It’s a grant, not a miracle…

I got a call from a young would-be home buyer who apparently read my post about the new MSHDA Homebuyer Grant Program and wanted to talk to me about what was required to get the grant. As we talked it became apparent that this buyer had not fully comprehended that this is a program to help first time homebuyers, or those who haven’t had a home for at least three years, cover some of the costs involved in buying a house. It can only be used in conjunction with the home-buying process and no money ever ends up in the hands of the buyer – it all goes into the purchase somehow. It can be used to cover closing costs and things like insurance and the tax proration and even to pay down the amount of the loan, so that the buyer gains instant equity; however, none of it leaves the closing in the buyer’s pocket.

 

The next thing is that this is not a miracle that will rescue someone with a 550 Credit score and make them a homeowner. All of the major lenders and organizations like Freddie Mac and Fannie Mae and even FHA, what to see credit scores of 640 or above, with or without a MSHDA Grant. In fact, the way the program is set up to work, you apply for this grant as part of the mortgage process and no mortgage lender is going to go down below 600 no matter what grant money you might qualify top receive. You have to qualify for a mortgage before you should even worry about this grant.

There is good news for those with fair credit (640 and better) who do qualify for a mortgage - there is no means test for this program – you can make $40,000 or $80,000 or more and still get a grant. That’s rare in an environment where most programs are aimed squarely at low income buyers only. You also never have to pay it back – it’s a grant, not a loan. But remember, it’s not a miracle. You need to get your credit in order.  Your credit score needs to be at or above 640 before worrying about this program.

That brings me to the next thing that came out of this call. The buyer told me that he/she had engaged a “credit-fixer” to get his/her credit score raised. I didn’t have the heart to ask if he/she had paid that credit-fixer up front for that work. There are just too many scams out there right now involving people and companies that claim to be able to repair your credit. Every reputable financial advisor will tell you - never, NEVER, pay anyone up front to repair your credit. You are likely never going to see them again nor any improvement in your score. There are several reputable, non-profit credit counseling agencies available in this area to help you. Go to the web site for the  National Foundation for Credit Counseling (NFCC) for help finding a free or low cost credit counselor in your area.

The last topic that this call covered was the concept of the lease with option to buy. That seems like a reasonable thing to hope for, if you are not in a credit position to buy right now. The reality in the market that we have right now is that there are very few homes for lease, period; and few if any landlords looking for option to buy leases. Those landlords who might entertain such an arrangement are likely to want a hefty up-front and non-refundable option payment and will want top dollar on the sale price, since they are betting on a market price for the house a year or more out. Right now it would be very rare to find any lease with option offerings – not impossible, but rare.

So for this would be grantee, my advice was to focus for the next year or two on getting their credit rebuilt and their credit score up. This grant program will likely be long gone by then, since it has limited funding; however there are other programs and other grants that will still be there to help first-time homebuyers and people who haven’t owned a home for 3 or more years. The USDA will likely still be running their 100% financing program in 2-3 years for people buying in areas designated as rural and the VA will still be running its 100% financing program for vets.

The MSHDA Grant Program is a great deal for those who are ready (and qualified) to buy now. You can read my original post on this program by clicking here or just scrolling down three posts if you are reading this on my blog. There are links there to the forms and document that explain the program. Right now one of the big things you need to do to take advantage of this program is to find a mortgage company that has been state certified to do the grant paperwork. John Adams Mortgage is the only one that I know of right now that is currently processing grant requests. I am obliged to inform you that the owners of Real Esate One, for who I am an agent, also own John Adams Mortgage.

Don't be a has-been...

“I am not a has-been. I am a will-be.” (Lauren Bacall), from Jack’s Winning Words.

Jack went on to talk about keeping a positive attitude about things and about cities like Detroit being on the come-back or will-be trail.

I had a tough year in real estate last year, but I don’t think of myself as a has-been just because of that. It was a tough year for many agents in my office, with listings way down and homes hard to find for the buyers that we had. It was also a year where many of my deals were short-sales, which meant increased work for decreased payback. So my production was down and my pay suffered for the loss.

