Strategic default is defined as walking away from a mortgage that you have the ability to pay. Why do homeowners do this? Or not do this? It can be pretty much broken into two schools of thought.
First, the ethical argument. You agreed to buy your house at a then fair market price with a mortgage at the then market rate. You signed a contract obligating you to keep making payments even if similar houses are now selling for half the value of what you paid. Even if a new mortgage can be obtained at a lower interest rate by another buyer. Even if you can’t refinance.
The other argument is that this is a business deal, plain and simple. If I don’t make the payments, you take the house. I’m not going to make the payments, so feel free to take the house.
The report examines the use of social media and social influence on our decision making. If enough people that you know (or are connected to) are saying its fine to strategically default, you begin to get more receptive to the idea. After all, it worked out great for them, why not me? (A lot like the continual anecdotes I hear about the ‘buddy’ that picked up a $600,000 house for $100,000 as a foreclosure - I can do it, too.)
An industry source, CoreLogic, says that 11 million homes (22 percent of the housing market) are underwater and that another 2.4 million have less than 5% equity, so there’s a lot of potential for more strategic defaults out there.
Banks are also part of the problem. People looking for refinance options often get the runaround or can’t qualify with the current stringent requirements. I know mortgage reps that can’t refi their own homes, what chance does a regular consumer have? It may be easier for some people to opt into strategic default as a result of feeling helpless, or because they think the big corporations don’t care about them.
A single strategic default (which ends up as a foreclosure home) won’t kill the value in a neighborhood. But think about the areas where there are a lot of strategic defaults in addition to the short sales and foreclosures due to hardship – loss of a spouse, losing a job, illness. Distressed sales do, in fact, bring down property values and are not good for neighborhoods. Strategic default is only a part of the overall problem.
Friday, December 30, 2011
Cash Is Still King
A report in DS News quotes a study that claims 38% of all homes bought in 2011 were financed by cash, not mortgages. Tight lending criteria is likely one of the causes, but investors are also looking for ways to make their money yield better returns, too. This trend is expected to continue for the near future. And right now we’re seeing true record low mortgage rates (sub 4%)!
My own experience is that there are a lot of cash buyers who want to be owner-occupants. It’s not unusual for me to see cash offers on homes up to the $140,000 price point, so there’s a lot of competition for homes in ‘move-in’ condition.
A recently released Realtor Confidence Index for November 2011 also indicated that 28% of home purchases were cash financed. This report was based upon results obtained from just over 3,000 Realtors nationwide and is conducted monthly by the National Association of Realtors Research Division.
Please remember one very important thing. A cash offer does not guarantee that you will be the successful bidder in multiple offer situations. While it takes some uncertainty out of the equation for the seller, many sellers are still looking at the bottom line. Depending on the margin between a cash and financed offer, they may take a ‘cleaner’ and lower priced cash offer or they may take the higher priced mortgage offer knowing that it will take up to 45 days to close.
Everybody wants a deal but if you’re seriously underbidding on homes that have been on the market less than a month, you’re not going to be in the game.
My own experience is that there are a lot of cash buyers who want to be owner-occupants. It’s not unusual for me to see cash offers on homes up to the $140,000 price point, so there’s a lot of competition for homes in ‘move-in’ condition.
A recently released Realtor Confidence Index for November 2011 also indicated that 28% of home purchases were cash financed. This report was based upon results obtained from just over 3,000 Realtors nationwide and is conducted monthly by the National Association of Realtors Research Division.
Please remember one very important thing. A cash offer does not guarantee that you will be the successful bidder in multiple offer situations. While it takes some uncertainty out of the equation for the seller, many sellers are still looking at the bottom line. Depending on the margin between a cash and financed offer, they may take a ‘cleaner’ and lower priced cash offer or they may take the higher priced mortgage offer knowing that it will take up to 45 days to close.
Everybody wants a deal but if you’re seriously underbidding on homes that have been on the market less than a month, you’re not going to be in the game.
Thursday, December 15, 2011
A Lot Of House For The Money
Freshly painted and recarpeted it is in 'move-in' condition. You'll love the gas fireplace in the great room, the doorwall to the deck and a full unfinished basement. Municipal water and sanitary sewers, the community has a common pool and clubhouse and public sidewalks for ease of walking.
No offers for first 7 days, then offers from owner occupants until day 13, all others after that. Must have a Wells Fargo Home Mortgage pre-approval to submit an offer or proof of funds for cash offers. Priced at $133,900 - watch my web site for price updates and other new listings. MLS# 211128026.
How Do You Legislate Common Sense?
The National Transportation Safety Board (NTSB) thinks it’s by banning all cell phone use while driving.
It actually recommends banning the use of all hand held electronic devices, even if they’re ‘hands free’. So answering a call while wearing your Bluetooth headset would be illegal. Interestingly, they exempted GPS devices, most of which are not integrated into the car dashboard, because they are “designed to support the driving task.” Hmm. So a navigation app on my cell phone would probably be illegal, but maybe not. I guess that will depend on the interpretation of the officer that pulls you over.
None of us would reasonably argue with their premise that, “no call, no text, no update is worth a human life.” But there are many distractions available to drivers, from fiddling with a sound system, to drinking a cup of coffee or eating while driving, to even arguing with a passenger (usually a family member). How about the folks that are smoking and driving? While using a standard transmission?
I personally will answer a call with my Bluetooth, but the only way I initiate a call is by using the voice controls, which means you have to be in my address book. I can’t tell you how many times I’ve made a caller wait for a time (seconds to minutes) until I could pull over and safely have a more in-depth conversation or to write something down.
I think those of us that are on the road a lot, whether you call yourself a ‘road warrior’ or not, are more in tune with safe driving practices. Michigan already has a ban on texting and driving (July 2010) which I think is reasonable and a good thing. But don’t tell me I can’t use my hands-free device to answer calls. If I think conditions are too bad for that, I will let the call go to voice mail. But then, I consider myself a reasonable person.
Regardless of your opinion, contact your legislator and let him or her know how you feel about it. You can use this service to find your Michigan State Representative if you don’t already know who they are.
The entire NTSB Meeting summary on this topic is here.
It actually recommends banning the use of all hand held electronic devices, even if they’re ‘hands free’. So answering a call while wearing your Bluetooth headset would be illegal. Interestingly, they exempted GPS devices, most of which are not integrated into the car dashboard, because they are “designed to support the driving task.” Hmm. So a navigation app on my cell phone would probably be illegal, but maybe not. I guess that will depend on the interpretation of the officer that pulls you over.
None of us would reasonably argue with their premise that, “no call, no text, no update is worth a human life.” But there are many distractions available to drivers, from fiddling with a sound system, to drinking a cup of coffee or eating while driving, to even arguing with a passenger (usually a family member). How about the folks that are smoking and driving? While using a standard transmission?
I personally will answer a call with my Bluetooth, but the only way I initiate a call is by using the voice controls, which means you have to be in my address book. I can’t tell you how many times I’ve made a caller wait for a time (seconds to minutes) until I could pull over and safely have a more in-depth conversation or to write something down.
I think those of us that are on the road a lot, whether you call yourself a ‘road warrior’ or not, are more in tune with safe driving practices. Michigan already has a ban on texting and driving (July 2010) which I think is reasonable and a good thing. But don’t tell me I can’t use my hands-free device to answer calls. If I think conditions are too bad for that, I will let the call go to voice mail. But then, I consider myself a reasonable person.
Regardless of your opinion, contact your legislator and let him or her know how you feel about it. You can use this service to find your Michigan State Representative if you don’t already know who they are.
The entire NTSB Meeting summary on this topic is here.
Tuesday, December 06, 2011
Holiday Spirit in Howell Michigan
A couple of weeks ago, some business owners in Brighton got together and made a video about just that topic.
Now we have a great promo video of being in downtown Howell during the Holidays. A lot of video was shot during the Fantasy of Lights Parade (which everybody should see at least once!) and really gives you the feeling of shopping in a downtown area.
Big box stores and malls are fine for some things, but don’t forget about the folks who work right there on your Main Street. They usually do a lot more for your community than the big franchises (sorry, corporate policy doesn’t let us do that) and they really are more a part of your town than the big outfits.
Make a pledge to yourself that you’ll do at least some of your shopping at the smaller, local businesses this year. And while you’re in your downtown, why don’t you stop at a local restaurant for lunch or an appetizer and try something new?
Monday, December 05, 2011
Foreclosure Purchases By Owner Occupants Declining?
Wow. Real Estate Professionals know that buying a foreclosure is an economical way for first-time homebuyers to get into a house of their own, so this recent study by New Vista Asset Management surprised me a little.
As reported in DS News, New Vista began tracking foreclosure sales in Q1 of 2009 and has continued their quarterly tracking since that time. They monitor 18 national housing markets, of which only Wayne County is in Michigan, but they plan to add additional unnamed housing markets beginning in 2012.
There has been a general decline of owner occupant purchases since the advent of the data collection. An owner occupant is a homebuyer that plans to live in the house, as opposed to a purchase by an investor for rehab-resale or as a rental property. Interestingly, the only one of the eighteen markets that showed a gain in owner-occupant purchases was Wayne County, MI.
I list foreclosures, and it’s not unusual to have a stipulation in the listing agreement that says no offers will be submitted for the first 7 days, then offers from owner occupants only for the following week. However, this is not universal among banks and some entities are going to auctions and bulk sales of ‘as-is’ homes that will generally not appeal to an owner occupant, due to either the cost or scope of needed repairs.
Banks that will take the time and effort to put a home into move-in condition are the most likely to have sales completed by an owner occupant purchaser.
As reported in DS News, New Vista began tracking foreclosure sales in Q1 of 2009 and has continued their quarterly tracking since that time. They monitor 18 national housing markets, of which only Wayne County is in Michigan, but they plan to add additional unnamed housing markets beginning in 2012.
There has been a general decline of owner occupant purchases since the advent of the data collection. An owner occupant is a homebuyer that plans to live in the house, as opposed to a purchase by an investor for rehab-resale or as a rental property. Interestingly, the only one of the eighteen markets that showed a gain in owner-occupant purchases was Wayne County, MI.
