What if you can't pay your mortgage?

For many of us, even the thought of not paying your mortgage sends shivers down your spine!



But the question is still valid: What if you can't pay your mortgage?



Here's an excerpt from a recent post by the Wall Street Journal:



You should contact your lenders right away. If you are like most folks, you aren't answering the lenders' mail or returning their phone calls. Most think they don't need to speak with their lenders about their situations, or think they can take care of their problems, if they recognize them as such, without involving the lender.
But a large percentage also believe their lenders can't or won't be any help, or are simply too embarrassed or scared to ring them up. But all these people are wrong -- on all counts.



Your lender does not want to take your home from you! They only want to be paid back for the loan they made to you. So, if you're in trouble, call your lender right away. They will work with you to come up with a way for you to get over your trouble with making payments, and get caught up. Trust me on this!

December Market Statistics

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As you all know, I review our market statistics around the middle of each month.


What I'd like to focus on this month is the overall strength of the market in, and around, Saline.

The first chart I’d like to review is shown above. I’ve tracked real estate activity for the Saline market since 1996. There is a definite seasonality to the market – strength in the summer, weakness in the winter. A reading above 25% is a “seller’s” market, while a reading below 20% is a “buyer’s” market.

It’s no surprise to learn that we have been in a “buyer’s” market in Saline since the end of 2004 – more than three years, now.

What’s intriguing about this first chart is the strengthening of the Saline market since October. What could be the cause of this?

This second chart (above) shows 2 lines. The top line shows the number of homes available for sale (listings) in the Saline area. The lower line shows the number of homes sold each month.
In answer to my question posed above (What could be the cause of this?), the strengthening of the Saline market since October is a direct result of fewer homes listed for sale. How could this make the market stronger? Well, with fewer homes competing for the available buyers, it’s more likely that any of the homes listed for sale will actually sell during the month. That’s what we mean by a strengthening of the market!

Another interesting observation from the chart is that the number of sales in the Saline area has been rather consistent since 2005! In a previous post, we learned about the three "P's" that you control when you sell. The homes that are selling now, and have been selling since 2005, are those that have consistency between the three "P's". Go back and check that post for a reminder.

So, if you're looking to sell in this market, take heart! Call me!

The Best Of Ann Arbor

The Best Of Ann Arbor

Each year, the Ann Arbor News asks its readers to vote for their favorite businesses in the Ann Arbor area. It’s called the Reader’s Choice awards. The list encompasses restaurants, stores, sports, and entertainment.

If you’re looking for the best of Ann Arbor, the Reader’s Choice awards is a great place to start!

PS – My favorite burger joint, Blimpy’s, made the list again!

How Much Home Can I Afford?

How much home can I afford?

How many times have I heard that question?

Let me be clear up front – I’m not a mortgage loan officer. There is enough to learn about the business of real estate that I don’t have enough left-over brain space for even beginning to learn the mortgage business. I’d rather leave that in the more-than-capable hands of the two mortgage loan officers with whom I’ve had the privilege to work over the past many years.

That said, here’s my simplified version of figuring out how much home you can afford. It all begins with determining your budget. If you can nail down your budget, you’ll be well along your way to owning a home.

1. Determine your annual income.
2. List your expenses (beginning with basic needs, followed by your “wants”,
and don’t forget savings).
3. Prioritize your expenses.
4. Stop when you use up all your income.

Your mortgage loan officer will work with your budget figures to help you understand how much home you can afford.

And now, a pet peeve of mine. If this process looks simple, it’s because it really is simple. So why can’t our illustrious elected officials in Lansing figure this out? We still don’t have a balanced budget for the State of Michigan.

Property Taxes

Property Taxes

I am often asked about the property taxes on a piece of real estate – it could be a home, or a condo, or a building site for future use.

Given the state of our market (which I’ve written about previously), there are likely to be a lot more questions about property taxes in the coming year. More specifically, since the overall value of most properties In the Ann Arbor area has gone down by 15% since our market peak in 2004, most of us will expect that our property taxes will go down by the same amount.

Au contraire! (pardon my French, there).

If you bought your home since 2004, then it’s likely that your property taxes will go down in 2008. However, if you’ve owned your home for a while, and have seen its value increase until 2004, then it’s possible that your property taxes will actually go up next year. How can this be?
In seeking an answer for this question, I found a helpful post by the City of Saline, which I’ve excerpted below.


What is the difference between the Assessed Value and the Taxable Value?

Each year the Assessing Office must calculate the SEV (Assessed Value) and Taxable Value of each property. In determining the SEV, the assessor identifies area neighborhoods and uses a 2 year sales study to analyze market values within each neighborhood, comparing the sale price of a property to its assessed value. The sales study period for the 2007 assessments was 04/01/04 to 03/31/06. A review of all arms length sales within each neighborhood for the required study period is used to determine individual Assessed Values.
The Taxable Value is the value to which the millage rate is applied, thereby determining your taxes. The Taxable Value on the property is said to be: “Capped” if the property owner has not had any additions or losses on the property or did not purchase it in the preceding year. The Taxable Value is calculated by adding the CPI or 5% (whichever is less) to the prior years Taxable Value. Proposal A intended to put a cap on the Taxable Value of property so that taxpayers wouldn’t be as affected by a strong economy and significant increases in valuation, the intention was to make changes to the Taxable Valuation more gradual by tying it to the rate of inflation.

