I knew it wouldn't last forever, but I was kind of shocked to get the information in my email that the HUD incentives for Michigan are ending soon.

As of February 12th of this year (yes, less than 2 weeks away) HUD is putting an end to the wonderful incentives that they've been offering for the since the fall of 2008 in Michigan.

The $100 down FHA program will be gone, as well as the $2500 buyers "gift" on home purchases over $25,000.

Please please PLEASE if you are considering putting a bid on a HUD home and want these incentives your bid has to be accepted by February 12th.  Any bids  accepted after that date will not be able to use these incentives.

Agents and mortgage brokers:  If you have clients who are starting the process to purchase a HUD home and are counting on the $2500 or the $100 FHA down payment you will want to pass this information along to them quickly.

To read the announcement from HUD please visit Mcbreo.

I wrote a blog post earlier about appraisals, and what we as buyers agents can do to help our buyer clients to understand current market value and to avoid appraisal issues.

One of the comments I recieved said something like "You may not make the sellers happy..." 

I'm a nice person.  I like to think that I'm an easy agent to co-op with, and that I do perform my duties with care and diligence.  My brokers have never received a complaint about me, nor do I ever expect them to. However, being nice and co-operating with the sellers agents doesn't mean that I won't do my job to the best of my ability for my client - the buyers.

My fiduciary responsibility as a buyers agent is to my buyers.  When they find a home they wish to purchase my responsibility kicks in to high gear.  I will analyze the current market for them and present them with all of the facts that I have on hand.  They will then be able to make an educated decision about the price to offer for the home. I will then take their offer to purchase, along with my data and present it to the sellers. 

Not long ago I heard these words from a sellers agent after my buyers offer was presented to them: "My seller is a nice man.  He's worked hard, and his home is in good shape.  He really deserves a better offer and isn't happy with this one."

My reply?  "I'm a nice lady.  I work hard.  My home is in nice shape.  I deserve good things to happen to me. But my home is still only work XXX and it wouldn't appraise for more than XXX, and I surely wouldn't expect a  buyer to pay more than XXX."

               My buyer didn't overpay for that home, and we moved on to find them another home.

Listing agents need to keep their sellers in the loop.  Sellers need to know current market values.  They need to understand the danger of overpricing their home, and have realistic expectations of a sales price.  All sellers  deserve this information from their agents on a regular basis - not just the nice sellers :-)

When you plan on purchasing a home using mortgage money it doesn't matter what type of mortgage you are applying for (FHA, VA, Conventional) - your mortgage lender is going to order an appraisal of the homes value.   They will want to make sure that the amount of money you are asking to borrow is not more than the home is worth in todays market.

Below are a couple of things that I do as a buyers agent to help make sure that my buyer clients are not wasting their time and money on a home prior to writing the offer:

Investigate the last 90 days of sold homes within a 1 mile radius, in the same school district and of similar construction & features.  (Do not consider sales data greater than 90 days unless you have fewer than 3 comparable sold homes in that initial look back period.)

Include the distressed sales in the search of sold homes.  (They are the norm now, unfortunately, and you can bet that the appraisors are going to use this data in their reports.)

Deduct sellers concessions that were paid by the seller of the sold homes to the buyers from the "sold" prices.  This deduction will reflect the market value of the home that sold more accurately.

Ask your agent to prepare an analysis using this type of data to present to the seller and their agent when your offer is presented.   It is much easier for the seller to understand how you came to the price of your offer when they have hard raw data in front of them.  It then becomes more of a business decision to them, and less of a personal affront if your offer is much lower than their asking price.

If your offer is a sound one, based upon recent data and your own personal view of the homes value, and it is not accepted by the seller don't be shy about walking away and finding another home.   A buyers agent who is working for you would much rather have you walk away then to spend emotional energy and financial resources to continue the process of purchasing a home without much of a chance of it passing the lenders appraisal guidelines.

Just as we suspected would happen, FHA has now had some major changes and it is now going to cost you more out-of-pocket money to purchase a home.

            New - Sellers concessions are limited to 3% of the purchase price.

            New - Upfront mortgage insurance premium is increased to 2.25%.


Here is an example of what the lower sellers concessions to the buyers will look like for you:

If you are purchasing a $50,000 home the seller will only be able to  contribute $1500 to help you with closing costs, pre-paid items and/or tax prorations.   (This same purchase before the new FHA guidelines  would have meant $3000 in help to you.)

