Monday, December 31, 2007
“Thanks. That was a very satisfying operation, and I’m very pleased with how smoothly it went. You did a splendid job of managing all the details, and your efforts are appreciated very much.”
“Thanks again for making time to come to the closing. I know you must have been very busy just getting back from vacation. We appreciate all of your help in selling our home. You helped make the process go smoothly and quickly.”
“…we were talking about how easy you make everything in this transaction, compared to our last experience. We are happy that we were able to make such a quick turnaround on this property…”
“I am still very thankful for all of you who worked so hard with me to make this possible and appreciate it more than you know.”
“Thank you for all your help and patience with me.”
“We would feel really confident referring our friends to you because you have been incredibly dedicated as we have explored this option over the past year.”
“We just wanted to say thank you for all of the time and hard work you did for us. You made us feel special.”
“…wanted to let you know I am very satisfied with the service Vance has provided. I would not hesitate to use him again.”
If you'd like to find out more about how I work, please call!
Wednesday, December 26, 2007
According to Wikipedia, a Real Estate Appraisal is defined as follows:
Real estate appraisal is the practice of developing an opinion of the value of real property, usually its Market Value. (Real estate appraisal is American usage; many other countries use the terms property valuation or land valuation.) The need for appraisals arises from the heterogenous nature of property as an investment class: no two properties are identical, and all properties differ from each other in their location - which is the most important determinant of their value. So there cannot exist a centralised Walrasian auction setting for the trading of property assets, as there exists for trade in corporate stock. The absence of a market-based pricing mechanism determines the need for an expert appraisal/valuation of real estate/property.
A real estate appraisal is performed by a licensed or certified appraiser (in many countries known as a property valuer or land valuer). If the appraiser's opinion is based on Market Value, then it must also be based on the Highest and Best Use of the real property. For mortgage valuations of improved residential property in the US, the appraisal is most often reported on a standardized form, such as the Uniform Residential Appraisal Report. Appraisals of more complex property (e.g. -- income producing, raw land) are usually reported in a narrative appraisal report.
So how does this affect you, as either a buyer or a seller?
Whenever there is a mortgage involved in the sale of real estate, an appraisal is required. The appraisal gives the mortgage lender an assurance that the real estate is worth what the buyer is paying. In the (unfortunate and unlikely) event that the buyer cannot meet their mortgage obligation, the lender will rely on the appraised value such that the lender will not actually lose money. The lender will sell the property for the amount they are owed (knowing that it is worth at least as much as they are owed, based on the appraised value), and then turn around and lend the money to the next buyer.
As a buyer, the appraisal (usually ordered by your lender) gives you an assurance that you are not over-paying for the property you are buying. Generally, though, your Realtor will have already provided you with a CMA (comparative market analysis) so that you know approximately how much the property is worth. So, is your Realtor’s CMA as good as an appraisal? Generally, again, no. A true appraisal can only be done by a licensed appraiser. Some Realtors also hold an appraiser’s license, but they are few and far between. So, the CMA done by your Realtor, and the appraisal done by your lender, should be similar in value, but not exactly equal.
As a seller, the appraisal (ordered by the buyer’s lender) gives you an assurance that you aren’t “giving” away your property. Note, however, that the lender is the client of the appraiser (in other words, the lender ordered the appraisal, so the lender gets to know of, and keep, the appraisal information to themselves). As the seller, you may not get to see the appraisal report. As in the paragraph above, though, your Realtor will have provided you with a CMA prior to your listing agreement, so you should have a very good idea of what the appraisal report should say.
Sadly, though, there are some unscrupulous appraisers, lenders, and Realtors in every marketplace. What they do is practice mortgage fraud.
For example, an unscrupulous appraiser could falsify their appraisal by coming up with a value significantly higher than actually exists. Then the lender, thinking that the property is worth the appraised value, will over-lend against the property. The extra money ends up with the buyer, who takes off with the money and leaves the property to deteriorate. Fortunately, such unscrupulous appraisers are very rare, but they do exist.