I list foreclosures, and it’s not unusual to have a stipulation in the listing agreement that says no offers will be submitted for the first 7 days, then offers from owner occupants only for the following week. However, this is not universal among banks and some entities are going to auctions and bulk sales of ‘as-is’ homes that will generally not appeal to an owner occupant, due to either the cost or scope of needed repairs.
Banks that will take the time and effort to put a home into move-in condition are the most likely to have sales completed by an owner occupant purchaser.
Saturday, December 03, 2011
USDA Rural Development Loan News
On December 1st the U.S. Department of Agriculture’s (USDA) Rural Development (RD) program reported that they are funded for FY 2012 in the amount of $24 Billion for their Single Family Housing Guaranteed Loan Program (SFHGLP). Purchase loans are available now but it will take approximately two weeks for the funds to be posted to the program for loan refinances, and in the interim they will approve ‘conditional’ commitments for loan refinancing.
The FY 12 loan structure is 2 percent upfront guarantee fee for purchase transactions; 1 percent upfront guarantee fee for refinance transaction; and 0.3 percent annual fee for both purchase and refinance transactions.
RD loans can be refinanced WITHOUT an appraisal. Contact your lender or loan originator for more details. USDA RD loans are a great option for those that qualify. See their web site for more information. All Livingston County Michigan single family homes are eligible for RD financing, if you meet the income requirements.
The FY 12 loan structure is 2 percent upfront guarantee fee for purchase transactions; 1 percent upfront guarantee fee for refinance transaction; and 0.3 percent annual fee for both purchase and refinance transactions.
RD loans can be refinanced WITHOUT an appraisal. Contact your lender or loan originator for more details. USDA RD loans are a great option for those that qualify. See their web site for more information. All Livingston County Michigan single family homes are eligible for RD financing, if you meet the income requirements.
Monday, November 28, 2011
Support The Troops - Rush Time!
Hey, Livingston County! One of the Brighton Optimists, Donna Campbell, is helping a friend collect items to send over to the troops in Afghanistan. She'll be collecting items Thursday morning at the Bauery Restaurant at Mt. Brighton, during the weekly Brighton Optimist Club Meeting. An excerpted list of items that are wanted are:
lotion, sunscreen, deodorant - all travel size; chap stick, soap, eye drops, disposable razors; individual packets of trail mix, beef jerky, and general munchies; disposable cameras, small toys like beanie babies that the troops can hand out to the kids over there; zip lock bags and holiday decorations, duct tape, writing paper. Optimists, let's fill her vehicle up THIS THURSDAY - then go ring bells for the Salvation Army. Bring your stuff to Mt. Brighton at 7:30 am Thursday, December 1st.
All Livingston County residents - if you can stop by with some of these items, please do so. Stick around for breakfast on the Brighton Optimist Club if you wish. If you can't make the early hour, drop your items off at Campbell's Collision on Grand River just east of Whitmore Lake Rd. Let's help make the Holidays a little nicer for our troops!
lotion, sunscreen, deodorant - all travel size; chap stick, soap, eye drops, disposable razors; individual packets of trail mix, beef jerky, and general munchies; disposable cameras, small toys like beanie babies that the troops can hand out to the kids over there; zip lock bags and holiday decorations, duct tape, writing paper. Optimists, let's fill her vehicle up THIS THURSDAY - then go ring bells for the Salvation Army. Bring your stuff to Mt. Brighton at 7:30 am Thursday, December 1st.
All Livingston County residents - if you can stop by with some of these items, please do so. Stick around for breakfast on the Brighton Optimist Club if you wish. If you can't make the early hour, drop your items off at Campbell's Collision on Grand River just east of Whitmore Lake Rd. Let's help make the Holidays a little nicer for our troops!
Ypsilanti One Of Least Expensive College Towns for Home Buying
An Inman News article released today listed the top 10 cheapest and top 10 most expensive college towns in the USA. Michigan had two entries in the least expensive category - Eastern Michigan University in Ypsilanti at number 3 with an average list price of $107,458, and Western Michigan University in Kalamazoo at number 5 with an average market list price of $116,455.
The least expensive college town listed was the University of Memphis, in Tennessee, at $89,244. They were also the only town where the average listing price was below $100,000.
Eight of the ten most expensive towns were in the western part of the country, with UCLA (Westwood CA) being tops. The average listing price in that market is $1,271,428. The bottom of the list for most expensive college towns was Annapolis Maryland, home of the US Naval Academy. Their average list price is $522,420.
I guess that means that East Lansing and Ann Arbor fell somewhere in the middle. Inman News is a Real Estate industry news service.
The least expensive college town listed was the University of Memphis, in Tennessee, at $89,244. They were also the only town where the average listing price was below $100,000.
Eight of the ten most expensive towns were in the western part of the country, with UCLA (Westwood CA) being tops. The average listing price in that market is $1,271,428. The bottom of the list for most expensive college towns was Annapolis Maryland, home of the US Naval Academy. Their average list price is $522,420.
I guess that means that East Lansing and Ann Arbor fell somewhere in the middle. Inman News is a Real Estate industry news service.
Holiday Fundraiser Gives Both Ways
I’ve been an active member of the Brighton Optimist Club for many years. They are a community service group under the Optimist International umbrella and their motto is, “Bringing Out The Best In Kids.” Over their 35 years of existence, they’ve done a lot of great things for the community and its youth.
But these projects take money, so fundraising is needed. Their annual Holiday fundraiser is called Green2Green, in partnership with Dutchman Tree Farms in Michigan. Dutchman sells container grown evergreens, balled and burlap trees, holiday wreaths, and both 7’ cut and 3’ tabletop Christmas trees.
We’ve been getting their wreaths and they are outstanding – pleasing to the eye, fresh, and lasting well past the holiday season. Friends and family that have purchased trees have been very happy with them, too. For every purchase made with the Brighton Optimist Club’s promo code, a donation is made by Dutchman Tree Farms to that organization. Dutchman ships across the USA and they guarantee that if you are not happy with the product upon delivery, they will get you a replacement within a business day. No hidden fees and prices include delivery.
Please consider supporting a Michigan business and this local community service organization by making a purchase this Holiday season. In return you’ll be getting a great product AND you’ll help a community group to continue their work. To order, just click this link - http://www.dutchmantreefarms.com/organization/OCBRMI
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| courtesy Dutchman Tree Farms |
But these projects take money, so fundraising is needed. Their annual Holiday fundraiser is called Green2Green, in partnership with Dutchman Tree Farms in Michigan. Dutchman sells container grown evergreens, balled and burlap trees, holiday wreaths, and both 7’ cut and 3’ tabletop Christmas trees.
We’ve been getting their wreaths and they are outstanding – pleasing to the eye, fresh, and lasting well past the holiday season. Friends and family that have purchased trees have been very happy with them, too. For every purchase made with the Brighton Optimist Club’s promo code, a donation is made by Dutchman Tree Farms to that organization. Dutchman ships across the USA and they guarantee that if you are not happy with the product upon delivery, they will get you a replacement within a business day. No hidden fees and prices include delivery.
Please consider supporting a Michigan business and this local community service organization by making a purchase this Holiday season. In return you’ll be getting a great product AND you’ll help a community group to continue their work. To order, just click this link - http://www.dutchmantreefarms.com/organization/OCBRMI
Friday, November 25, 2011
New Listing - 7061 Braun, 48843
The master suite has a two-sided fireplace shared by the bedroom and master bath, which has a jetted tub, a bidet and a multi-head shower that includes an instant steam feature. There is a motor-operated chandelier that will make it easy to dust and change bulbs.
The mud room features a floor sink with a hose sprayer for your pet, and an egress door that leads directly to the fenced dog run area.
The upper floor has three more bedrooms, each with their own bath, and one bath has a bidet.
The interior has just been repainted and recarpeted and is in move-in condition. Hartland Schools. Offered at $340,000.
http://www.realestatemich.com/10/listing/21547 for the complete listing. Some seller concessions may be possible. A Wells Fargo Home Mortgage pre-approval is necessary to submit an offer, although you can use any lender.
Monday, November 21, 2011
Shop Local Video - Brighton Michigan
A group of business owners got together to write, rehearse, and shoot a little video on patronizing businesses in their town - Brighton Michigan. The narrator is George Moses of George Moses Company, publisher of the Marketeer. Many other business are featured. What a great idea! My wife and I do almost all of our Holiday gift shopping in either downtown Brighton or downtown Howell. We do a lot of other shopping in the downtowns, too. We like to keep our dollars local as much as possible. Oh, and if you want to buy a Brighton home for sale, or a house for sale in Howell - give me a call!
Here's the video link:
http://www.youtube.com/watch?v=BJdzXWjBmY4
Here's the video link:
http://www.youtube.com/watch?v=BJdzXWjBmY4
Sunday, November 20, 2011
12 Days of Gleaners
Last year, local radio station WHMI (93.5 FM) in Howell, Michigan, began a program to raise money for Gleaners Food Bank of SE Michigan. WHMI partners with the Howell Soft Cloth Car Wash for the 12 days prior to Thanksgiving to raise funds. With Gleaners’ buying power, $1 will feed 1 person for 1 day.
Volunteer organizations each take a day and solicit change from the customers at the carwash. Today is the day that I help out with the rest of the Brighton Optimist Club. We’ll be on site from 10am to 6pm. My shift is from noon to 1pm.
WHMI was pleased with the contribution level in 2010, their first year, but hope to do even better this year. Gleaners of Livingston County cannot meet the needs of the county on their own, and regularly food from other Gleaners locations have to be brought in. If you live in Livingston County, consider stopping by today between 10am and 6pm to make a small monetary donation. No family should have to go hungry and the needs are more acute during the holiday season.
Kudos to WHMI and the Howell Soft Cloth Car Wash for their efforts, as well as to the Brighton Optimist Club and other community groups that each take a day for service to those in need.
Volunteer organizations each take a day and solicit change from the customers at the carwash. Today is the day that I help out with the rest of the Brighton Optimist Club. We’ll be on site from 10am to 6pm. My shift is from noon to 1pm.
WHMI was pleased with the contribution level in 2010, their first year, but hope to do even better this year. Gleaners of Livingston County cannot meet the needs of the county on their own, and regularly food from other Gleaners locations have to be brought in. If you live in Livingston County, consider stopping by today between 10am and 6pm to make a small monetary donation. No family should have to go hungry and the needs are more acute during the holiday season.
