I am going to try to keep this post simple and basic.  Each state and lender may have different laws and rules. 

 I am consistently about people losing their homes because they are not seeking advice from a Realtor®. 

 1^st, call the lender for arrangements.  Ask for a temporary arrangement, if permanent will not be granted.

Options:  Deed in Lieu, the lender takes the deed with out foreclosure process; this could save the homeowners credit.

 Foreclosure:  the process of a bank reposing a home. 

            Stages:  1.  homeowner is late on payments

2.      3-4 months later, bank sends account to attorney to start the foreclosure

3.      ask the bank “Deed for Cash” homeowner gives deed, bank may give homeowner moving money

4.      homeowner recieives notice of “Sherriff Sale”

5.      at the “Sherriff Sale” the loan is purchased at auction, usually purchased back by the bank, then the bank can sell the property later to recoup loss

6.      after “Sheriff Sale” is home is occupied, homeowner can redeem home for 6 months (home owner can repurchase home from bank)

7.      ask the bank “Keyes for Cash” bank may pay homeowner to vacate premises

8.      if home is not occupied, MI law says bank can take over 15 days after “Sheriff Sale”

Can a homeowner sell during foreclosure?  Yes, until the last day of the redemption period.

 Short Sale during Foreclosure:  A short sale is when the bank will agree to take less then the homeowner owes the bank.  

                        Points to consider:  Will the lender consider the debt paid in full?

                                                Is the lender going to attempt to recollect the difference?

                        Will you get a 1099 from the lender? 

Will you have to pay taxes on the amount forgiven?

Purchaser must prove financial situation has changed.

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.

Seller's you have to visit this site:  How do you want the buyers to remember your home?

Virginia Tatseos Stage-Show-Sell
Bloomfield Township, MI
More about me...
Stage-Show-Sell

Cell Phone: (248) 421-8201
Email Me

The Real Estate Training Academy in Burton, MI is offering the 40 hour Salesperson Pre-licensing class.

The class date starts 03/31/2008-04/11/2008.  The class runs Monday - Friday 6pm - 10pm for 2 weeks.

Cost:  $225.00 and this includes materials.

Location:
Real Estate Training Academy, REPlace
4284 E Court St
Burton, MI 48509
810 744 2078

Angie@AngieRidley.com

Please call for your reservation asap.  The class is filling up...

Print, fill out and send...

Real Estate Training Academy

Registration Form

Must be return 5 days before class start date.

Class: Salesperson Prelicensure Class $225.00 Text included

Class Date:  March 31- April 11, 2008, M-F, 6pm - 10pm

Student Full Name:  ____________________________________

Address:  _____________________________________________

City, State, Zip:  _______________________________________

Phone:  ________________________Cell:  _________________

Last 4 of SS#:  ___________________DOB:  ________________

Payment:  Signature ___________________________________

Date:  _______________ Charge $_________________to my

_____VISA or ____MasterCard #_________________________

Expires ____________________ 3 Digit Code_______________

Mail, Fax or Email to:

4284 E Court St

Burton, MI 48509

Phone:  810 744 2078

Fax:  810 936 4395

Email:  Angie@AngieRidley.com

Educational Coordinator

As of today the number of homes pending (waiting to close) is 587 in Genesee County, MI.

 Solds Stats According to the Flint Area Association of Realtors.

	2008	2007	2006	2005	2004	2003	2002	2001	2000
January	326	282	302	324	274	327	181	181	222
February	394	340	307	347	340	299	215	215	386
March		448	460	523	439	402	450	372	431
April		447	417	562	485	462	505	401	425
May		404	482	582	513	448	556	462	473
June		468	490	592	671	481	592	497	561
July		415	412	486	577	523	531	424	491
August		476	515	607	615	546	510	510	518
September		339	429	576	540	488	403	403	382
October		414	474	459	528	545	416	416	421
November		381	409	408	488	386	343	343	338
December		343	387	401	497	441	365	365	389
Totals	720	4757	5084	5867	5967	5348	5067	4589	5037

Are we really doing that bad?  I don't think so...

The difference really shows in the average price, from $103,604 to $76997 in Feb. 08.

There are currently 18 listings for every home sold.

Step 1.  Getting Prepared

• Contact your mortgage lender for PREAPPROVAL. 
• Know what you can afford.
• Explain to Realtor your needs.

Step 2.  Previewing Homes

•  Take pad of paper, ink pen and camera.
•  Note all the likes and dislikes.
•  Ask yourself, how does this home make me feel?  Do you feel enclosed, comfortable or overwhelmed with too much space?
• Note how much updating you may need to do.  What are the approximate costs?

