Chat about Macomb County MI real estate & Homes for sale search site

One of the most frequent issues that I run in to while representing a home buyer in my area (Macomb County, St. Clair County, Oakland County) is the fact that so many homes are foreclosures (bank owned) and my buyer clients are using an FHA or VA mortgage.

FHA has what I term “health and safety” standards for the homes in which you can purchase using this mortgage product.  The FHA appraiser will look for things such as:

• Flaking or peeling paint in a home built before 1978.
• Adequate drainage away from the home (to prevent water leaking in to the home and/or settling and foundation issues)
• Trip hazards in concrete
• A roof with an adequate life span left
• Electrical service that is safe and adequate

This list is not the full list, but you get the idea.   One of the issues though is this:  A foreclosure is “as is”.  Most banks or asset managers will not make the repairs to a home that are needed to pass FHA (or VA) standards.   You have to be diligent and make sure during your purchase process that you will be allowed to make any necessary repairs (if they are minor) or be willing to walk away from a home if the repair list cannot be completed before closing.

Here is a photo of what a typical repair could look like that you may be able to do yourself prior to closing in order to satisfy FHA or VA.   Note the flaking & peeling paint around the window of a garage. We were able to take a couple of hours on a weekend, scrape the loose paint off and re-paint around the window.

The appraiser then came out to the home to re-inspect the window, and updated the underwriter that things were done correctly and my client was able to close on their new home.

Talk to your buyers agent about these potential issues & repairs as you are viewing homes. Many of them can be corrected so that your purchase can be a smooth process.

Kris Wales - A partner for your real estate needs in Macomb County MI
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I will probably sound like a broken record   (if you are old enough to remember vinyl records):

Once again there is chatter and some serious talk about the government raising FHA down payments to 5%. (Currently the down payment for an FHA mortgage is 3 1/2 percent.)  This is just one of the changes being proposed to help keep FHA in the black, however I firmly believe that this raise in required down payment will hurt our local real estate market even further, and prevent a stabilizing of it in the near future.

There was an excellent article recently by Karrie Panchuk over at the thehousingwire.com.     Outside of the real estate industry (agents, brokers, NAR, mortgage lenders, etc) there hasn’t been much publicity about this going on.  That needs to change.   Too many future home buyers will be affected, as well as home owners who have been stymied by the real estate market in trying to sell their homes.

Currently the FHA mortgage with it’s low down payment is one of the most used mortgage products in Macomb County. Most first time home buyers and even many repeat home buyers are applying for and obtaining an FHA mortgage for their home purchases.  Increasing the required down payment on this mortgage will cause some potential home buyers to wait to purchase, or even worse, keep renting.

I will keep my eyes and ears open to let you know how this progresses.

Kris Wales - a partner for you real estate needs in Macomb County MI
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If you’ve been searching all of the homes for sale databases in Macomb County (or the tri-county area) then I’m sure you’ve been seeing many listings of homes that are Fannie Mae held foreclosures.   One of the nice features of these foreclosures is that many of the homes are approved for a Fannie Mae renovation mortgage.

I recently met with Mario Rea of Flagstar and he went over the renovation mortgage program for me.  Here are a couple of the highlights / advantages of the Fannie Mae HomePath Renovation mortgage:

Low down payment for most purchasers:  3%

No private mortgage insurance (routinely called PMI or MIP)

Up to 35% of the purchase price can be borrowed for your renovations costs (or $35,000, whichever is less)

Renovation funds are borrowed as part of the purchase price and held in escrow until the renovations are completed.

If you have looked at foreclosures in the past in our area (Macomb County MI & tri county area) then you know how frustrating it can be to view a home that needs repairs in order to meet FHA or other program guidelines.  This Fannie Mae Renovation programs will be a huge help to those who wish to purchase a Fannie Mae owned home that needs repairs and/or renovations.

Mario Rea was a big help to me in answering my questions so that I could feel confident the next time a buyer asks me about these listings.  If you’d like further info, or want to talk to Mario about pre-qualifying for this mortgage, you can contact him at 586-996-2020.   He can also be reached via email at Mario.A.Rea@Flagstar.com.