I’d be happy to answer your questions about appraisals, or provide references for outstanding local appraisers. Just ask!
Friday, December 21, 2007
In America today, you can buy just about anything besides Happiness (just ask Visa). And since you can buy just about anything, that also implies that just about everything is for sale. Realtors are also for sale. They come in all sizes, shapes and colors. Like computers, they come with different amounts of onboard memory, and with different features, goodies and gadgets. You can see them everywhere. They often have hardware attached to their ears.
Just like trying to purchase a car, it can be very difficult to decide which model is the best for you. Should you shop for what you want, or what you need? Should you get Old Faithful, or this year’s newest edition? Should it be fancy, or a base model?
With a Realtor, you are hiring someone to guide you through what may be the largest financial transaction of your life. You don’t need a pretty face. You don’t need an Armani suit. You don’t need a Mercedes to look at houses in. It might flatter your ego, but hurt your wallet. Don’t get me wrong, there are some very attractive Realtors who are exceptional at their craft, but this is one situation when judging a book by its cover is a mistake. Appearance and tools (like cars and clothes) are not nearly as important as the skill of a Realtor, which does not always wear a pretty package.
Technology can be a wonderful productivity enhancer. It can also get in the way. Have you ever seen someone chatting away on the phone while they all but sideswipe you coming out of the grocery store? And they didn’t even notice you! Tools and gadgets can make a Realtor more valuable to you. But, having all the gadgets is just not necessary. Why does anyone need a pager, a cell phone, a Blackberry and a laptop to go along with the office computer. Every single one of these devices requires attention. There may not be any attention left over for you, the client.
A couple of years ago, there was a TV commercial about motor oil – not something you think about every day. The point of the whole commercial was “You can pay me now, or you can pay me later, but you’ll be paying.” The point was clear - sometimes a bargain is not a good buy in the long run. This definitely applies to hiring an Agent.
When interviewing agents, ask each one if they are flexible on their fee. If they say “yes”, then terminate the interview. It sounds backwards doesn’t it? Realtor’s fees cost thousands of dollars. Why not try to save a few? Well, the fact of the matter is that there are no bargains on a Rolls Royce. And for your home, you want the Rolls Royce of Realtors working for you. He or she will save you much more than they cost you in the form of stronger negotiation skills and support after the sale. A Rolls Royce Realtor will take your call 6 months after closing when the furnace won’t start. A Rolls Royce Realtor will work for their clients long after they get paid.
Real Estate Agents don’t get busy by accident. They get and stay busy because they know what they are doing, and word gets around. High demand Realtors are in high demand because they have already been through a fire or two and they brought their clients through it safely. Don’t think that because an Agent is already busy, they won’t have time for you. You may have to wait a short time but it is the best thing for you. Impatience can cost you thousands of dollars.
If the Realtor has an assistant or receptionist that always has to take a message, move on. An assistant that tries to connect me immediately, or offers to connect me to a cell phone, or tells me that “He’s on the line right now, but says he can call you back in 5 minutes”, gets my business. This assistant is trying to channel business efficiently. Don’t be put off if a busy Realtor cannot pick up the phone right away. Do be put off if it takes hours to hear back from them. Every exceptional agent out there is adamant about returning phone calls quickly. If it feels like the receptionist is protecting the inner sanctum from intruders, you may be talking to the wrong Realtor. You should expect to get through to your agent at least part of the time.
Excellent Realtors are strong and confident people. They know that they are smart. They know that they are skillful. They know that they are very good at what they do. They act confidently, and can appear to be know-it-alls. They usually have very strong opinions about their industry. But, do you really want a timid General leading you into a war? Not me, I’ll take the strong-willed leader every time. Arrogance is self-centered, confidence is not. If the Realtor is completely focused on my transaction but appears to be really opinionated about how to handle things, I am probably dealing with a confident individual, not an arrogant one.
