Congratulations to American Associates, Inc Realtors Builders- Randy Haney Broker/Owner,  RE/MAX Select/ Paul Raymond Team- Paul S. Raymond, and Burrell Realty for winning the MI Genesee County HUD Listing contract. 

As always, Complete Realty, LLC is here to service any HUD Buyers as a Buyers agent for your home purchase.  For a list of avaiable HUD homes in your area, please call 810 744 4600.

Angie Ridley

Exemption “t”, as designated in the Michigan Transfer Tax Act, sets forth that a seller may seek an exemption from paying the state transfer tax if the following criteria are met:

With property values and corresponding SEV declining due to the struggling economy, home owners and real estate agents first took notice of the exemption’s possible applicability under the state transfer tax. However, absent an official interpretation, there was little awareness of its proper application.

The opinion from the Attorney General uses examples to show how the application would apply. One example illustrating application provides:

If the SEV of the principle residence when acquired in 2006 is $74,000.00 and the SEV when transferred in 2008 is $72,000.00 then criteria one and two above are satisfied. You can establish the true cash value by doubling the SEV at the time of transfer. In this case the true cash value is $144,000. If the sale price in 2008 is $140,000.00 then the sale does not exceed its true cash value. All three criteria are satisfied and the exemption would apply.

Source:  Brian Westrin, MAR Manager of Legal Affairs

Public Act 96 enables a person who has established a new principal residence to retain a Principal Residence Exemption (PRE) on property previously exempt as the owner’s principal residence that is not occupied and for sale by submitting a Conditional Rescission of Principal Residence Exemption Form #4640. The conditional rescission allows an owner to receive a PRE on his or her new property and on previously exempted property simultaneously if certain criteria are met:

• the property is not occupied,

• the property is for sale

• the property is not leased or available for lease

• the property is not used for any business or commercial purpose

*The opportunity to apply and qualify for a conditional rescission begins for the 2008 tax year and is not retroactive to previous tax years.

To qualify for the conditional rescission in 2008, Form #4640 must be submitted to the assessor of the local unit of government where the property is located on or before May 1, 2008.

Source:  Brian Westrin, MAR Manager of Legal Affairs

MAR Legal Counsel- Short Sale, Foreclosures and Commissions  

For agents and sellers

Greg McClelland, Michigan Association of Realtors General Counsel, spoke today about Short Sale, Foreclosure and Commission issues.

Ever go tot he court to find foreclosure records?  The records may not be there.  In MI foreclosure can happen by advertisement with out court supervision.  The property is also posted with "Notice of Foreclosure".

Always-always have a title company run pre-commitment.  The pre-commitment will tell you how many mortgage and what mortgages are on the property.

Michigan redemption (abandonment) period is 6 months.  If the home is abandoned, the period can be shortened to 15 days. 

A myth:  2nd and 3rd mortgages go away after the sheriff sale.  This is a myth.

Before you list a short sale, the following paper work must be done and sent to the Loss Mitigation Department:

• Hardship letter
• Financial statements
• Market Value
• Settlement statement

Bank will never tell you what they will accept.  Just take offers until they get one they like.  If the bank doesn't sign the short sale Purchase Agreement, the Purchase Agreement should state, "Subject to Lenders Approval".

Can agents in anyway get the bank to respond quicker?  NO

If the agent or broker doesn't follow through on a sale because the commission is cut, the agents / broker is in violation of Fiduciary Responsibility and can be sued!  At closing, each broker should sign a commission agreement to avoid further action.  According to Greg, once the agent accepts the commission at close, there is no more recourse.  Some brokers attempt to get commission from the listing company, that only caused hard relationships later.

A buyer's agent does not have to show REO properties as long as they explain to the buyer why.

CASH FOR KEYS!!  This is a new practice with lenders.  The lender themselves will approach the home owner.  The lender will ask the homeowner to get estimates for renting an apartment and moving van expense.  Lenders will send the homeowner a check for the move in return for the keys.  If you have the listing, make sure you advise your client smartly and ethically.  Don't get sued!

Consumer will not pick an agent based on who mailed the best pie recipe post card.  They are looking for one that can provide facts.

How do you answer the question:  Why should I buy now if prices are still going down?

Because of the changing market, you may not financially qualify tomorrow for what you financially qualify for today. 

The government is getting involved in the economy by lowering credit card and short term loans.  The impact of this action the interest rates will raise. 

            Price Today $150,000 @ 6% = $899.53 per month
               Price Later   $138,000 @ 7% = $918.12 per month

 MI 2008 Projected Foreclosures 28,239.
         MI homes affected by the 28,239 is 1,442,570.

The 2008 waive of foreclosures is not because of loans, it's because the values are declining so people just walk away.  The people that are walking away don't realize the market will come back and real estate is a cycle.

Quick notes from the MI Broker Summit

Market Trends and Forecast

Lawernce Yun, Ph D Chief Economist

MI Real Estate prices are declining but not as fast as they appreciated.  Homes sales are rising bringing down the inventory and stabalizing prices.  The market is expected to start correcting now and finish in 2009.

Top 2 reasons for foreclosure:

•1.      Loss of jobs (Michigan has loss jobs for 7 straight years)

•2.      Home prices declining, people just walking away when the price declines

Now that homes are selling, prices will begin to stabilize.  Nationally home prices in 2007 were the same as 2002.

Jumbo loan rate sh/ be coming down soon.  They can't of administration issue.  The software is the issue.  This should be solved April 09.

New Home Construction is slowed.  That's good.  This will assist to stabilize current inventory prices.

Homeowners benefit from Fed rate cuts, new home purchasers don't because the cut causes mortgage rates to go up.

People can buy; they won't because of the fear factor caused by media.

In Michigan, Unions are assisting in the economy struggle.  Unions help existing jobs and scare away new potential employment opportunities.