What the new TILA-RESPA rules mean for the buyers or sellers

When any major changes occur within industries that impact their current systems there is always a bit of “the sky is falling” reaction to them. The changes to the disclosure and closing documentation requirements for real estate transactions are no different. You have likely already seem newspaper stories about the coming TILA-RESPA changes. You may hear your Realtor® talking about it, but it primarily impacts the mortgage lenders and the title companies. Your Realtor should be able to explain things to you as well, but the primary source for information about how this might impact you should be your mortgage agent.

Here’s the gist of these rule and documentation changes.  The Consumer Financial Protection Bureau (CFPB) was created under the Frank-Dodd legislation that was aimed at cleaning up the financial industry mess after the housing industry collapse that brought on the Great Recession. One of the actions that the CFPB took on was to clear up the confusion caused in real estate transactions by the differences in the Good Faith Estimate that the buyer got from their mortgage rep at the front end of a real estate transaction and the closing documents, including the Buyers’ and Sellers’ Closing Statements and the HUD-1 document, that the buyers and sellers got at the closing table.

Buyers often noticed differences in what they expected their costs to be and the actual costs at closing. In addition, the mortgage industry fell into a practice of not getting the closing information to the buyers in a timely fashion before closing (many times buyers saw the closing docs for the first time at closing). It was sometimes very difficult for the buyer to even determine how much he should bring to closing, since he did not have the final documents.  There was a need identified to standardize the information that was presented to the buyer at the front end and what they eventually see at the closing table, as well as controlling the changes that might be allowed between those two times. There was also a need to get the final closing information to the buyer well in advance of the closing date, so that they could react to any changes and know how much to bring to closing.  

Based upon those needs the CFPB produced the new, consolidated TILA-RESPA documents. TILA stands for Truth in Lending Act, which was the original law that set up the requirement for the Good Faith Estimate at the front end of the deal. RESPA stands for Real Estate Settlement Procedures Act, which defines the rules and documentation requirement for the closing of the sale. The CFPB decided to create new rules and documents for both ends of the sale and initially stated that they would impose those rules in August of 2015. The new document that the lender will give you at the front end is called the Loan Estimate. The new closing document packet is called the Closing Disclosure and clearly presents all of the information that used to be on the Closing Statements and the HUD-1. Best of all the Loan Estimate and the Closing Disclosure use all of the same terms and data fields (although the Closing Disclosure has some data fields concerning the cost of the sale and tax rebates on it that the loan officer would not have known at the front end) and they look very much the same. It is possible to lay them side by side and see what, if anything changed from the front to the back ends of the sale.

 Based upon an outcry of the real estate industry that they didn’t want to try to implement these new things during the height o the busy real estate season, the implementation was delayed until Oct 3, 2015. All mortgage loan officers are being trained, as are all title company people and most Realtors. Your first line of questioning should probably be your mortgage rep; however,  the CFPB has also created a new Home Loan Toolkit for buyers, so that they have a clear reference guide to the new documents and the new process.  In the Toolkit are examples of the new documents as well as helpful forms to help you choose the right mortgage product and to compare mortgages if you choose to shop at more than one mortgage company.

One of the other areas to pay attention to in the Toolkit and with your lender is the changes that are allowed between the initial Loan Estimate and the final Closing Disclosure. Those changes can and do occur because of changes in things like rates or closing dates or other factors; however, they are limited by the new TILA-RESPA rules asn can cause the whole process to be re-set to zero if they are too large. Another new rule concerns the timing requirements on the lenders and title companies to get the Closing Disclosure documents to you. The new rules require that you have them in-hand three days prior to closing. That not only gives you time to get the necessary funds ready, but also to review and challenge any changes that you see that you don’t understand of maybe don’t agree with your lender about. Keep in mind, however, that any changes that may be made during that three day period may reset the clock and push back the closing. There are exceptions which define acceptable last minute changes, but they are few and relatively minor, compared to some of the “closing table surprises” that used to take place under the old system.

So, the sky is not falling. From the perspective of the buyer or seller, these rules and document changes are a good thing and hopefully will make life easier. The mortgage and title company people will adapt, even while grumbling about all of the extra work and time involved (it will likely add about a week to the process). I recommend that you go download the CFPB Toolkit if you will be in the market for a house this fall. Read through it so that you will be an informed consumer who knows what his/her rights are and what to expect in the process.

Summertime in Milford…

It’s officially summer, and that means lots of things to do in the Milford, Michigan area for the next few months.

The annual 4th of July Parade kicks things off, with hundreds expected downtown to watch the parade. The parade steps off at 11 AM in front of the Milford Historical Museum and proceeds down Main Street all the way to Huron Street. Over 45 groups will be participating in the parade with candy and goodies for the kids who are watching. The parade theme this year is “Celebrating the Huron Valley” and signifies that the parade is made up of marchers and watched by spectators from

all over the Huron Valley area.  The parade Grand Marshall this year is Mary Lou Gharrity, a life-long resident of Milford who grew up in Ye Olds Hotel on Main Street  and who, along with her late husband, owned the Milford Times weekly newspaper for many years. Mary Lou is also a founding member of the Milford Historical Society and a “go to” person if you want to know about Milford’s history.

On July 10 & 11 Milford’s Downtown Merchants hold their annual sidewalk sale, with great bargains to be had on a variety of store items, plus entertainment, special prizes and refreshments and other “goings-on” downtown.   On those same two days the Milford Historical Society will be holding its annual Granny’s Attic Sale from 9 AM until 4 PM both days and features an eclectic mix of donated items and items from estate sales in the area. There are things that Granny pulls out of her attic that you won’t find anywhere else, from glass and china to furniture items. Check it out on your way to and from the Sidewalk Sale.

In August Milford’s big event of the year – Milford Memories – will take place over three days from August 7 - 9 - Ranked 41st in the Nation by Sunshine Magazine & Voted 2nd Best Festival by Vote 4 the Best. Over 200,000 guests can't be wrong! This is a huge event, with hundreds of booths featuring art and crafts and other products. It’s not to be missed. Click here to go to the Milford Memories web site.