Out of the adversity of 2012 I think I learned a bit about myself and grew a bit as a person. Now I’m more ready for what will likely be another challenging year and better equipped to deal with the real estate landscape as it exists. I can’t change the real estate environment that I have to work in, but I can and will change how I deal with it.

I don’t cringe at the prospect of yet another short-sale, because I’ve finally developed a very good approach to them and have a good team in place to help. I can’t make homes pop onto the market to meet my buyers’ needs; but, I have become much better at figuring out how to expand my buyers’ minds about the choices in the market that we have. I won’t win every listing that I compete for; but, I will sleep easy at night knowing that I gave it my best shot and was honest with the homeowners about the real market value of their home.

So, how do you see yourself in these tough times?  Are you a has-been or a will-be? Will you seize the day or let the pressures of the day seize you? You can start off by vowing that you refuse to lose. Even if you don’t win every listing or make every offer stick, that doesn’t mean that you’re a loser. Learn something from every setback and see the opportunity to make changes in how you do business based upon that new knowledge and your “will-be” will turn into I am. I know that I am.

Don't cover it over - clean it up...

I’m starting to see more and more people who were displaced from their homes 3-4 years ago coming back into the market as potential home buyers. Most of them have been renting and rebuilding their credit, so a recent post by George Souto, a Connecticut Mortgage Broker seemed appropriate to reference today. George wrote in answer to a question about whether judgments, liens, collection and charge-offs need to be settled before one can buy a house again. See his article by clicking on the lionk below.

http://activerain.com/blogsview/3601434/do-judgments-liens-collections-charge-offs-need-to-be-paid-before-closing-

From within that post you can also read what George wrote about FHA changes to their lending practices. The long and short of it is that FHA and everyone else had tightened up significantly in their lending and now require a much better and much cleaner credit record to get a new mortgage. All the bad practices that led up to the real estate bubble burst have been abandoned. That means that there are lots of people who could have gotten a mortgage in “the good ol’ days” who don’t qualify for anything now.

It also means that you need to take a good hard look at your situation concerning anything that might be a vestige of your past mortgage and financial problems. You can’t just say that you’re still contesting some old judgment or charge or collection effort, you have to clear that up. You should definitely pull your free credit report from all three major credit reporting services and see what they still have on file and what they will be reporting to mortgage lenders. Blemishes there are like pimples on a bride’s face and must be erased before the mortgage lender will say “I do.”

My advice is to get with a good, reputable mortgage loan officer and have them look at your credit in enough depth to give you a pre-approval letter. That still isn’t as thorough as an underwriter might be later, but you’ll get good feedback and good advice on what you need to do to fix whatever they find is currently wrong with your credit picture.  Without a good pre-approval letter in hand it is just a waste of time to go out looking and without getting any issues cleared up ahead of your file going to underwriting, it’s a wasted effort to make offers. Call me for advice on a good mortgage loan officer to see.

 

Norm Werner is a Realtor® in Milford, Michigan working out of the Real Estate One office in Milford. For real estate, whether you're a buyer or seller; when you need help, Norm's your feller.

Homebuyer grants available from bank settlement fund…

You may recall the big class action lawsuit that most states Attorneys General  joined into over illegal mortgage foreclosure practices (robo-signing and other shenanigans). That suit was settled in February of 2012 for $25 Billion. The states eventually divided up the settlement money and now Michigan has launched a grant program to use some of that money to provide help to first time homebuyers.

The grant program is being administered by the Michigan State Housing Development Authority – MSHDA.  This grant program should not be confused with the MSHDA Mortgage Assistance program that has long been available for low-income home buyers. It should also not be thought of as a loan in any way. It is not a loan. It is an outright grant of up to $3,000 that does not have to be repaid. It also differs from the Mortgage Assistance program that MISHDA runs because it has no earnings restrictions associated with getting a grant.

This grant program is not without some rules or guidelines. Here are a few things that apply:

·         The grants are aimed at First Time Homebuyers purchasing a single family home as their principal residence (note that for purposes of this program, people who have not owned a home within the last 3 years are considered to be first time buyers).

·         The grants are only available on purchases that involve a new mortgage (it does not have to be a MSHDA assisted mortgage, any type of mortgage will qualify but the sale cannot be a cash sale).

