The recent mini-depression is sad news for some in Michigan. It’s not easy for a person or a family member to lose a job, and many here are in that situation. Many people are cutting their losses and finding employment in other states with a more balanced economic outlook.
The good thing about all of this financial doom and gloom is that the real estate market in Michigan is now extremely competitive. If you live in Michigan and are in the mindset to buy, now might be your best chance yet of getting a really great deal with lots of extras.
Consider the statistics: in September 2005, there were 7,000 homes for sale in Oakland County, which is my home and immediately north of Detroit. Even back then, real estate agents were calling it a “buyers market.” In September 2006, there were over 14,000 homes listed for sale, twice the amount available the year before. It’s taking longer to close the deal, and many sellers are getting nervous.
Median priced and starter homes are mainly affected. We sold a home in the summer of 2005, just as the market was slowing. Our home was listed for ten months, and we were ecstatic when our buyer walked through the door and signed the papers.
Prime Time for Buyers and Tips to Remember
- Before you start, make sure you know what you’re doing. There are many good online references, including zillow.com and realestate.com. These will give you a feeling of what is out there and what people are asking. A note about zillow.com: the site gathers their information from the last time the home was sold. This may not be an accurate depiction of what that home would sell for now. Almost all of the major real estate brokers have national and local websites as well.
- Narrow your choices to what works for you. If you really want three bedrooms, two baths and a garage, make sure you stay with it. There’s no need to settle for less. Remember, the market is flooded and you can afford to be picky.
- Go low. Because of the slow market, sellers are reducing asking prices to maintain a certain amount of competitiveness. If you’re a buyer, pay attention to how long the house has been listed. Sometimes sellers will accept less than what they originally asked. (We did!) No longer is it considered in bad taste to lowball an offer. After all, it doesn’t hurt to ask! What can they say, no?
- Ask for something extra. Usually homes are sold without appliances or those items which can be removed, like fixtures, curtains and other window treatments. These days homeowners are willing to part with just about anything and everything just to make the sale. This may even include the seller’s furniture. If you find yourself attracted to a property and need something “extra” to close the deal, don’t be afraid to ask for it. When we sold our last home, the buyer wanted our patio furniture and the bathroom fixtures I had purchased for our new home, which she had spied stored in the garage. What did I say? “Go ahead, take it!” Make sure you any extras you want are drawn in writing into your purchase agreement.
- Look for properties that offer incentives. This doesn’t include the “extras” listed above. These are serious incentives above and beyond the washer/dryer and window treatments. Some of the super-incentives I see by looking at the real estate papers include cars (some luxury), vacation trips, redecorating allowances and huge bonuses for signing agents.You can also try looking for foreclosed homes. Local agents will not be able to help you there, but you can gain the information by scouting banks and savings and loans. Buying a foreclosed home requires more legwork on your part, since you will be dealing directly with the bank. Friends and neighbors can assist by letting you know which properties are in foreclosure mode.
Also, remember that if you end up purchasing a home that is severely deflated from its original taxable value, you can make a case the next year with your local tax assessor and have the value of your house equalized to what you actually paid for the property. It will take a year or so, but your tax bill will be lowered.
It’s an excellent time to be a home buyer!