You hear this all the time, but it is one of the best ways to find out who you are dealing with. Satisfied customers will thank their agent for doing a good job. It takes a very satisfied customer to write a letter. If you find an agent with a shelf full of thank you letters or testimonial letters, then this is probably an individual who will work hard on your behalf. He or she has already done it for other clients. Those clients were pleased enough to write a letter about it. There is not a stronger proof of excellence that I can think of.
I would welcome the opportunity to discuss this further with you. Feel free to contact me.
Monday, December 17, 2007
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!
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!
Saturday, December 15, 2007
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!
Wednesday, December 12, 2007
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.
Monday, December 10, 2007
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.
Wednesday, December 5, 2007
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.
Monday, December 3, 2007
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!
Monday, November 26, 2007
Since that’s the case, there are encouraging signs in Real Estate. In my most recent post, we learned that the number of sales in our area is rather consistent, going back through the 12 years I’ve been tracking the data.
In another post, we learned from the statistics tracked by the Ann Arbor Area Board of Realtors that the number of homes where the sellers have accepted a sales agreement increased from 55 in October, 2006 to 71 in October, 2007. This is a good omen for the future.
Now, we read in the Wall Street Journal that construction of new homes rose 3% from September -- the first monthly gain since June.
Going back to my original premise, that all Real Estate is local, it’s helpful to understand our recent history.
Back in 2003 and 2004, our Real Estate market locally was rolling along just fine. The chart of listings and sales posted earlier shows that in 2004, the number of homes listed for sale began to increase substantially. At the same time, in the rest of the country, the overall real estate market was sluggish, at best. So our local market began its decline in 2004 – three years ago. During 2004 and 2005, the real estate market in major areas (Florida, Arizona, Nevada) began to “boom” (at least, until the hurricanes hit Florida).
Beginning in 2007, the national media began to report concerns over the national real estate market – mostly due to problems in the mortgage market. In some of the major markets (Phoenix, Las Vegas), investors who bought pre-construction homes (as an investment) are now losing their own homes through foreclosures. Meanwhile, our local market continued to languish.
Perhaps our local real estate market is about 3 years out of phase with the national real estate market. If that’s the case, perhaps we have hit the low point of our local market, and things will pick up in 2008. We shall see!
Thursday, November 15, 2007
In my previous post, we learned about the market statistics from the Ann Arbor Area Board of Realtors.
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, Ann Arbor.
The chart above shows 2 lines. The top line shows the number of homes available for sale (listings) in the Ann Arbor area. The lower line shows the number of homes sold each month. I've been collecting this data since 1996, so you can see some trends in the data. There is a definite seasonal trend for both listings and sales, but more pronounced for sales.
The great news is that the number of sales is rather consistent! The overall number of sales is down slightly (as you'll recall from the previous post, sales are down about 11% compared with the same period in 2006). But many homes are selling each month!
In another previous post, we learned about the three "P's" that you control when you sell. The homes that are selling now 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!
Tuesday, November 13, 2007
The Ann Arbor Area Board of Realtors has released their overall market statistics for October, 2007.
A quick review of the statistics shows that listings are down about ten percent compared with October of last year. Sales are down about eleven percent.
At the same time, the number of homes where the sellers have accepted a sales agreement increased from 55 in October, 2006 to 71 in October, 2007. This is a good omen for the future.
Monday, November 12, 2007
When buyers go out looking for a home, they approach any home from the same perspective, which is comprised of five steps.
1. The community.
The very first thing that any buyer will be looking to "buy" is the community in which they will live. As a seller, there's nothing you can really do to affect the community buying decision.
2. The neighborhood.
The second step of the buying decision for most buyers is the choice of neighborhood they will live in. Will it be rural or urban? New or old? Acre lots or city parcels? Sidewalk or not? Streetlights or not? As a seller, you bought your home for a particular reason, and one of those reasons was the neighborhood itself. Any new buyer will make the same choice.
3. The street.
Once a buyer likes the neighborhood, they will begin to pay attention to the street on which their future home will be located. Are the other homes representative of an area in which they would like to live? Are the homes and yards well maintained? When the buyer is driving home after a long day's work, will they smile as they turn onto the street on which their home is located? As a seller, you can begin to have some impact here, as long as you know your neighbors well enough to talk with them!
