Jun. 10, 2008
Summer weather roared in with blazing high temperatures and strong storms here in Grand Rapids, Michigan! It's been a little while since I've been able to look out my window at a clear blue sky and gently swaying trees. In some ways the recent rush of climatic activity is a metaphor for the real estate situation here in West Michigan.
2008 has been a year in which we have seen some stormy conditions. The year commenced with the down draft in the mortgage sector due to the sub-prime lending crisis. In fact, until just recently, most of West Michigan was considered a declining market which meant that New Home Buyers were being asked to bring additional money to the closing table to close loans. Money which many of them were hard pressed to find. Zero down programs evaporated into the cosmic ethers.
Yet, not all the news was bad. In the midst of this tempest, affordability levels increased as the prices of homes plummeted sharply creating all sorts of opportunities for buyers and investors to pick up properties at rock bottom prices. Home owners learned hard lessons about the laws of supply and demand Because bank owned properties now constituted almost 1 out of every 3 sales, marketing times increased to almost a year and homes that were not priced correctly were all but ignored.
In an environment in which so many winds of change are raging, it's often difficult to decipher exactly what is going on. Recently, Jennifer Granholm the Governor of Michigan signed some important legislation into LAW! It's the Agency Responsibility Act (ARA) I think that this legislation is one of the best things to emerge out of the storm which has engulfed our industry.
The Governor's signature on the acts is the culmination of the Michigan Association of Realtors hard fought efforts to clarify for consumers the real estate services that were being provided by various agencies. This movement was brought about by the amazing discovery that the ONLY duties imposed by statue or rule of law when representing seller or buyers or real estate property were:
The duty of agents to present offers to sellers within a reasonable period of time
The duty of listing brokers to review and sign the closing statements.
ASTOUNDINGLY, THAT WAS IT!
While most Realtors® were offering substantially MORE than this, the public had limited understanding of the potential vast difference of service levels between brokers because all brokers were using the "Exclusive Right to Sell Contract." (Buyers usually are serviced under a Buyer Agency Agreement)
As a result of this legislation, brokers who do NOT provide the required MINIMUM service levels will now have to use a LIMITED SERVICE AGREEMENT form which clearly defines exactly what they are doing or NOT doing. The ARA also amends the law to make it a VIOLATION of the Occupational Code if a Realtor FAILS to provide all Statutory Services unless they are expressly waived by a client in a limited services agreement.
The is a huge advancement forward for the rights of consumers to ensure they understand exactly WHAT they are getting when they sign up with a real estate broker. I think it will help to dispel some of the misunderstanding and confusion which has marred the positive perception of the real estate industry.
Sometimes, it takes a storm to bring out the best in nature. Today, my lawn is a gorgeous green and the flowers are blooming. It may have been a little rough getting here, but the results I'm witnessing make it worth it. The Act becomes effective as law on July 1, 2008. My hope is that the turmoil in our industry will continue to yield changes which serve the good of our profession and the clients we have the privilege of assisting.
Copyright 2008 Audu Real Estate All Rights Reserved
Apr. 29, 2008
It's Friday night. If you're anything like me, Friday Nights are nights when you let down your hair and relax a little...perhaps dinner, a movie, or a show. This past Friday is no exception. We've still got a teenager at home who doesn't drive, so Friday night involves playing part-time taxicab driver too.
As we're preparing to go out, I notice that he's busy at the computer. I'm a "quasi hip" mom, so I presume he's checking out Facebook to see where everyone will be hanging out. Imagine my surprise when he tells me he's downloading music because he's going to be the DJ! I can barely contain my surprise..."You're downloading music for the dance onto your iPod?" He barely gives me a sideways glance...continues tapping the keyboard and says..."Ya."
Now, you've got to understand, I can still remember the days of vinyl records. The DJ's table was exactly that...a sturdy looking structure with various turntables, speakers, gadgets and microphones. By the time things went totally digital...I'd started having kids and sleep was far more important than dancing into the wee hours of the night. So...for the me the trajectory was turntables, to CD's and then things dropped off.
Until they resumed this Friday night with my iPod DJ downloading songs for the party at school onto a device that fit neatly into his back pocket. I asked him how they would hear the songs. He replied in mock disbelief.."We'll hook the iPod up to the speakers and if they don't like my selections, we'll hook up someone elses." Wow...talk about feeling old fashioned! This type of DJ experience is not even on my radar...
So, it seems that while I have been sleeping, the world of dance music and entertainment has become much more portable. Music travels hipster style to where the party is...not the other way. It's a fluid movement of exchange and interaction which allows anyone with the right mix at the moment to step up to the turntable, hook in and share what they've got playing on their iPod.