Kudos to WHMI and the Howell Soft Cloth Car Wash for their efforts, as well as to the Brighton Optimist Club and other community groups that each take a day for service to those in need.
Wednesday, November 16, 2011
To Hell and Back
Yup, and it only took a little over an hour.
And jokes abound, of course. In summer, if your city is warmer than it is there, you can honestly say it’s “hotter than Hell.” In winter, if you record a lower temperature, it’ll be “colder than Hell.” Meteorologists’ from around the world actually call the general store to find out the temperature so they can work one of those little gems into their weather broadcast. If you feel the need to check the weather in Hell, this link will do it for you. You can then amaze your family, friends and acquaintances with little known weather knowledge. You may even win a free drink at your favorite tavern with a properly phrased wager.
But it goes on. Some taxpayers take their returns to the general store in Hell to have a hand cancellation that reads, “Hell, Michigan” before mailing to the IRS! No lie. Rumor has it that ‘Dear John’ and ‘Dear Jill’ letters also get the hand cancellation treatment, but I’m betting that texting and emailing are cutting into that market.
Now, Hell is no novelty to me since I live fairly nearby and have visited it on many occasions. Hell is not a novelty to me for other reasons, but I won’t digress. The Dam Site in has dam good burgers and pizza, Screams Ice Cream Parlor serves great goodies and you can buy all sorts of Hell emblazoned merchandise at the store (with the Post Office inside. There are only three buildings in Hell and if it’s too hot for you, you can walk down to the creek and dip your feet to cool off a bit).
There’s a fairly new miniature golf course, and frequent events that can draw an amazing number of people. In September of this year, a new Guinness Book of World Records milestone was met when Hell hosted the longest ever parade of hearses, with 51 vehicles officially participating.
It has been a while since I’ve been to Hell and I was both pleased and surprised to see a new sign! Yes, a piggy back on the Pure Michigan (Michigan’s Official Travel and Tourism site) campaign, with the sign at the right. Also, I’m not sure when Hell starting billing itself as ‘The Hysterical Town’, but today there were no signs of hysteria, mass or otherwise. If I had been a little later I would have stopped for a Smitty’s Burger at the Dam Site Inn, but alas, this was an earlier in the morning expedition.
People get married in Hell (guess they want to get the worst part out of the way early), and you can actually be the Mayor of Hell for a Day! If you’re planning a visit, the official road to Hell is Livingston County Road D 32, otherwise known as Patterson Lake Rd (at least east of Hell). Drive to Pinckney, turn left at the park in the center of the Village (Howell Street), then go down to the first stop sign and make a right. It’s just a short jaunt to Hell from there.
And if you want to find a house in Hell, call me. According to some, I've been an expert for years.
‡=Purell is a Registered trade mark of Johnson & Johnson.
I had to preview a bank owned property today. It was what I euphemistically call ‘a Purell ®‡ house’. You know, the kind that you can’t wait to get back to your car to wash your hands with Purell®? This kind of property has made me an expert and turning lights on and off with my elbows, by the way, so my wife will be pleased to learn that you can teach an old dog new tricks. The house was in the Pinckney zip code, but really it was just a bit west of the lovely hamlet of Hell, Michigan. Yes, there really is a Hell, Michigan.
And jokes abound, of course. In summer, if your city is warmer than it is there, you can honestly say it’s “hotter than Hell.” In winter, if you record a lower temperature, it’ll be “colder than Hell.” Meteorologists’ from around the world actually call the general store to find out the temperature so they can work one of those little gems into their weather broadcast. If you feel the need to check the weather in Hell, this link will do it for you. You can then amaze your family, friends and acquaintances with little known weather knowledge. You may even win a free drink at your favorite tavern with a properly phrased wager.But it goes on. Some taxpayers take their returns to the general store in Hell to have a hand cancellation that reads, “Hell, Michigan” before mailing to the IRS! No lie. Rumor has it that ‘Dear John’ and ‘Dear Jill’ letters also get the hand cancellation treatment, but I’m betting that texting and emailing are cutting into that market.
Now, Hell is no novelty to me since I live fairly nearby and have visited it on many occasions. Hell is not a novelty to me for other reasons, but I won’t digress. The Dam Site in has dam good burgers and pizza, Screams Ice Cream Parlor serves great goodies and you can buy all sorts of Hell emblazoned merchandise at the store (with the Post Office inside. There are only three buildings in Hell and if it’s too hot for you, you can walk down to the creek and dip your feet to cool off a bit).
There’s a fairly new miniature golf course, and frequent events that can draw an amazing number of people. In September of this year, a new Guinness Book of World Records milestone was met when Hell hosted the longest ever parade of hearses, with 51 vehicles officially participating.
People get married in Hell (guess they want to get the worst part out of the way early), and you can actually be the Mayor of Hell for a Day! If you’re planning a visit, the official road to Hell is Livingston County Road D 32, otherwise known as Patterson Lake Rd (at least east of Hell). Drive to Pinckney, turn left at the park in the center of the Village (Howell Street), then go down to the first stop sign and make a right. It’s just a short jaunt to Hell from there.
And if you want to find a house in Hell, call me. According to some, I've been an expert for years.
‡=Purell is a Registered trade mark of Johnson & Johnson.
Monday, November 14, 2011
Brighton Michigan Housing Market Snapshot-Nov 2011
Brighton has a vibrant downtown area with a number of restaurants serving a variety of cuisines, small specialty shops, a large children’s play area - the Imagination Station - and is centered by the Mill Pond. There is a gazebo at the Mill Pond, as well as a renovated Village Cemetery, and if you feel like walking you can stroll on the boardwalk and ‘tridge’ to get around the downtown area. There are many civic events in the downtown area all year round, and commercial interest remains very high for restaurateurs, office space and retailers.
This snapshot will be for homes in the City of Brighton. Right now, there are 132 active residential properties. They have been on the market for an average of 123 days and range in price from $24,000 at the low end, to $364,900 at the high end. The average list price is $149,482 and the median list price is $146,250.
In the last 12 months, 72 homes have sold ranging from $25,100 to $390,000. The sold properties were on the market for an average of 117 days and the average sales price was $144,348 and the median sales price was $143,500.
Brighton has a variety of home style and ages. Established neighborhoods have homes going back 100 years right up to newer subdivisions built within the last 10-15 years. All homes in the city limits have municipal water and sanitary sewer, and all are on paved roads.
Monday, November 07, 2011
Housing Market News
I receive bulletins from the Chief Economist at Comerica Bank, Robert Dye. A couple of the recent emails that pertain to the housing market indicate that home sales dipped 0.3 percent in September, while prices are down 3.5 percent from a year ago. The Consumer Price Index (CPI) gained 0.3 percent in September and is up 3.9 percent for the year. September 2011 housing starts were up a hearty 15 percent to a 658,000 unit pace, but this is judged as ‘not sustainable’. This data is a compilation for the nation and the report was subtitled, “More of the same, No Breakout, No Backslide.”
If you’d like to subscribe to these periodic emails, visit the page at http://www.comerica.com/economics, then follow the link titled, “Subscribe to Newsletter.”
If you’d like to subscribe to these periodic emails, visit the page at http://www.comerica.com/economics, then follow the link titled, “Subscribe to Newsletter.”
Saturday, October 29, 2011
The Red Barn
One thing that seems to stay constant in my real estate life is an appreciation of architecture, form, light and color. Some pretty typical-looking homes just seem to catch my eye. I guess the same thing goes for cars, people, animals, and yes – even barns.
I was driving to a new property assignment yesterday morning. There was a moderate fog at my first stop, and as I neared my second destination, the sun was poking through and burning the fog off. I’ve passed this particular barn many times over the years, but coming out of a foggy patch into the sun and seeing this dilapidated old barn in that exact light made it seem as though I were seeing it for the first time.
Of course I pulled over and grabbed my always available camera to snap a few shots. This one was at f5.6, 1/1000 sec exposure and ISO 800. It’s definitely the one I like the best.
Tuesday, October 25, 2011
Case-Schiller Annual Price Change Improvements
The just released (Oct 25 2011) Standard & Poor’s Case-Schiller Home Price Index shows their 10- and 20-city composite data recording mild improvements in home prices. August 2011 data (3.8 percent and 3.5 percent declines) was improved from August 2010 (4.1 percent and 3.7 percent declines). So yes, while prices are still going down, they are improving.
Sixteen of 20 cities in the index posted improved figures from the July data, another hopeful sign. Atlanta and Las Vegas appear to be bucking the trend with lower negative trends. Detroit (2.7%) and Washington, D.C. (0.3%) were the only two cities to show an annual gain.
Locally, for Livingston County, average sales prices are up just over 21% for 2011 vs. 2010 and up more than 19% for 2011 vs. 2009. Inventory continues to be an issue, with a 32% drop for 2011 vs. 2009 and over 20% lower for 2011 compared to 2010. Days On Market (DOM, or the time it takes to get a home sold) are also declining. So buyers that are serious have to move speedily to have the best opportunity at the house they really want to purchase.
If you’re looking for a home in West Oakland, Livingston, or North Washtenaw County, call me for a no-stress discussion of the market.
Sixteen of 20 cities in the index posted improved figures from the July data, another hopeful sign. Atlanta and Las Vegas appear to be bucking the trend with lower negative trends. Detroit (2.7%) and Washington, D.C. (0.3%) were the only two cities to show an annual gain.
Locally, for Livingston County, average sales prices are up just over 21% for 2011 vs. 2010 and up more than 19% for 2011 vs. 2009. Inventory continues to be an issue, with a 32% drop for 2011 vs. 2009 and over 20% lower for 2011 compared to 2010. Days On Market (DOM, or the time it takes to get a home sold) are also declining. So buyers that are serious have to move speedily to have the best opportunity at the house they really want to purchase.
If you’re looking for a home in West Oakland, Livingston, or North Washtenaw County, call me for a no-stress discussion of the market.
Monday, October 24, 2011
New Listing - 7843 Turnberry-Whitmore Lake
This one-owner home has been well maintained. The comfortable family room has a gas fireplace and overlooks the Links of Whitmore Golf Course. Newer well pump and constant pressure tank, this home is also equipped with a quiet dishwasher, inground irrigation system and side-entry two car garage.