Many of you are thinking of using your income tax refunds to help you purchase your first homes this year.  Often you think that it will be more than enough money with some extra for furnishings, repairs, etc.  That may not be the case anymore.  You may need every last dime of that  refund for your FHA down payment (3.5% of the purchase price) PLUS money for closing costs and pre-paid items.

When you receive your income tax refund tuck it away in your savings account. Have a conversation with your mortgage lender about how much you will need to bring to the closing table for that new home purchase.  Save every penny that you can - you're going to need it.

Here in my Macomb County MI area we have been in the throes of the foreclosure / unemployment / plummeting home values for several years.  

During all of this chaos I've spoken with many people who have tried to have their mortgages modified with
the Making Home Affordable program.   They've all shared the same scenarios & frustration:   Repeatedly
faxing and / or sending requested documents, phone calls to follow up weekly and in some cases daily,
mortgages being sold to another lender while in the midst of the process & having to start all over again.

Most of the people that I know of who have tried to have their mortgages permanently modified are now in
their 9th month to one year of "send it again, we didn't get it" mess.   Only a couple of them have been put
into the "trial program" of making the new modified payments for a 90 day trial period before they are
supposed to receive the permanent modification paperwork.  (I know of 2 people who are in the trial program, completed the 90 days of payments, and still haven't received permanent modification.)

Yesterday though I received a phone call from someone who said:"It's here!  The permanent modification  document!"   (This was after almost one year of haggling, begging and the loan being sold to another lender and starting all over again.)

Of course I asked what they thought was the key to getting the final documents.  The answer?  Getting angry. Refusing to take "no" during one lengthy phone call and consistently going up the chain of command to the new mortgage holder.  Doing this finally put them in touch with the Fannie Mae Foreclosure Prevention Specialist who actually provided this person with their own contact information for follow up calls and email. 

Today I am going to call or email the other people that I have spoken to about their frustration with this process to hopefully give them a bit of momentum to keep going forward and to see the light at the end of the tunnel. 

One small step, but an important one, and one that I hope we will hear much more about in the coming months as  these "trial periods" progress.

A recent question on Trulia Q & A section has still been on my mind days after I replied to it.   

The former home owner who asked the question was denied a short sale in which the lender wouldn't take $30,000 less for their home.  It was then foreclosed upon and sold for $116,000 less that what was owed.

As someone who is seeing this type of thing happen in the Metro Detroit area time after time again I am outraged.   I am also curious as to whether these people would stand a chance in court with an affirmative defense of "plaintiff failed to mitigate damages" ?

My prediction:  It's going to be a wild 5 years or so of increased litigation, precedence set in some scenarios, and more debt buying companies jumping on the "let's buy the debt and sue for deficiency balances" bandwagon.

Are any of you reading about or seeing firsthand this type of activity by the banks / mortgage holders starting to try and collect the deficiency balances after denying a short sale?

Last week I wrote about the average sales price during the 4th quarter of 2009 for residential
sales in Macomb County MI.   I thought it would be interesting for those who are perhaps looking
for a home to purchase in Macomb County, or those who are considering putting their homes
on the market to get a glimpse of the homes that sold near the average sales price of $92,626.

In St. Clair Shores (the south east side of Macomb County) this home on Marter sold for $90,000 with $5400 being paid by the seller in concessions to the buyer.  This brick ranch featured 3 bedrooms,a 2 1/2 car garage and was approximately 1450 square feet.

Along the Martin and Gratiot corridor in
Roseville this home on Rock sold for
$93.000 and the seller contributed $2927
in concessions to the buyer.  It is also a
brick ranch with 3 bedrooms,  1 1/2 baths,
a 2 car garage and is approximately 1425
square feet.

On the far east side of Macomb County towards the north is Harrison
Township.  This ranch on Chart Street sold for $94,750 with sellers concessions of $5685.   It has approximately 1000 square feet and is a 3 bedroom home with a 1 1/2 car garage.

New Baltimore MI is on the northern end of Macomb County bordered by Anchor Bay on Lake St. Clair.This newer built ranch home on County Line sold for $94,000 with the seller paying $2820 towards the buyers closing costs (concessions).   It is approximately 1200 square feet with 3 bedrooms, 2 full baths and a 2 car attached garage.  (Home is being reported as a foreclosure sale)

If you have any questions about recent home sales in your area please do not hesitate to contact me.    No pressure - just conversation.