Number 1 question, do people really purchase the first home they look at?

      Yes, many people purchase the first home they look at.

Step 3.  We Found a Home!
Once you have selected a home, have agent do a Market Analysis of the area to help you determine offer price. (Compare apples to apples)

Items that will affect your offer:
      1.  Property Condition
      2.  Property Improvements
      3.  Market Conditions
      4.  Seller Motivation

Step 4.  Make Your Offer

Your agent will assist you with the offer.
      Discuss home inspections, home warranties and well test....

Step 5.  What to Expect from Owner Seller

• Agent will present offer to seller's agent or seller.
• You will know the result, accepted, counter-offer or rejection immediately.
• Fast negotiations.
• Inspections
• Get Home Owners Insurance
• Close

            What to Expect from Bank Owned Seller

• Agent will submit offer to seller's agent or bank.
• Bank can take offer and others.  Don't plan on a response for 2-4 weeks.  If you get one sooner you are blessed.  Yes, they can still receive offers while you are waiting.
• Bank will provide their own "Addendum" specifying the terms.
• Inspections
• Get Home Owners Insurance
• Close
• Bank will charge you a daily fee if transaction is not closed on date specified in the purchase agreement.
•         Timely, purchasers are usually upset about the length of time it takes the Bank to respond.

            What to Expect from HUD

• Sign Contract
• Earnest Money is not negotiable. 
• $500 for homes below $50,000
• $1000 for homes $50,000 and above
• Must be in form of a cashiers check made out to Real Estate Brokerage
• Agent submits offer on-line
• M-F expect a 24 hour response
• Have all inspections done with in 15 days of accepted offer.
• Get Home Owners Insurance
• You must close with in 45 days.
• Easy, fast and most of all, very affordable.

The Last Step:  Closing, the Home Becomes Yours.

• Your lender or real estate agent will contact you with the final $'s you must bring to close.
• Bring your Driver's License
• Your lender or title company may request a last minute item, be prepared.
• The closing documents may be signed on one day, reviewed then finished the next.
• In most cases you will only be required to be at the title company one day.

We believe and understand.  made by www.1000WattConsulting.com 

Seller Beware!

Unfortunately the real estate industry has a real problem.  Real Estate agents are giving lock box codes out to people without licenses to view vacant homes. 

This is not the way a real estate agent is suppose to practice. 

     1.  Make sure your agent will attend all showings with purchasers not represented by another agent.

     2.  Ask your agent their office real estate agent showing verification process.
              A.  Does the office require all real estate agents showing property to give a license ID number?
              B.  Does the office require the office to verify the license number with the state for accuracy?
              C.  Does the office require the showing agent to leave 2 telephone numbers?
              D.  How does the office verify these numbers are correct?
     3.  At what point is the lock box code to your vacant home released?

Why?  The real estate agents that are giving the lock box codes out with out proper verification procedures are at risk of causing theft, physical harm and more.

Our offices uses a system called "BookAShowing".  Only State of Michigan licensed real estate agents with a membership to the Flint Area Association of Realtors can use the system.  Our office knows the person setting the appointment is licensed and accountable.  Please see www.bookashowing.com for more information.

Out of area agents must give license number, office telephone number, office address and the agents direct number.  We then verify the license on-line, match all numbers with names, call the office if open, then the agent.  We are always looking for ways to improve the system, any ideas, please let me know.

I would like to do away with push button and dial boxes.  They are not the safest tool available.  Companies now make lock boxes that must be opened electronically.  When the lock-box is utilized an email and/or text message is sent to the listing agent.  This alerts the listing agents that someone is viewing the home.  The seller can get a full report as well.  The Flint Area Association of Realtors did have this type of service at one time, agents complained because there was an extra item that had to be carried.  It wasn't the best system, now the systems are much improved.

Any ideas to help secure homes and make showing safer is more than welcomed.

On December 18, 2007 The Flint Journal and the Flint Area Association of Realtors®, FAAR Publishing, Inc introduced

"REALTOR REVIEW" is a joint effort.  The economy dictated this joint venture.  In the Genesee County Area the Flint Area Assocaiton of Realtors produce "This Week In Real Estate" and The Flint Journal produced the "Homes for Sale" guide.  The real estate agents had to purchase ads in both places to please the sellers and get the word out to the purchasers. 

We hope this joint effort relieves the agents of financial distress while assisting the purchasers and sellers by having the homes inventory in one place.

We understand print advertising is decreasing do to the internet.  "REALTOR REVIEW" will assist agents and sellers during this transition.

