Five Deal Killers in Saline real estate

No matter the condition of the real estate market, you’ll want to avoid these five deal killers in Saline real estate.

1. Skipping the pre-approval process. You do not want to pick out your dream home, tell everyone about the home you are buying, and spend money for the appraisal and inspections, only to find out that you are not eligible for a mortgage to pay for it. Do you know what your new dream home is going to cost you a month? I’ve written before that mortgages are still available in Saline. Let’s be absolutely certain that you have been pre-approved for your mortgage, so you’ll know exactly what you can afford!
2. Not understanding what you are signing. The offer to purchase that you sign is a legally binding contract. If you are selling, the buyer can force you to sell. If you are buying, the seller could sue you for any loss they incur as a result of your not completing the purchase of their home. It is a good idea to talk with an attorney BEFORE you sign the offer to purchase. Make sure that your purchase offer expresses completely your understanding of the agreement. In God we trust – everything else must be in writing, to be sure that you can enforce your agreements.
3. Letting Emotions override the facts. Never let your excitement over any Saline home or condo cloud your vision. You can jump up and down with excitement AFTER you get back in your car, or once the deal closes. Otherwise, the seller will see your enthusiasm, and take advantage of it. Trust me, it happens!
4. Poor timing. If you’re considering a home involved in a short sale, give yourself a few extra months to complete your transaction. The bank you want to buy from may take weeks, or even months, to accept your offer. There could be hundreds of other possible delays. If you are a first time buyer, you may want to time your move with the expiration of your lease – but remember that it is a whole lot easier to pay for one extra month of rent at the end of your lease than to try to find a place to live for a month while waiting for your “short sale” deal to close.
5. Missing the whole picture. The wisest investor I know taught me early that he never made money when he sold a property – he made money when he bought the property. For that reason, think about when you will sell your Saline home or condo before you buy it. For example, a one bedroom home or condo might be great for you, but there’s a limited market for re-sale, which may add to your time to eventually sell it, or it may result in a reduced market value when you sell. Think about your property taxes, commute times to work and conveniences, the quality of the local schools, deed restrictions (if the property is in a homeowner’s association), and whether the home will fit your needs five, ten, or twenty years from now. Drive by the home at various times of the day - a quiet street during the day may be a zoo at night, or traffic might make getting to or from your home a challenge. Not being able to back out of your driveway in the morning can sure make for a bad start to each day!

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If you have questions about your specific situation, or if you’re considering buying any Saline real estate, you owe it to yourself to take advantage of my experience in the Saline market. I’d be happy to meet with you! Just give me a call at (734) 476-2063, or send an e-mail, “Vance (at) SalineMichiganRealEstate (dot) com”.

You can search for homes and condos in Saline here.

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Foreclosures in Saline

It’s a sad fact of life that, even in the Saline real estate market, many people have lost their homes through bank foreclosure.

According to RealtyTrac; a website that logs foreclosure filings, foreclosure rates continue to rise in most of the top 100 largest metropolitan areas of the country.

The effects of foreclosure have spread beyond the delinquent borrower. The losses had a chain reaction from the defaulting borrower, to the lender and the investors. The foreclosure process costs the lenders thousands in losses through legal fees and taxes due until the property is sold. Not to mention the lost equity when the house is priced to sell in a weak market. We’ve seen the news that many of the major financial institutions (such as Citigroup, Bank of America, Morgan Stanley and Merrill Lynch) have reported billions in losses on investments backed by mortgages. You can read one of these reports here.

On a wider scale, even those who have not, or will not, default in their payment were affected. Foreclosure raises the risk of fire, vandalism, theft and other crimes not only in the vacant foreclosed homes but in the surrounding houses, streets and neighborhoods. Here is an article that discussed how the mortgage meltdown sparked a crime wave in one of the areas hardest hit by foreclosure.

When you combine an increase in inventories of foreclosed houses for sale with the typically lower-than-market value sale price of foreclosures, the result is that it weakens the local housing markets. It pulls down the value of other nearby homes and sometimes the whole neighborhood. Buying a foreclosed property in an area known for a lot of foreclosures doesn't leave much room for capital growth, if an investor is planning to flip it.

Remember, although there are many opportunities available in foreclosed properties, not all foreclosures present an opportunity for successful investment. Do your own research. Check the foreclosure statistics in the area. How did the foreclosures in the area affect the neighborhood? Did it increase the crime rate in the area? Are there any developments or job growth that can affect the area's future capital growth potential? Be aware of any indicators that can further dampen the house prices and look out for genuine bargains that can be a potential gold mine.

If you’re considering an investment in a foreclosed home in the Saline real estate market, you owe it to yourself to explore the risks and rewards first. I’d be happy to share what I’ve learned through my experience. Just give me a call at (734) 476-2063, or send an e-mail, “Vance (at) SalineMichiganRealEstate.com”.

Understanding Buyer Agency for Saline Michigan real estate

If you’re in the market to buy Saline real estate, it’s vitally important that you understand buyer agency. In this article I’d like to briefly cover the subject.

When looking to sell their Saline home or condo, sellers will generally interview a number of agents, with the goal of hiring the best real estate agent to list and sell their home. As a buyer, you may just want to see some Saline homes or condos, and therefore you may think that you need an agent only to open the lockbox and let you view the property. In general, many buyers really don't care who opens the door to the house for them.

But they should.

When someone calls me to see one of the many homes I have listed for sale, there are a number of questions I’ll typically ask:

Are you working with another real estate agent to help you buy a home? No, why?

Well, we have to ask. Why?

Because if you are already working with another real estate agent, and if I'm not the listing agent for the home you want to see, then I can't show it to you. Aren't you the listing agent?

No, unfortunately, all of the available homes for sale in the Saline real estate market that you can view on my website are not my listings. Who's the listing agent?

You see, if you want to buy a home and you don't understand buyer agency, you really shouldn't be buying a home. If you do understand buyer agency and choose not to use a buyer agent to represent your interests in the transaction, then by all means, buy a home.

A real estate agent does more than open the lockbox and the door to the home and point out the obvious, such as “This is the kitchen” or “That's a nice walk in closet in the master bedroom.” A real estate agent offers a buyer negotiating expertise, knowledge of the Saline real estate market, and experience in helping buyers avoid potential pitfalls when buying a home. I’ve always looked at Buyer Agency as making sure that a buyer doesn’t make a mistake.

A buyer who chooses to become a client by entering into a written Buyer Agency agreement can expect me, and my Company, to provide the following client level services:

Obedience
Loyalty
Disclosure
Confidentiality
Accounting
Reasonable care and skill

Client level services also include advice, counsel and assistance in negotiations (emphasis added).