**All sold data courtesy of Mirealsource™ and its participating brokers & agents and is deemed to be reliable but not guaranteed **

As I read through the statistical reports for Macomb County yesterday and this morning I tried
to get a feel for what I am seeing and analyzing.

2009 was indeed a tough year for home prices in the county as a whole, with the average sales
price of a single family residential home plunging by 22.5%.   Looking at the sales prices recorded
in the month December there seemed to be a bit of stabilization:  There was only a 2.7% drop in
sales prices when looking at December 2009 compared to the sales prices in December of 2008.

One months worths of sales prices in comparison to the previous years for the same month
however doesn't predict a trend. Yet when I look at the 4th quarter of 2009 I am encouraged:

This is the smallest difference in reported sales prices that I have seen in years.  It is also encouraging
to me because if this trend holds we may be starting to see some stabilization in the freefall of prices
that have it our region of Michigan so hard during the last several years.

A couple of things need to happen to ensure that this stabilization occurs:   Job loss needs to be
nipped in the bud, and there cannot be an increase of foreclosures to hit our real estate market again.

Over the next week or so I will be posting more comprehensive sales analysis for each section of Macomb
County.  (For example:  How the city of Eastpointe is doing in comparision to Shelby Township, etc.)
In the meantime, if you would like a detailed analysis of how your neighborhood is faring please don't
hesitate to contact me for a no obligation market report.  No pressure - just conversation.

I've heard it so often that I cringe each time I hear it from a potential home buyer: "So-and-so told me to never offer more than 50% of the list price" or some version of that sentence.

My response?   If the homes list price is double what the market value is, then by all means an offer of 50% off the list price is justified.   Otherwise, expect your offer to be rejected. 


Most homes in the Macomb County area that are for sale are already market value priced.  It doesn't matter whether the home is a foreclosure (bank owned), a short sale (lien holder negotatied sale) or a private non-distressed home for sale.  In order to compete with todays market values home owners are pricing their homes to sell. It's as simple as that.

The 1300 square foot brick ranch in Chesterfield Township that once sold for $180,000 in 2001 is now listed (and selling) for $90,000 to $125,000 depending upon the condition of the home.  

If you listen to "So and so" and offer $45,000 for the home without taking in to consideration the condition of the home, the current market values for the neighborhood and the buyer activity in the area then you are setting yourself up to be rejected.  Over and over and over again.

Be smart.  Hire a buyers agent to work for you and to assess market value that is current.   This is your best shot at receiving value in your new home purchase, not listening to "So and so" who are not in the trenches every day.

People in Michigan who are attempting to participate in the Federal mortgage modification program are facing stressful times. Unfortunately, when people are in distress it tends to bring scam artists out of the woodwork.

Most people that I have encountered over the last year are doing their best to try and stay in their homes, contribute to their communities and ride out this storm. They call and talk to their mortgage lenders, they are persistant through the never ending paper trail involved with seeking a mortgage modification and they sometimes are successful.  (Not often enough in my opinion, but that's another rant.)

This week in the Metro Detroit area there was an arrest reported of a man who allegedly offered to help people with their mortgage modifications.  His alleged crime?  He wanted an upfront fee for the negotiations with the homeowners mortgage lender and then never performed what he stated he would.  Allegedly.  Remember, we are all still innocent until proven guilty.

Please please PLEASE run from anyone who wants money upfront to help you with your mortgage modification.  I know it is stressfull trying to get through to the right person at your bank / mortgage holder who can make a decision.  I understand that the bank will tell you that they've lost your file, or that they don't have a complete file (even though you've sent it in many times.)  I can only imagine that waiting months for a decision is frustrating as you cannot move on with your life until this part of your financial picture is completed. In spite of all of this please don't ever give money upfront to someone who says they can help you. (Unless that person is an attorney.  By all means, if you are able to  do so hire an attorney to be your advocate and help you through the process.)

It absolutely makes me sick that in these times of heartbreaking unemployment and economic distress that there are individuals who would prey on homeowners.  Thankfully one such alleged person is sitting in the Macomb County Jail today awaiting his day in court.