4. The outside of the home.
If a buyer has made it this far (the community, the neighborhood, and the street), then you have only one chance to make a good first impression. This is where you begin to have total control over the sale of your home. The list of "things to do" to make the outside of your home ready to sell is too numerous to publish here. Suffice it to say, anything and everything you can do to make the outside of your home "shine", you must do.
As an aside, I have to relate an experience from several years ago. While showing homes to buyers, we walked up the sidewalk to the front of the home. Mrs. buyer gasped as she rounded the corner and saw the front porch and front door. The sellers had arranged hanging flower baskets on each side of the sidewalk, in the shape of the sides of a heart. It was such an inviting appearance! Those buyers bought that house, and I've always remembered that sight, as representative of the importance of making a great first impression with the outside of your home.
5. The inside of the home.
Needless to say, if the buyers have really liked what they have seen on the outside of your home, then, chances are, they will like what you've done to prepare the inside, as well. Again, the list of "things to do" to prepare the inside of your home for sale is too numerous to list here (and is also unique to each home!). Remember, you've only got one chance to make a great first impression of your home on the buyer. Do everything you can do to make it the home that's #1 on the buyer's list!
Having made it through these five steps in buying, your home has a great chance of selling. You can improve those chances even further by making sure you have consistency between the three "P's" of selling (from an earlier post).
Be sure to contact me if you have any questions about the five steps of buying.
Friday, November 9, 2007
Well, the fall colors have just about faded in our area. On a recent sunny day, I captured a few final views to remember through the coming winter.
I caught this view while driving west on Bethel Church road, about half-way between Dell and M-50. There is a rolling valley to the north of the road there, which has always captured my gaze. There are plenty of pines and cedars on the hills, and right in the center was this golden hickory tree (from a distance, that's what it looked like). It was hard to peel away from this site!
This next photo jumped up at me. I was walking across the lawn and this red leaf caught my eye. The wind made it tumble away, but I chased it, because there was something about it that struck me. When I turned it back over, it was all the veins in the leaf that caught my eye originally. I'm sure, by now, this leaf has turned brown. But, what a blazing way to go out!
Monday, November 5, 2007
Recently, I read an interesting blog article about home energy efficiency audits. In today's economy of rising energy costs, both for driving and for heating and cooling your home, this only makes sense.
Looking at it simplistically, having an audit of your home's energy use could have a big payoff at the end (assuming that you follow through on the recommendations for improvement!).
Not only will you save money on your regular energy bills, you'll be making your home more energy efficient for the future. You can then promote this fact when you sell your home, something which will surely attract the attention of eco-conscious buyers. Those buyers will be more interested in your home, which may lead them to pay more for your home than they otherwise would. Voila! A nice return on the audit investment! It only takes a few rising sales in the marketplace, and we could make the list of locations with rising home values.
While on the subject of energy efficiency, we can't help but notice that there are more and more hybrid cars on the road. You could be saving energy costs both at home and on the road!
Here in Michigan, the fall colors have just about faded. Many of the trees are now bare, awaiting our first snowfall. Yikes! Will driving be bad then? It usually takes the first snowfall for drivers to, once again, remember how to drive in the snow. It's the drivers that make the difference, but having the right car for snow driving can make a difference.
What do you think about having a home energy efficiency audit?
Friday, November 2, 2007
Contrary to what you might think about the weather here in Michigan, we've had great weather so far this autumn. So much so, that there are still some flowers blooming around my house.
I'm not an expert on flowers, so I don't know what these blue flowers are called. They started blooming in July, and have been blooming ever since. Notice the date stamp in the lower LH corner - to prove this was a recent photo.
This flower sits really low to the ground, so the plant has already had to put up with some frost this fall. Still, the blooms keep coming along.
The way that both of these flower plants look, we'll be having flowers bloom well into November!