The best part of buyer agency in the Saline real estate market is that it doesn't cost you any money to be represented. The seller pays the commission to the listing broker, who splits it with the broker representing the buyer.

If you are ready to look at Saline homes or condos, call me at (734) 476-2063, and I’ll guide you to find the perfect home in Saline to meet your needs.

Too good to be true!

Just another quick article to let you know how I recently helped a client with their Saline real estate investment plans.

Bart and Lisa are experienced real estate investors in the Saline area. They watched with great interest as home prices have declined about 30% over the past 3 years, focusing mainly on bank foreclosures. Recently, a bank listed a home for sale which was “too good to be true,” only this time, it really was true!

Bart and Lisa had already done their “home”work, by getting their pre-approval with their bank. When the opportunity came up, we jumped, making the first and best offer, on the house.


After we had the home inspected and found nothing objectionable, we knew that Bart and Lisa would be making money right away with this property.

A wise Real Estate investor once told me “I never made money when selling a property – I made money when I bought it.” Given the level of home prices right now – mostly in bank foreclosures - lots of people will be making money when they buy. Will you?

Are you ready to start your Saline real estate investment search? Contact me, and I’ll guide you on finding the perfect investment property in Saline to meet your needs. (734) 476-2063.

Open House at your Saline home?

When you are considering Saline real estate, you may be wondering “What is an Open House, and what is its purpose?” The short answer: It depends. That wasn’t very helpful, was it? Let me explain.

An Open House can serve a multitude of purposes - it’s a real multi-purpose tool for a real estate agent. The intended outcome is to sell your Saline home, so that should be the primary goal of an open house. But the fact is, that doesn’t happen very often. Why? There are lots of different reasons most homes don’t sell at the open house. So why do Realtors® hold open houses? To sell your house. OK, is this not making sense?

Look at it this way: If your home does not sell at an open house, that does not mean the open house was not successful. Perhaps the buyers came through and will take that information back to their own Realtor®. Perhaps they are parents or friends of out of town buyers and will take that information back to the buyer. Perhaps they are nosy neighbors who are have always been curious about what your property looked like, but once inside, they know someone who would love your house! By holding an open house, you are creating interest in your Saline home. If your home is priced correctly, and prepared properly, you and your real estate agent have a real opportunity to generate some buzz. Hopefully you have done the things you need to do in order to welcome serious buyers. So what is your Realtor® doing? Marketing, of course!

How do you market an open house? It depends on the market for your home. Who are the potential buyers? Your real estate agent should be able to tell you who those buyers are, and have a plan for reaching them. You are hiring a real estate agent to market your home, hopefully they understand the difference between buyers who are looking for starter homes and buyers who are looking for a palatial estate in the country. Some marketing will be similar for each, but marketing is never a one-size-fits-all proposition.

Open houses are a form of entertainment for some people on a Sunday afternoon. Some Realtors® complain about those visitors, but I welcome them! Who better to appreciate your home than someone who looks at open houses for fun and excitement? I figure these are the people who are talking up homes to their friends! “You are moving?!? Where to? Oh! I just went through the cutest little home in Saline last week! Let me tell you about it…” Hooray! We have someone marketing for us! If you are an open house fan, you are welcome to my open houses anytime! Come on in! Take your time, look around. I only ask that you please remember me - Vance Shutes, Real Estate One, the brilliant and nice Realtor® who didn’t mind that you visited his client’s beautifully and well-priced home, welcoming you on Sunday afternoon as his guest. Then when you discuss homes tell people that you know a great Realtor® who holds the best open houses around (I suppose it’s too late for a shameless self-promotion alert… ?).

If you are selling a home, ask questions - know why an agent is holding your home open, and make sure it meets your needs.

I have to thank my friend Teri Lussier, in Dayton, Ohio for the inspiration for this article.

I'm Tired of Stairs!

Just another quick article to let you know how I recently helped a client with their real estate needs.

Bob and Zoe had grown tired of climbing stairs in their 2-story home. It was time for them to move to a home on a single level.

Geographic proximity to their children and grand-children defined the limits of our search for a ranch-style home or condo. We screened dozens of choices to find a few developments which offered the various amenities important to Bob and Zoe, which meant that we had only to visit a few properties to find the right one.

And now, Bob and Zoe are enjoying their new home, all on one floor!

Meanwhile, they are able to lease out their former home, earning income for their future needs.

So, who do you know that is tired of climbing stairs? Please pass this article along to them.

What are you waiting for?

Buy or Rent that home?

Not everyone wants to be a real estate investor. For that matter, not everyone wants to own a home of any kind. And that is okay. Some people just don't want to be "tied down" or have to deal with a leaking water heater or have to take the chance on replacing a roof.

But for those of you who are still wavering between buying and renting and are wondering how the current Saline Real Estate market plays into that decision and whether or not it is worth it and...

Let's just lay it all out there for you so you can make up your own mind.

Here is our scenario: A house in Saline that costs about $150,000 will rent for about $1200 in most of the Saline area. The house is a 3 bedroom, 1 and ½ bath brick ranch, in good condition, with (maybe) a 1 car garage. Let’s project that you will either rent there for 8 years or own there for 8 years. That’s about the average length of time a home owner stays put. Renters will move more often, but will usually move into another rental house before finally buying a home. So those are the rules.

RENT

We'll start with the renter because the numbers are more simple. Starting rent will be $1200/mo. We'll raise the rents approximately 5% every other year. Years 3-4 will be $1250/mo. Years 5-6 will be $1310/mo and years 6-8 will be $1375/mo. Sound reasonable?

At the end of the 8 years you will have paid to your landlord $123,240. And the good news is you didn't have to shell out any other expenses for repair type items.

OWN

Taking the $150,000 house, we are going to say that you are going to get a 100% loan. Don't think your’e alone! If you have little or no money to put down, you can still purchase a home in Saline. In fact, now is the perfect time to purchase a home. Historically low purchase prices, coupled with low 30 year fixed rates, are just two reasons to purchase Saline Real Estate now.

FHA IS THE WAY. There are many benefits that an FHA mortgage can provide to buyers. The most significant benefit is enabling the seller to cover a 3.0% down payment and pay all closing costs. There are no income restrictions. Whether you are a first time buyer, or a seasoned buyer, this is the most flexible program available in the mortgage industry today.

Based on a purchase price of $150,000 with the seller paying costs and down payment with a loan amount of $147,268, Principal and Interest (P&I) is $882.95 based on a 30 year fixed rate of 6.0% + PMI (Private Mortgage Insurance, required on FHA loans) of $60.63 + $275.00 estimated taxes and insurance. Your total monthly payment will be $1,218.58.