Enjoy the brick paver patio and garden area. A total of 1961 sq ft with 4 bedrooms, 2 full and 1 half bath. Living room and dining room are also available, and your guests will love the look of the towering entance/foyer area. Some furniture, 3D TV, and riding mower with attachments are available-make offer. See the full listing here.
Friday, October 21, 2011
Dump Your Old Electronics – Free!
Livingston County Solid Waste Program has a one-day collection coming up next Saturday, October 29th, from 9am to 2pm. No appointment is necessary, just bring your old computer equipment, televisions and peripherals, stereos, cameras, fax machines, gaming systems for drop off and proper disposal. The collection is at the County’s East Complex, 2300 E. Grand River (48843) at Chilson.
They also accept old cell phones, but drop those off at my office for the ‘Cell Phones For Soldiers’ campaign. We’ve collected over 2500 cell phones so far!
This event is free to County residents, and includes small businesses with 10 or fewer employees. Many hazardous substances can be found in electronics and this proper disposal will keep those contaminants out of landfills where they might filter back into ground water.
For more information, call 517-545-9609, or visit the website at http://www.co.livingston.mi.us/SolidWaste/
They also accept old cell phones, but drop those off at my office for the ‘Cell Phones For Soldiers’ campaign. We’ve collected over 2500 cell phones so far!
This event is free to County residents, and includes small businesses with 10 or fewer employees. Many hazardous substances can be found in electronics and this proper disposal will keep those contaminants out of landfills where they might filter back into ground water.
For more information, call 517-545-9609, or visit the website at http://www.co.livingston.mi.us/SolidWaste/
New facebook Real Estate Page Address
I've made it easier to find my facebook Real Estate page. The old link was a bit cryptic, but the new one is simply, http://www.facebook.com/MichiganRE
New listings go here first, and there are periodic posts about buying, selling, and general real estate news entered throughout the month. On the right side of this blog, you can also sign up for my newsletter if you wish.
New listings go here first, and there are periodic posts about buying, selling, and general real estate news entered throughout the month. On the right side of this blog, you can also sign up for my newsletter if you wish.
Thursday, October 20, 2011
Howell Condominium For Sale
The full basement is unfinished, the one car attached garage does not have a door opener. The entire condo has just been repainted and recarpeted. A new gas range, range hood, and dishwasher have also been installed. Association dues are $110/month, and the community is within the Howell city limits so there is city water and sanitary sewer service.
A short walk to the Howell Carnegie Library and downtown. Click here to see the full listing.
Be among the first to see new listings and get real estate news by "liking" my facebook Real Estate page.
Tuesday, October 18, 2011
Half of Foreclosure Aid Money Not Spent
Earlier this month, USA Today reported that over half of the $1 billion allocated to assist unemployed and underemployed people stave off foreclosure will not be used. The Emergency Homeowners’ Loan Program would have given up to $50,000 loans in 32 states and Puerto Rico.
Only 11,832 applicants of the total 100,000 were conditionally approved. It took almost a full year for the program to start taking applications, which left only a three month window in which to apply and be approved.
Under the terms of this program, homeowners could have received up to $50,000, which would be forgiven if they stayed in their home for at least five years. The program, administered by the U.S. Department Housing and Urban Development (HUD) was made possible by Wall Street reform legislation. Critics say that HUD added eligibility criteria that slowed the process.
A HUD spokesperson admitted a longer than anticipated ramp up, but also said the eligibility criteria defined by the law that created the program disqualified a higher than expected number of applicants. You can read the entire article here.
Only 11,832 applicants of the total 100,000 were conditionally approved. It took almost a full year for the program to start taking applications, which left only a three month window in which to apply and be approved.
Under the terms of this program, homeowners could have received up to $50,000, which would be forgiven if they stayed in their home for at least five years. The program, administered by the U.S. Department Housing and Urban Development (HUD) was made possible by Wall Street reform legislation. Critics say that HUD added eligibility criteria that slowed the process.
A HUD spokesperson admitted a longer than anticipated ramp up, but also said the eligibility criteria defined by the law that created the program disqualified a higher than expected number of applicants. You can read the entire article here.
Monday, October 10, 2011
September 2011 Credit Suisse Survey of Housing Market
Each month, Credit Suisse surveys Realtors about their local market. September’s results were just released and for the metro Detroit area it concludes that buyer traffic and sales prices are down and incentives offered to buyers from new home builders are flat. Even with true, record low mortgage rates (below 4%!), there are skittish buyers, largely attributed to economic uncertainty.
While the most recent month’s home prices on new construction are holding steady, data indicates prices will drop in the next few months. Folks in the Lone Star State should be happy, though, as both Austin and Houston were showing signs of a modest rebound. On the other side of the spectrum, Charlotte and New York saw big declines in buyer traffic.
There are some new construction starts in the Livingston County market, but I wouldn’t call it a groundswell of activity. After the last couple of years, any new home building is a good sign. Construction is occurring in the Northridge Hills condominiums in the City of Brighton, and there are some homeowners building outside of large subdivisions controlled by the big building and development groups, too. If you want to build a home, you may have a little difficulty in finding a willing lender, but there are still a few out there doing new construction loans.
While the most recent month’s home prices on new construction are holding steady, data indicates prices will drop in the next few months. Folks in the Lone Star State should be happy, though, as both Austin and Houston were showing signs of a modest rebound. On the other side of the spectrum, Charlotte and New York saw big declines in buyer traffic.
There are some new construction starts in the Livingston County market, but I wouldn’t call it a groundswell of activity. After the last couple of years, any new home building is a good sign. Construction is occurring in the Northridge Hills condominiums in the City of Brighton, and there are some homeowners building outside of large subdivisions controlled by the big building and development groups, too. If you want to build a home, you may have a little difficulty in finding a willing lender, but there are still a few out there doing new construction loans.
Brighton Country Club Annex Sub Attractive For First Time Buyers
Located in Brighton Township, just outside the Brighton City limits, this platted subdivision has been attractive for first time homebuyers for many years. Affordable ranch homes in Brighton schools, convenience to retail shopping and easy access to Interstate 96 and US 23 are some of the draws.
The boundaries are roughly Grand River Avenue to the south, Interstate 96 to the north, Old US-23 to the east, and the Brighton City limits to the west, and there are 179 homes in this sub. The Brighton Country Club subdivision is on the other side of I-96 and not included in this post.
The streets are all public, so they’re maintained by either the road commission or the township. Originally, the subdivision was served by community wells, but in January 2008, water service was transferred to the Livingston County Water Authority. The lots are predominantly 60 ft wide by 132 feet deep, although some are 90 feet wide. Some of the homes also have basements, but there are also some built on crawlspaces or slabs. Garages (when present) are typically two car variety and are most often detached. Most of the streets do not have through traffic, except for Burson which empties to Old US 23 on the east, and at Leland just north of Grand River on the west.
The housing stock consists of mainly ranch style homes in the 900-1200 sq ft range, most with three bedrooms and one full bath. You can find a few 1400+ sq ft homes, and some will offer an additional half or even full bath, but those are somewhat rare.
In 2008 there were 5 sales reported in the local MultiList System (MLS), all purchased by owner occupants with either FHA or conventional mortgages. The average sold price was $114,310 and the average time on market was 99 days. There were also 5 sales in 2009, but three were to investors buying for cash and the average sales price had plummeted to $67,010. Sales picked up in 2010 with 10 being reported. Three of these were investor-bought at an average price of $45,758. The other 7 were bought on either FHA (1), conventional (1) or USDA Rural Development (5) loans and were for owner occupants. The average price for these seven homes was $87,868.
So far in 2011 (as of 10/09/11), there have been 13 sales, 7 of which were to investors at an average price of $48,650, the rest going to owner occupants with an average sales price of $84,833. Many of the investor properties end up being rentals in the $800-900 range, but a few end of getting “flipped” to owner occupant buyers. The price disparity between investor purchased and owner occupant purchased homes shows that people are willing to spend more money for homes in better condition. If you don’t have the experience, time or money to do major renovations or big “DIY” projects, that is the way to go.
This neighborhood has become more affordable since the housing downturn, and with its location in Brighton Schools, the lower township property taxes, and a location that is great for commuters to Ann Arbor it has remained popular. Right now there are four for sale varying in price from $49,900 to $85,000. If I can assist you in your home search, please feel free to contact me via email or facebook.
The boundaries are roughly Grand River Avenue to the south, Interstate 96 to the north, Old US-23 to the east, and the Brighton City limits to the west, and there are 179 homes in this sub. The Brighton Country Club subdivision is on the other side of I-96 and not included in this post.
The streets are all public, so they’re maintained by either the road commission or the township. Originally, the subdivision was served by community wells, but in January 2008, water service was transferred to the Livingston County Water Authority. The lots are predominantly 60 ft wide by 132 feet deep, although some are 90 feet wide. Some of the homes also have basements, but there are also some built on crawlspaces or slabs. Garages (when present) are typically two car variety and are most often detached. Most of the streets do not have through traffic, except for Burson which empties to Old US 23 on the east, and at Leland just north of Grand River on the west.
The housing stock consists of mainly ranch style homes in the 900-1200 sq ft range, most with three bedrooms and one full bath. You can find a few 1400+ sq ft homes, and some will offer an additional half or even full bath, but those are somewhat rare.
In 2008 there were 5 sales reported in the local MultiList System (MLS), all purchased by owner occupants with either FHA or conventional mortgages. The average sold price was $114,310 and the average time on market was 99 days. There were also 5 sales in 2009, but three were to investors buying for cash and the average sales price had plummeted to $67,010. Sales picked up in 2010 with 10 being reported. Three of these were investor-bought at an average price of $45,758. The other 7 were bought on either FHA (1), conventional (1) or USDA Rural Development (5) loans and were for owner occupants. The average price for these seven homes was $87,868.
So far in 2011 (as of 10/09/11), there have been 13 sales, 7 of which were to investors at an average price of $48,650, the rest going to owner occupants with an average sales price of $84,833. Many of the investor properties end up being rentals in the $800-900 range, but a few end of getting “flipped” to owner occupant buyers. The price disparity between investor purchased and owner occupant purchased homes shows that people are willing to spend more money for homes in better condition. If you don’t have the experience, time or money to do major renovations or big “DIY” projects, that is the way to go.