In September we have the Home Tour weekend, which is comprised of several events over two day – September 19 & 20.  On both Saturday and Sunday, the Home tour runs from 10 Am until 4 PM and features f of the historic homes of Milford, plus 3-4 other venues for visitors to learn more about Milford’s History. On Sunday only there are three more events going on – The 31^st annual Milford Car Show will take place all the way down Main Street and into Central Park. The show runs from 8 Am until 4 PM. and features nearly 200 cars of all types in multiple categories that are judged for best in category by the show attendees.  Click here to go to the Milford Car Show web site.

Also on Sunday we have the annual Tractor Show out at the Huron Valley State Bank location at GM and Milford Roads. The show runs from about 10 AM until 4 PM and features both working farm tractors and vintage collectible tractors.

Finally that Sunday the annual Huron Valley Rotary Club Duck Race is held in Central park. There Click here for more on the Duck Race from 2014. Stray tuned for how to buy your 2015 duck. For a little extra this year duck owners will be allowed to paint their ducks a different color so that it makes it easier to see how their duck is doing in the race (each duck is numbered).

will be games and activities for kids, picnic type food available for the family and other activities leading up to the moment when the 1000+ yellow rubber ducks are dumped into the Creek leading to the Huron River and all frantically paddle away trying to be the first across the finish line down-stream. The duck are sold to raise funds for the work in the community that the Rotary does and a part of the funds collected goes to the owner of the first place duck. In the pasts that was well over $1,000.

In addition to those special events, the Concerts in the Park series of summer concerts at the LaFontaine Family Amphitheater continue, as do the Friday Might Live Concerts at the Center Street Gazebo. You can go to my web site www.movetomilford.com to see the schedule of acts at those venues. Then there are lots of activities throughout the summer at the YMCA and put on by the Community Rec and Adult Ed program. You can view schedules for both at the Move to Milford web site, as well as click on the Events Calendar for Kensington MetroPark. 

There’s always something to do in the Valley.

Dan Elsea's Market Report

Each month our broker, Dan Elsea, issues a report to the company agents which give us a broader view of the market than we might see from within our specific territories. This is Dan's report for June of 2015.

The spring rush is in full bloom with the market looking very much like last spring, only slightly less hectic. All indicators in May show a strong market as prices are up (7%), new contracts written are up (15%), the number of homes for sale is up slightly (2%) and new listings entering the market are up (4%). As sellers are noticing the strength of the market, they are responding by listing their homes. The market momentum does vary by lower, medium and upper priced categories and although they differ in strength, the lower priced markets are moving faster than upper-end markets. The trends with each price range are constant, regardless of geography (we use price segments of $0-250k, $250-500k and over $500k as a general representation of the overall metro area).

About 33% of all homes sales are selling for at or above list price, down from 39% last year. Homes that are selling in 10 days or less held steady compared to last year at 35%. This May, 59% of homes sold in 30 days or less. The upper-end market (over $500,000) as expected was a bit slower with 27% of homes selling at or above list and 22% selling in 10 days or less.



We are hearing from our sales team across all markets that the upper-end price range, particularly over $1,000,000 is slowing as the inventory rises faster than demand, with prices remaining flat. Year-to-date, there have been more sales in the $1,000,000 plus category (85 vs. 74 units in Southeast Michigan) but the pace has slowed the last 60 days.


For sellers, there is no better time to put your home on the market. Buyers need a combination of patience and quick reaction to work through competing offers. While each location inth4e area that I service may be slightly different, overall this advice holds true. It's a great time to be a seller and a somewhat frustrating time to be a buyer.Sellers need to avoid the trap of getting too greedy and overpricing their home and buyers just need patience and persistence

New-Home Sales Rise…existing home sales follow along for the ride

From a recent - National Homebuilders Association Press Release (May 26, 2015)

Sales of newly built, single-family homes rose 6.8 percent to a seasonally adjusted annual rate of 517,000 units in April, according to newly released data from HUD and the U.S. Census Bureau.

“Sales are moving forward and our builder members are telling us they are starting to see more activity as more buyers get off the fence and enter the marketplace,” said Tom Woods, chairman of the National Association of Home Builders (NAHB) and a home builder from Blue Springs, Mo.

“Following an unusually low sales report in March, today’s numbers are consistent with other data we’ve seen recently and indicate a continuing, gradual improvement in the housing market,” said NAHB Chief Economist David Crowe.

Regionally, home sales were mixed, rising 36.8 percent in the Midwest and 5.8 percent in the South. The Northeast posted a 5.6 percent decline and the West fell 2.3 percent.

The inventory of new homes for sale edged up to 205,000 units in April. This is a 4.8-month supply at the current sales pace.

In our area in southeastern-Michigan we can certainly see this trend. While sales of used homes are up too, new homes are selling as fast as they can be built. We still have a “tight market” in Michigan, with more buyers out looking than there are houses for them to look at. Multiple bids and bidding wars for good houses are not uncommon. Houses that are in move-in-ready condition are selling for at or above asking. All of that is good if you are a home seller, but quite frustrating if you are trying to buy.

The tight market has also impacted the rental and lease markets, with both experiencing rising asking prices and very low inventory. Many of the people who lost houses during the great recession are still living in leased homes while they rebuild their credit. It is very difficult to find lease properties, especially those that might accommodate a larger family.

So, what is a buyer to do? Well, for one, this is not a time to be “testing the market”. You are just wasting everyone’s time if you are out looking with no real plan to buy. You need to be pre-qualified and in a position to make an immediate offer. There are no “contingent upon sale of buyers home” offers being accepted these days and no sellers will even look at lowball offers. You should know exactly what your limits are, in case you get involved in a multiple offer situation and have to make your “best and final” offer. You should be prepared to walk away from homes that you really can’t afford, rather than getting swept up in the bidding wars.

You should understand that there will be cash bids that win houses (especially those under $200,000), even if they are a little lower than your bid with a mortgage, because the sellers don’t have to worry about you being successful in the mortgage process and many of those bids will be made without inspections and with a quick close. Most of all, you need to be patient. You will likely lose a d few bids before you have one accepted. Accept that and move on.