THE RESULTS

Over that same 8 year period you will pay PITI (Principal, Interest, Taxes and Insurance) of $116,984.

That is $6256 less than if you rented.

Now we have additional factors we have to take into account. Over that 8 year period you will have paid in interest alone $66,755. Home mortgage interest is deductible on Schedule A of your Income Tax return. If you are at the 28% tax bracket, you will have seen a tax savings of $18691 over those 8 years.

Now the difference is even more in OWN's favor, by $24,947 over the 8 years.

Another thing to think about is the reduction in the principal balance of your mortgage. Over those 8 years, each month you paid your mortgage, some of that money (at first a very small amount) went towards reducing the amount of money you owe. Over the 8 years, that amounts to $18,008.

The difference is now in OWN's favor by $42,955 over the 8 years. Do I have your attention now?

Still one more factor to take into account: Appreciation. It seems that we always talk about appreciation of home values. Lately, though, the talk is about lack of appreciation. Here in Saline, we have seen a loss in value of about 25% in the past three years.

Historically, the Saline housing market has appreciated at 5% a year. But for our purposes, we are going to use a yearly average appreciation of 3%. 8 years at 3% per year appreciation (on average) will make that $150,000 home sell for about $190,000. That is a $40,000 gain.

Now OWN's favor is by $82,955.

It is fair to say that after 8 years there will be deferred maintenance that will have to be caught up. So subtract from OWN $5000 for carpeting, $2,000 for appliances, $5,000 for painting and $5,000 for miscellaneous.

You are still left with an advantage to OWN by about $65,955.

There are, obviously, multiple variable and unknowns. The market could continue to go south like some gloom-and-doomers would have you believe. It wouldn't surprise me at all if we stay flat in 2008 and 2009.

There are those who would have us believe the stock market run-up of the '90's, and the real estate boom of the 2000's wouldn't end. They did. Now we are led to believe that the Saline Real Estate market will never rebound. It will. People will still need a home to live in. Banks will still exist, with a business model to make money by loaning money (for home purchases). You can count on that.

Another factor is lifestyle. Perhaps you just don't want to own. I understand that. I've sold duplexes where the tenants have been there more than 10 years. They liked where they lived, and didn't see any reason to do anything different.

The bottom line? Talk with an experienced Realtor®. They can guide you through the numbers of your specific situation, so you can make an informed decision.

Duplex? Do what?

One of the biggest decisions most people will ever make with their finances and their lifestyle is to buy (or sell) a home. Getting the best bargain in the purchase, or making the most profit on the sale, give buyers and sellers so much to think about that many may never stop to consider keeping that old house - or buying another - as an income-generating property. But the rewards, in savings, profits and problem-solving, can be high.

One option for buyers who otherwise might consider home prices beyond their reach is the property that pays for itself: a house you live in part of and rent out the rest (the simplest form is a duplex). This offers not only an obvious balance of cost and income, but perhaps lesser-known benefits in taxes and mortgage.

The rental unit(s) can be depreciated over time; considered to offset the rental income, this can lower your taxes on that income. At the same time, the addition of the rent to your finances helps you qualify for a larger mortgage, and investors who occupy their rental properties can, under certain conditions, get interest rates lower than those who do not. Of course you'll want to decide if the demands of being a live-in landlord are for you.

One of my early clients as a Realtor® is a prime example of what you can accomplish with an income-generating property.

Rob was in his late 20s, had a great job in the area, and earned a nice income. He could qualify for a mortgage for a “trophy” home, if he chose. Instead, Rob followed a game plan which I would have loved to have followed at his age.

Rob bought his first duplex with me in my first year of business. It needed some minor work (sweat equity) on the owner-occupied side, while the rental unit was nicely updated. Rob fixed up his side in the two years he lived there. On the two-year anniversary of the purchase of his duplex, Rob called to ask about the available duplexes on the market. He bought his second duplex a month later. He moved into the new duplex, taking the “worst” side for himself, and renting out both sides of his first duplex.

Over the next two years, Rob fixed up the unit he lived in, building more sweat equity. As Rob and I were regularly in contact, I knew to send him the list of available duplexes at his purchase anniversary date. Rob bought his third duplex almost four years after his first duplex.

Why always two years between purchases? Tax purposes only. Not being a tax-law expert, I’m not qualified to explain exactly why Rob always waited two years between purchases, except to say that he always explained it as being for “tax purposes”. Ok.

To make a long story short, Rob now owns five duplexes. The first three are fully paid for. The income from those three are used to pay down the fourth duplex. By the time that Rob is in his mid-40’s, he will have all five duplexes fully paid for. He can retire, if he wishes, and live off the passive income for the rest of his life. But knowing Rob, he’ll keep building his empire.

Owning an income-generating property is not for everyone, but - from younger buyers offsetting their purchase costs, to seniors easing the expenses of their retirement years - it can be for all kinds of people.

Who know? You could be the next “Rob” that I’ll be writing about?

What do you want - Part I

When it’s time for you to begin looking at Saline real estate, the first question I’ll ask you is “What do you want?”

Let me paint a word picture: Why does a 60-watt bulb light a room, but give little warmth, while a laser beam will burn a hole through the wall? The answer: Focus.

The more focused you can become about what you really want in your Saline real estate, the more powerful a force you become in the marketplace.

But, how do you really know what you want?

Your first inclination may be to go out and look at lots of houses. You want to experience first-hand what your “wants” both look and feel like.

Many people start off with a list of requirements that look like:
“Must Have”: What you absolutely know you want
“Should Have”: What you think you want
“Could Have”: What you’re not sure you want
“Won't Have: What you absolutely know you don't want

For any number of reasons, what people say they want doesn't always line up with what they really want in their minds and hearts. A lot of times that's because of the difference between theory and application: being able to actually drive the commute or experience how many flights of stairs there are gives people a clearer picture of "Could" vs. "Won't". The tricky part is separating the borderline "Must Have"s from the "Should Have"s.

Have you ever heard the advice, "You should always buy a home where there are good schools?" There are advantages to this because these are neighborhoods which are (in general) the last ones to decline and the first ones to appreciate, but remember that if the neighborhood has a reputation for good schools, that reputation is already priced into the house.

If you have school-age children, you may save money by buying in a less expensive neighborhood and sending your kids to private schools. You will get more house for your money if you don't have to pay for the school district's reputation. And you may get more upside from an ascending school district which is building a great reputation than one that's maintaining its high scores. When the best kept secret in the area comes out, people will be looking for that good value.

