Unless you live in Michigan, or one of the other hard hit by unemployment states, the signing of H.R. 3548 by President Obama yesterday probably was good news to you because of the extension to the first time home buyers tax credit. Here, in my local area, I'm cheering because there will be thousands and thousands of out of work people who will continue to receive an unemployment check, for at least 20 more weeks.

How hard hit is my area by unemployment?   (Look at these numbers and try to remember that the numbers reflect real people and their lives, and isn't just data.)

Michigans overall unemployment rate at the end of September was reported to be 15.3 percent.    In Wayne County alone it was 18.3 percent.   The city of Detroit?   A staggering 28%.

Many of those people who were laid off at the beginning of this year, or late last year, have not found replacement jobs.   It has been reported that approximately 44,000 people in Michigan cashed their last unemployment checks in October.  

Coming in to the winter months and having their unemployment benefits cease would be cruel.  Thank you to all of our government officials for taking care of this and giving an extended lifeline to those who so desperately need it.

When I read the news yesterday about the President signing this bill I was excited, and relieved, more so for those  who cashed their last unemployment checks then I was for future home buyers.   Needs first - wants later. 

A bit of a twist to my home sales market report for October '09 in Macomb County MI:

I thought it would be informative for home owners to see how home buyers in our area are purchasing
their homes - is FHA still "king", or are cash buyers taking the lead?

Macomb County had 917 residential homes sold during the month of October 2009, which is an
increase  from this time last year (730 homes sold.)

Sales prices county wide are still falling, with the average sales price being $91,890 compared to $101,574
in October of 2008.  It is a sharp decrease county wide, but some cities / townships showed increases.
(Please feel free to call or email me for a detailed report for your area.  I would be happy to provide the information for you - no fees for this service.)

How were buyers paying for their homes?  The chart below will show a breakdown of how these 917
homes that sold in Macomb County MI were purchased last month.

With the large number of cash purchases we can still see that investors are buying the lower priced homes, taking advantage of this buyers market to increase their portfolios of rental properties.   The large number of FHA and VA buyers also tells me that the first time home buyer tax credit had home buyers out in full force to take advantage of the money being offered to help them.

All of the data above was collected by Mirealsource™ and it's participating brokers and agents, and is deemed to be reliable but not guaranteed.  As always, if you want specific information regarding your neighborhood or  home, please feel free to contact me for a no pressure analysis.

One of the cities in my area has a wonderful online service in which you can find out the current taxes,
utility bills (water and sewer) and also check to see if there are any permits that have been pulled for
repairs or renovations.

In the case of vacant homes (foreclosures, REO's, etc.) there is also one more check that you as a purchaser
need to do:  Pick up the phone and call the city and find out if a certificate of occupancy is needed prior
to moving in to the home and if an inspection is needed by the building department.

A buyer client and I are in the middle of a "counter offer" purchase on a bank owned home, and one of the
things that I asked her to do was to call the city building department and find out if this home needed to
have an inspection prior to her being able to move in to it.   As it turns out, this home was red-tagged (although the tag was not readily visible when we viewed the home) and does need to be inspected by the building department.

It will cost the buyer $200 for the city building inspector to come out and look at the home, as well as additional fees if permits need to be pulled for any city mandated repairs.   Most small repairs can be done by the potential home owner, but those needing more expensive work (electrical, plumbing, heating & cooling, etc) will require additional inspections and permits.

Please don't assume that just because there isn't a notation on a city / township online service about an inspection being required that this is truthful.  Data does "fall through the cracks" and entries are sometimes not made in a timely fashion.

                                                Pick up the phone and call.  

For those wondering why I don't make the call myself for my buyer clients:  Third party translations can sometimes fall short of accuracy.  I want my buyer clients to hear for themselves what the city / township building department has to say.  They can also ask specific questions while they are talking to the representative while those questions are fresh in their minds.

It's taken too many years but the city of Detroit finally said to landlords: "If you own a home or an apartment building in the city and you rent out the home or apartment it is your responsibility to make it lead free." 

Is it going to be expensive for landlords?  Yes.  Is this new ordinance going to cause rent to rise to compensate for the testing and removal of lead?  Probably.

I have a feeling though that parents of children who live in these homes and apartments within the city would gladly pay higher rent in order to protect their children.  I also have a feeling that many other cities will now follow suit and be drafting their own ordinances.  It's going to be an interesting year ahead watching all of this unfold within the city of Detroit and hopefully within other cities in Michigan.

It's about damned time.

The text of the Detroit News article regarding the passing of this ordinance can be found here.

Oh, the wonderful world of bank owned properties!

Let's see, first the sellers disclosure is stamped:  "Exempt" or some such other language.  The bank owners have never lived in the home so they surely cannot attest to the condition of the home unless they have inspected it.  I get it.  My buyers get it.

What I don't "get" is this:  The Federally mandated lead base paint disclosure form is sent to buyers agents blank.  Not a bit of wording on it, not even the catch all: "Sorry, I don't know, have never tested the home, do your own due diligance."

I don't know about anyone else, but handing my buyer clients a blank form that is important to any purchase transaction in the US to just sign, date and initial willy nilly gives me the wilies.

What I have done since I first saw this blank lead based paint disclosure is this - I write the following language above the spot for the buyer clients to sign:

"As of the date of purchasers signature the sellers have not provided disclosure and purchasers are signing an incomplete form."

They are then given the opportunity to indicate whether they are waiving the right to have a lead based paint inspection, or whether they wish to conduct one. 

How do all of you handle this when you see it?  Surely it cannot be something that is typical only in my area.

