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Monday, February 20, 2017

New loan products from John Adams Mortgage

Sometimes we just need a second chance and now John Adams Mortgage has a loan product called the Fresh Start Loan  that can give that chance to those who may have fallen on hard times in the past.

No, we're not back to the easy money days that caused the Great Recession, but John Adams Mortgage does recognize that many hard working and trustworthy people have been shut out of the housing market by overly tough mortgage lending practices and rules; so they have created the Fresh Start Loan program to offer new mortgage loans to those who might have had a foreclosure, a deed-in-lieu transaction, a bankruptcy or  short-sale in the immediate past, but who might otherwise qualify.

Note also that they have a new program for Investors and also have a program to deal with non-warrantable condos - A non-warrantable condo is a condominium property in which the loan is not eligible to be sold to Freddie Mac or Fannie Mae, and as such, mortgage financing for this type of property is considered by most banks to be more “risky.”

From the BAC Florida Bank web site comes this explanation of non-warrantable condos - Freddie Mac and Fannie Mae would consider a condo to be “non-warrantable” if, for instance, the condo:

  • Is in a development which has yet to be completed
  • Is in a development which allows for short-term rentals
  • Is in a development where one person or entity owns more than 10% of all units
  • Is in a development where less than 50% of the occupants in a complex are the owners
  • Is in a development involved in litigation of any kind regardless of whether the building is suing another party, or is the party being sued.

Some of the common property types which fall into the non-warrantable category include condo-hotels, time shares, fractional ownership properties, and other projects which require owners to join an organization, such as a golf club.

So, if you need a fresh start or are trying into buy a condo in a complex that is non-warrantable, give Chris Knocke a call today and see if these programs might work for you.

Monday, February 13, 2017

Am I buying a time bomb?

Many first time buyers, or perhaps buyers moving out to the country for the first time, encounter something that they have little or no idea about – a septic system. Many people have lived their entire lives in cities of communities that have sewer systems. They never worried about where things went when they flushed the toilet, nor did they concern themselves about hiring someone to come pump out a huge tank in their back yard. If they had any notion of a septic system maybe it was from watching the 2000 movie Meet the Parents, which probably didn’t leave a favorable impression about septic fields.

So, now they are looking at houses out in the country a bit and seeing the terms Well and Septic on the listing ticket. What’s that all about? Should you be concerned if you see that? Am I buying a time bomb? The short answer is NO, you need not be overly concerned; but you should take the time to educate yourself about these waste disposal systems and what that means in terms of your responsibilities.

A septic system performs the same functions as the sewer system, just at a much smaller scale and much more close to home. Everything that goes down a drain in the house or is flushed down a toilet has to go somewhere and has to be dealt with somehow. In settings with sewer systems your house is hooked with pipes to much larger pipes that carry all of the waste water from all sources in your house (and every other house around you) to a central waste treatment plant somewhere. You really don’t care where that is at; unless, perhaps, you happen to live right next door to it. At the waste treatment plant the waste from thousands of homes is treated with chemicals and natural bacteria in huge ponds. The bacteria are there to breakdown and digest the solids in the waste water. Eventually the clean  water that results is released into stream or lakes.

Individual septic systems perform the same functions, just underground and right out in your back or side yard.  The waste water from your house flows into a large tank (called a septic tank, which is named thus because the water and waste that flows into it is septic - infected with bacteria) usually of 1000 gallons of more. The septic bacteria came mostly from you, but that’s likely more than you really want to know.  Anyway the septic tank provides a place where good bacteria can work on the solids in the waste water to break then down and digest them. The solids tend to settle to the bottom, providing a smorgasbord for bottom-feeding bacteria. Some remain suspended in the water which is directed out of the tank and into the septic field. The septic field is a series of pipes with holes in them that are buried several feet underground. The holes let the water escape out into the soil where other good and hungry bacteria digest whatever is in the water for them to eat.

A well designed and properly installed septic field can last for a very long time, if it is also well maintained. However, they are not necessarily design to last forever. A study of septic systems published in 2013 by Cornell Cooperative Extension (CCE) via a grant from the NYS Water Resources Institute with funds provided by the NY State, had this advice.

Most septic systems will fail eventually. These systems are designed to have a useful life of 20 to 30 years under the best conditions. Older septic tanks with concrete or metal parts degrade over time. Eventually the soil in the drain field becomes clogged with organic material. Many other factors can cause the system to fail well before the end of its “natural” lifespan. Pipes blocked by roots, soils saturated by high water tables, crushed distribution pipes, improper location, poor original design, or poor installation can all lead to major problems. The most common reasons for early failure are misuse or inadequate maintenance by homeowners. When a system is not pumped regularly, solids build up in the septic tank, then flow into the drain field and clog it.
Symptoms of Septic System Failure –

·         Slowly draining sinks, bathtubs and toilets.
·         Surface emergence of wastewater
·         Lush green grass over the drain field, even during dry weather
·         Nitrate, nitrite, or coliform bacteria in your well water

An excellent article by Mila Ready outlines the main reasons that septic systems fail. The bottom line is abuse or neglect (or both) by the owner. One of the more common things that I see in my little patch of the world is people overloading their septic system by having more people in the house than the system was designed to handle. When the developer lays out the plans for developments that will have septic systems associated with each house they have very specific guidelines about how many bedrooms the house should have given the proposed size of the septic field. The idea is that a three-bedroom house will house maybe four or five residents with their waste byproducts. Some developers then build houses with “bonus rooms” that they sell with a wink of the eye as the fourth bedroom. Sometimes owners just add bedrooms through add-ons or converting spaces in basements or elsewhere into bedrooms.  The result is a house with 5-people in it, all contributing to the waste going into a septic system that was design to handle 3-4 residents. He system gets overwhelmed and fails.

The other things that I see a lot is poor or no maintenance of septic systems. Many sellers tell me that they don’t even remember that last time that they had the septic tank pump out. Why is that important? Well, eventually the solids can build up to the near the top of the tank and get into the pipes that make up the field and clog them up. The other thing that can happen is that the field itself gets “clogged” with solids and can drain away the liquids, so they eventually come to the surface. Remember the scene from Meet the Parents when the main character was driving through the soggy, failed septic field – yuck.