Most of us consider commuting a necessary evil based on where we live and work. Time is money, right? Well, almost, because no matter where you were born, what your parents have, or what your opportunities are, everyone starts off with 24 hours in a day.

You can measure the value of your time in two ways. Economists measure the value of time in terms of opportunity cost, the amount of money you can make with your time at its highest and best use. Most people measure it in exactly the same way except with things they can be doing - activities like spending time with the family, or reading a book.

Now consider the cost of your commute. Let's say you've live in your home for five years and take the same commute each day. You earn a conveniently round number $100,000 and work 50 weeks out of the year for 5 days a week. Here's what your commute costs:

At only half-an-hour each way, the commute costs $62,500 over that period and $125,000 if your commute is an hour (two hours a day) each way!

There's no value judgment behind these numbers. Some people want to save money to keep their families fed, happy and well-educated so they will trade more commute time for cash savings. Others prioritize spending more quality time doing other things and choose to allocate more resources to the problem. My thanks to Steve Leung for this analysis and the ideas built around it.

The beauty is that the choice is up to you and experiencing a house search with an expert is an effective way of truly understanding what you want and what you're willing to trade-off in your search for your Saline real estate.

PMI, or Private Mortgage Insurance

As a home buyer in Saline, you want to know everything about the process before talking with anyone about your plans. That’s completely understandable.

Toward that end, I’d like to address the topic of Private Mortgage Insurance, or PMI. You’ll be paying PMI, in one way or another, whenever you put less than 20% downpayment on your Saline home purchase. If you’re a first-time homebuyer in Saline, coming up with that 20% downpayment may be a real struggle, so it’s especially important to understand PMI.

From Wikipedia, the free encyclopedia: Lenders mortgage insurance (LMI), also known as Private mortgage insurance (PMI) in the US, is insurance payable to a lender or trustee for a pool of securities that may be required when taking out a mortgage loan. It is insurance to offset losses in the case where a mortgagor is not able to repay the loan and the lender is not able to recover its costs after foreclosure and sale of the mortgaged property.

Another way to put it is that PMI is extra insurance that lenders require from most homebuyers who obtain loans that are more than 80 percent of their new home's value.

PMI plays an important role in the mortgage industry by protecting a lender against loss if you default on a loan, and by enabling borrowers with less cash (like a first-time buyer) to have greater access to homeownership. With PMI, it is possible for you to buy a home with as little as a 3 percent to 5 percent down payment. This means that you can buy a home sooner without waiting years to accumulate a large down payment.

In the past, most lenders honored consumers' requests to drop PMI coverage if their loan balance was paid down to 80 percent of the property value and they had a good payment history. However, consumers were responsible for requesting cancellation and many consumers were not aware of this possibility. Consumers had to keep track of their loan balance to know if they had enough equity and they had to request that the lender discontinue requiring PMI coverage. (As a side note, I track your home’s value for you, and call my clients when it appears that they may be able to drop PMI). In many cases, people failed to make this request even after they became eligible, and they paid unnecessary premiums ranging from $250 to $1,200 per year for several years. With the new law, both consumers and lenders share responsibility for how long PMI coverage is required.

You have the right to request cancellation of PMI when you pay down your mortgage to the point that it equals 80 percent of the original purchase price or appraised value of your home at the time the loan was obtained, whichever is less. You also need a good payment history, meaning that you have not been 30 days late with your mortgage payment within a year of your request, or 60 days late within two years. Your lender may require evidence that the value of the property has not declined below its original value and that the property does not have a second mortgage, such as a home equity loan.

Mortgage lenders or servicers must automatically cancel PMI coverage on most loans, once you pay down your mortgage to 78 percent of the value if you are current on your loan. If the loan is delinquent on the date of automatic termination, the lender must terminate the coverage as soon thereafter as the loan becomes current. Lenders must terminate the coverage within 30 days of cancellation or the automatic termination date, and are not permitted to require PMI premiums after this date. Any unearned premiums must be returned to you within 45 days of the cancellation or termination date.

For high risk loans, mortgage lenders or servicers are required to automatically cancel PMI coverage once the mortgage is paid down to 77 percent of the original value of the property, provided you are current on your loan.

If PMI has not been canceled or otherwise terminated, coverage must be removed when the loan reaches the midpoint of the amortization period. On a 30-year loan with 360 monthly payments, for example, the chronological midpoint would occur after 180 payments. This provision also requires that the borrower must be current on the payments required by the terms of the mortgage. Final termination must occur within 30 days of this date.

It’s always best to speak with a lender before beginning your home-shopping experience. Your lender will explain to you all of your options regarding PMI. If you’d like the names of some outstanding local lenders, give me a call or send an e-mail.

Are you Pre-Qualified or Pre-Approved?

Before you begin to shop for Saline real estate, it is best that you set up a time to meet with a mortgage lender, so you can figure out how much you can afford. This will put you in a better position as a buyer.

It is important to understand the distinction between being pre-qualified for a loan and pre-approved for a loan. The difference between the two terms will be crucial when you decide to make an offer on a house.

To get pre-qualified for a loan, a lender will collect information about your debt, income, and assets. The lender will also look at your credit profile and your assets for a down payment, so that you can get an idea of all the different loan programs that would work for you. The lender will then issue to you a pre-qualification letter indicating the amount you are pre-qualified to borrow.

It is important to understand that a pre-qualification letter is just an estimate of what you are eligible to borrow. It is not a commitment to lend.

Getting pre-approved for a loan gives you competitive advantage when the time comes to bid on a home, because you have been approved for a loan for a specified amount.
To get pre-approved, you will complete a mortgage application. With the application, you will provide the lender with various information - your employment, assets and financial status. The lender will also review your mortgage options and submit your application to the investor that best meets your needs. Once the application process is complete, you will receive a pre-approval letter indicating the amount your lender is willing to lend you for your home.

A pre-approval letter is not binding on the lender; it is subject to an appraisal of the home you wish to purchase and certain other conditions. If your financial situation changes (e.g. you lose your job), interest rates rise or a specified expiration date passes, your lender must review your situation and recalculate your mortgage amount accordingly.

So, when it’s time for you to shop for Real Estate in Saline, ask me for the names of some outstanding mortgage lenders.

Shop, or Buy?

Just another quick note to let you know about recent happenings in the Saline real estate market, and with a question: Do you Shop, or do you Buy?

What’s the difference?

Shopping means that you check out all of your available options and research until you conclude which choice is best for your needs. Then, you go out and buy.

These days, over 80% of home buyers do their shopping via the Internet. In years past, most home shoppers would dread having to drive around and look at many homes before making a decision. These days, buyers use the Internet to narrow down their home search choices to a few homes, which they then go out and see in person.

