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Trusted West Michigan Realtor

Your Trusted Real Estate Guide in
Greater Grand Rapids MI

Questions to Ask Potential Home Builders

1. Do you have to use their preferred lender? Many builders work with a preferred lender that offers attractive discounts on closing costs when you finance through them. It’s important to know if the lender is working as a referral or if the mortgage company is owned by the same company that is building your home. If you are not required to use their lender, talk to other lenders to see who can give you the best financing.

2. Can you see a copy of the builder’s sales contract? Builders use their own contracts that are similar to a regular sales contract but include additional terms specific to the building process, such as at what points during building the contractor gets paid, and what options you have to choose from. Your agent can help you interpret the terms of the builder’s contract before you sign.

3. What is the timeline for completion? This will depend on whether the build is a production home, meaning the builder is building select models throughout the development, or if you have hired the builder to build a custom home. The builder should be able to give you a timeline outlining each phase of construction. Factors affecting the timeline include weather, delays receiving building supplies, or the number of changes you make along the way.

4. Can you choose features, fixtures, or appliances that are not in their selected packages? You may wish to upgrade certain items, such as cabinetry, plumbing, or lighting fixtures, or you may want to save money by buying your fixtures or appliances on sale. Make sure your builder is open to you making choices outside of their selections. Usually, they will work with you as long as your selections are available and can be installed without major changes to the structure.

5. What is in the landscaping package included in the price? Many people assume their finished home will look like the model or the graphics in the brochure, only to find out that the builder’s landscaping package is the bare minimum, or even non-existent. You may choose to upgrade it or plan to add your own landscaping.

6. Can the builder charge extra for unexpected cost increases? Look over the builder’s contract carefully, or have an attorney do so, and note if there is an escalation clause that would allow the builder to pass cost increases onto you in the event that materials or labor costs increase during construction.

7. What warranties are provided? Normally a builder offers a warranty lasting from six months to two years, possibly longer for some items. You should know what is covered under the builder’s warranty and for how long. All the major structural items and mechanical systems are usually covered. Appliances are not, but they should come with a manufacturer’s warranty. Damage from weather, shrinkage or expansion of the home or foundation, and anything resulting from the homeowner’s failure to provide maintenance or from work done on the home after construction is not covered.

8. What are the deed restrictions and is there, or will there be, an HOA? Developers usually file a subdivision’s restrictive covenants when applying for approval to build the development. Any persons buying a property in the development are bound to abide by these restrictions. You can get a copy of the deed restrictions from the builder. Also ask if there is, or will be, a homeowner’s association, what the HOA fees will be, and what they cover.

9. Is there, or will there be community amenities? Amenities may include a gate or guard, communal park or green area, pool, playground or recreational facilities, a dog park, or parking area. The amount of monthly or annual HOA fees will depend upon the amenities and the number of homes in the development.

10. Can you do a final walkthrough before closing? Usually, there will be a “punch list” of items the builder needs to finish up at the end of construction. This may include a thorough cleaning, touch-up painting, repairing drywall nicks or scratches, last-minute trim work, caulking around cabinetry, changing out or re-keying door locks, and replacing landscaping that didn’t survive planting. It’s important that you go through the home before closing to make certain that every detail is taken care of before you sign the closing documents. If you and the builder agree that they will come back after closing to finish some details, make sure both of you have signed off on the list of what is still to be finished.

Click Here to Get a FREE copy of my New Construction Guide!

Choosing Lighting Fixtures

Choosing fixtures for your home can be complicated. If you’ve ever visited a lighting store, you know exactly what I’m talking about. ⁣
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To break it down into bite-sized bits, it might be helpful to review the three different types of lighting:⁣
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  1. Ambient lighting: the main source of light in a room (think overhead fixtures or recessed lighting).⁣
  2. Task lighting: the lighting “tasked” for activities such as working or reading (meant to illuminate a small area; not an entire room).⁣
  3. Accent lighting: the most decorative lighting in a room (think chandeliers, sconces, and lamps).⁣

As you plan, remember most rooms have two types of lighting—some all three. Make a list of the rooms in your home and the different types of lighting you need. Then, you can shop with clarity and purpose even amidst the blinding lights.⁣

Let’s Talk Home Equity

Home equity…Everybody wants it, but what exactly is it, and how do you get it?