Going all the way back to the headline question; perhaps you are buying a time bomb, if you don’t pay any attention to this very important system. You should have the septic tanks pumped out every 2-3 years and many will also recommend not putting normal kitchen waste down a garbage disposal. In fact, most country homes were built without disposals to begin with. Some of the solid kitchen waste that you might put into the septic system by grinding them up in an in-sink disposal just don’t “digest” the way that other waste matter does and can clog the system up. Animal fats and meats are particularly bad for the system.

If the septic system fails due to a clogged field, there are companies that profess to have remedies that you can introduce into the system to clean it out (here are links to two of them – NewTechBio and REX-BAC-T). Think of them as super hungry bacteria that get in there and eat everything they hit.  Most septic companies would probably disagree with that and still recommend replacing the whole system.; however, replacing a septic system can cost $8-15,000 (more if it is an engineered field). Hope springs eternal, so maybe trying one of those modern biotech solutions first is worth the few hundreds that they may cost. Of course, the best solution is not to have a failed system in the first place, so regular maintenance is still the lowest cost approach. You can get on the right track by insisting that the septic be pumped out as a condition of your purchase offer.

So, you don’t have to fear the septic like a ticking time bomb, but you do need to be mindful of its ability to blow up in your face, if you don’t take care of it. Set up a regular maintenance inspection and pump out with a local septic company to remain flushed with pride about your home.

Norm Werner is a full-time Realtor® working under the Real Estate One brokerage in Milford, Michigan. For more about Norm visit his web site – hppt://

Friday, February 10, 2017

Is it a good time to list my home?

One of the most common questions that I get as a Realtor is, “Is it a good time to list my home?”
The answer is YES, now’s a great time to list your home. The listing inventory is the lowest that it’s been in longer than I can remember and the buyers who are out looking are ready to buy.
We know that this is a great market to be in according to Fannie Mae’s Home Purchase Sentiment Index, a survey of 1,000 Americans in January about their attitudes toward housing.

  • ·         42% of Americans believe home prices will increase, a month-over-month uptick of 7 percentage points in January.
  • ·         69% of Americans say they are not concerned about losing their job, a 1 percentage point increase from December 2016.
  • ·         15% of Americans say now is a good time to sell, a 2 percentage point month-over-month increase.
  • ·         15% of Americans who say their household income is significantly higher than it was 12 months ago, a month-over-month increase of 5 percentage points.
  • ·         29% of Americans who say now is a good time to buy a home, a 3 percentage drop from December 2016 and a new survey low from May and September 2016.

These attitudes and sentiments point to a favorable market for those considering listing their current homes. The additional factor of it being a very “tight” market (few homes for sale) make it a Seller’s Market; one in which the Seller is in control and likely to get top dollar.

The only caution that I have to advise is not to get too greedy. Even in this favorable market, there are still homes sitting on the market for long periods because the owners got greedy and overpriced them. Listen to your Realtor® and price it properly. Not all areas have come back from the “Great Recession” at the same pace and there are still pockets of depressed pricing, which your Realtor can identify.

Many people decide to wait for Spring and warmer weather to list their homes. That is a mistake, too, in a tight market. The old saying to “strike while the iron is hot” should be modified to read “strike while the market is tight” for real estate. In the spring lots of new listing will all come on the market at once, giving the buyers too many alternatives to look at and potentially burying your home in the crowd. List now, while you will stand out in an un-crowded field.

I saw a sign outside a dentist’s office that read “Accepting new clients”. Well, I’m accepting new listings, if you are ready. The market is certainly ready and primed for your home to be listed. If
you’ve been waiting to downsize, nor that you’re retired or that the kids are all gone; or you are ready for that move-up home that you can now afford; give me a call and I’ll come out and give you a free Market Analysis, so that you can see what your home is worth in the current market as well as provide you with feedback on the things that you might still need to do to get it ready for the market. The analysis is free; but, the advice that I give you, based upon my visit may be priceless.

Call today – Norm Werner at 248-763-2497.

Thursday, February 9, 2017

Be a part of the dream - help build an Angel House

If you could save a child from a life of sex slavery or forced childhood marriage would you? How about if you could help save 50 children from that fate?

There are places in the world (too many places) where poverty and ignorance lead people into human trafficking, mainly of young girls, but also with young boys. One of the most dangerous places on earth to be a child is India, where abject poverty leads too many people to sell their children into slavery or into arranged childhood marriages that doom them to a miserable existence and rob them not only of their childhood but of any dreams that they may have had for their lives.

Two local people, John and Lisa Schiller have had a dream for many years to do more about john-and-lisait than just feel sorry for them. They have a long background in providing foster care of children in need of the love and discipline of a stable family environment. Now they are in the process of realizing a long-held dream to do more. They are behind a project to build an orphanage in India as part of the Angel House program there, which provides safe refuge for hundreds of children across India.
The Angel Hose that John and Lisa are building will begin construction in June of this year and is scheduled to open in the first week of December. Once it is built and open the on-going maintenance and operational costs will be picked up by a local church in India. John and Lisa plan on traveling to India in December of 2017 for the opening of their Angel House and to meet the 50 children who will live there.

Building the orphanage is a big undertaking financially and John and Lisa can uswoman-prayinge your prayers and financial help. You can see more about the Angel House Program please visit their web site at To learn how to support John and Lisa’s project to build their orphanage at If you can help financially, please contribute at that web site; if not, at least add them and their project to your prayers. 

I’m sure that John and Lisa will bring back pictures from India of the children that are being saved and given a chance and the opportunity for a less dangerous life.

Monday, January 30, 2017

The Fenton Winery & Brewery - A Great area Venue for Special Events

One of the greatest benefits of being an Ambassador for the Huron Valley Chamber of Commerce is the opportunity to meet the owners and staffs of area businesses. Recently I got reacquainted with Joe Sirl from Fenton Winery & Brewery, which is located just north of downtown Fenton. Joe does a lot of their community outreach and marketing stuff and he gave me an update on their banquet capabilities. I visited them when they first opened a few years ago and they had great plans for the utilization of the facility that they had just moved into at the time. It was good to hear from Joe that those plans have come to fruition and the property now offers a great venue for special events.

