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This is a site to help you with your real estate questions. I am a Realtor in the Downriver Michigan area. Whether representing the buyer or the seller, I specialize in short sales and foreclosures.
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Visit houselogic.com for more articles like this. Copyright 2011 NATIONAL ASSOCIATION OF REALTORS®
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I recently talked with a homeowner in Brownstown MI about her home that she no longer can afford. With many tears and tissues she told me about her job loss and inability to keep up with her mortgage. She had called her lender and explained everything and got the classic response, "We can't help you until you are behind on your payments. Call us back when you are 90 days late." Some help that was. It doesn't help Sue that she is not alone and many other families are struggling with the same scenario. Now I can't tell you to stop making your house payments. That is a decision only a home owner can decide after consultation with his lender and attorney. Realtors can help you if you decide that you need to sell your home. If your lender has not been able to modify your loan or if you have had to move over 50 miles away to another job, you may want to consider a short sale. This is where you would find a buyer at current market prices and then ask your lender to accept less for the house than what you owe on it. Many lenders are agreeing to such sales before foreclosure is more costly and complicated for them. Short sales do come with some negative impact. They are a hit on your credit score but not as bad as a full blown foreclosure. Each case is different and you will need to see if a short sale is right for you. If you do choose to short sale your home, you will need to hire a Realtor. The Realtor can explain the process to you, help you get all the paperwork ready and help you find a buyer. It is a long process. Most Realtors charge to list your home since they are taking on a more risky situation - risky that if you are not making house payments your home could go into foreclosure before the Realtor can get it sold and thus receive compensation for the immense amount of time and work a short sale requires. Fees range from $350 to $1000. Remember, once you get into the short sale process, the collection calls stop and you have gained some control over your life again. You have taken the first step in getting out from under your bad debt and put your first step forward in getting on with your life. There is life after a short sale. Get the info you need to get back on your feet. For a free no obligation consultation email me directly jan@justcalljan.com. You'll be glad you took action.
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What is becoming more and more evident is that there are a lot of homes underwater -- owing more than what they can be sold for. When this happens it is called a short sale.
Industry leaders are telling me that the lenders are watching increasing numbers of home-owners just simply walking away from their homes, not willing to pay the original sales price for their homes. Sure, that means a forecosure on their part but they think they are walking away from a huge debt. Lenders are not taking these "walk aways" lightly. More and more we will be seeing lenders pursing foreclosed homeowners for the amount between what they owed and what the foreclosed home sold for. They will not be forgiving these debts. This can affect your credit, garnish your wages or tax refunds. You are much better off trying to work out a short sale for your home. And in many cases, you can live in your home payment free during the short sale process. If you find yourself unable to keep up with your debt, unable to make your payments, falling farther and father behind, consider a short sale. But beware, not all Realtors know how to make a short sale work. They may tell you they have experience but many don't. You need a proven short sale professional. Let me put the power of my short sale negotiators to work for you.
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You must have a signed purchase agreement in place by April 30, 2010 to qualify for the current buyer's credit of up to $6500 or the first time buyer's credit of $8000. This means you have to find a home, write an offer and get it signed and accepted by April 30th. Not impossible but you need to act now! Note - foreclosures take longer to get signed documents back from the seller. You are cutting this close if you don't have your offer in now. Current buyers have to have lived in their homes for 5 consecutive years out of the past 8 years to qualify. First time buyers have to been non-homeowners for the last 3 years to qualify. Some income and home price limits apply. Do you qualify? Call me today.