Wednesday, October 31, 2007
Preparation refers to the work that you do on your home, prior to the actual listing of your home for sale. At a minimum, all of the "deferred maintenance" needs to be done. If you're not sure whether or not to work on something in preparation for selling, ask your Realtor.
Presentation refers to how your home looks to buyers during a showing (or open house). There are many things you can do to make your home more attractive during a showing - too many to go into here.
Price is a reflection of the two previous “P”s, relative to market forces.
As long as you are consistent between these three factors, you have a better chance of selling. Note that I didn't say that you would sell (for sure) - only that you have a better chance of selling. See my previous post, about Greg and Katie's recent experience in selling, to gain a better understanding of what that "better chance" really means in our present market.
Friday, October 26, 2007
Friday, October 19, 2007
Wednesday, October 17, 2007
Friday, October 12, 2007
While travelling down a country road the other day, I stopped to take this photo. The colors are just turning, so they could be brighter, but you get the idea here.
Now, does anyone know where this picture was taken?
Wednesday, October 10, 2007
Sales of homes fell 10.1 percent through the third quarter, with 2,388 homes having been sold through September, down from the 2,657 recorded in the same period in 2006. Listings decreased 5 percent, and the median sale price fell $6,000 to $217,000.
Sales of condos fell 15.7 percent through the third quarter to 537 units. In 2006, 637 condos had been sold in the same period. Listings for condos rose 3 percent, but the median price fell by $3,600.
While you could easily interpret this as gloomy news, I look at it this way: Nearly 2400 homes have new owners this year! It's not like NOTHING is selling.
When you notice that the median sale price has fallen since last year, you must understand that the homes that are selling are those that are priced right. See my earlier posts on this subject.
On another note, if you know anyone facing foreclosure, I read an interesting article recently on how to prevent foreclosure. Worth reading!
Monday, October 8, 2007
The speaker today was Chris Wallace from Fox News. His topics ranged from the War in Iraq to the 2008 Presidential Election.
But more importantly than the topics was the positive energy in the room!
Yes, there were economic leaders from businesses spread all around Washtenaw County. I overheard discussions about how many new people certain businesses were going to be hiring, and soon. I overhead some loud exclamations of business success so far this year in 2007.
Certainly there were some gloomy faces, but only a few. For the most part, there were smiles and excitement all around the room. It was really refreshing to be around such positive energy.
So, no matter what the headlines in the newspaper scream, just know that there are many good things in store for us here in the Ann Arbor area!
Friday, October 5, 2007
In today's real estate market, which is clearly a strong buyer's market, it's helpful to gain an understanding what today's buyers are thinking.
What I'll attempt to do in this post is to share my recent experiences working both with buyers and with offers on my listings.
What I define as a buyer is someone who is "ready, willing, and able" to buy a home. There are many people out there looking at open houses who aren't necessarily ready, willing, or able to buy right now. That's OK - the early lookers eventually turn into buyers.
For those serious buyers out there right now, they know that they hold all the cards. That said, they also know that one day they'll be sellers and may be in a similar situation to today's sellers, so they generally won't go to far in pushing their requests.
It's fair to say that a ready, willing, and able buyer today will ask their Realtor for a comparative market analysis of any home that they are considering. The results of that analysis will drive the basis of the terms of their offer.
What I've tried to do throughout my 14-year career as a Realtor is to get buyers to make their "best" offer right away. I've also encouraged other agents to have their buyers make their best offer right away on my listings. While it's exciting, and sometimes fun, to negotiate the back-and-forth of an offer between buyer and seller, it's also a serious energy drain for both parties. Rather than suffer that energy drain, I prefer my clients focus on the offer at-hand as the best offer.
It's critical for every buyer and seller to know their "walk-away" point. If the best offer satisfies the walk-away point, then we have a deal. If not, both parties walk away and move on.
Having closed more than 250 transactions in my career, serving both buyers and sellers, I've learned that it's better to negotiate when you understand the other side better than they know themselves. I hope this post helps you to understand yourself exceptionally well before entering into any real estate negotiation.