Fenton Winery & Brewery is the place for your event.
Indoor & Outdoor; it’s all here.

Rehearsal Dinners
Birthday Parties
Holiday Parties
Anniversary Parties

Our Banquet & Event building seats up to 280 guests and provides a beautifully rustic
feeling.  Uniquely built, cedar sided, and set back in a wooded setting, this venue will compliment any event.  Included is an outdoor patio area complete with a stone fireplace and an area for seating up to 150 people.  Our guests have the option of true one-stop shopping to actualize their vision for events.  Bridal and Grooms suites, on-site ceremonies, outdoor weddings with an indoor backup plan, in-house catering, and a developed network of partnering vendors for additional d├ęcor and entertainment services are among the most valued ease of planning features.  

We offer an acre of park like space outdoors that can be outfitted to hold events up to 300 people during those gorgeous Michigan months.  If you are seeking a smaller, more intimate location, our taproom area is cozy, inviting and has space for up to 35 people.  Our Banquet & Event Coordinators work with each guest individually to plan and execute the perfect event. Our chef has designed complete menus
featuring delicious entrees, tasty appetizers & luncheon or casual foods to fit a wide variety of banquet needs.  Our coordinators will happily arrange & price any specialty items that you desire.

Each year as we celebrate our Anniversary in late January a reflection occurs of what drives the continued growth of Fenton Winery & Brewery.  Events like our Mug & Stem Club Appreciation Dinner highlight the support and advocacy of local individuals which we are incredibly fortunate to have received by the bushel over the last 9 years.  Without our surrounding community believing in our mission, the current set-up of 20,000ft. split between two buildings and nearly 5 acres of total property would not bear our name.  It is a far cry from the 2,000 suite in a strip mall on N. Leroy St that was originally called home.

The passion to continue to create jobs and provide a hub of community is of vital importance and makes the long days profoundly worth it.  We have had the pleasure of working with seemingly countless community organizations and remain dedicated to expanding our scope.  The mutual support with groups such as the Lions Club, area Chambers of Commerce, Adopt-a-Pet, local schools, cancer and other health based organizations, small
business and community development groups is the most rewarding part of Fenton Winery & Brewery.  

It is an absolute honor to be chosen to partake in major life celebrations, like weddings and birthdays, and work with causes that so many dedicate their valuable time to propping up.  Those are the things that allow us to have such an incredible staff, a client base of friends, and insight into the strength of those we are surrounded by in our neighboring towns. -Joe Sirl

Joe provided me with the write-up above and the pictures. If you haven’t checked out the Fenton Winery and Brewery, you owe it to yourself to take the drive to Fenton, Michigan and on through town on N. Leroy Street, which turns into Fenton Rd. About 2-3 miles out of town you’ll hit N. Long Lake Rd and see the Fenton Winery and Brewery. The address is 1370 N Long Lake Rd, Fenton, MI 48430. Call ahead if you aren’t sure that they’ll be open at (810) 373-4194. They are closed on Monday’s but open most other days. Their web site is Check out this great local event venue for your event or just stop in and sample the great craft beers and wines that are made there. 

Thursday, January 19, 2017

National Radon Awareness Month

January is National Radon Awareness month. Radon is a big issue in the Milford area and throughout the Huron Valley. Radon is a colorless, odorless gas that naturally percolates up through the soil, especially in areas with heavy gravel and sand content in the soils. Thanks to the glaciers that used to cover much of Michigan or local soil conditions are conducive to Radon getting into basements. Radon bubbles up under the foundation and seeks any crack or hole through the basement floor slab to get into the house.

Why is Radon a big deal. Radon is known to be the third leading cause of deadly lung cancer in America. If you want to scare yourself, go read about it here. Of all of the issues that one can hit in a house that they might buy, Radon is the most serious health risk. It is also the easiest to deal with, so don’t panic if your home inspector reports a higher that acceptable level of radon. Radon remediation systems are relatively easy to install and, once in place, remove the danger forever.

Radon remediation system vary in price, depending upon the size and configuration of the house, but
generally they run between $800 – 1,500. The “system” usually consists of a vacuum pump and piping to exhaust the Radon gas away from the house. The vacuum pump pickup is placed underneath the basement floor slab by either using an existing sump pump well or cutting a new hole through the floor slab. If the sump pump well is used, the top is sealed shut and the sides are broken out to allow the gas to be sucked into the well. While Radon “bubbles-up” through the soil it is heavier than normal air, so it seeks the lowest levels. The sump pump well is usually placed in the lowest level of the basement. 

Most old houses in the Milford area were originally built with Michigan Basements, most of which had dirt basement floors. Many people concreted over the dirt, but many still have some dirt areas. In cases where the basements are not used there is likely no reason to worry about the Radon risk; however, as old homes were updated many were converted from their original steam or hot water radiator heating systems into forced air systems. Now, the Radon that was hovering around in the basement might be picked up by the heating system and blown throughout the house. It’s worth getting the basement checked for Radon if you have one of those old houses and it has been upgraded to forced air heating and cooling. It might be a bit more of a challenge to remediation in an old home that still has some dirt floors.

Many homeowner of more modern homes seem to believe that if they have a walkout basement that will remove the threat of Radon. That is not true. Opening and closing that doorwall or door may help lower the level temporarily, but is does not remove the threat. Radon health risks, like the risks from smoking build up over time and the time that you spend down in a finished basement area, even if it does have a doorwall, will let the Radon accumulate in your longs a little at a time. Eventually it will cause a major health problem..

Home owners can get free (or low cost) Radon test kits from the Oakland County Health Department.
You can also buy test kits at home improvement stores like Lowes or Home Depot. National Radon Awareness Month is as good a time as any, since homes closed up for the winter will give you the most accurate readings of the Radon levels in your home. Getting the basement checked and remediated, if needed is a much safer and less expense things to do, rather than taking that risk.