As for would-be sellers, now is the time to go for it. We are back to just about pre-recession values, so your house is worth more than ever. Waiting longer, so that you can wring just a little more out of the market also means that the next place that you are planning to buy is going up too, so it’s a wash. The key it to properly price you house; not to overprice it, in hopes of getting a little more. An overpriced house will just sit there; while a properly priced house may result in one of those bidding wars. The best place to be is to have a move-in ready house that has been well –maintained and has been updated. Hopefully you enjoyed those updates as you made them and now they add value in the market.

If you’re looking for a new-build home, don’t be surprised if you stop into a new construction site and discover that all of the sites and homes to be built on them are already sold. It’s that kind of market. If you do succeed in getting in on e one of these new developments, your next challenge is trying to coordinate the sale of your current home on a timetable that will mean only one move. That’s extremely difficult, so have a plan “B” in mind for temporary living somewhere, with your stuff in storage. It’s a pain in the short term, but hopefully worth it in the long run. After all, you’re getting into your new move-up house or maybe your retirement home, so you’ll probably be there for a while. 

Attorney’s Role in Home Purchase

This is the second guest post from local attorney Katherine Wayne-Spindler. 

A home is one of the largest and most significant purchases a person will make in life. So the purchase agreement, indicating your interest in buying the home, should not be signed impulsively. A purchase agreement is a binding contract and is the single most important document in the real estate purchase. Pre-printed contracts don’t cover the needs of every person. An experienced attorney can plan ahead for potential problems before you sign any real estate contract.

Often people come to an attorney after the purchase agreement has been signed and trouble develops in the transaction. At that point, an attorney can only try to find loopholes and language in the contract to allow the person to void the deal or correct the problems to save the sale. From the time a person starts the process of finding a Realtor and looking for a home, he or she should have an attorney in the wings to help with each step in the process. 

Here are some specific home-buying situations that benefit from legal representation:

1.      Unique Life Situations

An attorney will be familiar with the obstacles you might encounter depending on your life situation. In the case of a recent divorce, an attorney can help you determine how your credit history, or potential lack of one, can impact your closing costs and expenses. Receiving alimony? A family law attorney can help you understand the implications of buying vs. renting. What about a recent inheritance? Your attorney can make suggestions pertaining to real estate that may optimize your estate tax situation.

2.      Short Sales and Foreclosures

Short sales and foreclosures add new elements to the completion of real estate sales that can be aggravating to many purchasers and Realtors. An experienced attorney can help resolve these complications.

3.      Unique Circumstances

“For example, what if your prospective new home has an illegal in-law unit with an existing tenant whom you want to evict in order to rent the place to a friend? Only a lawyer can tell you with any certainty whether your plans are feasible. Or what if you’d like to rent the home for an extended period, such as a year, before you’re obligated to buy it? That will require drawing up an unusual lease.” – NOLO, Law for All http://www.nolo.com/legal-encyclopedia/hire-real-estate-agent-or-lawyer-29527.html For non-traditional purchase arrangements, including land contracts and intra-family exchanges, the advice of a real estate attorney combined with the experience of a Realtor will make the purchase process smoother.

Contact an experienced local attorney before troubles arise in the home buying process. Attorney Kathryn Wayne-Spindler can help home-buyers in Southeast Michigan with their home purchase questions. Contact the Milford, MI law office of Kathryn Wayne-Spindler & Associates www.kssattorney.com at 248-676-1000 or Milford-based Realtor Norm Werner at 248-763-2497. 

For those who like statistics…

Every month the local MLS publishes statistics for the month just past. Below are the April stats that the MLS that I belong to published for April, 2015.

Monthly Highlights:

•    All MLS sales for the month were up slightly by 1.0% from 5,143 to 5,193.

•    The median sale price for All MLS sales was up 21.7% from $118,000 to $143,550.

•    Average Days On-Market (DOM) for All MLS increased by 1 day, from 55 to 56 days.

•    On market inventory increased since last April by approximately 6.3% from 19,862 to 21,119.

•    93.5% of the on market inventory is designated as non-foreclosures and 6.5% is designated as foreclosures. Last year, 90.3% of the on market inventory was designated as non-foreclosures and 9.7% was designated as foreclosures.

April Retrospectives - Based on All MLS Market Activity

•    Over the last 10 years, April sales reached a high in 2009 at 5,956.

•    Over the last 10 years, February sales reached a low 2007 at 4,064.

•    This is the first April for DOM to climb (as compared to the previous April) since 2007.

•    Over the last 10 years, the April DOM reached a high in 2007 at 124.

•    Over the last 10 years, the April DOM reached a low in 2014 at 55.

•    This is the fourth year since 2011 for the April Median Price to increase over the previous year.

•    Over the last 10 years, the April Median Price has reached its highest this month at $143,550.

•    Over the last 10 years, the April Median Price reached a low in 2009 at $44,625.

I also track the sales of homes priced at $20,000 or more on a weekly basis  in the areas that I tend to focus upon – the ten townships/cities surrounding Milford – Milford Village and Township (combined), Commerce Two (including Walled Lake and Wolverine Lake, Wixom, Highland Township, White Lake Township, West Bloomfield Township, Lyon Township (including the City of South Lyon), Green Oak Township, Brighton Township and City (combined) and Hartland Township. Those stats are available at my web site www.movetomilford.com. Click on the “What has sold locally” choice. There is also historical data going back years for many of those locations. Enjoy. 

Dan Elsea's Market Report

Dan Elsea is our broker and one of the company owners. each month he reports on how the market has been doing through the end of the prior month. This is his May report.

In April, the market heated up even more than we had expected. With For Sale inventories rising through the winter and into the beginning of 2015, it looked like the market was becoming more balanced. To some degree it has settled compared to last spring, but the buyers are coming out full force as well. The result is a healthy gain in sales (6% in April, a nearly 10% year to date increase over 2014) and in price per square foot (6.5% in April, about an 8% year to date increase over 2014). New listings entering the market grew faster than sales causing inventories to rise by about 6% in April. The Months Supply of Inventory (MSI) is holding steady at 2.2 months with the vast majority of buyers (88%) buying homes that have been on the market less than 90 days. This makes the feeding frenzy for new listings even more active than the 2.2 months supply indicates.

There are a couple of industry issues that everyone should be aware of regarding any real estate transactions in the upcoming months. The first is a warning regarding a wire fraud scam moving across the country. The second issue reflects changes to the mortgage approval and closing process that could cause extended and delayed closings beginning with new sales this summer.