This neighborhood has become more affordable since the housing downturn, and with its location in Brighton Schools, the lower township property taxes, and a location that is great for commuters to Ann Arbor it has remained popular. Right now there are four for sale varying in price from $49,900 to $85,000. If I can assist you in your home search, please feel free to contact me via email or facebook.
Wednesday, September 28, 2011
Flood Insurance Update
Of Michigan’s 83 Counties, 59 will have re-drawn flood maps but right now only 22 have been completed. Here’s an interesting State statistic for Michiganders. For the years 1978 through 2009, $284.4 million dollars left the State in flood insurance premiums. In that same time, $45 million came back in the form of claims payments. Not a very good return for us as a State.
A few basics. Federal flood insurance covers only the structure, not personal possessions. Additional flood insurance policies are available through the National Flood Insurance Program (NFIP) and your homeowner’s insurance carrier for personal items, but that coverage is also quite limited or quite expensive. Rates are better if your municipality participates in the NFIP. As of 9/28/2011 there were no Livingston County listings, but Augusta and Ann Arbor Townships and the City of Ann Arbor were listed for Washtenaw County.
There’s a lot of talk about the 100 year flood, too. That doesn’t mean what some folks think it means, which is often that the area will flood once every 100 years. It actually represents about a one percent (1%) chance of a flood in any given year.
If your property is in a flood zone, you have to pay for flood insurance. Period. However, with the re-drawing of flood maps (still in progress for much of the nation – and parts of our State), some areas may not have been mapped properly and there could be properties that qualify for exemption. A Letter of Map Amendment (LOMA) will be needed, and this is definitely not something you want to do yourself. Your ability to acquire a LOMA will depend largely on the lowest point of your home’s exterior, and the best way to determine this to FEMA’s satisfaction is to have a surveyor come up with the elevation.
A surveyor experienced with flood insurance is your best bet. If they are certified to electronically file a Letter of Map Amendment (e-LOMA), this can be done in a very short period of time, a matter of weeks. This immediate help is available to properties in flood areas designated AE, or A1 through A30, because the base elevations of the area are known and an e-LOMA can be filed. If you’re in an ‘A’ designated flood area, it will take longer and require a physical package of documentation to be sent in to FEMA.
In some cases, a homeowner that is successful in getting a LOMA approved may be eligible for at least part of their flood insurance premiums paid for the last year or two. There are also other ways to get a LOMA approved, especially if your home is built on a crawlspace. This process is called a Letter of Map Revision-fill (or LOMR-f). Usually, you must have a landscaper install a clay berm around the low point of the house, it has to be 95% compacted, then covered with fill and landscaping. By changing the lowest adjacent grade (LAG) and installing flood vents in the foundation, a LOMR-f may successfully get you out of flood insurance.
The cost of this service which includes surveying and documentation submittal can run $600-$800, but at least one SE Michigan company will consult with you and only accept the full fee if they are able to help. That’s better than what many homeowners are paying every year for flood insurance. I’m happy to pass that info along to anybody that may need it, feel free to contact me via facebook, or phone.
photo credit: think4photop / FreeDigitalPhotos.net
Monday, September 26, 2011
Livingston County Rental Market Is ‘Robust’
In Livingston County right now, our MLS has 17 properties for lease at or under $1500/mo. Twelve are detached homes, the other five are condos. If you look at the $1000 and under market, we only see three homes and two condos. Of course, not every rental property is placed into the MLS.
Apartments are an option for some people, and you can expect to spend around $800 or more to live in a newer community with some amenities. Things like a washer and dryer in your unit, perhaps a pool and clubhouse, with or without a fitness center. There is also a higher end apartment that has a few three bedroom units, two car attached garage, private entrances, and pool/clubhouse, but they start at $1350/mo, with two bed units starting around $1200/mo. Some communities have waiting lists, too, and it’s not unheard of to leave a deposit if you want to be placed on the waiting list.
Some apartment complexes will let you enter into a six month lease rather than the usual twelve month lease, but expect to pay at least an additional $100/mo to do that. Do you have pets? Expect to pay an extra security deposit (damage) fee as well as a few extra bucks per month. I know that many people I talk to absolutely won’t consider a condo or an apartment. For those folks, if they can’t find what they want through a property listed in the MLS, there is always rent dot com, or good old craigslist.
If you want the amenities like a pool and clubhouse/fitness center, an apartment community is not a bad choice. Of course you won’t have covered parking (unless there are carports-for which you’ll pay extra), but you can forget that $30/month you’re paying to the gym. Also the convenience of a washer/dryer that come with the apartment is good, and repairs are normally handled pretty quickly in a well run community, too. Not terribly important for some things, but it makes a difference if your refrigerator, water heater, furnace or air conditioning goes out.
The tried and true method of looking at the Sunday newspaper ads may work, too, but a lot of landlords are going the electronic advertising route these days. No matter what your housing choice is, be sure to call quickly because the feedback I’m hearing is that affordable units ($1200 and under) are going very fast. If I can be of service with your home search, feel free to contact me.
Save The Wildlife 5K Run and Walks
This past Saturday I volunteered at the Howell Conference and Nature Center’s ‘Save The Wildlife’ 5K. It was a beautiful morning for the runners and walkers, cool and crisp at the start, then sunny and warming as the race concluded. It was also perfect weather for the volunteers, who sometimes struggle to stay warm without the assistance of generating a little extra body heat via exercise.
The 5K course traversed the trails on the property with a decent uphill on both of the first two miles, but the runners had the benefit of a good downhill on the last mile. It was great to see so many ages participating in the run and walks. Excellent support, smooth operation of the race and all of the athletes that I spoke with indicated they’ll be back next year.
The race staff has really become super organized in this third year of the event. This year the organizers went to full ‘chip’ results – start and finish timing – with the B-tag technology. A B-tag is where an RFID device is part of the runner’s bib (number) that they wear. It records their time from when they cross the start mat till the time they cross the mat at the finish line for an accurate event interval. This is different than ‘gun time’ where everybody has the same starting time, even if you’re the last person to cross the start line. Competitive runners certainly prefer a chip-timed event.
The Center has a lot of great activities - a Wild Wonders Wildlife Park, summer camps, a ropes course and zip line and Michigan’s tallest climbing tower. There’s also the new Nature Zone Center, periodic wildlife photo workshops, special events and don’t miss the new courtyard. The families of the participants had plenty to do while they waited for the athletes to finish their event.
The race started promptly at 10am with the first 5K runner coming across the finish line with a time of 19:29. Awards were wrapped up by 11:40am, leaving plenty of Saturday left for other things. Funds from the race will be used for the wildlife rehabilitation center
The Howell Conference and Nature Center is one of the area’s jewels. Great family activities, environmental education, and they are generally the ones called when an injured animal is found. If possible, they’re rehabbed and put back into the wild. They do accept general donations, donations of needed supplies for the infirmary, or gifts through the animal adoption program. You can visit their web site at http://www.howellnaturecenter.org/index.htm, or better yet, drop in for a visit.
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| New Nature Zone at the HCNC |
This past Saturday I volunteered at the Howell Conference and Nature Center’s ‘Save The Wildlife’ 5K. It was a beautiful morning for the runners and walkers, cool and crisp at the start, then sunny and warming as the race concluded. It was also perfect weather for the volunteers, who sometimes struggle to stay warm without the assistance of generating a little extra body heat via exercise.
The 5K course traversed the trails on the property with a decent uphill on both of the first two miles, but the runners had the benefit of a good downhill on the last mile. It was great to see so many ages participating in the run and walks. Excellent support, smooth operation of the race and all of the athletes that I spoke with indicated they’ll be back next year.
The race staff has really become super organized in this third year of the event. This year the organizers went to full ‘chip’ results – start and finish timing – with the B-tag technology. A B-tag is where an RFID device is part of the runner’s bib (number) that they wear. It records their time from when they cross the start mat till the time they cross the mat at the finish line for an accurate event interval. This is different than ‘gun time’ where everybody has the same starting time, even if you’re the last person to cross the start line. Competitive runners certainly prefer a chip-timed event.
The Center has a lot of great activities - a Wild Wonders Wildlife Park, summer camps, a ropes course and zip line and Michigan’s tallest climbing tower. There’s also the new Nature Zone Center, periodic wildlife photo workshops, special events and don’t miss the new courtyard. The families of the participants had plenty to do while they waited for the athletes to finish their event.
The race started promptly at 10am with the first 5K runner coming across the finish line with a time of 19:29. Awards were wrapped up by 11:40am, leaving plenty of Saturday left for other things. Funds from the race will be used for the wildlife rehabilitation center
The Howell Conference and Nature Center is one of the area’s jewels. Great family activities, environmental education, and they are generally the ones called when an injured animal is found. If possible, they’re rehabbed and put back into the wild. They do accept general donations, donations of needed supplies for the infirmary, or gifts through the animal adoption program. You can visit their web site at http://www.howellnaturecenter.org/index.htm, or better yet, drop in for a visit.
Saturday, September 24, 2011
Some Sellers May Be Exempt From State Transfer Taxes
An interesting point came up at one of my company’s (Preview Properties, Brighton, MI) recent sales meetings. It’s that some sellers may not have to pay the State transfer tax at closing. Here’s how it works, according to Michigan Compiled Laws (MCL 207.526):
You must meet all three conditions.
1. The home must be your principle residence and classified as homesteaded
2. The SEV in the year you sell must be less than the SEV for the year you acquired the property
3. The property can’t be sold for more than its ‘true cash value’ when it’s sold
So, if you bought a house in 2006 and the SEV was $74,000 and sold it in 2011 when its SEV was $68,000, points 1 & 2 above are met. The true cash value is established by multiplying the current SEV x 2. In this case it would be $68,000 x 2 = $136,000. If the house sold for $125,000 in 2011, all three criteria have been met, as long as it was your principle residence and homesteaded.
A couple of points. Most electronic public records only go back five years, so you may have to dig through your old property tax statements to find the SEV in the year you bought the property. Make your title company aware that you qualify for this exemption, and provide them with the documentation.
This applies only to the State Transfer Tax of $3.75 per $500 of sale price. On the above $125,000 sale that amounts to $937.50 – not a bad exemption! You will still have to pay the County Transfer Tax of $0.55 per $500 of sale price, or $137.50, but obviously you’re ahead of the game.