Monday, January 9, 2017

Real Estate laws and practices that no longer serve a purpose…

As the society evolves around it, the world of real estate has gotten out of sync with current needs and expectation in its laws and practices. That is not unusual. Many things that have been around, basically unchanged for many years, begin to look and feel dated over time.  Some laws and practices that were originally put in place to help may now be actually hurting the businesses or the very people that they were initially trying to protect or help.  That is certainly the case in the world of real estate.

Recently the Michigan Legislature finally abolished the Dower Rights laws that have been embedded in Michigan Law and real estate since the late 1700’s. Those laws were originally put in place to protect the rights of widows against being thrown into poverty due to the death of a spouse or ex-spouse.  Dower Rights established the right of the widow to a 1/3 share of the real property of the marriage, should the husband die first. Later laws dealing with estates broadened and clarified the rights of inheritance of widows, but the old Dower Rights laws remained on the books in Michigan, which was the last state with Dower Rights still in effect. In practice that meant that a man could not sell property without his wife signing off on giving up her Dower Rights to that property.  With society changing to recognize non-traditional marriages, the old law, as written actually may have become unconstitutional, so the Legislature thought the easiest way to deal with the changes was to do away with the Dower Rights  law. See this article from the Michigan Bar for more on this.

Many practices in real estate are not backed up by laws, but rather are just rules or practices that various groups that are involved with the process have enacted over time. Some are defended as being in place to protect the rights or interests of the buyers and sellers of the real estate, but, in reality, many were put into place to protect the interests of the companies involved – to shield them against loss or to add to their bottom-line profit. I recently read a good article by Benny L. Kass, a staff writer for the Realty Times web site, entitled “Escrow Accounts Serve No Purpose” .

In the article, Kass makes a very reasonable case that the escrow accounts that most buyers are forced to establish with lenders is not really needed and may just serve the lender by giving him access to the escrowed funds (one way or another). These escrow accounts are a classic case of the consumer being told that he/she is being protected from themselves for their own good, by “insuring” that they have money set aside for taxes and insurance on the property. Kass makes the logical case that it is in the best interest of the owner to make sure that those obligations are met and so the escrow accounts aren’t really serving anyone but the lenders.

In Michigan the real estate brokers have all found a way to charge just about the same amounts for what they have euphemistically called “Compliance Fees”. The original rationale was that they were collecting these fees to cover the costs imposed by the State laws for record keeping and reporting of the sales. Court cases challenging these fees under RESPA laws (and now under RESPA-TRID) established that were was no such work actually being done; so, now the brokers just call it what it always was – extra commission on the sale – even though many still use euphemisms to try to mask the real nature of this added cost.

While there has been much complaining about the new TRID rules governing the mortgage and closing processes, most of that has come from the people that the rules were enacted to reign in from shady or fraudulent practices. The old practices of lenders that brought about the need for TRID involved not sharing all of the costs and charges with the borrower until it was too late for them to use that information to make decisions. It was not uncommon before TRID for lenders to release the final closing packets the morning of closing and for that final document to be full of surprises for the borrower. Many times the borrower would not even know how much he had to bring to closing until that morning. It was a mess of their own making that required that lenders be brought under tighter government control.

The real estate business itself has been slow to evolve, with many traditional brokers having to be dragged kicking and screaming into the 21nd Century. There are many experiments that are ongoing to try to find alternative business models to the traditional broker-centric model that make sense in modern times. Hopefully some of them will succeed, because there is really no reason to maintain the current broker-centric model.  Traditional brokers were very good at lobbying for laws to protect their interests; so, there will be many State laws governing real estate that will need to be repealed or modified. 

The so-called “traditional brokers” will need to accept changes to how the business will be run in the future based upon the changing needs of the customer and agent bases.. Just like the automotive industry is morphing into a mobility industry, the classic real estate brokerage needs to morph into something that better serves both the customers and the people (agents) who are actually out doing the real work. The somewhat feudal-like relationship between the traditional broker and the agents will need to change to reflect the lesser role and lesser values of the brokers in today’s real estate world.

Most of the changes that need to take place and will take place over time will be kicked off by customers and agents asking “Why”. Why do we need this practice? Who does it really serve? What purpose does it really serve? Why am I paying for somethings that doesn’t benefit me? Why are the laws protecting the profits of a few at the expense of the many? There will be much mumbling and perhaps even some loud cries of consternation from those in the real estate industry who have sacred cows that will be gored by these changes. For many it only by that sleight-of-hand and hidden extra fees that they get by these days. Change is in the air and perhaps it will blow away some of the odor left from tired old practices and no longer serve any good purpose. 

Thursday, January 5, 2017

Michigan Legislature Votes to End Dower Rights in Real Estate

Michigan has the somewhat dubious distinction of being the last state in the Union to have laws in effect that provide for the association of Dower Rights to real property. Most other states repealed any dower rights laws on their books years ago.

So what are Dower Rights?

A very good explanation of dower  and dower rights comes from a paper published by James M. Leby titled LAST ONE STANDING: MICHIGAN’S DOWER LAW . Brief excerpts from that paper below may help explain the concept:

The dower right was originally a common law creation. During feudal times, the common practice was that property passed from the husband to the eldest son, and real estate was the primary source of wealth.  The concept of a Dower provided a method of supporting a man’s wife and children after his death. The Dower gave the widow a life interest (estate) in one third of the real property owned by her husband during the marriage, from which she could support herself. This right attached to more than just the land held by the husband at his death. The wife retained dower rights even in property that the husband disposed of, unless she signed off on the transfer of the property as well.

Statutory forms of dower in Michigan stretch as far back as an ordinance from 1787. The 1787 ordinance actually provided for the widow to receive a life estate in one third of her spouse’s personal property as well as the traditional life estate in a third of his real property. Later statutes once again removed the right to take personal property.  Early forms of dower were justified partly by the fact that women could not own their own property while they were married, and thus could not build up any independent resources.  The state legislature gave women the right to own their own property in the mid-1800s; however, the legislature continued to retain dower as a means of supporting widows.