·         The grants must be processed through licensed mortgage brokers who are participating in the program. John Adams Mortgage Company is one such participating broker.

·         Non-military homebuyers may receive up to $3,000; while active duty and veteran homebuyers may receive up to $5,000.

·         There is no limit on the home sale price to which the grant may be applied.

·         There will be no cash given to the grantee. The funds must be applied towards the closing costs of the sale or may also be applied against the principal amount of the loan.

To read more about the program and view a FAQ document and the application go to my web site – www.themilfordteam.com and click on the MSHDA Grant Program choice.

This is an exciting program that should help get Michigan’s housing market with its recovery. The three year requirement to be eligible for a grant fits nicely into the timetable that many displaced people have been on while they re-built their credit after a foreclosure or short-sale. Download the documents and read through them or just give me a call (248-763-2497) or email and let’s discuss how to use this program to get you into a new home.

This program was funded to the tune of $35 Million for 2013 and about $8 Million has already been spent, so let’s find you a house and get your grant request in before summer when the money will likely run out.

Real Estate Sales Statistics for the Milford, Michigan Area

 For those readers who might be new to this blog, a little commercial, if you will. I am a full-service Realtor working out of the Milford office of Real Estate One - Michigan's largest real estate company. I primarily deal in residential real estate; although I do have some commercial real estate listings. I list homes for sale and help buyers find homes.

I also track the local markets in the markets in which I focus, which is in the immediate vicinity of Milford, Michigan on a weekly basis. Specifically I do business in and  track weekly real estate sales in Milford (Village and Township), Highland Township, White Lake Township, Commerce Township (including Walled Lake Village and the Village of and Wolverine Lake), West Bloomfield Township, Lyon Township (including the City of South Lyon) in Oakland County; plus the Livingston County Townships of Green Oak, Brighton (Including the City of Brighton) and Hartland.

The statistics that are available on my web site http://www.movetomilford.com for those markets include the listed and sold prices (including the calculated percentage of asking that the place actually sold for), the State Equalized Value (SEV) and the calculated SEV multiplier, the number of days that the house was on the market, the listed square footage of the house and the asked and sold cost per Sq Ft. Those are important statistics that you can use to gauge the markets and determine where a house that you are looking in one of those markets fits in - above or below the averages.

I have been doing this tracking for some time, so the site also contains at least three years worth of data on each market (the data on some of the markets goes back 5 years). I hope you will visit my site and take a look at that data. While you're there you can also learn all about the Milford, Michigan area and see what's going on in the community with a calendar of events that is updated daily. My site also has a link to the Search function on the Real Estate One corporate web site. That is probably the best place to use for a home search, since it is updated several times a day and aggregates the listings from all of the surrounding MLS's. Many national sites are out of date by the time you do your search.

 

I hope that you will visit this blog frequently. I try to do new posts 3-4 times a week. I also encourage you to visit my Move To Milford web site. If you (or someone you know) are experiencing difficulties keeping up with your home mortgage and trying to figure out what to do, I also run a web site called http://www.mishortsales.net that can explain the short-sale process and why that may be your best option. I honesty hope that you don't have to go there; but going there is way better than letting your home slide into foreclosure.

 

 

MLK Day Parade in Milford

It was a very cold day in Milford today, with a temperature of 19 and a brisk breeze blowing; however, that did not prevent a good crowd from showing up for the 8th annual Martin Luther King Day parade - a March on Main Street. See the pictures below which show the crowd at the gathering point and a couple of march pictures. There was a short program at the rally point to honor the winners of the art and writing contests that are run in conjunction with the event. Organizers had on hand goodies and coffee (provide by the local Starbucks) and the kind folks of Coratti's on Main Street passed out hot chocolate to marchers as they passed the restaurant. A short musical program followed at Central Park