Friday, September 28, 2007
Lighthouses fascinate me! This is the lighthouse at Betsie Bay harbor in Frankfort, MI. If you've ever been there, then you know how peaceful the setting really is.
Gaze at the photo, take a few deep breaths, and let go of some of that stress!
Monday, September 24, 2007
But I'm not the only one who tracks statistics in the real estate market. Our local Board of Realtors also keeps track of market statistics every month. Here's their latest commentary:
For the second month in a row, the average list and sales prices are up over last year for
residential properties, according to the Ann Arbor Area Board of REALTORS®. Average list
and sales price shows a gain of 9.33 percent and 6.75 percent respectively over last month
and an 8.06 percent and 7.28 percent over last year. While the total number of transactions
still trail over last year, activity has been good.
Lawrence Yun, senior economist for the National Association of REALTORS® said “There’s
been an unusual hit to home sales, starting in March when subprime problems emerged and
more recently when problems spread to jumbo loans, with many potential buyers on the
sidelines. However, the jumbo loan market is now beginning to settle, and FHA-insured
loans are helping to fill the subprime vacuum. Nationally, the volume of existing-home sales
this year will be better than 2002, which was the second year of the housing boom.”
The mortgage markets will calm further in the months ahead, but it’s important to
underscore the fact that conventional loans – the vast majority of available financing – are
available to creditworthy borrowers, “ Yun said. “FHA modernization could buffer the fallout
of subprime loans, which would raise our sales forecast in the future.”
If you'd like to see the statistics which the local Board tracks, you can see them here.
Monday, September 17, 2007
For those who are more detail oriented, here's the actual raw data from September, 2007 that makes up the chart you see above.
Something to keep in mind as you're searching the web for your next home.
Wednesday, September 12, 2007
Making Mortgage Relief Work for You
by David Bach
On Aug. 31, while many of us were getting ready for a long holiday weekend, President Bush addressed the nation about the mounting concerns in the housing market. His speech took place exactly one month before we'll see a record-breaking $50 billion in mortgages reset to a new rate.
That's right, in the month of October alone, many homeowners will be forced to pay higher monthly mortgage payments than they can reasonably afford. And while this number is staggering, it's not exactly new information -- it's been known for two years that the crisis was coming.
The Associated Press reports that, in all, 2 million homeowners have adjustable rate mortgages scheduled to reset by the end of 2008. Of those, the Federal Housing Administration (FHA) estimates that 500,000 could experience foreclosure.
Is Bush's Proposal Enough?
In my opinion, the president's proposal is an excellent start -- but will it offer enough help to those half-million families at risk of losing their homes?
Bush isn't proposing a direct bailout for homeowners who knowingly overextended themselves.
Nor will the government be rescuing irresponsible lenders and speculative investors who bought homes to flip for a profit. As the president acknowledged, that would only encourage the problem to occur again.
Instead, Bush's proposal strikes a balance by offering:
• Temporary tax relief to ensure that cancelled mortgage debt on a refinanced mortgage isn't counted as income
• A foreclosure-avoidance initiative through homeowner education and outreach
• Ways to help responsible homeowners refinance through FHA loans offering a lower interest rate and lower monthly payments
Help for Those in Trouble
Among the president's new initiatives is the immediate introduction of a refinancing product called FHASecure. This product will now be offered through the FHA and offers help to homeowners who are already in default of their primary residence mortgage loans. Previously, the FHA would not insure refinanced loans from borrowers delinquent or in default, so this is a significant change.
There are specific criteria that must be met in order to qualify:
1. First and foremost, you must have a history of on-time mortgage payments before your teaser rate expired -- which means you must have a decent credit history.
2. Your interest rate must have reset after June 2005 but before December 2009.
3. You must have at least 3 percent cash or equity in your home.
4. You must have a sustained history of employment.
5. You must have sufficient income to make your mortgage payments.
Beefing Up the FHA
Since 1934, the FHA has helped more than 34 million people become homeowners -- not by lending them money directly, but by guaranteeing their loans. This reassures lenders who might otherwise be reluctant to make loans to buyers who don't have a lot of money. Borrowers have always paid a set price for this insurance.