Don’t confuse what the law calls ‘true cash value’ (based upon the SEV) with your real ‘market value’. Your Realtor determined the market value when he or she suggested the listing price. Market value can be defined as what a ready, willing and able buyer will pay for a given property. That could be more, or less, than what the State considers ‘true cash value’. In fact it is almost always a different figure.
One final caution. If you take this exemption and were not entitled to it by the criteria of the law, there is a 20% penalty of the tax assessed plus whatever tax is due. So make sure you have the Title Company double check everything to verify that you are eligible to claim this exemption.
My special thanks to Sherry Hinsperger at Sterling Title in Brighton for the clear explanation of how this works.
Feel free to contact me if you are considering the sale of your home. I’ll be happy to put my 13 years of experience to work for you! Get useful info like this by signing up for my monthly email newsletter on the right side of this blog page.
You must meet all three conditions.
1. The home must be your principle residence and classified as homesteaded
2. The SEV in the year you sell must be less than the SEV for the year you acquired the property
3. The property can’t be sold for more than its ‘true cash value’ when it’s sold
So, if you bought a house in 2006 and the SEV was $74,000 and sold it in 2011 when its SEV was $68,000, points 1 & 2 above are met. The true cash value is established by multiplying the current SEV x 2. In this case it would be $68,000 x 2 = $136,000. If the house sold for $125,000 in 2011, all three criteria have been met, as long as it was your principle residence and homesteaded.
A couple of points. Most electronic public records only go back five years, so you may have to dig through your old property tax statements to find the SEV in the year you bought the property. Make your title company aware that you qualify for this exemption, and provide them with the documentation.
This applies only to the State Transfer Tax of $3.75 per $500 of sale price. On the above $125,000 sale that amounts to $937.50 – not a bad exemption! You will still have to pay the County Transfer Tax of $0.55 per $500 of sale price, or $137.50, but obviously you’re ahead of the game.
Don’t confuse what the law calls ‘true cash value’ (based upon the SEV) with your real ‘market value’. Your Realtor determined the market value when he or she suggested the listing price. Market value can be defined as what a ready, willing and able buyer will pay for a given property. That could be more, or less, than what the State considers ‘true cash value’. In fact it is almost always a different figure.
One final caution. If you take this exemption and were not entitled to it by the criteria of the law, there is a 20% penalty of the tax assessed plus whatever tax is due. So make sure you have the Title Company double check everything to verify that you are eligible to claim this exemption.
My special thanks to Sherry Hinsperger at Sterling Title in Brighton for the clear explanation of how this works.
Feel free to contact me if you are considering the sale of your home. I’ll be happy to put my 13 years of experience to work for you! Get useful info like this by signing up for my monthly email newsletter on the right side of this blog page.
Sunday, September 11, 2011
The Michigan Soybean Festival
There were swap meet vendors, an old Model A, and some tractors on display. We missed the tractor pull and the evening entertainment, but the Historical Village was open, and the soybean displays were interesting.
Being ‘city slickers’, we decided that farmers are pretty ingenious. Who else could get you to buy tickets to ‘cow pie bingo,’ a game where you literally pay to watch where a cow poops. A grid is drawn on the ground and a well fed cow then walks around and does its thing. The grid with the most ‘stuff’ is the winner. As my wife said, “at least we didn’t have to fling it or pick it up.”
And because this is a two-day event, your hand stamp was good for both days. There were a lot of other things going on in the County this weekend which likely hurt the attendance a bit, but it’s an interesting concept and has the potential to grow.
Really, it’s a celebration of farm life, and I was surprised to find that Michigan has over 2 million acres of soybeans planted and that it is our number two crop, adding about a billion dollars to the State’s economy. That’s a pretty good reason to celebrate the soybean, too.
Saturday, September 10, 2011
Centerpiece of Brighton’s 9-11 Memorial Arrives
Small groups gathered on both sides of Grand River near the Fire Station, with a larger crowd at the site. People came alone and carrying large flags, or in twos and threes. Families were there with young children, and many veterans and a few presumably active duty troops in fatigues, too. At 12:07, the vehicles escorting the girder came into view. A large contingent of Rolling Thunder Chapter 5 on their motorcycles, a military Hummer, various police cars and fire trucks were part of the procession, as well as the truck with the flag covered girder.
Fire Chief Larry Lane addressed the crowd, as well as Capt. Gregory Mowbray, who was one of the six Brighton Area Fire Department personnel that travelled to NYC to pick up the girder.
The truck was positioned near the memorial, and a lift was used to hoist the girder into place. As each clip on the memorial was attached to the girder, the crowd applauded. Shortly after the last clip was affixed, some in the crowd started to quietly sing “God Bless America.” Many more joined in.
Chief Lane and Capt. Mowbray then presented the folded flag that had covered the girder en route to the memorial site to Jim Lemke, a local veteran and member of the Rolling Thunder contingent. The girder was covered with a black cloth until tomorrow’s formal dedication, which will occur at 9:00 am.
The memorial looks even better than the architectural renditions that I’ve seen. If you’re available tomorrow morning, consider attending the official unveiling. Grand River will be closed at 8:15 am from Main Street to Cross (near the Meijer store), but a shuttle will be running from Meijer’s to the Fire Station. Chief Lane suggested that you try to arrive no later than 7:30 as a large crowd is expected.
Thursday, September 08, 2011
Brighton Michigan Events This Weekend
On Saturday at 11am, the centerpiece of the new 9-11 Memorial will be delivered to the memorial site at the Brighton Area Fire Department, 615 W. Grand River, 48116. Supporters are encouraging area residents to line Grand River while holding American flags of any size.
Sunday, September 11th, the memorial will be dedicated at 9am. Grand River will be closed to traffic from 8:15am to 11:00 am from Main Street to Cross Street. There will be a free shuttle running from Meijer's at Cross and Grand River. A very large crowd is expected to attend.
Why not have some fun Friday and Saturday at the Smokin' Jazz and Blues Fest, then attend the 9-11 Memorial dedication on Sunday? Brighton has a vibrant downtown with some interesting shops and restaurants.
Friday, September 02, 2011
Brighton’s 9/11 Memorial Progresses
The centerpiece will be a twisted segment of steel beam from the World Trade Center, suspended from the four angled black beams in the picture and will hover above pieces of broken concrete. There is also to be a wall around the memorial with the names of emergency responders that perished in the disaster.
A team of Brighton Area Fire Department personnel travelled to New York City to pick up the approximately 8’ x 3’ beam. Site plans call for the beam to be displayed in its current condition, rust and all.
Wednesday, August 31, 2011
New Listing-12.28 acres Commercial Land
Adjacent to Village Elementary on the south side of M-36.
Thursday, August 25, 2011
Market Notes – August 25, 2011
I just received the August survey results from Campbell/Inside Mortgage Finance, a firm that surveys agents and brokers from across the country. This is one of many Real Estate-related surveys in which I participate. Their results are broken down both in general groups of buyers and/or sellers and by geographic region.
Last week my blog entry, “July 2011 Market Data” reported that the number of local cash sales is way down compared to 2010. This most recent national survey reports that July 2011 investor purchases are at a 12 month low. This survey also says that about half of investor purchased properties in July 2011 (48%) will be rented out, compared to 28% in July 2010. Is that due to tighter loan requirements for first-time buyers (investors wanting to re-sell have a worse market), a lack of confidence in the economy by buyers, or something else? It is a big difference in numbers.
Some survey comments conclude that investors are acting decisively while first-time home buyers seem to be demonstrating fear and indecision. The rental market in my area is robust, so perhaps investors are leveraging those conditions.
The sales price to listing price ratio for our region, the Industrial Midwest (MO, IN, IL, OH, MI) shows that damaged foreclosure (REO) properties sold at a 91% ratio. That means a $100,000 listing sold for $91,000. Move-in condition foreclosure homes did marginally better at a 93% ratio, short sales sold at a 91% ratio and non-distressed homes were at 94%.
Remember that homes in better condition sell for more money, too, so while the percentage differences are small, the ultimate purchase prices are much wider. The average sales prices on these categories are: Damaged REO - $57,938, move-in condition REO - $114,015, short sales - $150,493, and non-distressed homes sold for an average of $205,604.
If you are looking for a house, a foreclosure or short sale can be a great bargain. Just know the difference in timelines (and processes) to close, and also know that you still pretty much get what you pay for. A $57,000 house will need a lot more work than a $114,000 house.
As always, if you have real estate questions, feel free to contact me.
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| scottchan / FreeDigitalPhotos.net |
Some survey comments conclude that investors are acting decisively while first-time home buyers seem to be demonstrating fear and indecision. The rental market in my area is robust, so perhaps investors are leveraging those conditions.
The sales price to listing price ratio for our region, the Industrial Midwest (MO, IN, IL, OH, MI) shows that damaged foreclosure (REO) properties sold at a 91% ratio. That means a $100,000 listing sold for $91,000. Move-in condition foreclosure homes did marginally better at a 93% ratio, short sales sold at a 91% ratio and non-distressed homes were at 94%.
Remember that homes in better condition sell for more money, too, so while the percentage differences are small, the ultimate purchase prices are much wider. The average sales prices on these categories are: Damaged REO - $57,938, move-in condition REO - $114,015, short sales - $150,493, and non-distressed homes sold for an average of $205,604.
If you are looking for a house, a foreclosure or short sale can be a great bargain. Just know the difference in timelines (and processes) to close, and also know that you still pretty much get what you pay for. A $57,000 house will need a lot more work than a $114,000 house.
As always, if you have real estate questions, feel free to contact me.
Tuesday, August 23, 2011
Community Shred Day - Saturday August 27, 2011
Matt Ikle, owner of Elite Insurance in Howell, invites the community to a Shred Day event on August 27th from 10 a.m. until 2 p.m. at his agency office, located at 3399 E. Grand River, Suite 201(Across from Home Depot). Anyone who would like to participate may bring along their confidential and personal documents to be shredded by Corrigan Record Management, free of charge from 10 a.m. until 2 p.m.
There is no charge for this service, but donations will be accepted with all proceeds going to the Spastic Paraplegia Foundation (http://www.sp-foundation.org/). The foundation is dedicated to finding the cure for spastic paraplegia as well as providing information and support.