Ed. – Effectively this meant that a woman in Michigan could buy and sell real estate without her husband’s approval or sign-off; however, a man who married needs the approval and sign-off of his wife to dispose of any real estate that he owns, even if he owned it prior to the marriage, because her dower rights gave her an interest in it.

New laws abolish the Dower –

New laws that the lame duck 2016 Michigan Legislature passed and sent to the Governor for signature will abolish this last vestige of the common law practice of dowers in Michigan. From the Legislative News published on the web site

Dower Repeal (Senate Bills 558, 560 (Jones - R-Grand Ledge) & HB 5520 (Kesto, R-Commerce Township)

The three-bill package eliminates Dower and references to Dower Rights in Michigan. After the United States Supreme Court legalized same-sex marriage, Michigan's Dower Rights statute came under scrutiny by outside groups and the legislature. Specifically, the constitutionality of all gender-based laws came into question.  Since Michigan's Dower is limited to the "wife" and the requirements of Dower created transactional uncertainty and clouds on title, the preferred approach by the legislature and stakeholder groups like Michigan Realtors® was to pursue elimination of Michigan's arguably unconstitutional approach to Dower.

For those unfamiliar with Dower, upon the death of her husband, a wife is entitled to the use – during her lifetime – of 1/3 of all lands owned by her husband during the marriage.  It is important to note that Dower is an expectancy only, meaning that her rights only vest if a wife survives her husband.  As a practical matter, this right is rarely, if ever, exercised upon the death of a husband. Instead, a widow in Michigan has the alternative of electing a share of all of the property of her husband at the time of his death.  It is rarely the case that an interest in the income from one-third of real property he had owned would exceed that.

Ed. - So, what is Michigan left with after the old dower rights are repealed? Just like politicians at the national level, the Republican-led State Legislature in Michigan has repealed an existing law without providing any replacement. It may be argued that none is required due to protections provided to widows and women in general under other, more modern laws governing estates and probate and divorce and such, but only time will tell on that. The same legislature has been reluctant to deal with issues concerning non-traditional marriages, so it remains to be seen whether any new laws to protect the interests of partners in same-sex marriages will be needed or ever enacted, even if they are needed.

Thursday, December 22, 2016

What business is it of theirs?

In the real estate business we often hit cases where a buyer may need to tap into the Bank
of Mom and Dad or perhaps another relative.  Many times these transactions take place in secret, without the buyer informing his mortgage company. The common attitude is, “What business is it of theirs if I get some help from mom and dad?” Unfortunately, it is their business and they will discover it anyway when they look at the detailed bank statements that the underwriter will ask to see perhaps going back as long as six months or more.

Why is that their business? Well there are a couple of reasons that mortgage underwriters look to see where the money is coming from in a real estate sale. One reason is an unfortunate sign of our times and that is that real estate sales have often been used by drug dealers to launder their ill-gotten gains. Any large sums (and not that large to attract attention) that flow into the buyers account in the last six months will be questioned and documentation demanded for the source of those funds. If you sold something else, maybe
even another property, and the money came from that, you will need to document that sale.

Perhaps the money is coming from parents or relatives. That’s not illegal or necessarily bad, if it is a gift; however, the underwriter is going to want proof that it is a gift and not a loan, which would count against your debt to income ratio. You will be asked to provide a letter from the person giving you the money that states that it is a gift with no expectation of it ever being paid back.  If there is any expectation that you’ll pay it back “once you get on your feet”, it will be treated like a loan and probably screw up your debt to income ratio and could cost you the mortgage.

I’ve also seen buyers go out and spend money for things like furniture for the new place or maybe even a new car after they’ve been pre-qualified, but before the underwriting is done. They also think, what business is it of theirs if I buy furniture or a car. What does that have to do with the house mortgage? Any new and big expenditures like those will also impact your debt to income ratio and could screw up the mortgage process.

The bottom line is that once you apply for a mortgage, your life becomes an open book, at
least to the mortgage underwriter. He/she is going to want to know everything about your and your finances. The amount of detail that the underwriter may ask for and the depth to which he will probe may surprise and even annoy you; however, he is trying to learn enough about you very quickly to make a call for the bank on whether or not you are a good credit risk and will be able to repay the loan. You might not be able to repay it if you are in jail because it was drug money  or if you also have to repay that relative who so kindly “loaned” you that money for your down payment.

So, it really is their business and they are usually very good at it, so don’t think you are going to outsmart them with a wink and a nod to your parents about their “gift”. The penalties for fraud, which is what that would be, are quite stiff and could even land you in jail right next to that drug dealer.

Monday, December 19, 2016

Dealing with fixtures…

One of the areas in real estate transactions that cause quite a few disagreements between buyers and sellers is the concept of what is a fixture that goes with the real estate, vs. personal property that the sellers may remove and take with them. Many Realtor® and most lay people involved with the sale of real estate understand (or think that they do)  things like refrigerators and stoves and other items that are obviously considered to be personal property and not a part of the real estate that is being sold. However, there are lots of things that are not as cut and dried, because they may fall under the legal concept being  a fixture in real estate terms.

We recently had a Continuing Education class on this topic at our office that was conducted by Donald Rump, Chief Council for our Capital Title Insurance Agency subsidiary. Real Estate One does a lot of Continuing Ed classes at its branch office to keep its agents up to date on the changing world of real estate. Don is a Vice-President and the chief litigator for Capital Title and has a career in real estate law that spans over 30 years. He’s also an entertaining speaker on what might otherwise be a very dry topic.

All Purchase Agreements have some standard boiler-plate language about the fact that all of the normal stuff that one might expect would go with the house actually does go with the house. We have a fancy term for most of that called appurtenances. WikiPedia defines the term this way -  Appurtenances are things that belong to and go with something else, the appurtenance being less significant than what it belongs to. In the case of real estate the appurtenances belong with the realty or property. Fixtures would be considered to be appurtenances; however the devil is in the details of how a fixture is defined. That definition is what Don spent his time on helping us to understand.