Market Report for January 2013

Norman, W Werner 248-763-2497

Michigan Monthly Market Report – January 2013   December ended the year with strong momentum (our strongest month of the  year seasonally adjusted), carrying about 20% more buyer interest into 2013 than we had going into 2012. Buyer demand will build as those who were forced to sell and rent are now coming back into the market to buy, along with stronger economic growth.  An offset to that increase will be additional inventory as prices rise to meet the target home values  many Sellers have been waiting for, as well as more investors begin to put their homes on the market.   In spite of an increase in homes for sale, we can expect an inventory shortage throughout 2013. Buyers will have to be more creative and will need to make some compromises in their home searches.   Ideally, you want to buy a home that will be the easiest to sell; updated, homogeneous design to the area, good schools, not too remote, etc. However, that is the same advice every-one is given, so those homes sell fast and they do sell for a premium. Nonetheless,  if you can find one, buy it! With today’s prices, that premium still makes sense. That does not mean you should shy away from the less than perfect homes. In fact, that is where the best bargains lay, in those homes that need some work or are not in the perfect location. You will sell them for less than the "perfect" house, but you also may be able to buy them for a larger discount, so you may actually come out ahead from an investment standpoint.   The market statistics chart below tells the story of how far the market has moved since the end of 2011, with large double- digit positive changes in most categories.   Market Stats: Dec 2011' vs. Dec 2012' – Southeast Michigan Market Area 2011 Dec' 2012 Dec' % Change   Median Sale Price $70,500 $92,500 31.21%   Average Price per Square Foot $68 $82 20.59%   Average Days on Market 71 65 -8.45%   For Sale Inventory 23,600 14,400 -38.98%   % of Current Bank Owned Listings 35% 23% -34.29%   Months Supply of Inventory (MSI) 6.3 3.3 -47.62%   % of Bank Owned Sales 37% 24% -35.14%   % of homes selling over List Price 18% 30% 66.67%   Median Price Bank Owned $50,000 $60,000 20.00%   Median Price Non-Bank Owned $88,250 $112,500 27.48%     If you would like more information on the market, like to list your property, or want information on any property with any broker, you may call or email at any time. Thank You,   Norman, W Werner Put my team to work for you P: 248-763-2497 normwerner@comcast.net http://www.movetomilford.com

Off to a fast start...

We are only a couple of weeks into the new year, but it does seem to have started on an uptick. I was already seeing a positive trend in rising home prices and that has certainly proven to be true so far in 2013. Of the 9 markets that I track four have started by breaking through the $100/ Sq Ft mark in the first two weeks. Hartland only has had 4 sales thus far and three of them are distressed, so it backslid down to the $60's in terms of cost per square foot. That is an anomaly. Most markets are holding in the 90's somewhere. West Bloomfield has started off strong and broke through the $100 mark for its sold average. The Median is still in the mid-90's.

You can see all of the data for 2013 so far in the markets that I track - Milford, Commerce, Highland, White Lake, South Lyon, West Bloomfield, Green Oak, Brighton and Hartland Townships (including villages and cities within those townships) at my Web site - www.movetomilford.com.
 
Other than Hartland's 75% distressed sales, Commerce at 56% and White Lake at 50% are still being heavily impacted by distressed sales. At the end of last year, most markets had managed to get below the 50% mark in terms of distressed sales. There is no doubt that those sale drag the entire market down in each area. People looking in those markets become conditioned to offer less, even if the homes that they are bidding upon are not distressed sales.

We are still in a tight market - a sellers market. I'm finally starting to see more people come out of their bomb shelters and take a look at where they are at in terms of potential market prices. That's a good thing, because the home value bounce back in the market was faster and higher than predicted and prices are currently higher than they will be if we get a more balanced market - one where inventory matches up better with demand.

There are still good values to be had in the market and the mortgage rates remain at historically low levels. Buyers have to be ready to act quickly if they see a house that they like and should be prepared to decide what to do if a bidding war breaks out. Multiple offers on good houses are the norm, rather than the exception right now.

So,stay tuned for more data and reports in 2013. We seem to be off to a good,fast start.

Are you stuck in Turboparalysis?

This post on the Jack’s Winning Word Blog was so good I had to re-blog the whole thing.

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“Sometimes it’s just easier to sit around spinning your wheels…but you never get anywhere.” (Susan Gale) I came across a new word recently…Turboparalysis! It’s defined as furious motion, without movement in any direction. It has happened with my car in a snowdrift. It can happen with us, too. We keep doing the same thing over and over with no result. Maybe we need a shove to begin moving forward. ;-) Jack

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I particularly like Jack’s comments on Turboparalysis. That so accurately describes the state that I get into every now and then. There are just so many things to do in real estate, each of them vying for one’s time, that it is easy to fall into the Turboparalysis trap. That tends to happen when I try to multitask and find that I’m flailing away, doing bits of many things at once and really accomplishing very little. I’m spinning my wheels. Does that ever happen to you?