The president's proposal seeks to introduce risk-based pricing, which will give borrowers with weaker credit more access to FHA loans. Rather than being denied an FHA loan, underserved borrowers will instead pay a slightly higher fee. This will allow them to refinance at a lower interest rate with more affordable monthly payments.
President Bush is also asking Congress to pass new legislation that would modernize the FHA. These proposed changes -- including lower down payment requirements and higher maximum loan limits -- would also help borrowers with weaker credit and lower incomes. Hopefully,
Congress will act quickly.
Can the Fed Help?
Echoing the sentiments of President Bush, Federal Reserve Chairman Ben Bernanke also weighed in on the situation on Aug. 31. He stated that it's not the responsibility of the Fed to protect lenders and investors from the consequences of their actions.
However, he also acknowledged that developments in certain financial markets, including those currently emerging with mortgages, could have broad economic effects. As a result, the Federal Reserve will take those effects into account when determining policy.
Many believe the odds are growing that the Fed will cut the federal funds rate, now at 5.25 percent, by at least one-quarter percentage point on or before Sept. 18, its next regularly scheduled meeting. The Fed hasn't lowered this rate in four years.
That could be good news if you currently have an adjustable rate mortgage. Even a mild rate cut of .25 percent might mean a slightly lower payment for you now. A cut of .75 percent would create significant breathing room for those on a tight budget, and could potentially send the stock market on a tear. My prediction is that the rate will get cut between 25 and 50 basis points.
Other encouraging news came on the Tuesday after Labor Day, when the Fed put added pressure on loan-servicing companies to modify loan terms or defer payments for borrowers having trouble making their mortgage payments and facing default.
Take Action Now
With the combination of new and current programs, the FHA estimates that it will be able to help 240,000 American families avoid foreclosure.
Only lenders approved by the Federal Housing Administration can process an FHA loan for you. If your adjustable rate mortgage has reset or is about to reset, call your lender and ask if they offer FHA loans and find out whether you qualify. The FHA web site offers loads of additional information, and includes a search feature to find an approved lender in your area.
In two previous columns ("Adjusting to Higher Mortgage Payments" and "Six Steps to Avoiding Foreclosure"), I advised those of you with an adjustable rate mortgage that'll reset this year to call your lender and find out about refinancing options. Have you reviewed your mortgage documents and made that phone call yet?
Tuesday, September 11, 2007
I read a recent post from the Wall Street Journal that makes some excellent points about the timing of buying a home. It's worth a read.
What are your thoughts - Is now a good time to buy?
Friday, September 7, 2007
If you've ever been to Mount Rushmore, in the Black Hills of South Dakota, you know how impressive the site really is. First you wind your way up the mountain to the entrance of the memorial. Then, you park in this huge parking structure! When I visited Mount Rushmore back in 1980, there was only a small surface parking lot. It just goes to show you how we Americans love to travel!
Leaving your car, you proceed up this fabulous granite sidewalk to the base of the memorial. From there, you can overlook the amphitheatre - which was bustling with the setup for a concert on the day we arrived.
Sadly, a rapidly-approaching thunderstorm overtook the mountain while we were there. We ran back to our car and made our way back down the mountain to find our hotel for the night.
I encourage everyone to visit Mount Rushmore at least once!
Tuesday, September 4, 2007
My answer is usually the same. "It depends on whether you're selling or buying." Let's examine that a bit further.
If you're selling, then you already know that it's a different market than just a couple of years ago. If you see my earlier post on August market statistics, you'll see a visual depiction of the decline in the market. There is a glut of homes for sale on the market, many of which will be your direct competition when you're selling. There are also plenty of national articles on the impact on prices for homes.
But, if you're buying, well....it's a different story! In fact, we may be experiencing a Once in a Lifetime opportunity! Let me explain.
First, you've already read the national articles about declining prices for homes. In our area - the general Washtenaw County area - prices are down about 10% from last year. There has also been a huge impact on builders.