How one determines whether something is a fixture and becomes an appurtenance to the real estate is determined  by a combination of law from court cases and the facts in each instance. Since not every possible situation has been litigated, the courts have established over time a set of three guidelines or tests that may be applied to try to determine if an item is a fixture prior to having to litigate the matter.  Don went over the three tests that courts would use and apply to determine whether an item is a fixture or not.

The three tests are:

Annexation – This is the test that looks at whether or not the item is attached (i.e. it has been annexed onto the real estate). Annexation further breaks down in the Actual or Constructive, with actual annexation covering those cases where the items have been physically added to the property through attachment or securing them to the real estate. If it is screwed, nailed, tacked or glued to the real estate the court would likely find it to be a fixture.  Court cases have established under this principal that carpeting in a property is a fixture. In another instance a wall-mounted Flat screen TV might not be considered to be a fixture.  Keep reading to find out why. Constructive Annexation most often deals with situations where smaller pieces of land may have been added to a larger piece to create an even larger parcel.

Adaptation – This is the test that looks at whether the item was adapted to become a part of the real estate or perhaps the real estate adapted to accommodate the item. A case in point may be found in the creation of a home theater room, where the room may have been modified to fit the home theater projection equipment and the equipment integrated into the room design. Court cases in foreclosure disputes have found that the equipment becomes fixtures within that room and property. If you had to modify the property to accommodate the items it most likely is now a fixture. But keep reading to see why your wall-mounted flat screen is still not a fixture.

Intention – This is perhaps the difficult one for home sellers to understand. It concerns the intention of the homeowner at the time the item was added to the property, not when the owner decides to become a seller and tried to take the item with him. The court will try to decide if it was the intention of the owner that the items be integrated into the property at the time it was added.  

So, you can’t just walk away with your home theater equipment and leave a big empty theater room that you built into the house, with everything missing and large holes or spaces where it used to be
integrated. You can, however, walk away with your wall-mounted TV and even  the mount, if you want it, since it was possible that you did not intend it to be permanently used there and so there was no intention of it being permanent (a fixture). You may still have to repair the holes in the wall where the mount was screwed in, but that’s a different issue between you and the buyer.

The value of understanding these three tests is in not making the mistake of trying to take something out of a property that you are selling that a buyer (and the court) might reasonably believe passes one or more of these tests for whether or not it was a fixture. As a Realtor, It’s my duty to inform seller clients how to avoid getting into a situation that might involve a court having to make a decision based upon those three tests. The best way is to be very detailed and clear about what is staying and what is not in the listing agreement and the MLS advertising. 

If I’m a buyer agent on the deal I tell them to put in the Purchase Agreement anything and everything that you believe should come with the property.  There may be items on their list that the seller intends to take, but that can be clearly and unambiguously established in the negotiations before the deal is finalized. Make no assumptions. Put everything in writing.

Some of the examples that Don used were from commercial sales and involved things like the tools or equipment that make be part and parcel to the property functioning in its commercial role. One example was a bowling alley that was foreclosed and where the owner removed all of the bowling equipment. The owner claimed that the equipment was separate from the real estate and was his property to take and use elsewhere. The courts said, No, the equipment met the test of annexation, adaptation and intent (it was a bowling alley, after all) and thus that equipment became fixtures.

The classic real estate fixture disagreement is about light fixtures, especially large and special chandeliers. It is an easy one to decide but not a decision that the sellers want to here. A light fixture (hint in the name), even a chandelier is a fixture. It certainly passes the first two tests and even though your intention now might be to take it with you, that was likely not your intention when you installed it. I always advise my listing clients,“If you intend to take it, then take it down (or out) now and replace it, so that a buyer will not see it and make any assumptions about it being a part of the property.”

Another common issue that we hit in the residential real estate business involves things like play structures. The key tests there may be whether the legs or posts of the structure sit atop the ground (think about the metal swing sets that you buy and put together yourself) or have been buried (perhaps even cemented in) the ground and whether things like a maybe a wooden border were added around the structure area with perhaps rubber mulch added to provide safe places to fall off the structure – that’s a fixture. An owner would be hard pressed in court to defend a decision to take that structure when he moved. Utility sheds also come up often and the difference may be between  the little plastic shed that you buy at Home Depot and haul home and assemble yourself vs. the shed that you have a concrete pad pored for and then have it built or assembled on that slab. Which do you think passes one of more of the tests for a fixture?

The whole issue of whether something should be considered to be a fixture or not is so dependent on the situation that there is no hard and fast rule, just the tests that the courts have established; and even those are subject to further consideration of the facts of the specific situation. As in all matters that involve legal decisions it is best to consult and attorney if there is doubt. Your Realtor is a good starting point for advice and he/she will suggest that you get legal help if the situation is not clear cut. The three tests that Don outlined provide a good background for you to look at the situation yourself. If you are honest with yourself about those three, you probably won’t have a problem or maybe not create a problem for yourself later.  And remember, when in doubt, put it in writing.

Thursday, December 15, 2016

Get the water tested when buying new home

There has been much in the news about water and testing of drinking water ever since the Flint crisis of lead in the drinking water exploded in the news.  It is a good idea to have the home inspector that you hire to do the inspection of the home also perform a water test. You can even do one yourself and for $6, if you live in Oakland County  and some of the other local Counties.  Water test kits are available from the County Health Department. 

Lead isn’t the only potentially bad thing that can show up in your water. In fact, if you are buying a home that has a well and a septic system, lead may be the least of your worries. 
Many homes and subdivisions that were built in rural area were built on land that had once been farms. Farmers use tons and tons of fertilizer on crops, as well as many pesticides and herbicides to control unwanted bugs and weeds. We don’t think about it too much, but many of those farms also had farm animals, sometimes a lot of them, that may have had an impact on the ground water that we are now using for the new homes. Run off from farm animal waste can seep into the water table over time. Both of those things often resulted in increasing the levels of Nitrates and Nitrites in the water that is now drawn from the wells that service those new subdivisions or homes.