The other morning I read a wonderful article by Rich Jacobson.  He wrote about how we as real estate professionals need to the voice of reason and trust to our clients,as well as telling us about a real life situation in which this was conveyed professionally by him to his clients and vice verse.

As I read his article I found myself nodding my head in agreement with him, and also remembering the times that speaking honestly and at times, bluntly, with my clients has caused me to be fired over the years.

You see, I have this funny quirk of bluntness that leads my mouth to spill out the  words: 
"That won't work"  or  "It isn't a good idea" or  "I can't do that".

Recent examples of my quirky bluntess: 

• The FHA buyer who wanted to look at condos in subdivisions that I knew wouldn't
  fly with HUD.
  
  
• The home owner who wanted to put their home on the market for $30,000 more than
  the current value to "just give it a try."
  
  
• The first time home buyer who insisted on viewing short sale homes with the Federal tax
  credit being the overwhelming factor in his buying a home this year.

I lost all 3 of those potential clients because of my bluntness when it became clear that no matter what I said or how I worded it that they were going to go full head on with their decisions.

On the flip side, I had a Rich Jacobson moment just a short while ago in which my buyer client said "This is why I hired you.  Thank you." when giving her advice and explaining why something wouldn't work out and wasn't in her best interest.   

Lose a few clients and sleep better at night?     I'll do that every time.

My Macomb County MI area has been in the midst of this housing value decline for several years now, and I thought it would be interesting to see how this past September home sales compared to the previous September sales data (2007 and 2008).

While we aren't seeing home prices stabilizing as of yet, we are seeing fewer homes come on the market.  We're also seeing more homes being sold this year than in years past. That should help us in the near future with the supply & demand issue that has been so heavily tilted to the "supply" side of the market.

It's interesting to note that while fewer homes are coming on the market this year (less foreclosures and bank owned homes) there is more competition for the homes. The increase in the homes sold when comparing September 2007 to this past September is 60%.

If you would like specific information regarding your Macomb County homes value  please don't hesitate to contact me.  No pressure - just conversation.

All data courtesy of Mirealsource™ and its participating real estate brokers and agents and is deemed to be reliable but not guaranteed.

The common misconception about Buyers Agents is that we take people out to look at a few homes, write the offers, then sit back and collect a paycheck.

Misconception?   What an understatement!

Take for example what goes on behind the scenes before we ever step foot in a home with our buyer clients:

• Talk with the buyers about their wish list / want list / must have list in a home.
  
  
• Sort through all of the thousands of listings in the various MLS databases, narrowing
  down only those that fit the buyers criteria.
  
  
• Research the property taxes on the properties.  (I'll let you know about the importance
  of this in a separate post.)
  
  
• Check the ownership of the home (looking for conflicting information in public records)
  
  
• Sifting through the comments and photos to ascertain whether a home meets your financing
  criteria (Will the condo be HUD approved?  Will the home pass FHA or VA muster?)
  
  

A good buyers agent will spend hours behind the scenes working in the buyers best interests before they ever step foot into a home.    But you the buyer don't know that, because we don't give you a detailed invoice of work performed like other professionals do.   The list above is only  a snapshot of what a buyers agent does for you.  The list goes on and on during the process of purchasing your home.  

How do you know if we have done a good and thorough job for you?   When you get to the closing table thrilled with the purchase of your new home, with as little stress as possible, and without any surprises.   We willingly take on the stress and sleepless nights so that you don't have to.

ActiveRain has a Q & A section that is set up for consumers to ask questions of the real estate professionals here, much like Trulia has for its site.   While Trulia is catching on with the general public and has many professionals answering questions from consumers in a timely manner, the Q & A section here has not.

There are some wonderful questions asked lately by members of the public that have gone unanswered:

Location: Arkansas
Submitted 09/19/09 08:12 PM

Q. looking for 10 to 20 acres with small house, want to start farm/greenhouses.

Location:  North Carolina
Submitted 09/18/09 07:26 PM

Q. looking to buy 1.5 acreas in waynesville nc

Many of the questions that are posted are those that we cannot answer (those that need an attorneys advice, etc.) but most are questions that we can help people with and also gain more exposure to other consumers.  

The Q & A "Ask a real estate professional" section of ActiveRain can be found on the main screen, and by scrolling down to just above the list of states.  See a screen print below:

One of the most confusing aspects of the purchase process for home buyers is sellers concessions.  They've heard their mortgage lender mention it, in lieu of the buyers needing to bring to closing all of their closing costs, pre-paids, etc.    It's also been discussed with their buyers agent during the process and while sitting down to write an offer on a home.   It is still confusing to most buyers though unless you draw it out for them - who is really paying for what, and what it means to them in the amount they will finance.  The table below is an example of a buyer who is putting 3 1/2% down on their FHA mortgage and asking for the allowed 6% in sellers concessions:

Notice that I highlighted the "Sellers net".  This is what the seller will be concerned about as they go over your offer to purchase.   If the "net" isn't  what they had in mind and counter offer, they probably will do so at the expense of the sellers concessions towards you.  Let's say for example that the sellers have decided they want their "in our pocket" to be $97,000.  If you need all 6% of the  allowable sellers concessions in order to purchase the home you will have to finance your closing costs.  An example of a counter offer to make it work for the sellers and for you:

Helpful tip:  Ask your mortgage lender to give you 2 or 3 different Good Faith Estimates.   In these estimates the lender can estimate your payment based upon 2 or 3 different mortgage amounts.   If you do this prior to writing your offer to purchase you will be able to make a comfortable decision on what would be your final offer to the seller.