I guess the solution is to slow down, take a deep breath and prioritize what needs to be done and what is reasonable to get done and then set out at the tasks at hand - one task at a time. Maybe the "shove" that Jack refers to that we all need could come from a coach or other person that you can feel obligated to report to and to be honest with.That's the basis for the whole "life coach" business, giving people those littel shoves to get them going.

No matter how you do it, just do it. Don't sit there spinning your wheels.

Stay in the moment - focus upon today...

From the Jack’s Winning Words blog comes this piece of advice - “I think in terms of the day’s resolutions, not the year’s.” (Henry Moore). Jack went on to write - This week I came across a SMART way (by Kelly Olin) to make and keep resolutions. S=Be Specific. M=Be Motivated. A=Make it Action-oriented. R=Be Realistic. T= Make it Timely.

Olin’s advice is surely applicable to real estate sales. While it is always good to have long term goals and plans, it can sometimes be depressing to focus upon how few of those plans might have been achieved thus far in the year, especially in January. Since almost all good plans are based upon being able to see the year-long goals as an aggregation of monthly, weekly and even daily goals; it is much better to focus on the work needed to achieve today’s goals than to worry about the overall goals.

If your plan is based upon understanding the numbers game that is real estate sales, then you’ll have some daily numbers somewhere in that plan that you can focus upon today – the number of prospecting calls that you must make in order to get the number of appointments that you need in order to get the number of new listings that are required to give you the opportunity of making the number of sales that will support the amount of money that you want to make.

The fact is that the number of whatever it is that is required today to meet your overall goal is the only thing that you can commit to work on today. So you can take Olin’s list and start with those tasks as the Specific things that you are committing to do. Then give yourself that little Motivational pep talk about getting started. Lay out your Action plan for accomplishing the tasks at hand and be Realistic about the time and effort it will take. Finally get to it – make it Timely, like now.

If you can think and act in those terms each day’s work will seem less daunting, but over time each day’s work will add to the achievement of the year’s goals.

NAR/Google Study reinforces the importance of the Internet –

A recently released  survey and report by the National Association of Realtors®, in conjunction with Google, once again shows the importance of the Internet in the home-buying and selling process. It’s a must read for real estate agents and a good read for everyone else.

Some highlights of the information contained in this report  include:

·         90% of home buyers searched online during their home buying process

·         Real estate related searches on Google.com have grown 253% over the past 4 years2

·         Buyers use specific online tools during different phases of the home search process

·         How important “local” search terms and websites are for buyers

·         How mobile technology connects online to offline home buying—including the reading of online reviews

·         How video and YouTube satisfy buyers’ research needs

·         The role of age and gender in driving real estate decisions both on and offline

·         Top states where online searches around first time home buyer tips, senior housing, and foreclosures are happening

·         36% of new home shoppers utilize a mobile device while they are watching TV

I guess it should have been obvious that people would use the Internet for this search; after all, they use the Internet for just about everything else. The more “traditional” means of seeking information about homes for sale have really fallen off as the population becomes more Internet savvy. Statistics from the study show the flowing levels of importance of sources for information about homes for sale:

1 - Internet

2 - Real Estate Agent

3 – Yard Sign

4 – Open House

5 – Newspaper print ads

6 – Home Book or slick magazine

 

The demographics that were uncovered about who (by age groups) uses the Internet for home searches are also interesting, if somewhat predictable. Surprisingly, seniors indicated a strong preference for using the Internet, with 75% reporting that they used on-line searches as part of their buying process. 52% of first-time buyers reported starting their search for a home on-line. Surprisingly (at least to me), women, more than men, were reported to be using the Internet for real estate decisions – 53% vs. 47%.

What was not surprising is that more and more people are using mobile devices (basically their phone or tablet) to do the searches while they are on the go. Also not surprising is that UTube videos are the most used source of video-based information (a category of research that led the report in terms of information sources).  The most viewed videos were about community information and home interiors, in that order.