You certainly may be forgiven for not knowing what Nitrites and Nitrates are and how they may harm your health. I didn’t know either, before I got into real estate sales and started dealing with home inspections and water tests for wells.   From a Study published by the Water Research Center  comes this information about Nitrates/Nitrogen in the groundwater.
The primary health hazard from drinking water with nitrate-nitrogen occurs when nitrate is transformed to nitrite in the digestive system. The nitrite oxidizes the iron in the hemoglobin of the red blood cells to form methemoglobin, which lacks the oxygen-carrying ability of hemoglobin. This creates the condition known as methemoglobinemia (sometimes referred to as "blue baby syndrome"), in which blood lacks the ability to carry sufficient oxygen to the individual body cells causing the veins and skin to appear blue.   Note - The health concern is primarily related to potential exposure through consumptions by infants.

Adults can tolerate higher levels of nitrate-nitrogen with little or no documented adverse health effects and may be able to drink water with nitrate-nitrogen concentrations considerably greater than the 10 mg/L level with no acute toxicity effects. However, little is known about possible long-term chronic effects of drinking high nitrate water. If your water test indicates a level of nitrate-nitrogen above 10 mg/L and only adults or older children will be drinking it, consult your family physician for a medical recommendation.
To read the entire report got to -

If you find an unacceptable level of Nitrates/Nitrogen in your well water, you may chose to ignore it, if you don’t have small children or babies; however, you may wish to deal with the problem by installing a system to remove the Nitrate. From the same report comes this advice –  Nitrate can be removed from drinking water by three methods: distillation, reverse osmosis, and ion exchange. Home treatment equipment using these processes are available from several manufacturers. Carbon adsorption filters, mechanical filters of various types, and standard water softeners do not remove nitrate-nitrogen. To read more about the methods available to remove Nitrates, go read the full report.

In addition to any potential nitrates/nitrogen issues, the water tests should also test for
arsenic, lead, E.coli and Chloroform. The issues with lead are well documented, so I won’t go over them. Suffice to say that lead in the water is bad. 

Arsenic is a poison that occurs naturally in the ground in Michigan and shows up in almost all wells at some level. Arsenic ingestion can result in both chronic (long-term) and acute (short-term) health effects. Acute effects can include nausea, vomiting, neurological effects such as numbness or burning sensations in the hands and feet, cardiovascular effects and decreased production of red and white blood cells which may result in fatigue. Chronic effects include changes in skin coloration and skin thickening and small corn-like growths that can develop especially on the palms of the hand and soles of the feet. Chronic exposure to arsenic is also associated with an increased risk of skin, bladder, and lung cancer. There is also evidence that long-term exposure to arsenic can increase risks for kidney and prostate cancer. 

There are filters that may be added to your water system that will remove up to 99% of the arsenic from the water. As a side benefit they also remove several other heavy metals that are not good to ingest in the water either. 

E.coli is a bacterium that causes an intestinal infection. We hear about it most often as being caused by contaminated foods, but is may also be in the water system. While it is often caused by animal feces at the surface level, in wells the main cause seems to be infected bugs that get into the well casing, due usually to cracks in the well head cover. The bugs may have picked up the bacteria from animal feces and carried it with them to the inside of the well casing. Once there they die and fall into the water at the bottom of the pipe – the water that the pump into your home. An E.coli infection is pretty nasty and can be life threatening. There are no sure ways to get it out of the water with filters. You could put in a reverse-osmosis system for your drinking and cooking water, but it is much easier and less expensive to just treat the well itself to remove the threat by having the well chlorinated to kill the bacteria and then making sure that a new, secure cap is on the well head.

Chloroform, a simple compound consisting of carbon, chlorine and hydrogen, and is often a byproduct of water chlorination. Chloroform was the “go-to” anesthetic during the American Civil War. Doctors eventually stopped relying on chloroform for surgery and childbirth after it was shown in some cases to cause adverse effects on the heart, liver and/or kidneys and safer anesthetics were developed. Most coliform bacteria will not likely cause illness. However, these bacteria are used as indicators in water tests because their presence indicates that disease-causing organisms (pathogens) could also be in the water. The presence of some types of coliform bacteria in the water signal the presence of feces or sewage waste. Feces and sewage wastes are usually the source of the disease-causing organisms (see the E.coli advice above).

There are many more organic or inorganic things that can show up in well water, some caused by industrial or farming pollution and many that just occur naturally. You can’t see or smell most of these potential health hazards in the water and most are not going to be handled by the normal filters and water softeners that may already be in place. You just won’t know until you get sick, unless you have the water tested.  

The bottom line is that you should go ahead and spend the extra money to have the water tested or take the time to get a water test kit from your County Health Department (for $6 in Oakland County, Michigan)  and draw some water from the tap in the home that you are buying and turn it in to see what is in your water. In 90% or more of the tests there may be traces of any or all of these potential health treats; however, they rarely show up in concentrations that are dangerous to humans. Some of these hazard have cumulative effect, so they build up over long periods of time. Water is necessary for life; however, water-born chemicals and bacteria can make life miserable, so test the water before you finalize the sale.

Monday, December 5, 2016

Local business event this week - Heinsight Eye CAre

The Huron Valley Chamber of Commerce is holding a ribbon cutting event this week during an
open house by Heinsight Eye Care. Dr. Marla Hayden is the new owner of Heinsight Eye Care, which was previously known as Heinsight Optical. Dr Hayden and her staff have made many changes to the practice, including a complete remodeling of the facility. Come and check out Heinsight's remodel and meet Dr. Hayden and staff. Open House from 5-7 p.m. and ribbon cutting at 5:30 p.m.

Dr. Hayden graduated from Illinois College of Optometry in Chicago in 1999.  During her last year in optometry school she worked at Omni Eye Specialists in Baltimore and the Detroit VA Hospital. She specializes in primary care optometry including treatment and management of vision disorders and ocular diseases such as dry eye. Think of Dr Hayden as your primary eyecare specialist. If she finds a disease or disorder that she can't treat, she will refer you to the appropriate specialist who can.  She also has extensive experience in fitting contact lenses,
including single vision, monovision,  bifocal, multifocal and Ortho K/CRT lenses.  
Dr. Hayden purchased Heinsight Optical in June of 2015 and is looking forward to the next phase of her career.  She has enjoyed exploring the Milford area and loves how genuine and caring the people of Milford are. Dr. Hayden grew up in Kansas, graduated from Kansas State University, and attended Illinois College of Optometry in Chicago. She moved to Michigan with her husband after optometry school 17 years ago. She is a member of the Huron Valley Chamber of Commerce and attends The United Methodist Church in Fenton.