1) The Wire Fraud scam is based on giving false wire instructions to a buyer, tricking the buyer into wiring their down payment money to the crooks. The criminals, using various methods, gain access to someone's email (Buyer, Seller, Realtor, Title Company, etc.) to monitor the activity during a transaction. When they see a closing coming, they impersonate the Realtor or Title Company, sending bogus money wiring instructions to the Buyer, thereby grabbing the Buyer’s money for the sale.

The solution to prevent the scam is relatively simple for buyers. Always call someone you know in the transaction (the Realtor or Title Representative) to verify any wire instructions you receive (in addition to using email, the crooks will sometimes call and impersonate the Title Company). 

The more we communicate exclusively via email the easier it is to get lulled into a scam. When it comes to wiring money, always add the additional step of personal verification with your Realtor or Title Representative. 

2) The new regulatory changes will affect mortgage applications received after August 1^st, 2015. These changes are part of the final implementation of the Dodd-Frank legislation. We will go into more detail next month, but the core changes will be a new closing statement replacing the HUD 1 and new time frames for lenders to provide information to buyers during the application and approval process. The result will be a lengthening of the mortgage approval process. Most industry experts suggest that we plan on up to 10-15 additional days, as well as the need for a flexible closing date. Transactions during which sellers are closing on their home in the morning to buy their new home in the afternoon ("back to back closings") will be trickier, as will closing where the buyers are scheduled to move in the day of closing. It will be more important than ever to plan some flexibility into the choreography of the closing and moving process, allowing for an extra 10 days or so for the mortgage approval process and an additional 5-7 days for the time between loan approval and the actual closing.The additional disclosures and new forms are benefits to the consumer. The trade-off is a slower mortgage approval and closing process.

April activity for the company followed the strong market activity. Combined we had a truly remarkable record month with over $500 million in new contracts written, a company record and certainly the most ever for a broker in Michigan. Only a handful of real estate companies sell over $500 million in a full year, let alone in one month. 

Take a 2nd Look - get a second opinion and quote...

Recently I posted a blog by Chris Knoche, our local John Adams Mortgage rep, about the clarification of the HUD rules for getting another mortgage is you have been through a foreclosure of some sort. It is good advice for those impacted by the recent recession.

Chris (really John Adams Mortgage,but Chris is their agent in our office) has a also got an important program going right now call 2nd Look. The 2nd Look program is really very simple - you give Chris the opportunity to look at your  mortgage requirements and give you a quote, even if you already have a quote from another mortgage company. You can do it in person or over the phone. You will need your Good Faith Estimate or the closing costs worksheet from that other company, because that allows an apples-to-apples comparison and quote.

So, what's in it for you? Well if they beat your current quote for the mortgage that you need the savings for you will be obvious AND they will give you a $50 gift card for taking that 2nd look. But what if they can't beat your current mortgage deal? Well they will give you a $50 gift card just for giving them a chance. You can't beat that! Click here to read the flyer that they have on the 2nd Look offer.

What's the catch? Well you must be willing to meet with the John Adams rep (in person or over the phone) AND you must give them the necessary information or documents for them to be able to do a valid mortgage pre-approval. Those information/documents may include statement for income, asset and credit. There is no cost to you for this service and you get the $50 gift card.

If taking a 2nd Look before you lock yourself in to the rates on your current mortgage quote sounds like a good idea to you,give Chris a call at 249-535-7073. Tell him that Norm sent you. That won't get you anything extra, but I'll feel better about help Chris out, since he has helped me out so many times.

And, if you're just getting started in your house hunting and don't have a contract with a Realtor®
already, give me a call. I don';t require an exclusive contract - just for the houses that I show you.

How long must you wait…

Chris Knoche is a loan officer for John Adams Mortgage, which is the mortgage company that Real Estate One owns . Chris makes sure to keep all of the agents in the Real Estate one offices that he serves up to date on the latest news and procedural changes from HUD, FHA, VA and lenders in general. Recently he sent this information out to all of the offices.

We’ve received clarification from HUD on the seasoning requirements for previous foreclosures and the treatment of them going forward. This guidance is not new but has been more clearly defined in the new handbook. Even though the new manual will not be effective until September, we are to use the defined timing rule effective immediately.  

For previous foreclosures or deed-in-lieu of foreclosure that are FHA insured, the borrower is not eligible for a new FHA-insured mortgage for three years after HUD pays the claim to the Lender or Servicer. 

For previous foreclosures or deed-in-lieu of foreclosure that were  VA, USDA , Conventional  or any other loan type, a borrower is not eligible for a new FHA insured mortgage until the date that the title ownership of the property changes from the borrower to the lien holder.  If the credit report does not indicate the date of the foreclosure or deed in lieu of foreclosure, the mortgagee must obtain the settlement statement, deed, or other legal documents evidencing the date of property transfer.  This is not the same as the sheriff’s sale date.  The “seasoning” must include the 6 month redemption period as required by law.

In short, the waiting period from a foreclosure is now three and a half years. I am available if you have any questions. Chris Knoche - 248-535-7073.

So those who had the misfortune to go through a foreclosure or who gave up their house in a deed-in-lieu of foreclosure transaction  now know more clearly how long they have to wait in order to get another mortgage that is backed by FHA (and thus by HUD). 

Lots to do in the Huron Valley this weekend

There are lots of events going on on Saturday in the Huron Valley. You can start your day at 8:30 Am with a free, outdoor, instructor-led workout at the Lutheran Church on Huron St (across from Taco Bell), courtesy of Anytime fitness in Milford. In Highland there are events all day long as part of Highland's Founders Day, with a parade, plant sales, vendors and much more and over in White Lake the Summer Showcase will give you a taste for the events being run this summer by the Huron Valley Recreation and Community Ed program at Lakeland High School starting at 9 AM. For the details on these events go to my web site - www.movetomilford.com and click on the posters for the events.

May will be a very busy month , as will June, so go to the web site often to keep up with what is going on in the Valley. MAybe I'll see you at a few of them.