When do you? What do you? Market Questions

I was asked today "when do you think the market will come back and what will my home be worth then? What would you have sold my home for 2 years ago?" (Michigan)

2 years ago I would have price the home in mid $90's-$100. The square footage is an issue along with the bedroom situation upstairs. I can't estimate a future price. That wouldn't be fair to you and honestly, I don't know how long it is going to take for the market to come back. You can find an agent to tell you what you want to hear, to price where you want to price, that doesn't help the home sell.

Homes are selling. They must be priced to sell and sparkle perfect.

Every month someone waits now, it costing unless you wait a couple of years and that's not gauranteed. The market value is dropping monthly. The foreign investors are purchasing US securities at a discount rate. As long as that is happening we are in trouble. Our dollar is valued less and less almost daily. I don't believe we are done seeing the foreclosures. More ARM's are coming due for the next couple of years. This was only the first year. Most ARM's adjust 3, 5 or 7 years.

Everyday more homes become available on the market at lower prices because of foreclosures. Until we have a 6 month supply of homes on the market, it will continue to be a buyers market. There is currently a 13 month supply of homes on the market equivalent to yours.

I hope this helps.

(this home now comes in at a market value of about $88k, I waq suggesting pricing at $82-84k due to the saturated market and 13 month absorption)

I hope this answer explains the issue. I wish I knew how to fix.

Whether it's your first home or your 5^th today is the day to purchase. Whether you are purchasing an occupant owner home or an investment property today is the day to purchase. I don't have to tell you about the great deals on the market, you already know that. Let me tell you some other advantages.

Owner occupied investments.

If you are thinking of purchasing your first home, stop there. You are actually purchasing your first investment. This investment, if treated right, will lead you to your dream home.

Let's say you purchase your first investment for $100,000. You put $10,000 down (10%) of the purchase price. $100,000 is the present value today. The market finishes correcting itself and you sell in 6 years. If your property increases an overall of 8% per annum as it has in the past, your investment is now worth approx. $158,700. You will have approx. $28,600 in mortgage payments and $10,000 cash out, while receiving about $ 20,000 after the sale. Where else can you make $20,000 in 6 years?

Use the equity to purchase your second investment.

Don't sell; why not turn the first investment, into a life time money maker? This is when your money starts paying you. A person always needs shelter. As the population increases, shelter needs increase. Rent the home; let the tenants purchase the home for you. If you can, charge a little more than the house payment and pay down the mortgage faster or create a fun fund.

Soon you will be able to use the equity again to purchase your 3^rd investment and so on.

There are many tax benefits to being a "landlord". Talk to your accountant, but here are a few, the heater you would need to replace if you lived there or not. Most maintenance items and the interest you pay on the debt. A property manager, yes property manager, you have better things to do than collect rent and it is a write off. Taxes and the list goes on.

Remember, as the debt is paid down the equity goes up!!! The value increase in the property will offset any maintenance issues usually.

When you do decide to sell your investment property, you may want to invest in a 1031 Exchange. The 1031 allows you exchange or trade your investment for a different one. This is a great way to up your investments and defer payment of taxes.

Real Estate Counselor for the Seller

Download this episode (2 min) Podcast, please listen or read.
This cast explains why you need a Real Estate Counselor and not just an agent.
Thank you for listening.

This pod cast will identify the reason a Real Estate Counselor is needed for your real estate property, especially in today's real estate economy..

A Real Estate Counselor will listen to your needs as a seller. We will identify the goals and time frame needed to accomplish the goals. Many say the goal is selling the property. Factors include time frame, market situation and reason for selling.

A Real Estate Counselor will then explain how we can assist. If you agree that our plan will help you meet your goals, then we provide you with the information needed to price your home.

We control the process, you control the decisions.

A market analysis will no longer be enough to price a home!

Absorption rates tell us the month's supply of homes on the market.

Absorption rates can be broke down to meet any criteria, price,
	number of bedrooms and immediate neighborhoods.

6 month supply = balanced market, greater than 6 = buyer's market, less than 6 = seller's market for an example of an absorption rate chart.

From the information gained from the absorption rate process, we can then calculate the "Odds of you selling your home" This information will help you price your home correctly to sell when you need the transaction to occur.

The Real Estate Counselor will identify potential purchasers. Negotiate on the sellers behalf. Once negotiations are mutually agreed, then we assist you with your inspection process.

We will keep in contact with the lender of the purchasing party.

We will attend the closing to answer questions you may have. When the keys are ready to be transferred, we will be your contact.

Have questions after the transaction, please call. Once a client, always a client. For more information, please call 810 744 4600, this is Angie Ridley, your Real Estate Counselor.