Equity represents the degree of ownership an individual or entity has in an asset after subtracting any debts against the asset. To say someone shares equity in a company means they would share in any assets remaining after all debts are accounted for.

For example, if your business has sold $500,000 worth of product this year, but you have rent, operating expenses, and a business loan payment totaling $400,000 for the year, you have $100,000 of equity in your business. Equity changes as the value of your assets and debts change.

Home equity works the same way. When you take out a mortgage to purchase a home, your home is collateral on the mortgage loan, so the outstanding mortgage principal must be deducted from the value of the home to determine your home equity.

In most cases, you make a down payment when you purchase your home. That down payment is your initial home equity. If you pay a 20% down payment on a $200,000 home, you have $40,000 equity when you close on your purchase.

As time goes on and you continue to pay down your mortgage principal, your equity grows. Usually, the longer your own your home, the more equity you gain because you are paying down your mortgage. However, any debts you take on using your home value as collateral, such as a second mortgage or home equity line of credit (HELOC,) decrease your home equity.

The changing real estate market also influences your equity. If you paid $200,000 for your home, and two years later the homes in your neighborhood start selling in the $400,000 range, your theoretical equity increases. (Theoretical because you don’t realize your home equity until you sell your home and pay off all debts against it.) You can also lose equity if the market takes a dive but be patient and it should recover in time.

Equity also grows if you make improvements on your home that increase its value. Let’s say you add a swimming pool and all new appliances. You have increased the value of the home. Your equity doesn’t increase by the amount your spent on the improvements, but on the value you get upon resale. This is an important point when considering making improvements prior to putting your home on the market, and one that is often misunderstood.

Let’s say Joe spends $50,000 on upgrades to his home. He might tell his neighbor, “I have $50,000 in my home,” but when he goes to sell, the current market dictates how much he will actually get in return. If Joe ends up selling for $40,000 more than he originally paid, his $50,000 investment got him $40,000 in home equity.

Some things you can do to increase your home equity include:

1) Make a large down payment when you purchase your home. The more cash you put down, the more equity you begin with.

2) Make increased or extra payments on your mortgage principal. Adding to the principal portion only on your monthly payments, or making extra payments when you are able, helps chip away at your outstanding debt.

3) Be smart when making home improvements. Not all improvements build equity. Some improvements may be personal preferences that don’t necessarily add value for resale. Improvements such as a new HVAC system, new appliances, or a new roof are usually more reliable investments than a fountain in the front yard or surround sound speakers throughout the house.

4) Don’t borrow against your home equity unless you must. Home equity is often a homeowner’s biggest asset, and can help to build your retirement nest egg, but it can also come in handy if life throws you a curve ball and you need to borrow against it for an unforeseen emergency. Be careful not to borrow against your equity for frivolous purposes, so it will be there if you really need it.

5) Sell when the market is favorable. If you are counting on your home equity to help finance your next home, pay for your children’s education, or add to your retirement funds, try to sell during a seller’s market when inventory is needed in your area.

Quick Tips to Get Your Pantry Organized

Organization is so much fun!! (Well to me it is…) Who doesn’t love opening your pantry and having everything in place? If you’ve got a little time and motivation, get your pantry organized with these quick tips:⁣
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•Empty your pantry and place everything on the counters so you can have a good look at what you’ve got.⁣
•Check expiration dates, throw away misfits, toss anything that’s stale.⁣
•Group what’s left into categories (canned goods, dry goods, snacks, spices, cereal, etc.)⁣
•Use baskets to store like categories and label them.⁣
•Place your most used items at eye level and consider a designated “snack basket” for those hungry kids.⁣
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When you’re done, you will love how easily everything can be found!