It occurs to me that in a sense, this is not unlike what is happening in the real estate industry today. The conversation online about real estate moves with fluid grace and sometimes jolting jerks...either way, it's a continuum of moving parts which includes websites, news feeds, blogs, video casts, podcasts, social networks and the mainstay of the real estate genre...MLS systems.
Today, real estate buyers are surfing for the hottest offerings online. The average buyer is visiting numerous websites to sample what's out there.
Recently, I looked up a certain price range for homes in our local area online. The results were interesting. In the top 8 Search Results, the number of listings in "a particular search area" ranged from 1 home to 32! No wonder buyers feel they must look at all options...landing on the wrong site means that you may not be seeing 90% of what's available for Sale.
That's one reason why connecting with a good real estate who is pluged in to one or more MLS systems as well as many of the other frequently visited sites which feature Homes for Sale is so critically important. This is a partnership...a dance which requires coordination and synergy. As a home buyer, you should move in perfect sync by:
1. Clearly thinking and writing down what you would like to find in a home
2. Choosing a real estate agent to assist you...preferably one who is connected online
3. Link up with a good mortgage specialist to make sure your finances are in order
4. Create your own Playlist...Surf online, take virtual tours, research various blogs and sites
5. Be prepared to sync up with your agent on a regular basis, learn from them and create winning solutions.
What's wonderful about this new emerging conversation is that it is so portable. You can find listings everywhere. You can download them to a number of devices. You can search for homes by Street Name through the Search Engines. Don't snooze now or you loose. The best deals won't wait...they'll just twirl around to the next available player!
Vector photo courtesy of Sabrina Campagna's photostream on flickr.com
Dance photo courtesy of firutin's photostream on flickr.com
Copyright 2008 Audu Real Estate All Rights Reserved
Sep. 20, 2007
you need a smack "upside" the head to jolt you into
reality. Well, it was two smacks for me today to be
precise. Delivered via virtual space long hand in a
couple of blog posts. Mark Eibner, the Real Estate
Zealot, writes a blog post entitled "Are You Gearing Up for Gen Y
Business?" in which
he links to a recent CNN article about the 17 year old kid who unlocked the I Phone's
tether to AT & T; making it possible to use the phone with
other carriers. This was big news on August 24,
2007. Although I did hear about it on the national
media, I didn't fully grasp the implications of what had
CNN article clarified things for me. The code that
tethered the iPhone to the At & T network was one of the
most closely guarded secrets on the face of the earth. The
system was programed to be be unbreachable by some of
the most brilliant computer experts on the
planet. It also represented potentially billions of
dollars of proprietary business; blocking out other would be
The fact that the code and process
could be unraveled so quickly was astounding...but by a 17 year old
kid! After accomplishing this monumental feat, the kid
posted all his "how to instructions" on-line for other would be
hackers; apologizing that it was such a cumbersome
process. He also gave "assistance credits" to two individuals
from Russia whom he didn't know apart from their on-line
monikers. Thus heralding, a new concept in
collaboration...networking to create solutions across the
globe by collaborating anonymously with others on-line towards
the accomplishment of a shared goal. Talk about kicking
the concept of Free Shareware up another gigantic
This is how Gen Y
thinks. And this is why they won't
do real estate the way their parents did. They
have this insatiable desire to share...everything.
On-line music, blogs, games, movies, shopping....The fact that
we can obtain real estate information anywhere for Free is
baseline for them. That's par for the
They also have a radically
distinct view of "ownership." The kid (of iPhone
hacker fame) felt that his
solution to the
"problem" faced by many who were held
"prisoners" to a
proprietary system was ultimately
the property of the world. This is
the generation which created major headaches for the recording
industry with pirated music from Napstar and thought it
was cool to allow everyone to listen to music for
Free. Will this approach to ownership and proprietary
information make the current process of broker aided real estate
transactions seem archaic if not downright draconian?
Perhaps we are about to
witness a radical transformation of the meaning of the word
transaction...how it's executed, how it's paid for and what
it is. The Real Estate Transaction of the near future will
embody elements that cannot be imagined today. It
is certain that there will be a re-definition of the meaning
and value of professional expertise. We can also anticipate
that the relationship with the "expert" will be much more
collaborative and interactive than it is today. Real Estate
Blogging represents the primary swing into the first
portion of the arched curve around this
This also underscores why
111 Million Gen Y's (1982 - 2000) connecting to
the real estate market within the next decade will make the real
estate transaction of today feel like viewing the relics of a
dinosaur. I quote from the
Mike Eibner, the Real Estate
Zealot..."All media is
moving to the palm of your hand and this includes real
estate." Are you ready for a revolution that's aims
with the precision of a pinpoint to transform the world with
the gentle side swipe of a finger?