Absorption Rates and Odds of Selling in Flint, MI and surrounding areas.

Complete Realty, LLC is attempting to assist homeowners’ that are facing possible foreclosure.  There are more options:  Short sale or Deed in Lieu.

Short Sale

Homeowners who are upside down and can no longer make their mortgage payment, up to now the only option was bank foreclose. That’s not a good option since a foreclosure sticks on your credit record for at least 10 years. Experts are now advocating a “short sale.”  You sell the house for a loss, and the bank agrees to take a loss (although they could still demand the homeowner make some kind of payment or share the loss). Posted by: Dean Foust on March 05, http://www.businessweek.com

Put another why,

A sale of a house in which the proceeds fall short of what the owner still owes on the mortgage. Many lenders will agree to accept the proceeds of a short sale and forgive the rest of what is owed on the mortgage when the owner cannot make the mortgage payments. By accepting a short sale, the lender can avoid a lengthy and costly foreclosure, and the owner is able to pay off the loan for less than what he owes.   http://www.nolo.com/definition.cfm/Term/51715E63-5BC5-4DCE-B5E96F71DFF3D5AB/alpha/S/

A Deed in Lieu of foreclosure (DIL) is a disposition option in which a mortgagor voluntarily deeds collateral property in exchange for a release from all obligations under the mortgage. A DIL of foreclosure may not be accepted from mortgagors who can financially make their mortgage payments.  Please see the following website for more information.  http://www.hud.gov/offices/hsg/sfh/nsc/faqdil.cfm  The lender is not required to accept the Deed in Lieu and can show his/her refusal by filing a Notice of Non Acceptance with the County Recorder. In any event, a decision is required whether to accept the Deed in Lieu. Usually the owner is submitting the Deed in Lieu when he/she is unable to meet his/her obligations and the property equity has gone to zero.  http://www.wealthnetwork.com/products/prod_foreclose/deed_lieu_foreclose.htm  Your bank will tell you if they will allow the Deed in Lieu.

To start either process the home must be listed with a licensed real estate agent in most cases.  The client will need to sign an authorization for the creditor to speak to the listing real estate agent.

You may not need this information personally, but you may know someone who needs this information.  Please tell them to give us a call.  We are helping people save their credit.

NAR's Gateway

The National Association of Realtors® (NAR) is at it again.  It is up to you decide whether or not it's a benefit.  Have you heard of the "Gateway"?

The "Gateway" is supposed to be a National MLS.  Hmmmm.    I'm not sure where to begin.

1. Unrepresented Sellers will be able to list their homes.
2. The term "Realtor®" is not in any of the rules.
3. This will be a shareholder company.  Who will the shareholders be, NAR doesn't know yet.
4. Isn't this what Realtor.com started out to be?  Oh, they sold Realtor.com to another company that decides what information they will let the public view.
5. Do you think NAR will sell the "Gateway" too!  Nice money maker.
6. Will NAR attempt to dominate our local boards and MLS's?
7. Does anyone remember what Realtor® stands for?  Does NAR?

Please Google  NAR Gateway, the internet is full of information.  That is what little information is really available.

Here's a thought, let's just use POINT2.

Wow, the listing total in the Flint Area Association of Realtors (FAAR) has reached a record high, 8192 listing.  This does not include homes for sale by unrepresented sellers, nor does this figure represent homes listed by out of area real estate agents.  The average number of listings use to be 3000-4000.

Actual closed sales are are close to last year.  FAAR is down about 66 closing, this year to date FAAR agents closed 2804 last year, 2870.  2001 was acutally a tougher year for real estate agents, just less noticed.  2001 had 2551 total closings.  We sure wasn't paniced then.  The years between average about 3000-3200 closings per year.

I don't have to tell you the prices of homes have dropped dramatically because of the price investors are purchasing foreclosed homes at.  Some are angry at the investors and some home buyers getting these good deals.  I look at this way, the home gets fixed up, the purchase helps the neighborhood stay in tact and the cycle of a seller's market will begin again in a couple of years.

I was watching the news today, I was stirred when I heard some banks and lending companies will no longer provide mortgages until the market changes.

The news keeps taking about sub prime loans, I don't think the news ever explained sub-prime loans.  Sub prime loans are loans that would not be approved through normal channels.  Sub prime loans have special investors and fees.  Adjustable rate mortgages are an example.  Loans that require no documentation are also an example. 

FHA loans are up.  FHA seems to be the new sub prime as my brother from ICON Mortgage Lending puts it.  It's the new sub prime with the government calling the shots.  Right now, that's a good thing!