Staging Tips #3- The Top Interior Staging Recommendations

Entry

  • Make sure that the entry is welcome and inviting.
  • Put away all coats and shoes that may be left at the door.
  • Consider adding a small table or bench for potential buyers to set things on as they remove their shoes or put on shoe covers.

Master Bedroom

  • Remove any excess furniture – an open, airy feel in a bedroom is really important. Basics to leave: bed, night stands, dresser, possibly a bench or side chair if there is room.
  • Pack up or relocate any non-essentials to storage (seasonal clothes, extra shoes, etc)
  • TV is ok to leave but hide or remove cords for photos so it looks styled and not messy.
  • Make the bed as luxurious as possible (light neutral bedding, lots of layers, lots of pillows & throw pillows) (borrow or consider buying pillows if needed.)
  • Clear all personal items from surfaces (this includes lotions, tissue boxes and alarm clocks)
  • Replace any personal photos

Master Bath

  • Create a very neutral, luxurious ‘spa’ feel as much as possible
  • Remove any open laundry baskets
  • Replace any items on open shelving with folded face cloths, new candles, small decor items, etc. (especially watch for the small personal items that are stored ‘out’, which signal to a buyer that there isn’t enough storage)

Living Room

  • Evaluate the layout and the amount of furniture in the space: the goal is to create an open, airy feel with good traffic flow – often some pieces need to be moved out and the room rearranged. Try not to cover windows or block walking paths with furniture
  • Remove all family photos and really simplify decor (pack this stuff first)
  • Almost all surfaces should be clear – add a few decor items to tables and bookshelves but keep it very minimal
  • Bundle, tuck, hide or remove as many loose cords as you can (tv lamps, etc)
  • Updated throw pillows  (consider buying or borrowing if you don’t have some)
  • Kids toys should be put into baskets or hidden completely if possible (anything large should be stored)

Kitchen & Bathrooms

  • Mop and polish floors
  • Clean appliances and fixtures
  • Clean and organize pantry, throw out any old items and show off the storage space
  • Replace old caulking
  • Remove all stains from sinks, toilets, showers/tubs
  • Keep all toilet seat lids closed
  • Stow away your personal soaps, hygiene products, medications, etc.

Looking for more tips? Click here to download my Staging Guide.

SOLD!! 1141 Rathbone SW, Wyoming MI 49509

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1141 Rathbone SW, Wyoming MI 49509

4 bedrooms, 1.5 baths, 2 stall garage, 1,568 square feet, built in 1920. List price is only $169,900!

If character, charm and space are what you are looking for, you’ll find it all here! Welcoming front porch, foyer opens up to the spacious living room with built-in bookshelves and the dining room that has plenty of space to dine and entertain. The kitchen offers a dishwasher and an adorable breakfast nook. Large owner’s bedroom with ample closet and furniture space. The full basement has ample storage and the laundry room. The outdoor space has much to offer as well with an enclosed porch, fenced back yard, 2 stall garage and a shed. Ring doorbell, window A/C units, and window treatments remain. Location perks include being close to both 131 and 196 on ramps and walking or biking distance to Marquette (0.3 mile), Battjes (0.7 mile) and Pinery (1.2 miles) Parks.

Listed for $169,900 and sold for $201,000!!

@Home Realty, 5789 Balsam Dr (office location)

What is an Escalation Clause?

In this market, buyers are wising up to ways they can make their offer stand out above the rest. One strategy? Including an escalation clause.⁣
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What is an escalation clause? Let me explain.⁣
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An escalation clause automatically increases a buyer’s offer by a certain amount, for example $2,000, each time another buyer makes a higher bid up to a predefined cap (set by the buyer). It essentially eliminates the back and forth of offers and counteroffers.⁣
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This is a common practice in this current market where so many buyers are competing for the same property. Is it always the best strategy?? Not always! Make sure that you hire a Realtor that has a lot of experience competing in this market. They will be able to guide you to which negotiating strategy is the best for your scenario!

Looking for more ways to write a competitive offer? See my article on Tips for Winning in a Bidding War.