Tell me lies, because I want to believe…

One of the more desperate lines of all times is, “Tell me you love me, before we leave the bar.” For whatever reasons, many people would rather be lied to that to hear the truth in some situations. I happen to work in the real estate business and I run into that a lot. I lose more business than I care to admit, because of that. It usually comes down to some other agent telling the potential client what they want to hear, even if it is not the truth of the situation. That usually involves the pricing of the listing. Many people just do not want to hear what the true market value of their home is; so they believe the agent who tells them the highest number. Often that is a number well above the current market value; but, that doesn’t matter to them, because the higher number makes them feel good for the time being.

Some people play this game for ego reasons. They can go to work and tell everyone that they live in a house that just listed for $300,000, even though the best estimate of its market value may be $250,000. Many people get into this mode because someone else, somewhere else, told them that they thought their house was worth more than the Realtors were telling them. Usually that person is out of the area, many times out of state, and has no idea about the local market. Sometimes the seller points to a house down the street and says that it sold last year or last month for what he is asking me to price his house at; usually with no idea of the updates or upgrades that the other homeowner had put into the house to justify that price (unlike my client, who many times had not have invested in his home in years).

Sometimes, however, it is a less than totally scrupulous fellow Realtor who knows that if he tells the seller this lie, he will get the listing and he can then start pushing for price reductions when it doesn’t sell. That’s not dishonest, just not the way that I chose to work. When someone asks me to do an market analysis for their home to help establish a market value for listing it, that is what I do. I usually come back to them with two things – a list of things that they can do to increase the value and decrease the time it will take to sell; and, a recommended pricing range, with a lower value for a quicker sale and a higher price to achieve maximum value. Both are reasonable numbers that reflect a balance between perceived value and price, but which also show the time trade-off of the pricing options. I try to explain this clearly, so that they understand the factors and logic that I used to arrive at the numbers. I’ve stopped using the word Comps (Comparables) and chose to use what I call Similar Houses that have sold and that are active to establish a reasonable market value expectation.

Some people take my report and advice better than others. Some may initially feel like I’m being negative about their home by pointing out the things that will likely detract from its value, but I usually give them plenty of advice about the things that they could do to correct some of the issues. For things that it is too late to correct or for those that are too costly to correct as you are getting ready to sell, I try to help them understand how potential buyers are likely to react and what impact on their offers those items are likely to have. Unfortunately the process of selling one’s house is fraught with emotions and sometimes they feel better with the agent who comes in and tells them that he/she loves the house and that there is nothing at all wrong with it. They tell them that they love them before they leave the bar; and they feel good about that.

So, I lose some listings because of that; but, I don’t lose any sleep at night over anything that I’ve said. I often get calls months later from those same buyers letting me know (as if it somehow cleanses their conscious) that I was right and the house eventually sold for what I said it would. How nice of them. I’ve only had one case of someone coming back and asking me to list their house after an unsuccessful time on the market with the agent that they left the bar with initially. I’ve heard plenty of horror stories from people about being bullied by Mr. Smooth, sometimes within the first week or so of the listing. The other thing about agents who work like that is that they are not usually very patient. They want to get in, get the listing however they can, get the price dropped as quickly as they can, get the place sold quickly and get out before the client wakes up to what happened. Others have related how they never saw the agent again after he took the listing; because he was on to the next bar, telling more lies to the next desperate patron.

We all use the old saw “Buyer Beware”; but there should also be one for “Seller Beware”. When the time comes to think of selling your home it needs to stop being your home and become a product. The home that you have known and loved for years will live forever in your memories. You should look at the house that you now need to sell with the same cold calculating eye that potential buyers will be using when they visit. So, you don’t need a lover (someone to lie to you) you need someone to give you professional advice.  If you’re ready for that, give me a call. Let’s get out of that bar and go sell your house.

Meet the serial entrepreneur who owns the Milford Anytime Fitness

Many times when I meet small business owners I see that they are people who have a special passion for what they are doing and I always wonder how they got to this point, to this particular business at this time in their lives. Well before I joined Anytime Fitness in Milford, I met Christine Wierenga, the owner, at a Chamber of Commerce event. It was an after business hours mixer at a local bar/restaurant in Milford.  I’m a Huron Valley Chamber of Commerce Ambassador and one of our Ambassador duties is to attend events like that one and to make sure that members, especially new members, get introduced around and get the opportunity to meet their fellow local business people. I met Christine that night and took it upon myself to introduce her around. We’ve been friends ever since and I eventually joined her Anytime Fitness gym in Milford and began my personal fitness journey.

I asked Christine to answer the question that she gets often about how she got into the business of gym ownership and below is her answer -

A question I am frequently asked is “How did you get into the fitness business”? I never mind answering that question because telling the story reminds me of the seemingly random way I came into gym ownership. I won’t go into too many details, but here’s how it happened.

I bought a classic car after I graduated high school and I wanted a custom interior in it. I couldn’t afford to pay someone to do the job, so I taught myself to sew and bought an upholstery sewing machine. It turned out well, so I invested in a bigger sewing machine and starting doing upholstery repairs for gyms in Michigan (while also doing automotive restorations). I grew my upholstery repair business to include gyms across the country, specializing in on-site repairs. As I went from gym to gym, I realized that many gyms were very poorly run and were severely lacking in customer service; so, I decided I could do it better. I did my research on the gym industry and bought an Anytime Fitness franchise on the East Side.

After running the fitness equipment upholstery business for almost 10 years (and having been a member of at least 8 different gyms) the decision to open an Anytime Fitness was an easy one!  That decision was fueled by my experiences with those facilities - ranging from overwhelmingly positive to shockingly horrible!  What set the exceptional clubs apart from the rest?   Customer service!  Or as we call it here at Anytime Fitness – Club Culture.  It’s an atmosphere that welcomes you, encourages you and keeps you coming back!   We know that most people have a difficult time making fitness a habit - It is my team’s goal to make sure that our members feel at home in the club.   We strive to keep our clients motivated and engaged. After all, they trust us to help them with their fitness journey!    