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There is a lot of confusion about the home buyer's credit that the federal government is offering. The following are some commonly asked questions to help you take advantage of these great deals. There is no guarantee the government will extend these again, and most experts expect that they won't be. What Home Buyer Credits are available? 1). The first time home buyer credit is available for buyers who have not owned a home for over 3 years. 2) Current Homeowners can receive a credit when they purchase a new home if they have lived in their current home for at least 5 of the last 8 years. How Much Are These Credits? The first time buyer credit is for 10% of the sales price not to exceed $8,000. The current homeowner can receive up to $6,500. When Do These Credits Expire? You must have an accepted offer in place by April 30, 2010 and close on the property by July 1,2010. How Do I Get The Credits? The credits are given to you through your tax returns. They will either lower what you owe on your return or increase the amount you will get back in a refund. In an effort to reduce fraud of the system, to get the credits you must attach a copy of your purchase agreement to your tax return. Contact your tax preparer for details. Can I Use the Tax Credits To Help With The Purchase of My New Home? In some cases you may be able to use the credits for some of your purchase expenses -- check with any programs your lender may have. But remember, if you do use the credits for the purchase, the seller wants their money at closing so you will have to borrow the credit amount to close on the property. Then you must repay that loan with interest when your credit comes through. Many Michigan lenders do not have programs that provide this option. To sum it up, if you are looking to buy a home you would have to be a fool not to take advantage of the free money the government is offering. It's up to you when you receive your credit: Fix up your home, buy furniture, take a trip or whatever.
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Hi Everyone, Just a quick blog to remind you all that if you want to take advantage of the First Time Home Buyers Tax Credit, you had better hurry!!
You have to find a home, negotiate the deal, get the financing and inspections done and have the closing by the end of November. That's just a little over 4 months to get in on this great deal. A typical real estate transaction takes at least 45 days -- probably more. The federal government is offering you a tax credit of 10% of the sales price of your new home up to $8,000. And, you don't have to pay this credit back - ever. Last year's credit has to be repaid.
Do you qualify? Yes, if you haven't owned a home in the past three years you are considered a first time home buyer and if your yearly income qualifies (single not over $75,000, married not over $150,000.
These tax credits can be received by filing an amended return on your 2008 personal income taxes or waiting and applying them to your 2009 tax return.
Spend at least $80,000 on a home and you get FREE $8,000!!!! This is not rocket science. Don't miss out!! Call me or email me today to get a list of homes in the Michigan Downriver Area. janmurphy1@yahoo.com
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The foreclosure market has exploded and most buyers are looking at foreclosed properties. Many of these properties are not in the best condition and are priced accordingly. Some buyers find the perfect home, other will decide they are too much work and hassle and decide to shop among privately owned homes. What is a Foreclosed Home? A foreclosed home is one where the owner was unable to keep up his house payments and the bank had to evict the owner for non-payment. These homes could have been purchased with a conventional loan, a FHA loan (HUD) or a blend of adjusting rate loans. They are now vacant. I See Empty Houses In My Neighborhood. What Takes So Long For Them To Come On the Market? When an owner goes through a foreclosure there is a time line defined by state law that has to be followed. After 1 or 2 missed payments the bank or mortgage company will notice the homeowner that he is in default of payment and give them an opportunity to "catch up". Most owners are behind because of money problems and don't have the funds to catch up. After 3 missed payments, the bank may send the home to a Sheriff's sale. This means the house goes on the auction block to the highest bidder. Banks usually buy these houses back - the public usually doesn't want to pay all the outstanding liens and taxes on these homes. After the sheriff's sale the homeowner has 6 months called a redemption period to come current with the bank including late fees and penalties. Most homeowners don't have the money. After the six months the bank asks the homeowners to leave - sometimes requiring the sheriff to evict them. Now the bank has to do a clean-up of the property and file the proper papers with the courts to get a "clean" title to sell the house. So a foreclosed home can take over a year to actually come on the market. My Agent Took Me to a Foreclosure. What's With the Electricity Being Off? Most foreclosures are weatherized - the power and water are turned off. The banks don't want to pay the utility bills on these homes. How Do I Put In An Offer On A Foreclosed Home? You can use the agent listing the house but remember - that agent is the bank's agent. You will want to find a good buyer's agent to help you with the process. It has many confusing twists