So, when it comes time to sell your home, you want to be absolutely certain that your home is marketed effectively and extensively via the Internet.

And you can be certain that will happen with me.

What are you waiting for?

So, You Want to Rent, Instead?

In the Saline and Ann Arbor area, there are many different sizes and types of rental housing available to you. All you have to do is decide which kind you prefer. There are many positive and negative aspects associated with each and the type that is right for you depends on your preferences and desires. To make this process of figuring out what type of building you want to rent, here are some of the benefits and downsides associated with the various rental properties:

Single-Family Houses

Single-family houses are free-standing rental properties that are habited by one person, family, or group of renters. Single-family rental units are very much like owning your own house.

Positive Aspects: As you do not share this rental space with any other tenants, single-family homes offer the most amount of privacy.
Negative Aspects: Many of the amenities that you may expect from a larger rental unit are not available.

Duplex/Triplex/Quad

Positive Aspects: You can expect similar conveniences as with a single-family home when renting a duplex, triplex, or quad unit. These rental units offer greater privacy and independence.
Negative Aspects: However, like single-family homes, these rental properties may not offer as many amenities as larger rental buildings are able to provide. Furthermore, you must also consider that you do have neighbors that are closer to you than what would be in a single-family home.

Small Apartment Buildings

Positive Aspects:Small apartment buildings offer more amenities (generally) than single family homes or townhouses, while simultaneously providing a living situation that you share with a small number of other tenants.
Negative Aspects: You will have more neighbors in a closer proximity than you would if you were renting a single-family home or townhouse. Furthermore, you may not have access to as many amenities as you would have if you were to rent in a larger rental property.

Medium Apartment Complex

Positive Aspects: Medium apartment buildings will often provide many of the amenities expected from large apartment buildings, but shared with fewer people.
Negative Aspects: You will have many neighbors that you must consider when living in a medium apartment building.

Large Apartment Complex

Large apartment buildings are comprised of numerous rental units and house the largest number of tenants under one roof.

Positive Aspects: You can generally expect a greater amount of amenities and luxuries from a larger apartment building than you might from smaller rental properties. Many have on-site management and 24- hour emergency maintenance, in addition to other amenities like swimming pools, clubhouses, and fitness centers.
Negative Aspects: You are surrounded by numerous other tenants and must co-exist with others peacefully. There will generally be more noise and activity in the building, which occurs naturally with the larger population of tenants.

In general, the smaller the rental unit with the smallest number of tenants the greater privacy and a more independent living situation. However, many of these smaller units are not able to offer the same variety of amenities provided by the bigger apartment complexes.

So, if you’ve decided to rent in the Saline or Ann Arbor area, you’ll have a large number of options. If you have questions about any of the material covered in this post, please let me know. I’m always happy to answer your housing-related questions.

Lockbox? What's that?

When your home is listed for sale with a Realtor®, other Realtors® will be interested in showing your home to their prospective buyers. It is best that you are not at home during any showing. If you’re in your home during a showing, the prospective buyer will feel uncomfortable about the intrusion into your home, even if it was cleared by their Realtor®. The best way for a showing to occur is for you to allow the placement of a secure lockbox on your home.

In the Saline and Ann Arbor area, there are a couple of lockbox options which most Realtors® use on a regular basis. The first option is an electronic lockbox (which most Realtors® refer to as an “iBox”).

iBox Supra electronic KeyBoxes are used on over 2.3 million homes nationwide.

The iBox works as follows:
1. It usually hangs on your front door knob, or a secure home feature near the front door (perhaps a water faucet or a porch railing).
2. One of your front door keys is kept inside the lockbox.
3. Realtors® will open the iBox using their own security device. The security device must be updated each day by the Realtor®, so you are assured that only a Realtor® can open the lockbox.
4. After the showing, the Realtor® will replace your home key inside the iBox, so it is available for the next showing.

The next option is a combination lockbox. There are several types of combo boxes – alphabetic rotating dials, numeric rotating dials, and numeric push buttons.

Supra - Push Button Portable Lockbox -- Push-button key boxes make access easier, Codes are easily changed, Great during escrow for appraiser, termite, repair, etc. Trusted by real estate agents for over 40 years.

The combo boxes work as follows:
1. As with the iBox, it usually hangs on your front door knob.
2. One of your front door keys is kept inside the lockbox.
3. Realtors® will open the combo box using the combo provided by the listing Realtor®. Note that once an agent knows the combo for the lockbox on your home, they can re-enter at any time. Note also, though, that no right-minded Realtor® would ever jeopardize their professional status by an un-authorized entry of your home.
4. After the showing, the Realtor® will replace your home key inside the iBox, so it is available for the next showing.

So when it comes to putting your home up for sale, be sure to ask your Realtor® about the lockbox they will be using on your home.

What's That Smell?

Oooh, that smell! Can you smell that smell?

Other than being a great song from Lynrd Skynrd, it’s not something we, in the Real Estate business, ever like to hear.

One of the things my parents taught me, from an early age, is that you never get a second chance to make a good first impression. That said, can you imagine a worse first impression of any house than a bad smell when entering? Yuck!

The possible sources of bad odors in a house is endless – far more than I could ever list in this article. I’m reminded of the gist of a definition from the Supreme Court – You can’t really define it, but you know it when you see (smell) it! Here’s a “short list” of possible bad odors you can leave in your home, which will turn off most buyers:

1. Cooking odors – especially regional spices.
2. Animal odors – food, dander, litter box, you get the picture.
3. Smoking – both legal and illegal materials.
4. Mold – more on that later.

Let me relate some experiences (each of these with different buyers) I’ve had in my years in the business:

A. I recall showing a house in the country, which was occupied by tenants. Evidently they liked living in the country for law enforcement reasons, as the house reeked of freshly-smoked marijuana! They must have stubbed out the joint right before we got there. Wheeeeee!!!!

B. Another house smelled so terribly of dog (it must have been a “water” dog, like a retriever) that the buyer and I both coughed terribly upon entering. We tried to make it into the next room, hoping the odor would dissipate, but no luck. That house stunk so bad, even a dog lover wouldn’t touch it!

C. In another house, the buyers and I arrived soon after dinner. We coughed and sneezed at the spices in the air – throughout the whole house! It wasn’t just the kitchen. When I called the other agent to report what we had found, I was told that they had prepared their special (insert country name here) “death sauce”. Lovely! Right before you want to show your home to potential buyers? Brilliant!