Kris Wales - A partner for your real estate needs in Macomb County MI
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More often than not, when a home is bank owned the utilities to the home have been turned off.   I would venture to guess that in the Macomb County MI area 75% of the foreclosed homes are without electricity, gas or water.

Pre-planning when writing your offer to purchase the home and estimating closing and inspection time-frames is essential to not have to scramble later for extensions.  (Most banks - asset managers do not like to give extensions on the closing dates.  In fact, many have penalties imposed upon the buyers for going beyond the date on the contract.)

Plan your home inspection period for a minimum of 10 days if possible. This will give you extra time to order the turn on of the utilities into your name.  Here in Macomb County electric service can be turned back on within 2-3 business days and the gas companies are right around the same time frames.

**One local gas company is requiring that you prove that you
are purchasing the home in order to turn the service back on.
Ask for a  supervisor if this happens to you and they in turn will
give you their name and fax number to speed this process up.**

Most cities and townships water departments can also do things within 2-3 business days, although they may require you or someone you  designate to be on site when they do this in order to check for leaks.

Once the utilities are back on you can then have a full home inspection to discover the “as is” condition of the bank owned home you wish to purchase.  If you are purchasing the home using a FHA or VA mortgage you will want to leave the utilities on for the appraiser to properly do his/her job.

Kris Wales - A partner for your real estate needs in Macomb County MI
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Is it really April already?   I think this winter dragged on so long that the first few days of April kind of sneaked up on me!

This morning I took a peek at the single family residential home sales that happened in the first quarter of this year in Macomb County and realized once again that first time home buyers and investors are still out in droves snapping up the homes and taking advantage of the low interest rates.

1705 homes sold during this period in Macomb County, with the bulk of the home sales coming in the $5000 to $55,000 price range. (I started the data search at the $5000 price mark to weed out the rentals that are for some reason included in “sales”. )

Here is how the breakdown of home sales / price ranges / average days on market looks like:

**The usual disclaimer:  All data that I used came from Realcomp II LTD and is deemed reliable but not guaranteed.**

The 743 homes sold (almost 44% of the homes sold) is quite high once again, and should clearly show home sellers that pricing their homes to reflect current market values in their areas of the county will bring in the buyers.

If you have any questions about the current market values in your specific area of Macomb County please don’t hesitate to contact me.  No pressure - just conversation.

~Kris Wales~ A partner for your real estate needs in Macomb County MI
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What a frustrating weekend!

I tried to make appointments for my buyer client to view 2 owner occupied Oakland County homes this weekend.  We were giving plenty of notice (a day and a half).    Both homes were set up for “online showing access” through our Multilist databases.   Should be easy enough right?

Wrong.

We couldn’t get a call back from either real estate company.    Both real estate companies were closed on the weekends and even though they had voice mail activated not one return phone call was made.

Sellers, please PLEASE ask your potential real estate agent how they handle calls for showing requests: Is their office open on the weekends?   If they are not open, did the agent provide a cell phone number for buyers agents to use for after hour calls?  How often do they check their voice mail and return calls?

I tried both online showing desk features for the homes, as well as following up the next day (10:00 am) with their voice mail systems to ask if they had confirmations yet for our showings.

Neither agent or their office returned the calls.

Guess what?  My buyer client viewed 3 other homes, and doesn’t need to go back out and view any more.  Your home will still be on the market this morning, probably next week as well, and the following week…after all, if we can’t see it YOU can’t sell it! The sad part is the sellers probably have no clue that this is happening to them.

Kris Wales - A partner for your real estate needs
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HUD has changed its asset manager in Michigan, as well as the incentives they used to offer. (Much of last year there was a $2500 bonus to HUD home buyers that could be used to help pay for their closing costs.)   This is no longer available, so anyone thinking of purchasing a HUD home in our area should be aware that only 3% of the purchase price is allowed now.

If you were counting on asking for 6% of the purchase price in sellers concessions to help you with your closing costs, pre-paid mortgage items or tax prorations then you will be out of luck with a HUD home purchase.  (Unless you have money tucked aside to make up the difference.)