and turns and you absolutely want an agent you can trust. Your agent will go over the purchase agreements, bank addendums to contracts, agency agreements, etc to make sure your offer protects you. An earnest money deposit (EMD) is needed with your offer to show the bank that you are serious about buying the property. EMDs can run from $1,000 to 3% of the sale price. But remember too, foreclosed homes are sold "AS IS" and in most cases the banks don't work with repairs or reductions for conditions. The homes are priced for their current condition so negotiations are for price only. Banks also don't care about anything but the bottom line. If you are late in closing the deal, they'll charge you a daily late fee. What If I Want a Home Inspection When I Put In an Offer? Most agents will put your offer into the bank contingent on the home passing a home inspection. Private Home Inspections typically run about $250-$300 for 1000 sq ft home. It is the responsibility of the buyer to order and pay for the utilities to be turned on for the inspection and for the appraisal if the buyer needs a loan to buy the property. Remember, your agent is vital in coordinating the turn-on of the utilities and opening the home to the utility workmen -- something they don't have to do when buyers purchase a privately owned home where the lights are already on. After the appraisal, the buyer is responsible for returning the property to the weatherized condition and turning off the utilities. If the buyer's loan does not go through, the bank wants the property restored to its condition upon first showing. What Happens Next? Once your offer is accepted and the inspection and appraisal is done it is time to process the loan. Now your loan agent will go through the underwriting process for you. This is where everything is researched that impacts the sale. Your credit history is reviewed. Your employment is confirmed. The title work on the deed of the house is reviewed. This usually takes 3-4 weeks. Your loan agent will tell you when you are "clear" to close. Why Do We Close At An Office On the Other Side of Town? Most foreclosure closings in SE Michigan are held by title companies working in the Southfield or Troy areas. These title companies are hired by banks located all over the country. You will be required to travel to the closing bringing the certified funds in an amount given you by your loan agent. Many times foreclosed homes don't close in full at the closing meeting. They usually close in escrow. This means that everyone comes to the closing table with funds, loan arrangements and contracts. Once the documents are sent to the out of town banks (the true owners of the foreclosed homes) then the keys can be given to the buyers. This can take 1-4 days. Your agent will do their best to speed this process along but will be dependent on how the bank handles their sales. How Does My Buyer's Agent Get Paid? Most homes are sold with a compensation offered to the buyer's agents. In some cases the foreclosed home is sold at such a low price - a great deal for the buyer - that the buyer's agent is not fully compensated. When that happens, the buyer's agent will charge a nominal fee to cover their expenses in helping you. Your agent will apply first any compensation offered by the seller and then will discuss with you any other charges required. Many times this can actually work out for the buyer. The selling bank doesn't have to raise the selling price of the home to fully compensate the buyer's agent. Since most of the buyer's expenses are computed on a percentage of the selling price, this helps keep all the other buyer's fees lower. It is really important to have an agent who knows how to deal with foreclosed properties to guide you through each step. If you have questions, please call me at 734-624-9985.
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Excellent question and if I had a crystal ball I would be rich. Experts didn't predict the financial mess we are in now so how can anyone predict when things will truly pick up. The reality in home buying is this: Once prices rise, you have missed the bottom! So with home prices and interest rates at the lowest levels in decades, now should be the time to start getting ready to make a home buy. You have to live somewhere, why not make somewhere the home you could begin enjoying today. Rent receipts are just paper and the paying down of a mortgage is building your personal equity. And, with rent receipts you don't get the tax benefits of home ownership. It's true that home prices could continue to fall before they level off. But waiting to buy your home and get on with your life puts your family on hold. But what if I can't sell my present home for a decent price! It's no secret that homes are selling for up to 40% less than what they sold for several years ago. And you will have to take a hit on your present home. But the bigger home or nicer neighborhood you're looking for is also "on sale". Example: Your $150,000 home now sells for $90,000 and that new home that 3 years ago cost $280,000, now sells for $170,000. Do the math: Home #1: $150,000 less $90,000 = $60,000 --- Home #2: $280,000 less $170,000 = $110,000. You lost $60K on home #1 but will get a price reduction of $110K on home #2. That's a difference of $50K in your favor!!!! And as property taxes re-adjust to new home values (communities typically compute taxes 2 years behind on home values), taxes and homeowners insurance will too. Only you know when it it time for your family to make a move - Could the time be now?