Event details:
Tuesday, December 6, 5 -7 p.m.
Open House/Ribbon Cutting
Heinsight Eyecare
304 W. Commerce, Milford

Friday, December 2, 2016

Get legal help on Lease with Option to Buy Agreements

I recently  read a good article on Lease with Option to Buy Contracts at the RealtyTimes site by Benny L. Kass, a lawyer. Option to Buy contracts are popular with people who may not be in a position to get the necessary financing to buy right now, perhaps because they are still trying to sell a home or maybe because they had some financial difficulties that impacted their credit and are still working their way back from that.

No matter what the reason is behind the need to do a Lease with Option to Buy contract, the buyer
and seller both need to realize that they need help with that contract beyond what a Realtor® would normally be able to provide. Hopefully the Realtors involved have already advised them to get an attorney involved to draft the contract. As Kass points out in his article, there are just too many questions involved in such a contract to leave it to chance.  Even if the Realtors involved have some “standard boiler-plate” Lease with Option to Buy contracts, it is worth a review by your own attorney to make sure that your interests are clearly protected and that there are clear definitions of what happens with any money that has been paid when the option is exercised or allowed to lapse.

In general, the lease portion of the contract needs to clearly define what happens to the money paid monthly as lease payments and what happens with any money that is paid as a security deposit.  In addition, the disposition of any “down payment” money that is paid up front, should the option not be exercised needs to be clearly stated in the document.  Also enumerated in the document should be any restrictions on the buyer during the term of the lease, including what they can and cannot do to the house. The owner might allow painting and minor redecorating but restrict
any real remodeling projects. There would need to be clear provisions for what happens to the remodeling content that might be added to the property, should the option to buy not be exercised. 

Both sides usually go into these Leases with Option to Buy contracts with the best intentions of the option being exercised; however, life gets in the way occasionally and both sides need to have clear protections in the contract for their interests and rights. The seller may not plan on ever getting the property back when he enters the agreement; however, what happens if his own fortunes take a turn for the worse? Can he get his hose back at the end of the lease period or even before?  What will he have to give back to the buyer if that happens?  As Kass points out in his article, both sides would like to have the contract skewed to better protect their own interests. The best contract would clearly state and protect the legitimate interests of both sides.

There is a clause in all of the real estate contracts that I have seen that advises the parties to seek the advice of an attorney. That clause states that the contract is an important legal document and should be clearly understood by all parties. Unfortunately, many buyers and sellers just see a bunch of “blah,blah, blah” legal gobbledygook  when they try to read through the contracts. The Lease with Option to Buy contact is one on which you absolutely should seek the advice of your attorney. If you don’t have an attorney that you’ve used for other things, as your Realtor for a referral. 

Tuesday, November 29, 2016

Don’t be afraid of winter if you want to sell your house.

Many would-be sellers mistakenly decide to take their houses off the market for the winter or to wait until spring to list. Doing so can actually cost cost them time and money.

According to a press release about a recent study by the real estate brokerage Redfin, the spring real estate season just barely nudged out the winter as the best time to be on the market. The Redfin report showed that 18.7 percent of spring listings received above the asking price while winter listings were close behind at 17.5 percent. What’s more, 48 percent of homes listed in the spring sold within 30 days; 46.2 percent of homes in the winter sold within that time frame.

Our local market makes things even better for sellers in winter because we have an on-going shortage of inventory on the market. So, while winter may be a period when there are fewer home shoppers out looking, there are fewer other houses on the market for your home to compete with for their attention. Not only that, but those who are out looking serious buyers and not the nosy neighbors and tire-kickers that are out there in the warmer months.

This time of year, little touches like having a fire going in the fireplace and leaving hot coco and cookies can also make the visit experience more pleasant for winter time visitors. You may also like leaving scented candles burning, but be very careful and very conservative with that. Too many or too much scent can actually be a turn off and some people are even allergic to the stronger scents. Even a little Holiday music playing softly in the background could help set a positive tone for the visit. Certainly and effort should always be made to make sure that lights are turned on, especially the porch lights, during these darker winter months. Don’t get hung up on the cost of burning a few lights when you are trying to sell a big ticket items like a house.

If you decorate for the holidays while your home is listed, you may have to tone it down a little this year and go for a traditional and tasteful look. Remember that not all potential visitors actually celebrate Christmas in a traditional Christian way. Perhaps you should also keep the blow up Grinch Who Stole Christmas in the garage this year. Make sure that any expensive presents are safely locked away during visits and not tempting visitors from under the Christmas tree. Finally, make sure that your decorations do not impede someone from walking through your house. They are there to hoping to buy a house and not to see how many Christmas do-dads you’ve collected over your lifetime.

Once we get past the holidays and into the deep winter, especially the snowy months, you will have to make some adjustments in your efforts. You’ll need to keep the snow cleared off
the driveway, the walks and porches and salt down any ice that may be on any of them.  A person who slips and falls while trying to get to your house is not likely to buy it. It’s OK to insist that visitors remove their shoes or boots in the winter; however, you should also make sure that there is a rug or mat at the front door to put snowy shoes on and a bench or chair that visitors can use to sit on and put their shoes or boots back on. It would be nice if there were a coat rack handy or if you’ve cleaned out the front coat closet, so that they have somewhere to put winter coats while looking at your home.

The fall and winter months are not a bad time to sell, just a different time, in terms of what you need to do to make the experience of visiting your home pleasant. It also requires more discipline from you and your family so that your own family’s winter wear and boots aren’t taking up all of the space in the front hall or mud room entrance. Remember also that, during the winter, your house is closed up odors, especially cooking odors linger. You can either tone down the odor level of your cooking or buy industrial size spray cans of Febreze and spray wash your house well ahead of the showing.

Call me for a visit and event more helpful tips about selling your home in winter.