Since opening my first location in 2007, I purchased two other locations (the latest in Milford) and subsequently sold off the two East Side gyms to focus upon the Milford location. I have often looked back to see how I got here. Sometimes in life, you don’t understand why a project isn’t working out or you’re pulled in a different direction. In hindsight, I know that every stumbling block, every closed door, every “coincidence” was there for a reason. When I was asked in school “what do you want to be when you grow up”, I always found it difficult to narrow it down to one profession.  As a small business owner, I don’t have to just “pick one”!  With Anytime Fitness, I'm involved in everything - all of the things I love. I am able to help people get started on their fitness journey. I have an excellent team (of who I am incredibly proud!), that I get to see grow professionally and personally.  As a numbers geek, I even love the back-office work….yes, even spreadsheets!  

Anytime Fitness of Milford is much more than just a business to me.  The people there are my family – staff and members alike.   I’ve been amazed by the transformations I’ve seen our members undergo – Not just the physical changes you’d expect to see, but the even more incredible changes in their confidence, self-esteem, health and energy levels!  It may have taken a strange turn of events to get me here, but I am sure glad I’m here!

Yours in Health,

Christine Wierenga

So, now you know Christine’s story. I encourage you to come into Anytime Fitness in Milford and meet Christine or her
 gym manager Willa Danowski. Right now (Ed.- April 2015) is a good time to do that because they are offering Free Workout Saturdays to introduce people to the gym. You can try out the gym for free! While you’re there pick up one of the free 7-day membership cards and come back to try it out during the week. If you get there in the early mornings, (Ed. - I define that as between 8:00 and 10 AM) you are likely to see me there, too. I go to the gym 5-6 days a week, most weeks. I know of no better way to start my day than with a good workout.

Like some of the ads that you’ll see on TV, the Anytime Fitness gym in Milford isn’t full of “lunks working to feel the burn.” It is full of people like you and me, just trying to get back into a little bit of shape. Joining means that you get a free assessment from one of the personal trainers to help you understand where you are starting from and them they give you a workout schedule to help you get started on your personal  journey to fitness. The gym has lots of exercise machines and, of course, free weights.They also offer lots of free classes for members, from the Saturday Morning Boot Camp, to Spinning, to Zumba to Cross-training to you-name-it. Choose how many or how few you may wish to participate in or just decide to work out on your own whenever you can get in. It took me a while to work up the courage to try the boot camps, but now I’m fairly regular on Saturday mornings.

The great thing about the atmosphere in the Milford Anytime Fitness is the sense of family that you quickly get to be a part of. The same people tend to show up at the same times and you soon meet everyone who is on your workout schedule by their first names. Sometimes I think some of the ladies who come in the early morning spend more time socializing than exercising, but that’s OK; they’re getting out and getting some time on the treadmill or the elliptical or the other machines and they
 are enjoying the time spent at the gym. Life’s too short not to enjoy it, so come on out to Anytime Fitness, at  141 South Milford Road, Milford, MI 48381 (in the old Farmer Jack’s Shopping Center near the corner of Milford Road and GM Road)  Phone: (248) 685-8373 and start your fitness journey. Maybe I’ll see you along the way. And if you think you're up for a real workout right away, join us Saturday mornings at 8 AM for Boot Camp.

Make a Difference on Earth Day…

We celebrate Earth Day April 26th and earlier this year we celebrated Make A Difference Day. I think we should combine the two thoughts and Make a Difference on Earth Day. If on Earth Day everyone on the planet did one little things to help preserve our planet; that would

be billions of little things that help. As they seem to say in Washington – a billion here and a billion there and pretty soon you’ve got something real.

There are lots of events going on around the country to celebrate Earth Day. Most of them have something to do with conservation of natural resources or lessening the impact of man on the planet through recycling or use of less polluting fuels. It is always sobering to read about or see on TV that entire species are about to be wiped out, but that is happening. The impact of global warming is finally being felt and realized by more people and the fact that the oceans are not limitless is now understood. Whether these revelations come soon enough to save what is left is still in doubt.

We are a throwaway society. We have become accustomed to just discarding something when it has been used for a while or when the “next big thing” comes along. Unfortunately we’ll not be able to see the next big thing once we have used up this planet that we live upon. Maybe a million years from now some space-roving explorers will discover a lifeless planet that shows signs that it once supported a primitive civilization that could only figure out how to make energy by burning things, with a people who had a penchant for killing things. They will wonder at the stupidity of a planet of people who committed such a slow and avoidable suicide. Of course, by that time the planet will be rules by the bugs that remained and not by the apes as their movies predicted.

So, maybe this coming Sunday you can begin the re-write of that scenario by making a

difference, by doing something, anything to change your personal behavior towards the planet. It can be a simple as not rolling down your window and tossing your fast food bag out as you drive, or maybe planting a tree instead of burning a pile of leaves, or maybe walking to the store instead of getting in the car for the 3- block trip. Every little bit helps. You don’t have to go out and hug a tree (however, that might make you feel a little better) or find a whale to save; but, you don’t have to do a lot of other things that are causing harm to the planet either. Just think about things before you do them; then don’t do some of the bad things and do go ahead with the good one. This isn’t rocket science, it’s earth science and that’s the only rocket that we have to ride on.

If you’re in the Milford Michigan area, here’s a great way to spend a part of the day - Earth Friendly Family Fun Festival 2015 - noon until 4 PM at Carls Family YMCA, 300 Family Dr, Milford, MI  48381. Help celebrate the Earth with lots of activities for the whole family. Click here to view the event flyer.

Come listen to the stories of our own Main Street Brat

The Milford Historical Society presents Mary Lou and Main Street - Our Thursday  April 16th General Meeting at 6:30 p.m. at the Milford Methodist Church at 1200 Atlantic St and it will be a Potluck. Pot Luck assignments are as follows:  A—F–  Salad or Side Dish   G—Q   Main Dish      R—Z— Desserts.

The Guest Speaker that night will be our own Mary Lou Gharrity (shown on the left

with Marlene Gomez, our recently retired Museum Director). This is a Meeting you will want to attend for sure. Come listen to the stories of the Main Street Brat! Mary Lou grew up in Yea Olde Hotel on Main street and has decades of Milford stories to share.

The Milford Historical Society holds general membership meeting every other month, with guest speakers talking about topics of historical interest from the area and from Michigan. Past speakers have talked about topics like the founding of Detroit and the early settlers who migrated out to found Towns and Villages like Milford, about the impact of the railroads on the small towns that they passed through, about the work of the CCC during the Great Depressing and the CCC camps that were set up in Michigan, about the Vernors soft drink company and about being in the Nazi concentration camps (from a concentration camp survivor).

