Birmingham MI Real Estate

April sales statistics appearing in the June edition of Metropolitan REALTOR® offer some hope for optimism in an Oakland County market that has been struggling.

There are still a fair share of rough patches, to be sure, but some notable municipalities did well in home sales, including:

• Auburn Hills (up 67 percent in sales April 2006 to April 2007)
• Birmingham (up 15 percent)
• Farmington Hills (up 36 percent)
• Independence Township (up 44 percent)
• Novi (up 16 percent)
• Oakland Township (up 42 percent)
• Oxford Township (up 29 percent)
• Rochester (up 50 percent)
• Royal Oak (up 10 percent)

Granted, Oakland County contains many municipalities and there are more than a few still struggling. The month’s most notable drops include Berkley (down nearly 60 percent in sales April 2006 to April 2007) and West Bloomfield Township (down 32 percent).

Still, the fact that so many municipalities can boast year-to-year gains is worth noting, as are the sales volumes figures for many of those same locales. Obviously, it’s far too early to say whether or not one can get cautiously optimistic about the coming summer months, but this wouldn’t be a bad start.

In Macomb County, however, the picture isn’t as promising. Sixteen of the 22 county areas covered by our stats compilation either posted no difference year-to-year or posted a loss compared to April 2006. Notable drops included Chesterfield Township (down 32 percent), St. Clair Shores (down 24 percent) and Sterling Heights (down 21 percent).

This is one of the biggest and most damaging misconceptions I have seen in my career.

Homeowners feel that buyer will make offers (low ones) on homes that are listed for sale but priced over the current market conditions. I have even written a book on the subject called Get the Best Deal When Selling Your Home SE MI Edition.

Most owners believe that Buyers will make low offers if they don’t feel the property is properly price, but experience has shown that they simply do not make any offer. Most Buyers are looking at several and sometimes many homes prior to making the decision to put an offer in writing. When the Buyer finally decides to put their pencil to paper they generally look to see which home they liked the most that was price the best. They feel that if they are not going to offer full price they stand a better chance of getting their offer accepted if they can find a home that is asking close to what they want to pay. So they generally make their first offer on the better priced home.

Once they have made the offer they are mentally committed to that home and are much more likely to work through the negotiations and buy that home than they are to move on to another property. This is just another way of saying that if you wish to get your home sold in the Birmingham or Bloomfield Hills area you need to be priced right from the outset. Otherwise you may not even get the chance to get into negotiations

Looking to buy a new construction home in SE Michigan or Oakland County?

Part of the process should be an inspection by a ASHI – American Society of Home Inspectors,® Inc inspector. We always suggest that our Buyers have any purchase inspected and new construction is no exception. It is your responsibility to make sure the job was done right. The installation of the HardiPlank siding is one example. This siding is an excellent product but there needs to be a water barrier installed at every seam or the seam is required to be caulked. I have seen new installations where the builder simply didn’t pay attention to the proper method. Watch what you buy and use a professional Realtor & Inspector to help.

It is important to share the truth. It is just to bad that 60 Minutes doesn’t share that feeling as pointed out by a real estate industry analyst expert.

REAL Trends Special Commentary

By Steve Murray, Editor of REAL Trends

60 Minutes aired a program this Sunday attacking the Real Estate industry as many others have including the print media exactly one year ago. Their timing is to air the information just before the Realtors meet in Washington DC in an effort to lobby Congress for the the benefit of Homeowners and the real estate industry. Once they delved into the charges and counter charges surrounding competition in real estate, 60 Minutes producers found that the whole topic was much more complex and not nearly as clear-cut as it appeared. The entire segment was almost killed this Spring. However, CBS apparently decided that it had so much invested in the story that it went ahead with a highly abridged version. I look forward to hearing what they will come up with this time around.

A nationally recognized writer, Blanche Evans, says it all better in her article, The Real Estate Industry Strikes Back. If you have just a short minute it is worth reading to set the record straight.

The President of the National Association of Realtors remarked:

The headlines are once again full of news from the mortgage and real estate front…and this time, the “Sub-Prime meltdown” is taking center stage. What exactly is going on, and what does it mean to you?

A “Sub-Prime” home loan is a loan where the client has some significant credit issues, or was otherwise unable to qualify for a standard, conventional loan. Due to the fact that these loans tend to be quite risky for the lender…they also bear higher interest rates to match, as well as often being adjustable rates that likely have recently hiked sky high, not to mention the steep prepayment penalties they generally carry.

These loans have been around for years – so why all the drama now?

Many Sub-Prime and other adjustable home loan rates have moved dramatically higher, due in part to the Federal Reserve Boards recent rate hike cycle. So as these rates are adjusting higher – and the payment right along with it – the homeowners are finding that they are unable to keep up with the dramatic increase in payment.