D. You can never predict your pets. I’ve lost track of how many times I’ve walked past a freshly-used litter box. It’s like the cats know that strangers are about to enter their home, so they like to leave a present for the guests. Yikes!

Earlier I mentioned mold. We’d all like to think that we don’t have mold in our homes, but the sad fact is that it’s everywhere. Given the increasing use of products like Tyvek in home construction these days, there is plenty of moisture available in most homes to breed a nice crop of mold.

I found a nice checklist from the government about problems with mold, and copy it here below:
Here are 10 things to consider regarding mold:

1. Potential health effects and symptoms associated with mold exposures include allergic reactions, asthma, and other respiratory complaints.
2. There is no practical way to eliminate all mold and mold spores in the indoor environment; the way to control indoor mold growth is to control moisture.
3. If mold is a problem in your home or school, you must clean up the mold and eliminate sources of moisture.
4. Fix the source of the water problem or leak to prevent mold growth.
5. Reduce indoor humidity (to 30-60% ) to decrease mold growth by: venting bathrooms, dryers, and other moisture-generating sources to the outside; using air conditioners and dehumidifiers; increasing ventilation; and using exhaust fans whenever cooking, dish washing, and cleaning.
6. Clean and dry any damp or wet building materials and furnishings within 24-48 hours to prevent mold growth.
7. Clean mold off hard surfaces with water and detergent, and dry completely. Absorbent materials such as ceiling tiles, that are moldy, may need to be replaced.
8. Prevent condensation: Reduce the potential for condensation on cold surfaces (i.e., windows, piping, exterior walls, roof, or floors) by adding insulation.
9. In areas where there is a perpetual moisture problem, do not install carpeting (i.e., by drinking fountains, by classroom sinks, or on concrete floors with leaks or frequent condensation).
10. Molds can be found almost anywhere; they can grow on virtually any substance, providing moisture is present. There are molds that can grow on wood, paper, carpet, and foods.

For more information on mold, visit the EPA’s mold site.

Don't Buy a Home?

Don't Buy a Home.

What? Are you kidding?

As a Realtor®, my job is to help people to buy or sell their real estate. When someone wants to hire me to solve their real estate needs, I am very gratified.

But, sometimes it’s better for my client to NOT buy (or sell) a home. How so?

You've probably heard all the perks about buying a house and how it's the centerpiece of the American Dream. But the American Dream is less about owning a house than the change it brings about in your lifestyle.

As a Realtor®, I want you to be ecstatic when buying a home. With an approach like that, it means that there are times when I recommend to clients that buying a house isn't the right way to go yet, particularly when the financial risk of keeping your home takes away from the enjoyment of it.

Here are five times when I counsel clients to wait on buying a house.

1. You're uncertain about your job.

Having a stable income is paramount in ensuring that your home doesn't turn into a financial burden, and almost everyone needs to work to bring in that money.

But if your company is considering layoffs, or moving their headquarters — or you're considering a career change — you may be forced into selling or renting out your home in short order. Doing so is time-consuming and costs money.

Generally, if you have to sell a home within five years of buying, you’ll be lucky to get away at a break-even. I’ve had clients having to bring funds to the closing when they sell, rather than walking away with a check for their proceeds.

You may be mentally prepared to sell your house quickly, but the market may not be so kind, and you might have to take a large loss in order to do so.

2. You have bad credit right now.

When you take out a mortgage to buy a house, your lender charges you interest every month for the privilege, but when you have bad credit, your lender will charge you a lot more.

Why? Because people with bad credit cost lenders money by not paying promptly or not paying at all. And what they charge you may end up being several hundred dollars a month! Bad credit is any FICO score below the national average 720. But be of good cheer! With a few months of "good behavior" you can increase your FICO score and save yourself all that money.

3. You're already in a lot of debt.

I not only want you to be ecstatic after buying a home, I also want you to be able to keep it for as long as you want to. The total of a lot of student loans, credit cards, car payments, etc.: all of this not only hurts your ability to buy a house but also your ability to keep it.

The challenge is that if you take on more debt in the form of a mortgage, you may take away your ability to pay off other more expensive debt. At that point, you're basically paying a lot of money for money you no longer have — a lose-lose scenario.

For people in this situation, the rule of thumb is to pay off your debt with the highest interest rate first and be careful taking on new debt.

4. The only way you can afford the house is using a “creative” mortgage.

Can you imagine a world where everyone had to buy a house using only cash on hand? Very few people would own a home if the world were like that.

Lenders know this and have come up with a number of loan types (they call them products) that are designed to help people get into their dream houses. The most notorious of these loans is the option ARM, sometimes called a "pick a payment" mortgage. The possibility of negative amortization from this loan means you pay less monthly but end up owning less of your house every month too.

I would never do business with someone who recommended one of these loans to my clients, and I recommend you don't do business with anyone who tries to sell one to you.

5. You don't have (at least) some reserves after your downpayment and closing costs.

Buying your home is only the first step. The freedom that comes with home ownership also comes with additional costs like property taxes, special assessments, home maintenance and repair work, none of which were applicable when renting.

I'd argue that if you're stretched to the point where you have zero savings left over to take care of unforeseen expenses after purchasing your home, you risk a lot of unnecessary stress, losing your house or having it fall into disrepair.

The amount you have in reserve doesn't have to be huge, but a couple month's worth of your mortgage in a readily available form like a high-yield savings account, or even stocks, can ease your mind.

Purchasing a house is a major financial decision that stretches the finances of many families, but there's a difference between having to pack your lunch versus risking foreclosure because of a bad month.

There are a lot of folks who want to you stretch to buy a more expensive house than you need or one sooner than you might be comfortable with. My real estate advice is geared so that you're in a position to own and enjoy your home for a long time.

HOA - Whoa!

What the heck is an HOA?

It is an abbreviation for Home Owner’s Assocation, which Wikipedia defines as “the legal entity created by a real estate developer for the purpose of developing, managing and selling a community of homes.”

But what is it, really?

I’ve never lived in a place where I was under the auspices of an HOA, so I cannot speak with direct experience. I can only relate what I have learned through experience, both good and bad, on behalf of my clients over the years.

On the good side…

An HOA can protect the value of your property by establishing and maintaining a uniform set of property conditions for your neighborhood. That’s good, in case you get a neighbor who does something with their property which reduces the value of the surrounding properties. For example, if your neighbor wanted to put up a really tall antenna for their amateur radio operations, many HOAs would preclude that. Who wants to look out their back window and see a tall tower, and the associated guide wires to keep it standing straight?

And, many HOAs have terms in them which would make it difficult to run a home-based business when you have many visitors each day. Who wants a “commercial” operation right next door in their own neighborhood? This doesn’t mean you cannot have a home-based business, only that you have to be careful about the volume of traffic it will generate at your home.

