HUGE MISTAKES Michigan Home Buyers & Sellers Are Making! - In today’s housing market, there are a lot of mistakes being made by homebuyers and sellers across the fine state of Michigan, so be sure to stick around and find out what those are, so you don’t make them.
Michigan Buyer & Seller Mistake: Thinking it's still 2020-2021
One of the first and most obvious mistakes or misconceptions a lot of people have made about today’s housing market is they think it’s still that 2020-2021 time, where homes were hardly put on the market, they received 100 offers over asking price, lines out the door, buyers buying eachother out of contracts, and open houses just looked like the secretary of state office at the end of every month. It was a frenzy, there was panic, and honestly no decision was made very soundly, it just seemed like a whole lot of peer pressure or buyer pressure I should say, because if you wanted to get a home bad enough, there was definitely a sacrifice that needed to be made. This mentality has made a lot of buyers sit on the sidelines lately. I’ve heard people say, “I don’t want to get into that bidding war nonsense, i’m just going to sit on the sidelines for a little longer” or “I’m not going to offer over asking price with this interest rate and how it is” and the truth is, the market has cooled down regardless of what sources and media will tell you, and that fact can’t be argued.
Of course, there are areas that are still doing pretty well when homes are priced correctly in an area where the inventory is particularly much less than most, places such as Novi, Northville, Livonia, even Dearborn and Dearborn heights have been considered one of the faster growing housing markets in Michigan alongside several communities on the west side such as Grand Rapids and Traverse City. During that 2020-2021 time, you had sellers on their thrones laughing at buyers as they received double and triple the returns on the sale of their homes. Despite the hotter markets across Michigan, the market has cooled like I said, the scale isn’t so much tipped in the sellers favor, but it still is to a certain extent due to the lack of homes for sale on the market today. The frenzy started from the cheaper mortgage rates, and the increase of the rates has been what’s slowed that demand and put buyers on the sidelines, and they are still on the sidelines thinking they will be outbid.
Michigan Seller Mistake: Greed
That’s a buyer misconception, but how does this translate to a seller? Well, if you spend just a few seconds scrolling on Zillow or a Realtor’s home portal, you’ll see all the price decreases happening all over the state, and the reason that is happening is because sellers are being a little greedy still in thinking this market is the same as it was during the pandemic, but as I reiterated, it is not. Seller’s will ask me from time to time, does this mean I missed the boat to float away with piles and piles of money bags? Well first off, that would look suspicious, and secondly, Not necessarily, the market is still tipped into a seller’s favor solely because the inventory is so low that a sellers home will be seen by a lot more eyes, and the pent up demand over the years will have most people looking at your house thinking finally, this is the place to live, even if it isn’t the prettiest model in the catalog, but when it comes to pricing, you can’t just look at your neighbor's home that sold 1-2 years ago and say that's what your home will be listed at, because what someone is willing to spend in this market today will not justify that.
Michigan Buyer Mistake: Eliminating Contingencies
Another buyer mistake I’m seeing today has to do with the buyers who are actually in the market looking to buy a home, not the ones who have decided to sit on the sidelines and wait things out. I’ve read, heard from friends, and other agents across the country about doing an unnecessary elimination of contingencies. What I mean by that is, people who were in the earlier years of this market have been trained to be aggressive and that aggressiveness is carrying over into this softer market. So they are thinking they need to waive their home inspections, offer free post close occupancy, bid above asking price when there’s not nearly as much interest, or any at all, and it may come back to bite you a little bit. Don’t waive inspections, don’t offer free things and don’t throw in offers thousands above asking price because you’re stuck in that mentality of a few years ago. As the age old saying states, “you can always work your way up, you can’t work your way down” and that’s why low ball offers are happening numerous times on listings these days, because people will start low and work their way up to the point they’re comfortable with instead of putting all their eggs in one basket to realize they were the only offer. I’ve mentioned it in a few of my other videos, but that comes down to thinking emotionally instead of strategically. In this market, it’s very important to think strategically to ensure you aren’t over spending for homes that are already listed at a premium.
Michigan Buyer Mistake: Get Your Own Agent
A lot of these issues can be avoided by implementing this next point and that’s getting your own agent. I know there’s so many people out there who think realtors aren’t worth it, they just want to get the process done, they don’t want to be sold, etc. and I feel for those people, but not all agents provide equal service, even though generally speaking we all get paid the same. So what a lot of people will do is call the sign that’s in the yard for the home they’re interested in, say they want to buy it and just use that agent to get the home. This is called dual agency, where the buyer and seller are using the same agent, here in Michigan that would need to be disclosed and signed on the dotted line. The goal of this realtor is to sell the home and get the seller as much money as possible. Well, that can become a little contradicting especially if they are working with the buyer to buy it as well. These agents more times than not will get paid twice since they are doing double the work, but oftentimes that could mean they are just trying to push this transaction forward and really not have the buyers or sellers best interests in mind, and that goes for sales representatives for new construction homes too. They may seem like the coolest person in the world, but they have a contract with the builder or developer to sell these homes. So having a buyers agent in that situation who is working solely on your behalf is a very crucial aspect to keep in mind when going into new construction and when buying a resale home as well.
More Michigan Seller Mistakes:
Those are the most common mistakes I’m seeing today not only in Michigan’s housing market, but all over the country. A few other mistakes that may or may not be known that i just wanted to rattle off real quick just to make you aware as a home seller include: selling without an agent, it’s important to get as much exposure and guidance as possible in this changing market, pricing a home wrong is probably number one, hiding any major defects or repairs instead of disclosing everything on the sellers disclosure, this can be something that can come back and bite you legally sellers, so it’s better to disclose everything and anything so 1) The home is priced as is based on that and 2) You don’t get into legal trouble if it’s proven you knew. Next is using bad listing photos or hiring an agent who doesn’t pay for them to be professionally done. Based on experience, I have had clients buy a home on photos alone, so posting bad photos will eliminate a lot of potential buyers and let’s be honest, when the first couple listing photos are bad I don’t even spend more time looking at them, and it makes me wonder what other corners have been cut. Of course, this can be situational, especially if the home has tenants and you get a couple exterior shots instead of the typical 20-25 package. The next mistake is taking low ball offers too personally. A lot of people will just say no and move on instead of putting their feelers out there with a counter offer, and lastly, limiting showings. If you’re selling your home, understand you may need to find another place to hangout at for a good chunk of the day, limiting the showing times for only a few hours each day will not benefit you very much.
More Michigan Buyer Mistakes
In terms of homebuyer mistakes out there, a lot of it has to do with your financials, from not saving up enough money and spending all your savings, to not starting the pre approval process early and only shopping around for one quote. It’s important to make an informed decision, don’t make one emotionally, think long term and truly weigh your wants and needs and decide what you truly need and what you could live without.
For those of you that have stuck around this long, what mistakes have you made when it comes to buying and selling your home? Drop them in the comments below.
Andrew McManamon is a Michigan REALTOR® with Signature Sotheby’s International Realty and provides real estate services to Buyers, Sellers and Investors throughout SE Michigan including Livingston County, Oakland County, Washtenaw County, Genesee County & beyond. Andrew has become one of the rising stars of Michigan real estate agents. Prior to his real estate career Andrew was responsible for managing a senior living facility in Brighton, Michigan as a dining supervisor and an activities assistant. Andrew’s passion to help people is unlike any other, and he continues to strive to be best resource he can be. Andrew graduated from Cleary University in Howell, Michigan with a double major and currently resides in Brighton, Michigan.