If you have confidential documents that are in need of proper disposal, consider this event. Identity theft is a major concern among consumers nationwide. You can visit the Elite Insurance web site at http://www.eliteinsuranceagency.com/ or call them at (517) 545-9325 for more information.
Monday, August 22, 2011
New Listing - 4228 Howard, Lincoln Park
Saturday, August 20, 2011
Short Notes on Brighton Businesses
Things are certainly popping in Brighton lately.
The tentatively named Western House Brewery approved by Brighton Planning Commission for the old Western House Hotel location, AKA the ‘Pink Hotel’, at West Main and First streets. This should be a great addition to downtown. Final vote by City Council will be September 1st.
The Pound Sports Bar continues through construction on the site of the old Singer Press building at West and Main streets, across from the Main Street Martini Bar.
Elite Feet opens up downtown. With the Runnin’ Gear store on Grand River just west of Old US-23, we now have two running stores.
Art Van Pure Sleep store opens on West Grand River near Cross Street, in front of Big Apple Bagels.
The Greater Brighton Area Chamber of Commerce has relocated to the site of the old Mellus Hospital/Leah Gold Confectionary/Premier Mortgage (depending on how far back your memory goes!), next to First Presbyterian Church. Two blocks north of Main St.
A Green Oak Twp firm, Excelda Mfg, has agreed to purchase the old Brighton Chamber property to build a new HQ. It should be completed sometime late in 2012 and will have up to 50 staff members.
A new wedding cake design shop has opened up in the small space adjacent to Lu & Carl’s on W. Grand River. There was a monument company in that space most recently.
The Wooden Spoon opened up at the old Mexican Jones site. No liquor license yet, but the renovations look very good and the food and service is great. Some specialty food items are available retail, too. Lunch is sort of ‘a la panera’ style, but there is wait staff for the evenings. It’s great to see that parking lot packed again.
The tentatively named Western House Brewery approved by Brighton Planning Commission for the old Western House Hotel location, AKA the ‘Pink Hotel’, at West Main and First streets. This should be a great addition to downtown. Final vote by City Council will be September 1st.
The Pound Sports Bar continues through construction on the site of the old Singer Press building at West and Main streets, across from the Main Street Martini Bar.
Elite Feet opens up downtown. With the Runnin’ Gear store on Grand River just west of Old US-23, we now have two running stores.
Art Van Pure Sleep store opens on West Grand River near Cross Street, in front of Big Apple Bagels.
The Greater Brighton Area Chamber of Commerce has relocated to the site of the old Mellus Hospital/Leah Gold Confectionary/Premier Mortgage (depending on how far back your memory goes!), next to First Presbyterian Church. Two blocks north of Main St.
A Green Oak Twp firm, Excelda Mfg, has agreed to purchase the old Brighton Chamber property to build a new HQ. It should be completed sometime late in 2012 and will have up to 50 staff members.
A new wedding cake design shop has opened up in the small space adjacent to Lu & Carl’s on W. Grand River. There was a monument company in that space most recently.
The Wooden Spoon opened up at the old Mexican Jones site. No liquor license yet, but the renovations look very good and the food and service is great. Some specialty food items are available retail, too. Lunch is sort of ‘a la panera’ style, but there is wait staff for the evenings. It’s great to see that parking lot packed again.
To Refinance or Not?
This is easily the most frequent recent topic of conversation when I bump in to past clients, fellow Chamber of Commerce members and almost anyone that knows I’m in Real Estate. The desire to take advantage of the great (record setting) lows in mortgage interest rates is overwhelming. Of course the sticking point is the ‘lack of equity’ caused by depreciation in our local housing market.
There are good reasons to refinance, and there are bad reasons to refinance. Good reasons include changing from a dreaded Adjustable Rate Mortgage (ARM) to a fixed rate mortgage – especially now with the low, low rates. Or perhaps you want to reduce your monthly payment. Who doesn’t?
If you owe 20 years on your current, higher interest mortgage and are told that you can refi for 15 years and still have lower monthly payments, why wouldn’t you want to do it? Make sure that if your loan ‘clock’ is starting back at a 30 year term, you’ll be in for the long haul, or at least that you’ll be making payments for another 30 years.
Remember that there are costs involved with a refi. You have to build those in to your analysis to make a good decision. There are also some costs (typically a percentage of your points) that are partially offset by tax deductions. Ask your accountant or tax preparer about those. Will there be appraisal, application, and credit check fees? Will you need all new title insurance? Can you get a credit from your existing title insurance? All of those factors need to be considered to find out your upfront costs.
Even if you ‘roll them in’ to the new mortgage and your monthly payment is reduced, you should understand how many months it will take you to ‘break even’ on the costs of the new loan. It may be 8 or 9 months, or it could be 24 to 27 months. In the first case, if you have to sell in a year, the refi choice was a good one. In the second case, not so good. And things happen.
Perhaps you or your spouse will get a job offer that you can’t refuse and forces you to sell. Maybe a family situation arises that requires you to move. Life can be like that. Here are a couple of references to get you thinking and to help you if a refinance is something that you’ve been considering.
First, a recent (August 2011) article from Forbes. It is pretty short, covers a lot of ground and has a downloadable refinance calculcator in MS Excel format.
Here’s an online article from Bills.com that covers some other thoughts, and a lot of other links – in case you feel like doing a lot more research. If you’d like to just plug in some numbers, try using the calculator I mentioned above in the Forbes article, or try these. One is from bankrate.com and one is from Realtor.com. Both are slightly different, but will help you understand the thoughts on refinancing.
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| scottchan/FreeDigitalPhotos.net |
Not everyone has that problem, of course, but many do. So here are a few thoughts on refinancing. Disclaimer: I am a Realtor®, not a mortgage broker. I don’t originate loans, and this will be fairly simple.
There are good reasons to refinance, and there are bad reasons to refinance. Good reasons include changing from a dreaded Adjustable Rate Mortgage (ARM) to a fixed rate mortgage – especially now with the low, low rates. Or perhaps you want to reduce your monthly payment. Who doesn’t?
If you owe 20 years on your current, higher interest mortgage and are told that you can refi for 15 years and still have lower monthly payments, why wouldn’t you want to do it? Make sure that if your loan ‘clock’ is starting back at a 30 year term, you’ll be in for the long haul, or at least that you’ll be making payments for another 30 years.
Remember that there are costs involved with a refi. You have to build those in to your analysis to make a good decision. There are also some costs (typically a percentage of your points) that are partially offset by tax deductions. Ask your accountant or tax preparer about those. Will there be appraisal, application, and credit check fees? Will you need all new title insurance? Can you get a credit from your existing title insurance? All of those factors need to be considered to find out your upfront costs.
Even if you ‘roll them in’ to the new mortgage and your monthly payment is reduced, you should understand how many months it will take you to ‘break even’ on the costs of the new loan. It may be 8 or 9 months, or it could be 24 to 27 months. In the first case, if you have to sell in a year, the refi choice was a good one. In the second case, not so good. And things happen.
Perhaps you or your spouse will get a job offer that you can’t refuse and forces you to sell. Maybe a family situation arises that requires you to move. Life can be like that. Here are a couple of references to get you thinking and to help you if a refinance is something that you’ve been considering.
First, a recent (August 2011) article from Forbes. It is pretty short, covers a lot of ground and has a downloadable refinance calculcator in MS Excel format.
Here’s an online article from Bills.com that covers some other thoughts, and a lot of other links – in case you feel like doing a lot more research. If you’d like to just plug in some numbers, try using the calculator I mentioned above in the Forbes article, or try these. One is from bankrate.com and one is from Realtor.com. Both are slightly different, but will help you understand the thoughts on refinancing.
Friday, August 19, 2011
Melon Festival in Howell This Weekend
But the Howell Melon Festival is in its 51st year and is quite a party, all the same. A wide range of events include the Melon Run with both a 1 Mile, a5K and a 10K, and other funs things like melon dash and melon roll and tot trots.
Get a taste of melon ice cream, take a steam locomotive ride, a river boat ride (on Thompson Lake), or perhaps a trolley tour. Try a taste of melon wine, tour the Howell Historical Museum. Add a Fine Art show, sidewalk sales and some interesting activities like a watermelon seed spitting contest, a bubble gum bubble-blowing contest and you’ll find something to do in Howell this weekend. The entire downtown area is the location.
If you’re planning to visit, check the schedule and parking maps first. This is a BIG weekend in Howell, and we want you to have a blast! And if you decide to look for a house in Genoa Township or one of the other nearby areas while you're here, give me a call!
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| photo credit: Maggie Smith |
OK, it's not exactly the Woodward Dream Cruise. (For those non-Michiganders out there, the Dream Cruise is a huge car party in Detroit's north suburbs. So large that it's actually the world's largest one day automotive event. Click the link for more info)
But the Howell Melon Festival is in its 51st year and is quite a party, all the same. A wide range of events include the Melon Run with both a 1 Mile, a5K and a 10K, and other funs things like melon dash and melon roll and tot trots.
Get a taste of melon ice cream, take a steam locomotive ride, a river boat ride (on Thompson Lake), or perhaps a trolley tour. Try a taste of melon wine, tour the Howell Historical Museum. Add a Fine Art show, sidewalk sales and some interesting activities like a watermelon seed spitting contest, a bubble gum bubble-blowing contest and you’ll find something to do in Howell this weekend. The entire downtown area is the location.
If you’re planning to visit, check the schedule and parking maps first. This is a BIG weekend in Howell, and we want you to have a blast! And if you decide to look for a house in Genoa Township or one of the other nearby areas while you're here, give me a call!
Wednesday, August 17, 2011
July 2011 Market Data
The July data has just been published by our MultiList System (MLS), RealComp II, Ltd. We’re seeing a continuation of trends from earlier in the year, namely, fewer listings, slightly increased sales numbers and a shorter time on the market.
First, listings. Year To Date (YTD) for 2011, we’re 11% below 2010 levels, with 3041 this year compared to 3404 last year. Short sales listings are down a significant 28% comparing July 2011 to July 2010(252 in 2011 vs. 352 in 2010).
Sales of residential units (detached homes and condominiums) are up 7%, or 237 in 2011 vs. 221 in 2010. Pending sales are also up 23% from last year. July 2011 showed the highest average ($173,608) and median ($153,750) sales prices of the year, and both of those indicators are nominally above 2010’s performance.