On the bad side…

An HOA can sometimes prevent you from doing something which is otherwise good. For example, many HOAs preclude the use of clotheslines or clothespoles in your back yard. Given the concern over energy usage these days, the ability to save some electricity by hanging your washed clothes out to dry makes sense. It’s good for the environment, and it leaves your clothes with a great “fresh” smell! So, why not allow it?

Many HOAs also have terms in them which prevent the use of fences in your yard, (unless required by governmental ordinances, such as around a built-in pool). When it comes to pets, the only option seems to be with the “electronic” fences, which many pet owners see as cruel to their pets. In such a case, a small fenced-in dog run may be a good option, but how to bring it about?

How do you change things?

In many cases, an HOA is run by a board of directors made up of your neighbors. Most HOAs have terms in them which define how changes can be made to the rules and regulations. With sufficient “yea” votes from your neighbors, you can bring about a change in the rules.

If you’re ever in question about your HOA, I’m happy to help understand a situation. I’m not an attorney, so I cannot give legal advice. If it involves any legal interpretation, I would be happy to refer you to a local real estate attorney for advice.

About Home Inspections

Once your offer to purchase has been accepted, a few things must happen relatively quickly, including the home inspection by an inspector hired by the buyer. A home buyer has a period of time, as outlined in the purchase and sales agreement and generally 7-10 days, to have the home inspection performed and then notify the seller of any unsatisfactory results.

There can be several parts to a home inspection, including the general home inspection, well, septic, radon and environmental testing. Depending on the property, the market and your experience in home buying, you may want all or none. I always recommend home inspections, no matter the market or the buyer’s experience. These are the typical inspections:

General Home Inspection. The inspector will:

• Evaluate the physical condition: the structure, construction and mechanical systems.
• Identify items that should be repaired or replaced.
• Estimate the remaining useful life of the major systems (such as electrical, plumbing, heating, air conditioning), equipment, structure and finishes.
• The inspector may also test for radon in air, if you request.

Well Water. Homes may either be on public water or well water. If there is well water, the inspector will:

• Test for bacteria in your drinking water and the presence of radon in water, among other things.

Septic. Homes can either be on public sewer or an individual septic system. The inspection is performed by licensed septic inspector, rather than the general home inspector. A septic inspector will evaluate:

• The use of the current septic system.
• The condition and performance of the septic system.

Environmental Tests. A home buyer may elect to have a variety of environmental-related tests performed, including lead paint, mold, asbestos, and UFFI (Urea Formaldehyde Foam Insulation). Some home inspectors will test for these items but they may also refer you to other companies. Here are some things to consider if you are thinking about having these tests performed:

• Expect lead paint in a home built before 1978.
• Mold is present in every home but people with allergies or with diminished immune systems should be more cautious.
• Asbestos was a common material found in insulating products and is commonly found in wrapping on pipes and water heaters, in floor tiles, shingles, etc. It can be found in many older homes.

How Much Do Home Inspections Cost? Costs for home inspections vary, depending on the size and type of property as well as the number of tests being performed. Expect to pay somewhere around $300 -$500 and up.

Also keep in mind that the inspector(s) may suggest that you ”investigate” certain items further. For example, an inspector may note that there is a foundation crack. He/she will likely recommend that you have a structural engineer analyze the crack for you and determine if you should be concerned or not. This would be an additional expense.

How to select a home inspector

Check with your agent for referrals. While not all qualified inspectors belong to the American Society of Home Inspectors (ASHI), a national organization that enforces a code of conduct and practice standards, their website, www.ashi.org., has a referral service. Your inspector should be licensed to conduct home inspections and should have training and or experience in building and construction standards as well as experience as a home inspector. Here are some questions you should ask:

Ten Questions to Ask Your Home Inspector.

1. What does your inspection cover?

• The inspector should ensure that their inspection and inspection report will meet all applicable requirements in your state if applicable and will comply with a well-recognized standard of practice and code of ethics. You should be able to request and see a copy of these items ahead of time and ask any questions you may have. If there are any areas you want to make sure are inspected, be sure to identify them upfront.

2. How long have you been practicing in the home inspection profession and how many inspections have you completed? May I have some references?

• The inspector should be able to provide his or her history in the profession and perhaps even a few names as referrals. Newer inspectors can be very qualified, and many work with a partner or have access to more experienced inspectors to assist them in the inspection.

3. Are you specifically experienced in residential inspection?

• Related experience in construction or engineering is helpful, but is no substitute for training and experience in the unique discipline of home inspection. If the inspection is for a commercial property, then this should be asked about as well.

4. Do you offer to do repairs or improvements based on the inspection?

• Some inspector associations and state regulations allow the inspector to perform repair work on problems uncovered in the inspection. Other associations and regulations strictly forbid this as a conflict of interest.

5. How long will the inspection take?

• The average on-site inspection time for a single inspector is two to three hours for a typical single-family house; anything significantly less may not be enough time to perform a thorough inspection. Additional inspectors may be brought in for very large properties and buildings.

6. How much will it cost?

• Costs vary dramatically, depending on the region, size and age of the house, scope of services and other factors. A typical range might be $300-$500, but consider the value of the home inspection in terms of the investment being made. Cost does not necessarily reflect quality. HUD Does not regulate home inspection fees.

7. What type of inspection report do you provide and how long will it take to receive the report? May I see a sample report?

• Ask to see samples and determine whether or not you can understand the inspector's reporting style and if the time parameters fulfill your needs. Most inspectors provide their full report within 24 hours of the inspection.

8. Will I be able to attend the inspection?

• Being there during the inspection is a valuable educational opportunity, and an inspector's refusal to allow this should raise a red flag. Never pass up this opportunity to see your prospective home through the eyes of an expert.

9. Do you maintain membership in a professional home inspector association? Are you bonded and insured?

• There are many state and national associations for home inspectors. Request to see their membership ID, and perform whatever due diligence you feel is appropriate.

10. Do you participate in continuing education programs to keep your expertise up to date?

• One can never know it all, and the inspector's commitment to continuing education is a good measure of his or her professionalism and service to the consumer. This is especially important in cases where the home is much older or includes unique elements requiring additional or updated training.

Renegotiating the Contract. Many buyers attempt to use the inspection to renegotiate the purchase price, which aggravates many sellers. However, if a buyer did his/her due diligence when putting in an offer, then there shouldn’t be too many huge surprises at the inspection and the price should hold. If there are any big surprises, then it is perfectly acceptable for the buyer to request the seller repair the items, reduce the selling price or ask for money in lieu of repairs being made. Getting the seller to actually do the repairs is completely out of the buyer’s control.