This months speaker is lifelong Milford resident Mary Lou Gharrity, who spent at least a part of her childhood living in Yea Olde Hotel, Milford's downtown hotel, which her parents ran. Later she and her husband owned and ran the Milford Times. Mary Lou, as much as anyone can represents a living history of Milford, and her stories of the old days are fascinating. we hope that you will join us.

The Milford Historical Society was founded in 1973 by a group of citizens who recognized the importance of the heritage of their community and wished to share it with their contemporaries and preserve it for those who will follow. To these ends, the members have established a museum, a research and archives room, and have sponsored, in conjunction with the Milford Township Library and the State of Michigan Library, the microfilming of the Milford Times newspaper beginning with the first issue in 1871. The Society is currently involved with a project in conjunction with Central Michigan University's Clarke History Library to convert that microfilm library into a searchable, on-line database.

The Milford Historical Society is chartered as a 501c3 Non-Profit organization and as such is eligible to accept tax-deductible contributions. The Society supports the Milford Historical Museum at 124 E. Commerce St (one block east of Main St) and all of its projects from membership donations and fund raising efforts and received no outside support. The Society’s continuing projects include an annual home tour, various research projects and an effort toward local architectural preservation. Through it’s own Sesquicentennial Committee, the Society published a book titled TEN MINUTES AHEAD OF THE REST OF THE WORLD – A History of Milford  as another step towards preserving and disseminating the history of Milford, Michigan.

I know I signed a contract, but what are my “outs”?

There was an interesting article by Benny L. Kass in my daily Realty Times news feed recently that covered the topic of when real estate sale contracts become binding.  You can read Benny’s article at -

http://realtytimes.com/consumeradvice/sellersadvice1/item/34181-20150408-when-does-a-contract-become-a-binding-contract

Benny is apparently from the Washington D.C. metropolitan area and the advice that he gives and contract that he references represent not only the legal side of things, but also the local real estate customs.

I suppose that some lawyers might argue that there is no such thing as a binding contract, just contracts that make it very onerous to cancel or get out of for cause. Locally (in Southeastern Michigan) almost all of the various Purchase Agreements (PAs) that I have seen from the companies

that do business in this area are binding when both parties have signed the contract; however, all of them have several clauses that provide “outs” for the purchasers. Those are contingency clauses that specify certain things that the buyer must be happy with in order to proceed or which must at least have outcomes that are to the buyers’ satisfaction. Usually there are time frames associated with each contingency during which the buyer must perform some inspection or test or complete other actions necessary to proceed to the closing. Perhaps calling then “outs” is a somewhat misleading term. They are not things that the Buyer actively looks for or uses to get out of the contract; but they are the contingencies that allow the Buyer to decide not to proceed with the deal and which allow the Buyer to get their earnest Money Deposit back in full. In most cases there are also provisions for the Seller to try to resolve any issues to the Buyers satisfaction. In every case there are also set time frames within which things must occur. Failing to meet the deadline requirements is considered to be acceptance by both sides of the state of things “as is”.

The first big hurdle that the deal needs to get over is usually the home inspection, which in this area is typically required to be done within 7-10 days (sometimes less) after the Seller and Buyer have both accepted the Purchase Agreement. The wording on most home inspections clauses usually specifies

how the Buyer is to express to the Seller his dissatisfaction with the findings and within what time frame. Most PAs then give the Seller some opportunity at a retort to the Buyers issues. Some contracts, however, let the Buyer move right to declaring the contract null and void, based upon his dissatisfaction with the inspection. If the contract wording allows the Seller time to respond it is usually short and the response requires that the Seller tell the Buyer what he is offering to re-mediate the issues. That could be an offer to have the problems fixed to the Buyers satisfaction or to reduce the agreed upon sale price by an amount that would allow the Buyer to resolve the issues after closing (that would be called a Seller Concession).  Should the Buyer and Seller fail to come to a mutually acceptable agreement on the issues the Buyer will normally have the option to declare the agreement to be void and get their Earnest Money Deposit back in full.

The next big hurdle is normally the appraisal, which is a key part of the Buyer’s ability to get the mortgage that he needs to buy the place. The contract normally specifies a window within which the Buyer must make his formal application for the mortgage, usually within a similar timeline as is set for the inspection deadline. Once the Buyer has applied for the mortgage, the mortgage company will order the appraisal. Getting the appraisal scheduled can take a week or more, so about 2-3 weeks

might pass from the time of acceptance of the contract until this appraisal actually takes place. The appraiser may take 3-5 days to get the report back through his management and into the hands of the mortgage company. If the Buyer gets one of those “Houston we have a problem” calls from his mortgage company another round of negotiations starts with the Seller.

The options for dealing with a low appraisal are that the Seller concede the difference between the strike price and the appraised value or the Buyer throws extra money into the deal to make up the difference or they reach some compromise in the middle.  Failing an acceptable compromise, most Purchase Agreements in this area would allow the Buyer to walk away from the deal and get his Earnest Money Deposit back. Appraisal issues have been the biggest cause of failed deals for the last couple of years, because the mortgage companies and the appraisers have been very conservative and have not kept up with the rising property values in the market.

Another part of the mortgage contingency language in Purchase Agreements also provides an “out” for the Buyer if the mortgage company turns down the mortgage, even if the house did appraise. OK, how can that happen? There are lots of things that can cause the underwriter at the mortgage company to turn down the mortgage, even if the mortgage originator (the mortgage agent that the Buyer was dealing with all along) thought that the Buyer was golden. Buyers can get a “Pre-Approval Letter” based on nothing more than the preliminary information that they give to the mortgage agent and a quick credit check.  Once the mortgage is actually applied for the file goes to the underwriter (that mysterious man behind the curtain) who begins an in-depth review of the deal and the Buyer. The Buyer is asked to provide all sorts of detailed financial information that wasn’t required initially and the devil is usually in those details.