Second, interest rates are still at incredibly low levels historically. Your buying power hasn't been this good in our lifetime!
Third, you have the luxury of time on your side. During the most recent Seller's market, the competition from other buyers meant that you had to decide on a house as soon as it came on the market. If you waited, the home would sell to another eager buyer. But today, you have so many homes to choose from, you can see lots of homes, then boil the list down to the top 5 to go visit again, then boil the list down to your top two, and negotiate confidently with either home seller, knowing that you'll get a good deal, no matter what!
All in all, it's a great time to buy a home!
If you've ever given thought to owning investment property, now is a great time buy. With the challenges in the mortgage market due to "sub prime" mortgages, many of those home buyers have turned back into renters. There are many, many tenants out there looking for a home or apartment to rent. You can buy a great single-family home, or a duplex, at today's prices, and rent it out for many years to come. You'll be glad you did! Just ask me!
On the Fiftieth (50th) anniversary of the opening of the Mackinaw Bridge, connecting the upper and lower peninsulas of Michigan, yesterday my family and I made the walk from St. Ignace to Mackinaw City.
The crowds were huge! On-line reports indicate that there were over 57,000 people who made the walk. The locals there told us that a typical figure was 25,000, although they expected more this year because of the 50th anniversary. Those of us who regularly attend UM football games, where the crowds are over 100,000, had no problem with the size of the crowd crossing the bridge. The only real issue was the traffic jam getting away from Mackinaw City following the walk.
The weather was perfect for the walk, sunny skies with temps around 80 degrees. The forecast for today, the Tuesday after Labor Day, had rainy skies and temps in the low 60s. So, the local Chamber of Commerce sure ordered up a good day for the walk!
Here’s a view of some of the crowd approaching the north tower.
Friday, August 31, 2007
Right after school ended in June, my family and I headed out west. We hit all the major sights along the way - The Badlands, Mount Rushmore, Devil's Tower - to our destination of Yellowstone National Park and Grand Teton National Park.
Here's a view of Mount Moran, in the Teton range, as reflected in the Snake River.
Thursday, August 23, 2007
Let me explain the data that makes up this chart. I keep track each month of the number of homes available - that is, those that are actively being marketed. I also keep track of the number of homes that have gone "under contract" - that is, where the sellers have accepted an offer, but it hasn't closed yet. The chart shows the percentage you get when you divide the number of homes "under contract" by the number of active plus "under contract" homes. What this tells us, really, is the pace of sales.
You can see, right off the bat, that there is some seasonality to the chart. The highs are typically hit in June or July, with the lows in January or February.
At this time, (August, the middle of the third quarter of the calendar year), the Washtenaw County market is in "Buyer's" market conditions. What this means is that there are more homes coming on the market than are being sold, so that buyers have the ability to choose. Buyers also have the negotiating leverage, especially on price.
Friday, August 17, 2007
I began my career as a full-time Realtor in 1994, following experience as a Plant manager, Materials manager, and Quality Assurance manager for local Automotive suppliers. I presently hold the title of Associate Broker with Real Estate One – Ann Arbor. I am also a graduate of the Realtor Institute (GRI).
In my career, I have closed over 230 transactions, for over $42 million in total sales. I grew up in Ann Arbor (Newport, Forsythe, Huron HS) and presently live in Saline with my family. I have sold properties from South Lyon to Dundee, from Clinton to Canton, and specialize in my “hometowns” of Ann Arbor and Saline.
My clients have recognized my professionalism and attention to detail. I have earned the designation of QSC, or Quality Service Certification, which less than 20,000 of the nation’s 1 million+ Realtors have earned. I have served the Ann Arbor Area Board of Realtors (AAABOR) as a Director from 1997-2004, as Treasurer, and as the 2004 President of the AAABOR. I have also served as a member of the Public Policy committee at the Michigan Association of Realtors (MAR).
I have earned both an MBA (Finance and Marketing) and a Bachelor’s degree in Industrial Engineering from The University of Michigan in Ann Arbor, and I look forward to serving your Real Estate needs.