As-is Sales and What if the Seller Refuses to Make Repairs? If you’re buying a house as-is, that means that the seller is not making any warranties about the condition of the property. However, that does not mean the seller will not necessarily make repairs or offer to reduce the sales price of the property if a problem is discovered that is unexpected.

For example, a buyer can see for himself/herself that a furnace is aged and that it may have to be replaced. However, if that furnace is only a few years old, the buyer could reasonably expect that furnace to be functioning. Upon inspection, the buyer discovers that the furnace was not installed properly and needs modifications. The buyer can certainly request that the seller make repairs, although the seller may still refuse.

If a seller refuses to make repairs you requested, you have three options:

1. Continue to negotiate and possibly give them an ultimatum - if you don’t do X, we’re walking. Only do this if you really are willing to walk away from the deal.
2. Accept the property as it is and buy it, knowing that you will have to make the repairs yourself.
3. Terminate the contract - you are within your rights to terminate the contract as long as it’s done within the time-frame specified in the contract.

I hope this information is useful to you in your home-buying and home-selling journey. If you have questions about anything in this post, please contact me.

It's the BIG SALE!

Now that the Holidays are past, retailers everywhere are fretting about how to get customers into their stores. In every newspaper around the country, there are full-color advertisements from retailers of every sort, exhorting us to visit their “Big Sale”.

A review of our market conditions here in January, 2008, reveals that the same thing is occurring in the Real Estate market, as well. Only, you’re just not seeing the big headlines.
So, let me be among the first in this area to trumpet the following headline:

It’s The Big Sale!

Seriously, never before in our history has there been such a big sale in the Real Estate market. When has there ever been this many homes available for sale? Never!

Just like in the retail business (when a retailer orders too many of a particular item, they have to lower prices to “move the goods”), the Real Estate market has been experiencing the same thing in our area.

There are many indications that overall prices of homes have come down 15-25% in our region since their peaks of 2003-2004. This is consistent with the retailers’ approach, as we Realtors are trying to “move the goods” for our clients. How? By offering some of the best homes at the best prices we’ve seen in many, many years!

On top of all of this, interest rates continue to be incredibly low, on a historical basis. Just this week, you could get a 30-year, fixed-rate mortgage, for an INCREDIBLE 5.75%.

So, never in our history have we had such a confluence of positives for the Real Estate market – plenty of homes to choose from, fabulous prices, and rock-bottom interest rates.

So, WHAT ARE YOU WAITING FOR?

I know, I know. It’s the economy, stupid (to quote a past President of the United States).

But, back to the matter at hand:

Here’s a chart of the market conditions for Saline, as of mid-January, 2008:

The top line on the chart shows the number of homes available for sale in the Saline area, going back to 1996. The number of homes for sale began to climb in 2004, and is only now showing some signs of a retreat. So, act fast to be sure to get the home you really want, while it’s on the market now.

The lower, blue line on the chart shows the number of homes which actually have sold each month, again going back to 1996. There is a remarkable resiliency in our market, which means that you can’t go wrong buying a home in the Saline market.

I’ve got many other charts like these, including areas like Ann Arbor, and the entire Washtenaw County marketplace. Let me know if you’re interested in a particular area, and we’ll talk.

By the way, I’ll be hosting an open house this coming Sunday, January 19, from 2-4pm, at 1513 White Street in Ann Arbor. It’s an affordable home in the Burns Park school district, priced at $225,000, with 3 bedrooms and 2 full baths. There’s also a walk-up basement, and a 2-car garage. You are welcome to visit!

The Best Referral Compliment I've Ever Received

What a way to start my day on a Monday morning!

I received this letter from a client, in response to a phone call to him last week. He is the Sales manager for his firm, which will go unnamed. His message was sent to his sales staff. This is his exact e-mail:

A word about growing your business:

The other day, I got a phone call from my Realtor. How is it that he is "my Realtor"? Really, he's a salesman who helped me with a large purchase five years ago. He's "my Realtor" because he made my purchase easy, because he is likable, and because he does good follow-up. I get a card, a call, or an e-mail from him every 90 days, plus one on either my birthday or the anniversary of my purchase.

Would you qualify to have your customer call you "my car expert"?

When my Realtor called on Wednesday, he got right to business. "The reason I'm calling," he said, "is that I've been looking at whether I can help save you some money on your property taxes."

Do you capture your clients' interest effectively when you call them?

"Based on your State Equalized Value, the government taxes your house as though it were worth $XXX,000. I assumed that, based on market conditions, your house might be worth less than the taxable value, maybe even less than you paid five years ago."

Do your clients believe that you think about their best interests?

"But when I did the research, it turns out that your house is worth $20,000 more than the taxable value - a good bit more than you paid. Your house has done very well."

How do you go about complimenting your clients on their wise choices?

I took the bait. "Wait a minute," I interrupted, "Now, I'm not in the market, but you're telling me that if you were going to list my house today, that you'd list it for $YYY,000?" (That number would represent a profit for me over what I paid). "Yes," my Realtor replied, "that's exactly what I am saying."

Can you draw you clients into the market today, or do you wait and hope that they'll call you?

"The interesting thing," he continued, "is that when I have run the analysis for other clients in Ann Arbor, they've seen market values below the taxable values - so they can make an argument to the assessor for a lower tax bill. And, it means that there are some buying opportunities right now, especially in homes that are a next step up from yours. Would you like me to email you some of those opportunities?"

How often do you ask clients for a sale?

I said yes. Of course, he emailed me before we got off the phone!

Do you follow-through quickly and completely?

"Before I let you go, just one other question," he asked, "I know that you're not in the market at the moment, but I do have a house rather similar to yours - do you know of anyone, maybe somebody you work with, who is looking for a house like yours?"

Are your clients comfortable providing you as a referral?

If you're looking for a house, or looking to market yours, allow me to mention that my Realtor is Vance Shutes. He's an associate broker with Real Estate One, in the Briarwood Circle office. His office number is 662-8600 x430 and his email is vls@provide.net

Make sure you mention that I sent you - he has a referral program.

Will your clients be your advocate? Do they know about your referral program?

I won't answer the phone if someone calls and tells me that they're checking in. I won't listen if they want to know how they can help. But when a salesman calls me for a reason; with a message; because he can show me how he can help - suddenly I am interested.

Do you have a plan when you make the phone calls scheduled in Rey-Rey, or do you just go through the motions? Are you working smart and growing your business?

Like I said, this is the finest letter I've ever received!