied that the highest bidder will be awarded the house.
The multiple offer situation will happen sometimes when buying foreclosures.
It is a tense situation, mainly because one usually does not know what the others are offering. It can create a lot of uncertainty as to what to do. The most stable approach that you can take is to not try to guess what the other guy is doing, but look at your numbers, and what you are willing to pay for the house. Put your best foot forward, and hope you are successful.
Probably the most important piece of advice, it to be willing to have the house and not have the house in your own universe. We willing to be the winner or the loser, and do not let your emotions get caught up in the equation. Try to focus on your business sense and stick with what you know you are willing to pay, and what you can pay, and go with that. Trying to do it any other way is to get all off track really.
The seller does not always go with the highest offer in these situations either. I have been witness to a bank or mortgage company taking a lesser sales price over another offer, simply becuase the smaller offer was a cash offer that could close in two or three weeks, and the other was a financed offer needing four or five. So there is a lot to be said about making a strong offer, rather than just focusing on the highest one.
Look over your terms. What can you do to make your terms competitive? Are you asking for an inspection period? Sometimes with a foreclosure it makes more sense to buy a home warranty with your purchase, and waive the inspection period. Each circumstance is different, and that is why you will want to work with a Realtor that knows the area and can give you insight on what to expect. Consider also reading and watching my video on negotiating tips.
When one is seeking to buy a foreclosure, it always a good idea to consult with a Realtor that has been through the process a number of times. Banks and mortgage companies have a standard procedure in the selling of a foreclosed home. To them it is an unwanted asset. However, they are also cognizant of the need to reduce losses, so they do not part with these homes cheaply if they can avoid it.
Knowing how to submit a solid offer to begin with has everything to do with your success. I put together the following video in my series on ‘Buying a foreclosure’ on YouTube below to help buyers navigate through this process.
Buying a foreclosure is best done with a Realtor that is representing you.
Some of the facts one needs to realize in buying a foreclosure is that the seller, which is the bank or mortgage company, has conducted an evaluation on the property. They have hired a variety of local Realtors and appraisers to give them professional opinions on what it is worth on the market. They know the fair market value, and they know the distressed market value. Usually they list a property for sale at a distressed value or close to this when they launch it onto the market place.
So, unless their market information was flawed, they are usually attempting to sell it at a low value for the surrounding neighborhood. Knowing a few things about the negotiating process, including factoring in how long it has been on the market, condition, and location can help you gain a better understanding on how to be successful in buying the home.
Almost all banks and mortgage companies sell their properties through an intermediary service company, often called an asset management company. They have an exact procedure to follow on submitted offers, and as long as you follow that procedure they will review your offer.
Going in too low on a recently listed property can often result in a rejected offer, or a counter offer back at full list price. Going in low on a property that has been listed for over 90 days with no other offers can result in an entirely different response, for example, and can often get accepted or countered with a reasonable response.
So there is a balance to learn on this and I have included a video I created on this below. I hope it helps.
When you are buying a foreclosure, who are the various players involved in the process? When a home is taken back in foreclosure, the deed is now in the hands of the original lender. They have seized the property back due to a default condition, and the original homeowner and borrower is no longer in the picture.
So the bank or mortgage company is now the seller, and that is their role.
Buying a home that is a foreclosure has many players in the process.
Because they are a large corporation usually, they will hire or have established a
Buying a foreclosure can be an exciting process.
middle property management company which is also called an ‘Asset Management Company’ to contract with a local Realtor, and sell the home. This asset management company is going to take control of securing the home, by changing the locks, boarding up broken windows, and if it is in the winter, seeing that the property is winterized.
They will also sometimes delegate some of these responsibilities to the local Realtor, who will in turn hire local contractors, etc. The local Realtor is the listing agent. They receive a listing agreement which covers the price the seller is offering to market the home at, the terms they will consider, and it also covers a time frame for the listing period. These are the key players on the selling side.
On the buying side, there is you as the buyer and your own Realtor if you have one. You can work with the listing agent directly if you do not have your own Realtor, but realize that the listing agent as a contractual obligation to represent the seller. Their primary allegiance is to their client, which in this case is the bank. So is you want some independent representation in the process, it is recommended that you acquire the assistance of your own Realtor to represent you as a ‘Buyers Agent’ in the process.
If you are looking to buy a foreclosure in Battle Creek or the Southwest Michigan area give me a call, and I would be happy to assist you. I can be reached at: 269-441-8182 or through my website at: www.michaeldelaware.com.
Michael Delaware