Also, since the asset manager change there is also a new website to search for HUD homes in our area.  You can search by city, or county, and HUD also provides any disclosures they may have for the property.

Here is the new HUD search site:  CitySideCorp.com Scroll to the bottom of the page to the “House hunting” box.

Kris Wales - Ask me about buyers agency in Macomb County MI
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I didn’t think it would happen during this time of the year (lousy weather, people not anxious to move in the winter, etc) but nothing should surprise me anymore.

My buyer client sent me a list of 6 homes that she would like to view tomorrow, and when I pulled up the 6 homes only 1 was still available.

(I sent a list of homes to her over the past weekend, so only 5 days had gone by since the time they were “active” in our Multilist database).

We used to see this during the boom years in Macomb County real estate (1997 or so through 2002 ‘ ish).  Now we are seeing it again, especially when it comes to clean, well priced owner occupant homes. (Not everyone wants to purchase a foreclosure or go through the hoops of a short sale.)

My advice:  Be ready.  Have your pre-approval for your mortgage taken care of before you start house hunting.   Thankfully my buyer client isn’t in a hurry to purchase, so she can take her time and won’t mind when these “quick sales” happen before we can view them.  If you are in a hurry (lease ending?  getting married?) then be to move quickly on viewing homes AND writing an offer.

Kris Wales - a partner for your real estate needs in Macomb County MI
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A phone call the other day illustrated to me once again how quickly our real estate market here in Macomb County is changing.

The gentleman who called told me that he had been on my website frequently and had his eye on a bank owned home that was on the market. He said that he had been watching it weekly waiting for a price drop before he would call me to ask to see the interior.

From the subject line of this article you can all guess what took place.

While I was on the phone with him I looked in the database and sure enough the home was not active anymore, but had an offer pending.

I could hear the disappointment in his voice.

The changes in our housing market is happening. It’s real. I see signs that are subtle but very positive:

• Homes are being priced with current market value in mind more often right from the start.
• Bank owners are lowering their prices more often, and more aggressively.
• Buyers are making offers on homes and having their offers accepted.

To avoid being disappointed because the home you had your eye on is sold before you had a chance to look at it, and offer to purchase it yourself, please keep in mind the following:

A buyers agent will work for you and keep an eye on the market (and specific homes) daily.

Take the time to make that initial “Get to know you” meeting with a real estate professional at his/her office.  Talk with him/her about your needs and your wants and desires. It will be well worth your time.  We don’t bite.  I promise.

~Kris Wales~ A partner for your real estate needs in Macomb County MI
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We’ve all come across those homes while house hunting that scream “Get me out of here“.  Whether it’s the clutter, the pet odors, the dirt that you don’t want to see anymore of or a combination of all of these things there is on occasion going be a home that you want to exit quickly.

Thankfully there aren’t that many homes in the Macomb County Michigan real estate market that scream “Get me out of here!” but once in a while it does happen.

If the home is vacant there isn’t a reason to continue viewing the entire home. Things can get a bit touchy though if the sellers are present and you don’t wish to be rude.

I’ll be the bad guy.  That’s my job as your buyers agent. You don’t have to say a word.  We’ll have a “code” before we  begin our tours of homes.  Normally I tell buyers to tap my back or arm if they have “seen enough” and wish to exit quickly.

I did have on one occasion a wonderful buyer client who couldn’t wait to get out of the home we were in before the seller could give us the personal guided tour of the basement. (The seller had guided us throughout the  whole house and was quite determined to show off each feature.)

My buyer client didn’t go for the tap code, he pinched me.

I had a difficult time keeping a straight face, but politely told the seller that there was no need to see the basement as we were running late for the babysitter and had to leave. (There wasn’t a babysitter, or a baby for that matter.)

We were able to leave quickly before the seller could get us into the basement, and my buyer client was so grateful that he was spared the rest  of the tour.

It’s my job as your buyers agent to get you out of those uncomfortable situations. As I said above, I’ll be the bad guy. We’ll set up a code.

Preferably a tap on my arm or back, but if need be, go ahead and pinch! Get my attention and I’ll get you out of there!

~Kris Wales~ A partner for your real estate needs in Macomb County MI
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