Common New Homeowner Mistakes to Avoid

Congratulations! You have officially closed on your home…..Now what? Below are a few suggestions of some things to consider before moving forward as the owner of a new home!

01. Ignoring Home Maintenance Issues

When you move in, your home is usually in pretty good shape. But like all man-made things, a house requires ongoing maintenance. Home maintenance includes tasks like cleaning the gutters, power-washing the house, prepping your pipes for winter, and much more. Later in the packet, I break down some seasonal maintenance suggestions to help you stay up to date.

02. Not Budgeting for additional Expenses

There are some additional fees that you need to be aware of and keep in mind in addition to your monthly mortgage. A few of the fees to keep in mind are homeowner’s insurance, property taxes, utilities, HOA fees, as well as the cost of buying the tools and equipment to care of the landscapeing and handle DIY repairs. Creating a budget ahead of time will help you tackle these additional charges.

03. Making Major Renovations Immediately

Before making any major renovations, give yourself some time to live your home, see how it feels, and then determine if any large renovations are needed. Small changes will be expected, I suggest waiting to make any major renovations.

04. Failing to Establish an Emergency Fund

Life happens and certain items that come with a home can be expensive. Having an emergency fund for any unexpected emergencies could be life-changing. I suggest putting away 1 to 3 percent of your home’s purchase price each year to develop your emergency fund. For example, if your home costs $250,000, set aside at least $2,500 each year if possible. You could make one large deposit or spread the payments out in monthly deposits.

I’m always happy to answer questions or share more advice for new homeowners. Feel free to reach out to me with any questions!!

Tips for Getting Pre-Approved for a Mortgage

One of the first and most important steps in the homebuying process is getting pre-approved for a mortgage.

While prospective lenders will have plenty of questions for you, don’t be afraid to find the right lender and loan by asking a host of questions all your own. 

Here are a few to get you started:

– What type of loan do you recommend for me? Why? There’s no one type of mortgage loan that’s superior to another—but whichever you choose, you need to know why it’s best and how it works.
– Will my down payment vary based on the loan I choose? If you’re tight on cash or don’t want to be cash poor, let your lender know. Different loans vary in their down payment requirements. 
– What is the interest rate and the annual percentage rate (APR)? Everyone talks about the interest rate, but the APR is just as important. It combines the interest rate with the fees a lender charges to originate your loan.
– Can I lock-in an interest rate? If so, for how long? If you think rates will be moving up, ask if you can lock it in for a set period of time. 
– What will my closing costs be? Are they a part of my loan or will I pay them in cash at closing? Remember, closing costs usually run 3-6% of your loan value so you need to know how they’ll be covered.

Don’t understand something your lender says? Stop and ask for clarification. This is your homebuying journey and you deserve to understand the process every step of the way. 

Keep in mind that since a pre-approval is only valid for a short period of time, you’ll want to wait to meet with lenders until you’re ready to seriously search for a home.

Have you talked to a lender about getting pre-approved for a loan? I’d love to help you get the ball rolling on this with my list of recommended lenders. Let me know if I can help!

What is an Appraisal Gap?

An appraisal gap is the difference between the agreed upon purchase price and the value that the appraiser determines at the time of appraisal. For example if a seller accepts a buyer’s offer with a purchase price of $250,000 and the appraisal comes back at a value of $240,000, the appraisal gap is $10,000.

In this current market, there is a possibility for homes to appraise for less than a buyer is willing to pay. Appraisers use past sales as comparable properties in their reports. With the low inventory and amount of buyers competing for the properties on the market, market values are rising and it may be difficult for appraisers to find comparisons to support the value.

To overcome this obstacle, many buyers are offering appraisal gap coverage or guarantees in their offers to compete. What does this look like? In our earlier example, if the buyer included an appraisal gap coverage of $10,000 in their offer, the seller will get the full purchase price of $250,000. The buyers would have to bring an additional $10,000 (the shortfall of the appraisal) to closing in addition to their down payment and closing costs.

For more ideas on how to write a competitive offer check out this blog post.