What was also not a surprise that the study pointed out is the long lead-time that is normal these days. The majority of buyers reported starting their research at least 12 months in advance of actually buying, with first-time buyers being the most likely to start that far out.

To download and read the entire report, click here.

Have You Got Gumption?

“Only two things you ignore: things that aren’t important and things you wish weren’t important, and wishing never works.” (David Shore) – from the Jack’s Winning Words blog.

This saying is particularly applicable in life if you substitute the words “put off” for the word ignore. It seems somehow falsely comforting to put off things that we really don’t want to do or face. There are meetings we really don’t want to have with people that we really don’t want to see to discuss topics that we really don’t want to talk about. So we put them off. We wish that they would go away, but they never do.

The real irony is that those meetings never turn out to be as bad as we imagined them to be when we were putting them off. That person whom you were sure would get upset and mad at what you had to say might just as easily say, “Oh, OK.” And let it go at that. Then you will have wasted a lot of energy and time worrying about a non-event. That tend to happen to me from time to time. I think it is the result of an over-active imagination that dreams up all sorts of scenarios that are really improbable, but which capture my thought process and consume lots of wasted energy. Does that ever happen to you?

I suspect that another saying from Jack’s Winning Words also applies to this issue – 

 “Everyone who has gumption knows what it is, and anyone who hasn’t can never know what it is, so there’s no need of defining it.” (L.M. Montgomery)

Well, I did look up the meaning, according to Webster’s dictionary –

GUMPTION -

Pronunciation: (gump'shun)

—n. Informal.

1. initiative; aggressiveness; resourcefulness: With his gumption he'll make a success of himself.

2. courage; spunk; guts: It takes gumption to quit a high-paying job.

3. common sense; shrewdness.

 

We don’t use that word very often. Maybe it’s because so few of us really have gumption. I think if there were more gumption around there would be less putting off of things, especially things we’d rather not face.  It certainly appears that our legislative leaders in Washington lack gumption when dealing with almost anything, especially fiscal issues these days.

I don’t think there are any gumption self-help books or gumption coaches around to help us find or get gumption; so most of us seem destined to go through life with little to no apparent gumption. Maybe, however, that if we focus upon the third definition from the list above (at least the “common sense” part) we’ll find that we have enough gumption to get by in life. So, show your gumption today and tackle those things that you’ve been putting off.

Like listening to the crickets...

The real estate market right now in this area is a little like a summer evening when you can sit out on the porch and listen to the crickets - it's quiet. That's not a good thing! It's quiet because we are literally running out of homes to sell. I have lots of buyers right now and nothing much to show them. The properties that we do look at are going fast, most with multiple bids and lately many of them for cash. Anythng under $100,000 is probably selling for cash and maybe a quarter to a third of the ones between $100K and 200K are being snapped up with cash offers. Most have multiple bids on them within days of listing. Many are being bought up by investors, unless they are restricted by HUD rules that favor owner-occupants.

This crazy, short supply market is really hard on would-be buyers, many of whom get discouraged by the whole process. I just lost my fifth bid with one young buyer who bid above asking price but has to finance in order to buy. That puts him at a considerable disadvantage against the investors/cash buyers in the price band that he is competing in. Not only are these cash buyers making at or above asking bids, they are specifying in many cases that there will be no inspection - they are taking the houses "as-is". That means theat they are speculating that they saw enough during a walk-through to be able to estimate the repair costs and/or they see enough upside in the investment to cover the risks involved in that type of bid. It's a bit crazy right now.

For would-be sellers this market is the perfect time to jump back in and get the top market dollar for their home. That still may not cover all of the losses from the recent recession; but for those who didn't buy for top dollar at the pre-bust market peak the recent run-up in prices may have made selling possible again. Many owners just don't know what their homes are worth today, because it's been 6 months to a year since they had their last appraisal or market analysis. Now is certainly the time to take a peek out of the bunker and see where you are at in terms of current market price. Give me a call, I can help with that.

We have pent-up demand that is manifesting itself in buyers out looking. The market should be jumping, instead of being quiet. So get your house on the market and make some noise!