Sales prices in my neighborhood have been decreasing. Will my property valuation decrease as well?

If you’ve owned your property for a significant amount of time, it is likely that your SEV exceeds your Taxable Value. If this is the case, a decrease in market value as determined by city sales studies, would result in a decreased assessed valuation and SEV. The Taxable Value however, is required by the Michigan Constitution to increase each year by the rate of inflation or 5%, whichever is lower. In the case of a long time property owner, the SEV could decrease, while the Taxable Value would increase. The Taxable Value cannot be higher than the SEV.

How does that impact my tax bill?

Because the taxes are based on the Taxable Value rather than the SEV, even with a decrease in the SEV, the taxes could still go up.

I just bought my house. Will the assessed value automatically be half of what I paid?

By state law, a home’s Assessed Value is not half its purchase price, but half of its market value. The study period and process identified in paragraph 1 is used to determine market values. The Assessor and the Board of Review must follow the same procedures for determining the Assessed Value (SEV) of properties that have experienced a “transfer of ownership” as are used for properties that have not experienced a “transfer of ownership”.


The “Bottom Line”?


If you’re wondering about your specific property tax situation, feel free to give me a call. I’d be happy to help explain your options and advise you how best to move forward.

Hamburgers

Hamburgers.

A quintessential American food.

I really like a good hamburger. Not every day, mind you, but once a week is great. Like most of us, I can cook up a good burger on the grill (except during winter – I want the burger cooked, not frozen!).

Most of us have our favorite restaurants, depending on the type of food we want to eat. For me, the best hamburger place is Krazy Jim’s Blimpy Burger, in Ann Arbor. Blimpy’s has been serving “Cheaper than food” burgers since 1953 – long before I was even a thought in my parent’s minds! Blimpy’s has won the People’s Choice “Best Burger” award from the Ann Arbor News for many years running.



The menu at Blimpy's is brief, but the possibilities are many! The mathematicians at U of M have figured out that there are 1.2 million possible combinations of burgers you can order!

When you order at Blimpy’s, you have to know the protocol:
First, you tell the fry cook how many patties you want (from 2-5).
Next, you say what kind of bun you want.
Then, you tell them if you want anything from the grill (like grilled onions).
Don’t tell them anything more than this, for now.
Then wait and watch as they cook your burger right in front of you.

As your burger is finishing up, the cook will ask if you want any cheese on your burger (don’t tell them anything about cheese until they ask you). The cashier will also ask what condiments you want.

The place can be a little intimidating to a first-time visitor, so remember this order well, and you’ll fit in like a regular.

My favorite burger at Blimpy’s is a double on a regular bun, with grilled onions and bacon. Couple it with an order of fried zucchini sticks, and mmmm….

If you haven’t been there, you owe it to yourself to experience Blimpy’s – and then keep coming back.

Roads in Washtenaw County

Like Howard Beale in the movie Network (1976), I’m “Mad as Hell”.

We all awoke this morning (Monday morning, the first day of the new work week) to find the residue of the winter storm which blew through last night. Wind gusts were up to 50mph! Snow, ice, and even Black ice were all over our roads.

Driving safely is an individual responsibility. Leaving the house this morning, most of us knew that we’d have to exercise extra caution in our morning commute.

Still, THREE PEOPLE DIED ON OUR ROADS THIS MORNING!

This is what I’m mad as hell about!

First, we have the dithering idiots in Lansing. They’re quick to raise our taxes to balance the state budget.

In Michigan, did you know that we pay 51.6 cents in taxes for every gallon of gas that we buy! This is the 5th highest rate of gas tax in the country, and well above the national average.

So, what do we get from those taxes? If you’re like me, you likely think that we drive on some of the worst roads in the United States! The roads are maintained by County road commissions. For us, that’s the Washtenaw County Road Commission (WCRC)

We read in the WCRC news update of November 21, 2007 that they have imposed layoffs in their staff. Now, I’m certain that none of the “desk jockeys” were included in those cuts. No, it’s more likely that the cuts came from the men and women who actually maintain our roads. You know, like GRADING our horribly bumpy gravel roads, or, SHOCKINGLY! Applying salt or sand to icy roads on a busy Monday morning commute.

Upon further research, I have learned that the WCRC will apply the following criteria to winter road maintenance:

1. Roads will be treated only when there is more than 2 inches of snow on the road. (A
condition we experienced this morning).
2. No weekend maintenance will be done.

So, if we get a blizzard on Friday night, I guess we’re on our own for getting around on the County roads!

If you’re like me, and mad as hell about the state of our roads, it’s time to make our voices heard! Write or e-mail to your local and state representatives. We need better results from our gas taxes!