The underwriter may look at up to two years’ worth of financial statements and tax returns (sometimes more), check on employment and review all recent credit purchases looking for any red flags that might indicate that the Buyer doesn’t have the wherewithal to carry this new debit load. Things like getting some money from mom and dad to make the down payment may seem to the Buyer to be his own business, but to the underwriter that is a red flag that must be explained and documented. Was it a gift or a loan? The underwriter also reviews the PA, the title work and any other documentation that may have a bearing on the deal; because his job is to protect the bank from undue risk.  This contingency, like the others in the PA, has a deadline; usually the mortgage must be approved (or denied) within 30-45 days from the date when all parties signed the deal. If the Buyer is turned down for the mortgage, most PA contracts contain provisions for the Buyer to back out of the deal and get his Earnest Money Deposit back.

There is another contingency written into most PAs that could occur between those two steps. When a real estate deal is signed one or both of the Realtors® involved will engage a title company to do the research on the title to the property to make sure that it can be passed to the Buyer at closing. Depending upon the office practices of those Realtors and t3he provisions within the PA, the title search could occur anywhere from a few days to a week or more after the PA is signed. The title search is done at the County Register of Deeds office and any and all recorded encumbrances upon the title are usually found. That may include recording for the sale of mineral rights (usually oil and gas), recordings of any tax liens against the property, recordings of any trades liens (sometimes called mechanics liens) against the property, all recorded easements for utilities, or access rights and any rights-of-way.

The “Title Commit” that comes back from the title company, based upon that search, gives a detailed list of any issues that were found or which need to be resolved in order to insure the title at closing. The PA language usually specifies both a deadline for getting title work done and to the Buyer for review and any objections, as well as provisions about how the Buyers objections must be expressed to the Seller.  Usually the Seller is given some time frame to rectify any issues with the title that the Buyer has; however, if the issues cannot be rectified to the Buyers satisfaction, this is another “out” for the Buyer and he gets all of his Ernest Money Deposit back. Deals have fallen through because of issue with the encumbrances on the title that could not be resolved.

So, let’s assume that the Buyer has gotten through all of these things and was satisfied with each; is it now full steam ahead to closing and the Buyer is now locked in? Well, almost. There is one final “out” that the Buyer could end up using. That last hurdle is the final walk-through. Most contracts

have a provision for the Buyer to walk through the house right before closing to be sure that the house is in substantially the same condition as the day that the offer was written and that the Seller has not damaged the house or removed items that were in the contract or considered to be a part of the house at the time of the offer. I have not had a deal fall apart at that late point, but I have heard of it happening. Sometimes Sellers do something stupid that dramatically changes the house as far as the Buyer is concerned and the Buyer is within his contractual rights to refuse to go through with the closing, if that is the case. Once again the Seller is usually given the opportunity to correct the issues.

If it seems like there are many places where the Buyer could back out and the deal fall apart, there are; however, in most deals both parties really want the deal to go to closing, so most of these “outs” are never used. The Buyer and Seller usually work out some compromise on any and all issues. It may be that the Seller makes repairs, offers price concessions, or corrects issue with the title or that both reach some agreement on how to handle the low appraisal. Most of the time, the sales go to closing.

There is one condition for which the Buyer really has no “out” and that is just getting cold feet and the last minute, sometimes called “buyer’s remorse”. This can occur for many different reasons and at any time, but it is usually after all other contingencies have been met and the closing is scheduled.  If, at that point, the Buyer has signed off on the home inspection and title work and been approved for the mortgage, he cannot just change his mind and back out, without consequences. No one can make the Buyer go through with the closing; however, at that point he will usually lose his Earnest Money Deposit, which will be given to the Seller (usually split between the Seller and his listing broker) as compensation for having taken his house off the market for the time that the deal was in-process.

If you are a Buyer, your Realtor should go over the Purchase Agreement with you in detail and explain all of these contingencies, so that you know what your rights are at every phase of the deal. If you are the Seller, you must understand that the Buyer has the right to back out of the deal and get his Earnest Money Deposit back if you cannot resolve these issues to his satisfaction. Most of the time the issues that come in a deal can be resolved and it makes no sense to blow the sale up and lose the Buyer over an issue that may have a relatively low price tag for resolution. If the home inspection finds Radon in your basement and you refuse to put in or pay for a Radon remediation system for $800, you have just bought your house back for that $800. Is it really worth it on a $200,000 to $300,000 sale? There may be some things that you just can’t fix or that you can’t offer a big enough price concession to overcome and the deal will fall apart. You’ll have to resolve those issues before you get another buyer, one way or another, because they will come up again. As the Seller, you have no ”outs” on those issues.

Hopefully, as either a Buyer or Seller, you now better understand the contingencies that may be within a real estate Purchase Agreement. Whichever side you are on, read that PA carefully before you sign and know your obligations and your outs.

Spring has sprung...get on the market

Spring has officially arrived, even if the weather sometimes doesn't feel like it yet. If you've been waiting until Spring to list your house, now is the time to act. The inventory in the area and especially in the Village is very low, so there will be less competition for buyers right now. And believe me, buyers are out looking! In fact many buyers have recently complained that they are getting frustrated because they want to move to Milford, but can't find many houses to look at. Take advantage of that to get the best price and the quickest sale for your house.

Another positive factor that could change if you wait is the low mortgage interest rates. Mortgages rates are still hovering right around 4% (up and down on a weekly basis) and mortgage lenders are hungry for business again. Programs allowing buyers to get into a home for only 3% down are back and some programs offering zero down loans are available. It won't get any better than that.

So, if you have been holding off making that move into a bigger house (or downsizing) or maybe trying to get closer to relatives, now is the tie to put your home on the market. In order to get ready, I suggest that you invite me in for a market analysis of your home. I'll need to do a quick walk-through visit and you'll end up getting tow valuable things - an estimated current market value for your home AND a to-do list of the things that you can do quickly to get it ready for market and achieve a higher price and quicker sale. The analysis is free but the information may be priceless.

If you've been looking in the Milford area and you're getting frustrated by not finding what you want, let me take some of that frustration off your shoulders and search for you. Many times a local Realtor like me will hear about homes that are going to be going on the market before they are even listed and can give you a heads-up. I might also be able to save yo some time by recommending that you not waste a visit on a listing that I know won't fit or that you won't like.

Give me a call today at 248-763-2497 and let me start helping you fulfill your dream. Whether your desire is to move away from Milford or to move into Milford, I can help.