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FINANCING BAIL OUT- FOR WHO??? It's the end of 2008 and many in the real estate field are sighing a big relief. It's been a hard year but also a year of opportunities. But many first time buyers are having a hard time getting the financing they need to take advantage of the opportunities. All the talk about the financial institutions getting all our tax dollars to loosen up credit seems to have done nothing for the little guy. WHERE IS THE MONEY??? Well you and I can't fix that. But we can try to figure our way around it. If you need financing the first place to look is your credit union. Unlike the big name banks who gave money to anyone, the credit unions understood their responsibility to their customers and were careful in how they loaned out money -- meaning many are in a good position to loan money. Join a credit union if you haven't already. It may be the best place to look. They will have some pretty firm guidelines but they do have money to lend. Also try the smaller community banks in your area. They too didn't get on the "give-away" bandwagon like the big banks. GET READY FOR 2009!!! Hopefully our economy will look up for the new year. There are going to be amazing real estate opportunities out there and getting prepared to take advantage of them should be first on your New Year Resolution List. Take care and Happy New Year!
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When you purchase a condo, you are also purchasing the condo association that goes along with it. One thing to make sure is that the condo you buy, DOES NOT have an association that is going bankrupt. In the past month I have worked with several buyers looking to buy a cheap condo foreclosure. What we found out is that half of the condo complexes we looked in had associations that were underfunded or bankrupt. How does that affect a buyer? Getting a Loan - Most lenders will not loan money on a condo that has an association that is under financed.
Liabilities - If the association doesn't have enough money to pay the lawn service or the snow removal, guess who does these chores? You will still be required to pay the monthly association fee even if they can't collect enough to pay the vendors.
Repairs - Again, if too many condo owners are behind in their association fees or have been foreclosed on, who is going to pay for the repairs on the common areas like roads, roofs, broken windows, etc. You may be faced with increasing association fees and assessments. Who is going to pay the building liability insurance in case the complex gets sued for an injury on common grounds? You don't want to find out you are not protected.
Resale - One of my buyers said, "This is such a great deal on this foreclosed condo, I'll just pay cash if my lender won't give me a loan." What is wrong with this thinking is all of the above AND who are you going to sell your condo to if future buyers can't get loans.
So, I'm not telling you that you shouldn't buy a condo - there are some great deals out there right now, BUT make sure that the complex is not experiencing a top-heavy number of foreclosures that would affect the value of your property. Your Realtor is invaluable in helping you.
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What is a buyer's agent? A buyer's agent is a Realtor who is under contract to work in the interest of the buyers. Without a buyer's contract, the Realtor is bound by law to represent the best interest of the seller of the property. How do buyer's agents get paid? Usually the homebuyer contributes little, if anything, to the buyer's agent earnings. The buyer's agent usually "cooperates" with the seller - this means that the commission paid by the selling homeowner to his agent is split between the listing and buying agents. I would guess that in 85% of home sales the buyers agent is paid totally by the seller., Can agents refuse to show low commission homes? Most buyer's agents will show any home you ask to see. When a seller is offering an extremely low commission to buyer's agents, the buyer's agent should determine with a buyer up front if an additional charge or buyer's commission will be needed in order to fully compensate the agent. At that point the buyer can decide if they want to see only homes that won't include a buyer's commission. But remember, the best home for you at a great price may be passed up over a few dollars. Low priced, distressed home sellers often offer low commissions to the buyer's agents. Many clients request that we start out just viewing homes that don't require a buyer's commission. If we don't find what they are looking for, we expand the search to all homes meeting their criteria. What do I owe if I don't buy anything? NOTHING! Here is the beauty of having your own personal buyer's agent working for you. Even if your agent has shown you 29 homes in the past two months and you decide that your finances just aren't right to buy right now, you owe your agent nothing. Your buyer's agent is not paid an hourly or weekly amount. Your agent is only paid upon the sale of a home. Why do Realtors work this way? I've often wondered this myself. None of my clients seem to want to work for free. But, this seems to be the accepted business model in our industry. The first Realtor who charges buyers an hourly fee to show homes will find himself out of business pretty quickly. Instead, my challenge is to make sure my clients feel my services are the best and remain loyal to me until they do buy a home. When my clients are happy, they feel good about referring their family and friends to me. Not all relationships work out, but the Realtor who stays in business over the long haul has learned what clients need and how to make their home purchases a satisfying transaction.