The time on market (time it takes a listing to sell) is at average of 114 days for 2011 compared to 121 days for 2010. It may not seem like much, but selling your home a week faster can be important to some people. It also means that buyers need to be motivated and move on their choices quicker.
The ‘hot spots’ for sales in Livingston County continue to be Genoa Township, Hamburg Township, Brighton Township, and Green Oak Township, in that order.
Cash sales are way down so far this year, with only 95 being reported. At the end of July 2010, that figure was 415 – a 77% decrease. Land contracts are a little more popular this year, but at 25 sales with those terms, they are still a very small part of the overall financing picture. Conventional mortgages are still the most popular financing method, followed by FHA loans.
First, listings. Year To Date (YTD) for 2011, we’re 11% below 2010 levels, with 3041 this year compared to 3404 last year. Short sales listings are down a significant 28% comparing July 2011 to July 2010(252 in 2011 vs. 352 in 2010).
Sales of residential units (detached homes and condominiums) are up 7%, or 237 in 2011 vs. 221 in 2010. Pending sales are also up 23% from last year. July 2011 showed the highest average ($173,608) and median ($153,750) sales prices of the year, and both of those indicators are nominally above 2010’s performance.
The time on market (time it takes a listing to sell) is at average of 114 days for 2011 compared to 121 days for 2010. It may not seem like much, but selling your home a week faster can be important to some people. It also means that buyers need to be motivated and move on their choices quicker.
The ‘hot spots’ for sales in Livingston County continue to be Genoa Township, Hamburg Township, Brighton Township, and Green Oak Township, in that order.
Cash sales are way down so far this year, with only 95 being reported. At the end of July 2010, that figure was 415 – a 77% decrease. Land contracts are a little more popular this year, but at 25 sales with those terms, they are still a very small part of the overall financing picture. Conventional mortgages are still the most popular financing method, followed by FHA loans.
Monday, August 01, 2011
Higher Rate of Buyer ‘Walk Aways’ Reported in June
An article in yesterday’s Los Angeles Times claims that a very high rate of real estate deals fell apart in June. Factors such as economic concerns, financing requirements and lower than expected appraisal values are leading suspects for the increase in failed housing contracts.
I personally haven’t had many transactions fall apart because of low appraisal values, and often sellers will adjust their selling price downward if a second appraisal supports that lower value.
Another factor is the increase in pending short sales, just the type of transaction that is problematic and often takes months to close. Does the increase in short sale homes under contract have a role to play in this statistic? Perhaps, but more likely it’s a combination of all of the above reasons, and perhaps others.
I had a recent transaction that encountered some lender issues, but nothing that couldn’t be solved. It was a purchase agreement on a foreclosure home owned by Fannie Mae. Of course it needed work and the first-time home buyer had to go with an FHA 203K streamline (rehab) loan. While waiting for two weeks for FNMA to agree to concessions for serious issues found only at inspection, our process became delayed. During that time the appraisal was completed and no value issues found.
We asked for a reasonable extension but FNMA wouldn’t agree. It had to be closed by the end of July, which was quite impossible for the lender. A two week extension would have had us closing in mid-August, but the house went back on the market as a ‘failed’ deal.
Why the stubborn tactics by the seller? My guess is that the asset manager gets dinged on her productivity bonus points for cloings that get extended, but not for failed deals. Of course, that’s just my guess, but other agents that have had similar occurrences feel the same way. How many of those go into the monthly totals under the failed deal category? (We have re-submitted the purchase agreement and are trying to get an acceptance at this time.)
For all of the noise about stabilizing neighborhoods and getting owner occupants into these foreclosed homes, sometimes it may just boil down to the personal motives of an asset manager. If our hunch is true, shame on the institutional sellers that impose these restrictions on the people handling the properties. Of course the asset manager is going to do what’s best for them, especially when they never meet a buyer, lender, selling or listing agent or anybody else at the front end of the transaction. Hey bank reformers – here’s a new niche market for you to examine.
I personally haven’t had many transactions fall apart because of low appraisal values, and often sellers will adjust their selling price downward if a second appraisal supports that lower value.
Another factor is the increase in pending short sales, just the type of transaction that is problematic and often takes months to close. Does the increase in short sale homes under contract have a role to play in this statistic? Perhaps, but more likely it’s a combination of all of the above reasons, and perhaps others.
I had a recent transaction that encountered some lender issues, but nothing that couldn’t be solved. It was a purchase agreement on a foreclosure home owned by Fannie Mae. Of course it needed work and the first-time home buyer had to go with an FHA 203K streamline (rehab) loan. While waiting for two weeks for FNMA to agree to concessions for serious issues found only at inspection, our process became delayed. During that time the appraisal was completed and no value issues found.
We asked for a reasonable extension but FNMA wouldn’t agree. It had to be closed by the end of July, which was quite impossible for the lender. A two week extension would have had us closing in mid-August, but the house went back on the market as a ‘failed’ deal.
Why the stubborn tactics by the seller? My guess is that the asset manager gets dinged on her productivity bonus points for cloings that get extended, but not for failed deals. Of course, that’s just my guess, but other agents that have had similar occurrences feel the same way. How many of those go into the monthly totals under the failed deal category? (We have re-submitted the purchase agreement and are trying to get an acceptance at this time.)
For all of the noise about stabilizing neighborhoods and getting owner occupants into these foreclosed homes, sometimes it may just boil down to the personal motives of an asset manager. If our hunch is true, shame on the institutional sellers that impose these restrictions on the people handling the properties. Of course the asset manager is going to do what’s best for them, especially when they never meet a buyer, lender, selling or listing agent or anybody else at the front end of the transaction. Hey bank reformers – here’s a new niche market for you to examine.
Friday, July 29, 2011
Livingston County Sales Figures – January to June - 2010 vs 2011
Single family residences (SFR) sales (detached homes) are down about 10% for the first six months of 2011 as compared to 2010. The bright spot is that both the average and median sales prices are showing nominal increases (3-4% margin), and are selling slightly faster in 2011 than in 2010.
Private sales (non short sale, non bank-owned) are up over 9% from 2010, but the overall decrease quoted above is heavily impacted by an almost 21% DECREASE in bank-owned home sales. The bank-owned sales are also selling for 6-10% less for average and median sales prices compared to 2010 and those that are selling are going about 5-6% faster than last year.
It appears to me that sellers who WANT to sell and have not been under pressure to sell may have tired of waiting for the market to improve. I know that I have had conversations with consumers that have another home, and while they can continue to make payments on both, are deciding to make the move to their next destination. Sometimes it’s for retirement, other times to be closer to family. Those of us that work with banks to sell foreclosed upon properties have definitely recognized that the supply has decreased.
Condo sales seem to be increasing in both average and median sales prices, and they are generally selling faster than last year’s pace, too. There is a 10% increase in bank-owned condo sales, but the short sales are down by over 26%. I’m not sure if that’s a sign of frustration with the short sale process (and it can be VERY frustrating), or if there are more ‘strategic defaults’ in that group of property owners.
The Real Estate market continues to change. If you’re considering either a purchase or a sale, make sure you work with a full-time Real Estate professional that is watching trends and market dynamics.
Private sales (non short sale, non bank-owned) are up over 9% from 2010, but the overall decrease quoted above is heavily impacted by an almost 21% DECREASE in bank-owned home sales. The bank-owned sales are also selling for 6-10% less for average and median sales prices compared to 2010 and those that are selling are going about 5-6% faster than last year.
It appears to me that sellers who WANT to sell and have not been under pressure to sell may have tired of waiting for the market to improve. I know that I have had conversations with consumers that have another home, and while they can continue to make payments on both, are deciding to make the move to their next destination. Sometimes it’s for retirement, other times to be closer to family. Those of us that work with banks to sell foreclosed upon properties have definitely recognized that the supply has decreased.
Condo sales seem to be increasing in both average and median sales prices, and they are generally selling faster than last year’s pace, too. There is a 10% increase in bank-owned condo sales, but the short sales are down by over 26%. I’m not sure if that’s a sign of frustration with the short sale process (and it can be VERY frustrating), or if there are more ‘strategic defaults’ in that group of property owners.
The Real Estate market continues to change. If you’re considering either a purchase or a sale, make sure you work with a full-time Real Estate professional that is watching trends and market dynamics.
Tuesday, July 26, 2011
Livingston County Homes - $100K or Less
But I recognize that it is a popular price range, so I thought I’d do some research as of exactly 06:52 this morning, on Tuesday, July 26, 2011. Here’s what I found.
In Livingston County there are 135 single family residences (SFRs), or detached homes, for sale in this price range. The lowest is $19,500. Located in Unadilla Twp in the southwestern corner of the County, the MLS remarks say it is not habitable and is just a shell. It was built in 1900 and is 1000 sq ft in size on a 100 x 131 ft lot.
There are also 42 condominiums for sale in this economical price range. The lowest priced is in Hidden Harbors on Green Willow St., just off Grand River across from Meijer’s in Brighton, listed at $23,900. They are smaller units in a ‘stacked’ configuration, like an apartment building.
First time home buyers looking at the low end of the housing spectrum should consider a couple of things before they start to look. First, the lower the price, the more likely it is that the house will need significant dollars to repair, even if it you can do it yourself. So when you get pre-approved (I recommend you do this before you ever look at a house), talk to your loan rep about rehab loans. If you qualify for FHA financing, there are FHA rehab programs out there, the 203K and the 203 Streamline.
The likelihood of needing repairs is quite likely and sometimes you can do repairs yourself, other times you must hire a contractor. Be prepared.
Condos are sometimes in better condition because the Condo Owners Association maintains the exterior and grounds, but occasionally there is significant interior work to be done. You also have to find out if the condo community is FHA certified. Your loan rep or Real Estate agent can do that for you. If you have to go FHA financing, there’s no point in looking in communities that aren’t FHA certified.
Investors with cash are definitely the ‘king’ for choices in the low end of the housing spectrum. They are often quite astute with estimating repair costs and they can quickly qualify or disqualify a property for their model of either renting and holding or repairing and selling. When estimating your budget, don’t forget about property taxes, homeowner association fees and maintenance. It’s always good to be able to have six months of rent in reserve for repairs and emergencies, too.
If you’re thinking about a low priced property, work with an experienced agent. I’d be happy to talk to you about your plans and formulate a search just for you.
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