In the past, homeowners in this situation would simply throw the house on the market, realize enough of a profit to cover any prepayment penalties, and literally move on. But the soft real estate market isn’t making this quite so easy any more – houses are not selling as quickly, and the home appreciation rates enjoyed in the past have moderated.

So the Sub-Prime homeowner is stuck – and many of these homes are falling into foreclosure, causing even more problems. As more and more loans are defaulting, mortgage lenders are forced to tighten up their lending standards across the board in response…making it tougher for a troubled homeowner to even refinance to get out of trouble. Many Sub-Prime lenders are feeling the pain, and in some cases, actually being forced to close their doors as they are hit with all the defaulted loans and foreclosed properties coming back home to roost.

How does this impact you?

In the short term, home loan rates are benefiting, as the stock market is taking a beating, causing money to flow into Bonds and Mortgage Backed Securities, which benefits home loan rates. But the longer term picture may spell higher interest rates ahead, as lenders have to absorb the cost of the loans that went belly-up, combined with the cost of increased compliance and accountability standards.

Now in many cases, the advice and loan strategy given to the client was perfectly appropriate for the client at the time they took out the loan but the perfect storm of colliding economic events may have just worked against them. Yet unfortunately, many homeowners are paying a very steep price for what may have been poor advice and counsel given them at the time of their home purchase or refinance. Now more than ever before, it is clear that it pays to work with a true professional, especially when your home is on the line. If you’ve ever thought it’s too expensive to work with a real professional…just wait until you work with an amateur. The price paid is clear and in this case, it’s a very painful one.

Because of these events, credit and lending standards are tightening across the board so it’s also a very wise idea to make sure your own credit score is as high as possible.

Look out for the newest scam if you happen to be behind in your mortgage payment and some one offers to bail you out.

Here is how the scam works. The home buyer gets behind on mortgage payments. The scam artist offers a “loan to get caught up” on the delinquent mortgage payments. In exchange for the rescue, the homeowner signs over the title to the predator, who promises that the home buyer may remain in the home while paying rent. The predator then sells the house to someone else, and the original homeowner gets an eviction notice.

If you are having problems it would be better to contact a real estate professional and get some good advice before acting. We can also help with Short Sale advice.

Federal tax deduction for mortgage insurance may be coming your way as bills which include the provision were passed last month by both the House of Representatives and the U.S. Senate.

Borrowers who close loans in 2007 or later and make less than $100,000 a year will be eligible to deduct the private or government mortgage insurance premiums.

This deduction will result in an average tax savings of $300 and $350, according to Howard Glaser, a former senior official in the Department of Housing and Urban Development. During the past several years, about one in five new loans have included mortgage insurance.
Maligned for years when two out of five loans were saddled with the coverage, and before laws mandated full disclosures and the right to cancellation, mortgage insurance has pluses and minuses. The insurance protects the lender from default, but the premiums are paid by the home owner.

Since 1999, private mortgage insurers must annually disclose the amount of insurance and cancel mortgage insurance when a homeowner pays down the mortgage to 78 percent of the original purchase price. A lender must cancel the insurance if requested once the mortgage balance 80 percent or less of the original value of the house. The borrower must be current on payments and meet other requirements.

Unfortunately, the law doesn’t apply to government insured loans and some others. If the President signs it, the new law will allow the tax deduction for all mortgage insurance — private and government — paid by qualifying tax payers.

One of my associates just came forward with a problem we have not had to deal with in the past. The new purchaser was being denied insurance coverage on the home they were purchasing because a previous owner had filed a claim several years ago for extensive water damage to the home. The claim is showing up in the CLUE database. The home is currently a corporate owned property and now the corporation has to find the employee and get all of the repair invoices to prove the repairs were made in a timely professional manner before the insurance can be written.

If you are buying a home make sure you are making insurance application early in the whole process.

Oakland County Clerk introduces new program to protect homeowners from fraud

Oakland County has become a hotspot for mortgage fraud, according to Oakland County Clerk Ruth Johnson, and she wants it to stop. Her office has introduced a service that will allow homeowners to check if any unauthorized activity, such as quick claim deeds, mortgages and warranty deeds, has been fraudulently recorded on their property.

The service is available now at www.LandAccess.com.

Fraud Check will allow online viewers the opportunity to see whether any documents, including quit-claim deeds, mortgages and warranty deeds, have been recorded with the Oakland County Clerk/Register of Deeds Office.

To use the program:

Go to www.landaccess.com.
Click on MI – Oakland County in the Select a County table to the right. (Macomb County residents do not yet have the option of using the service.)
Then, on the upper right hand side of the screen, click on FRAUDCHECK and enter your name.
The service is available seven-days-a-week, 24-hours-a-day, except during limited computer updating periods.

If homeowners want to conduct further searches there is a $5 fee. To view/print costs an additional $1 per document.

“This may be something that people want to remember to check on the daylight savings time schedule twice a year in the fall and the spring, Johnson said. When you change your clock, check your home on the Internet.