Stay tuned for the next installment
of My Second Slap Upside the head!
photo by Personeelsnet's on
Copyright 2007 Audu Real Estate All Rights Reserved
Here to Read More about Grand Rapids, Michigan
The Case of the Disappearing Realtor.
I talked with him yesterday morning to tell him the news. His offer was largely accepted, just a few slight modifications. Certainly not anything we coudn't work through. Closing was scheduled for next month.
By the end of the day, I'd received a call from his friendly title rep, offering to pull the commitment and help in any way possible. Next there was a call from the appraiser asking for access to the home to complete the appraisal. I was impressed! This was taking efficiency to a whole new altitude.
But something was a little off...I hadn't received written notification that my counter was accepted. Realising that his clients may have been at work and that he may not have been able to get the signatures, I waited. After a couple of hours, I placed a call into the agent.
The message on the cell phone instructed me to state the purpose of my call. So, I left an upbeat message confirming that I had just got a call from the title company to order title and from the appraiser to do an appraisal. But, when was he planning on doing inspections...or perhaps, they had decided not to do them. Please call!
A couple of hours later, I received another call, this time from the appraiser, "Lola, I just called you a few hours ago to set up the appraisal, well the lender just contacted me and said that I needed to wait a couple of days. I'll get back to you when they decide to reschedule it. I hope I haven't caused too much inconvenience."
I place another, more urgent call to the Realtor. No answer. I leave a message..."Please call me, I've had an appointment for an appraisal scheduled and cancelled by the appraiser, is there a problem. Furthermore, the paperwork you promised to forward over by this afternoon is not here. Have your clients changed their mind?"
My next call; SOS to the Mortgage officer. Fortunately, he IS picking up his phone. "Yes, Lola, I'm sorry I made a mistake. I didn't realise that the buyer had not signed the purchase agreement before I ordered the appraisal" Huh?? Since when do lenders order appraisals without a fully executed agreement...he simply didn't notice???
My suspicion meter is flashing Red! I place another call to the real estate agent. Now, I'm sure there's a problem. I know my number on caller ID is being studiously ignored. Trouble brewing...yep, he's never been hard to get a hold of before.
Finally, this morning, I reach him. My Disappearing Realtor has now materialized. He sounds very tired. I inquire cheerfully..."How are you?" He responds, "I haven't been doing very well, I 've been working on this deal until late last night and it doesn't look good" I'm not really surprised, I just want to know what has happened. Apparently, a fully qualified buyer has suddenly become unqualified because their lender went out of business. Just like that! The wife really, really wants the house and is prepared to sacrifice to get it, but the payments have now increased 20% and they''re adjustable to boot!
Then the Realtor said the following: "Lola, I couldn't do it, I couldn't allow them to get into something that I know they won't be able to afford and then loose it. I just couldn't encourage them to move forward on a deal that would not be good for them even though the wife wants it so badly. They just can't afford the payment"
Wow! I am witnessing the emergence of sanity in Sub-Prime Lending. I say "Thank You." because I know that no commission is worth doing something that we know is not going to be good for another person. As we talk, it becomes apprarant that this Realtor is fairly new to our industry. The company which had approved the loan was New Century Mortgage Company which was the subject of a very highly publicized shutdown on Friday. Everyone is trying to keep a distance...witness article by New Century Bank. The buyers had never been informed that their loan approval was now invalid!
I talked with him about some other options to explore like the FHA loan program. His lender had never mentioned this to him. He thought it could only be used for first-time home buyers. After, giving him a contact for an experienced loan officer that I have worked with, I called my client to explain what had happened. Fortunately, we were not at the closing table like some buyers may have been on Friday, only to find out that there mortgage was no longer valid.
We're taking this one day at a time. We'll see what happens, but I'm so thankful that my encounter with the disappearing Realtor, finally revealed a compassionate individual who is wrestled through some important decisions about integrity as a professional in the real estate industry...and he chose the high road. As we concluded, I said to him, "You, know even if this home purchase doesn't work out, all of us WIN because we're seeking to do what is right"
If you find yourself caught in this situation, here's an excellent article by Ken Stampe entitled: 100% Financing is alive & well, Just Not For Sub-Prime Lending. This article offers a number of loan vehicles and options to look into if you have clients in this situation. Please remember that there are all sorts of reasons that people may consider sub-prime lending, so make sure that you have an expert evaluation from a reputable lender to determine if this is the best or only option available to a client.