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Today's topic is FHA loans. This is the loan most first time buyers use. Read further to get an idea how they work? What exactly is an FHA loan? This is a loan backed or insured by the Federal Housing Authority. This means that your local bank or loan broker will write your loan, but FHA promises to back the loan up if you default or don't pay your monthly house payment. Sounds good for the Lender. Why aren't all loans FHA? FHA has guidelines on the condition of the homes they will insure. They must be ready to live in. Repairs regarding safety and live-in readiness (like a furnace or a bathroom) must be done prior to the home sale closing. If a home is sold not meeting the FHA guidelines, it must be sold under what is called a conventional loan. FHA does its own appraisal and lengthy inspection of all homes it grants loans on. When looking at buying foreclosed homes, often repairs are needed before they can be occupied. These homes would not qualify for a FHA loan. Homes in disrepair are usually sold with conventional loans which are harder to qualify for. Your Realtor should be able to tell if a home will not pass FHA approval. Why would I, as the buyer, care if my loan was FHA? FHA guidelines for approving buyers are easier. As an FHA buyer, your credit score does not alone drive your ability to get a loan. If you've had some credit problems in the past, often you can still qualify for a FHA loan. And, FHA only requires you to put down 3% of the sales price for a down payment - most conventional loans require at least 5% down. So in short, you need less money and your credit doesn't have to be perfect. You can also receive help from the seller in paying your loan's closing costs. How do I go about getting an FHA loan? Most banks and loan companies can help you with an FHA loan. They will explain to you the guidelines and can "pre-approve" you. They will tell you how much you can realistically afford to spend on a home and estimate what your house payment will be. This is the first step in house hunting. Without knowing how much you can spend or if you can even get the money, you could be wasting your time. If you need a referral for a lender or have any questions, check my website: justcalljan.com.
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Hi Everyone, Here is the juice on HUDs. HUD is the federal Dept. of Housing and Urban Development. HUD auctions off homes resulting from foreclosed FHA loans in all cities. Not just in bad areas. HUD is offering a $100 down payment plan with $2500 back towards your closing costs or repairs. This is in addition to asking for seller concessions up to 3% of the purchase price. THIS IS HUGE ! ! On a $100,000 home you can get $5,500 back in total to help you with closing costs like: Loan origination fees Escrow accounts Homeowners Insurance Home Inspector costs Repair escrows
And, with a full price offer, you may only need a $100 down payment. Believe me, a full price offer is a way-cheap price for these homes. If you can afford to put more down, you can even bid less than asking price. Here is the link to view HUD homes: http://mcbreo.com/st_mimain.htm - this link is inside the McBreo website and is the search page for homes. It also has links to learn more about HUD. All HUD bids must be submitted through a Realtor. That's where I come in. Browse the homes and if you see one you like, call me. I'll explain how a HUD auction can work for you.
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I have had so many people ask me how to figure out this crazy real estate market. Sellers ask: Are any homes selling? Buyers ask: How can I cash in on the deals? The fact is price is going drive the sale. Buyers are looking for deals and unless they perceive your home as a deal, they'll move on down the street and look for the next deal. Where does that leave you when you have to sell your home due to job loss or illness? What if you owe more than you can sell your house for? If you have to sell your house for less than you owe, it stands to reason that you aren't going to have any money in your pocket from the sale. In a short sale, the bank has to agree to accept less than what you owe in order to get a buyer to make a solid offer. What we try to achieve here is to save your credit score as much as possible - save it before you get behind in your payments and your home goes into foreclosure. Foreclosure is a very expensive process for the bank. They would much rather accept less than what you owe in what we call a "short sale" than have your home go into foreclosure. What do we do to get you and your buyer a short sale? First, banks will only deal with real estate brokers. They rarely work with distressed buyers trying to sell their home on their own - they don't know the process and emotions interfer with the transactions. Because of the lack of a profit, it just makes good sense for a homeowner to put the transaction,work and worry into the professional's hands and get the job done right. Your agent will market your home at a below market price to attract buyers. Once an offer is made, your agent will deal with the bank to get the offer accepted and get you out from under a mortgage you can't afford. There are buyers looking for these opportunities. Call me at 734-624-9985 or email me if you have a specific question on how short sales work.
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