If you're a Buyer thinking about purchasing a Home which may be in foreclosure due to the Sub-Prime Lending Crash, read this article entitle: So You Want to Buy a Foreclosure...10 Power Tips for Success!
Also, talked with Brandon at First Place Bank in Holland, Michigan today. He indicated that within the past few weeks, 3 big names in the Sub-Prime industry have "flamed out". They are Argent, Option 1 & New Century. According to Brandon, these companies were under funded and were doing loans which were being offered to very marginal buyers at adjustable rates. With so many of these loans in default, there has been a significant tightening in the money supply. So, the lesson is...investigate beyond the paper that says a buyer is pre-approved. Find out the source of the funding!
*Correction & Update- 3/17/07 Ken Stampe who wrote the article I referenced above was kind enough to point out a correction through a comment on my Blog on Active Rain. Ken writes: To be accurate, Option One is still in business only they have lowered their maximum loan to 90% of the sales price for their sub-prime programs. Argent is also still taking sub-prime loans although at 95% of the sales price. The subprime lenders offering 100% financing still are certainly fewer but some are still out there. The real question is will they be out there tomorrow? Or next week?
Thanks Ken for pointing this out.
Mar. 4, 2007
Affording a home is one of the biggest challenges facing new home buyers. The median income in 2006 for US families was $59,600. A CNN Money.com article by Les Christie quotes National Association of Home Builders President David Pressly as saying, "40.4 percent of all new and existing homes sold during the third quarter were affordable to families earning the median."
In a related January 2007 news release by the National Association of Realtors for housing projections for the year 2007, NAR Economist David Lerah indicates that the market will steadily improve during the year after what he terms a "soft landing" for the industry in 2006. The national median price for all housing is expected to rise 1.5% to $225,300 while the increase in new homes is expected to rise 3% to $248, 900. During her term as First Vice President of the National Association of Realtors (NAR), Pat Vregdevoogd Combs who hails from Grand Rapids, Michigan and is now the 2007 President of the National Association of Realtors commented on the third annual National Housing Opportunity Pulse survey:
"The survey sheds new light on the conditions that encourage people to support affordable housing," said Pat Vredevoogd, the first vice president of the National Association of Realtors, which sponsors the study. The NAR's hope is that the research will serve as a guide to local officials and give them "the political will to do what people want"
She's absolutely right! People want and need affordable housing. Results of the study found that more than 70 percent of the respondents would support building more affordable housing if it made for more efficient use of their tax dollars for public services, did not hurt local property values, did not contribute to overcrowding in schools, or did not further exacerbate clogged streets and highways. In view of these results, it is noteworthy that Grand Rapids, Michigan is considered one of the most affordable major metropolitan areas in which to live in the United States.
The CNN Money.com article indicated that last year the median price of a home in Grand Rapids, Michigan was about $128,000 which is affordable by over 80% of the population. I did a March 2007 search which revealed that the median price for homes within the Grand Rapids school district are now $115,000 according to the Grand Rapids Association of Realtors database. If you're an investor,Grand Rapids, Michigan is definitely the Best Bang for Your Buck. With good schools, a diversified economic base, low crime and high ratings on the quality of life index, this is definitely a community you should check out! As a homebuyer, low interest rates and excellent inventory levels in most communities make this a great time to get an excellent value on a home.
Are You Looking For New Listings that are Affordable Great Deals to Rent or Buy in Grand Rapids & Surrounding Communities? We have included several surrounding communities as well such as: Grandville, Mi, Sparta, Mi, Cedar Spring, Mi Jenison, Mi, Kenowa Hills, Mi, and Kentwood, Mi . Click below for a fully list of homes listed or updated within the past 7 Days!
Homes Priced between: 0 - $50,000
Homes Priced Between: $50,000 - $100,000
Homes Priced Between: $100,000 - $150,000
Find the Latest New Listings Here... Yes, this is Access to All New Home Listings as they come on-line!
Call the team at Audu Real Estate to arrange a pre-view tour of any of these homes.
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Grand Rapids, Michigan
Information about local real estate in Grand Rapids, Michigan & surrounding communities including Grandville, Wyoming, Jenison, Kentwood & Walker. Also, Lola Audu, CRS, an experienced Real Estate Broker shares insights and general wisdom about life and personal growth. Lola welcomes your thoughts & insights about the information shared on this Web Log.