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A gentleman that I know in the mortgage banking industry in Birmingham Michigan wrote an excellent article about purchasing a short sale and things that a buyer and their agent should pay heed to before writing the offer.

One of the things that my buyer clients and I often talk about are the differences between short sales & foreclosures. A foreclosure is fully bank owned. Short sales take place when the seller of the home owes more than the value of the home and asks their lender for permission to sell “short”.

There are quirks and practices and local customs that pertain to each of these purchases, and the best advice that I can offer is to hire a competent buyers agent prior to starting your home search. Also, please make sure that your mortgage lender is familiar with both foreclosures and short sales. Drew Sygit, the gentleman who wrote the article, is one of the mortgage lenders who familiarizes himself with all of the different purchase processes and can help guide his buyer clients through it all.

If you’d like to know more about how to purchase a short sale home please feel free to contact me or Drew and we’ll be happy to answer your questions. No pressure - just conversation.

~Kris Wales~ A partner for your real estate needs in Macomb County MI
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One thing that seemingly became lost in the hullabalooo about the ending of the first time home buyers tax credit is this:  Our active duty military members will not miss out because they are serving our country and away from home.  The tax credit is available to them upon their return.

Military members and some Federal employees serving overseas have one more year for the tax credit.   Please click on this link to details about the extension.

Thank you to the members of Congress and the House of Representatives for making sure that the people who give up the most are not forgotten.

Have a happy and safe Memorial Day everyone and please take a moment to honor those who gave all for each and every one of us.

~Kris Wales~  A partner for your real estate needs in Macomb County MI
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I love the excitement that a home buyer has once they hear that their offer to purchase has been accepted by the seller.  One of the areas that we talk about before they write an offer on a home is what happens during that “in between” time.  As a buyers agent in Macomb County I take my time in educating my buyer clients as much as possible about the whole process of home buying and that includes the “in between” time.

If my buyers are purchasing a home with a new mortgage one of the most important things we’ve talked about what to do and not to do during the mortgage processing.

1. Don’t change jobs unless you have talked with your mortgage lender about a potential job change.
2. Do keep adding to your savings account.
3. Don’t purchase anything except your bare living necessities.  (Don’t even apply for something like a 90 days same as cash furniture purchase.  It does hit your credit report and can have a negative impact.)
4. Do continue to save every new paystub and bank statement.

The best rule of thumb is to think of the day that you applied for your mortgage as a snapshot of your financial status.  Keep that snapshot exactly the same throughout the purchase process.  Don’t change a thing unless you have talked with your mortgage lender beforehand.

If you follow these simple rules during your “in between” time you should have smooth sailing to the closing on your new home!

~Kris Wales~  A partner for your real estate needs in Macomb County MI
Ask me about buyers agency in Michigan!
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Last week I received a call from a condo owner in Sterling Heights. She has had her condo on the market off and on a couple of times and would really like to sell it.  Pricing isn’t an issue, she is realistic about the over saturation of condos on the market and can price her condo accordingly.

Condition isn’t the issue - she has made several upgrades and it sounds like the condo is in nice condition.

What has kept her condo from selling? In my opinion (my 2 cents adjusted for inflation..):   The condo complex is not HUD approved.   Last month I wrote an article for home buyers who will be using an FHA mortgage and what they need to watch out for when choosing a condo.

Without having HUD approval on a condo any buyer using FHA or VA as their financing will not be able to purchase the condo.  In the under $100,000 condo market FHA and VA make up a huge percentage of the buyers financing.  Cutting those buyers out of the “pool” so to speak makes it extremely difficult for a condo owner to sell their home.

Conventional financing is still available for condos, but there is a much larger down payment and most first time home buyers do not have the funds to put 20-25% down on their mortgages.

Cash buyers & investors are still out there but unless the condo complex allows the condo to be rented investors won’t purchase it.

I could hear the frustration in the ladys voice as I explained to her the new HUD - FHA financing rules and also sent her an email with the links to HUDs website and explanations regarding this approval process.

What can she do? Talk to the association members and leadership and get the ball rolling to achieve HUD approval.   Yes, there is paperwork that has to be done.  Yes it can be time consuming.  However, not having HUD approval for your condo complex will bring property values down further for ALL the condo owners.    All condo owners should check and make sure their condo complex is HUD approved.  If not, contact HUD and start the process.

~Kris Wales~  A partner for your real estate needs in Macomb County MI
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A while back I received an email from someone who wanted to know if there is a list of HUD approved condos that she could look over.  I directed her to HUDS site that is updated when condo sites are approved, searchable by state, city or zip code.

This morning I had some free time to read and decided to more thoroughly delve in to the FAQs that are posted by HUD regarding all the new guidelines that must be met in order for a buyer to purchase a condo with a FHA mortgage.

I have to tell you, while scrolling through one of the FAQs I was outraged to read the following (question #25 in the above linked FAQ):

A HUD owned REO does not need project approval.

How’s this for a scenario?: 2 condos are for sale in Mystic Village (made up name).  One of them is owned by HUD, the other is owned by Mr. Jones.

The HUD owned property can accept an offer by a FHA buyer and smoothly sail to closing.

Mr. Jones cannot sell his condo to an FHA buyer unless his complex receives approval.

Excuse my language for a moment please…but how in the hell can this type of double standard be allowed to happen???

“Is there any down payment assistance anymore” or some version of this question.

Yes, there is. MSHDA, administered by the State of Michigan, has funds available to lend down payment & closing cost assistance.  If you click on the link highlighted above it will take you to the FAQ provided by the state to the program guidelines.  There is an income limit, but it’s pretty generous.

One thing to note: You do have to qualify for a mortgage.

Also, even though you will be receiving down payment assistance if you qualify you will still need some out of pocket money to purchase a home.  MSHDA requires that you have 1% of your own funds contributed to the purchase.   For example, if you purchase a $60,000 home you would need to invest $600 to satisfy the requirements.

I always suggest that a potential home buyer have at least $1000 of their own money to start the purchase process.   That $1000 would be used towards the earnest money deposit and the first years home insurance policy (that is required to be purchased prior to closing.)   If you don’t have $1000 tucked aside and can’t get it as a gift from a family member, then you need to save until you do have it.

One of the ladies that I work with in the mortgage and banking industry that is knowledgeable about the MSHDA program is Michelle Cyplik with Paramount Bank in Rochester MI.   She can be reached at 248-601-1349 ext. 206

I highly recommend that you talk to someone who has worked with MSHDA and is on their approved lenders list (as Michelle is) prior to starting your home search.

As always, if you’d like to know about buyers agency in Michigan before you start your home search feel free to contact me.

~Kris Wales~  A partner for your real estate needs in Macomb County MI
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Tom Kotzian, the team leader at Keller Williams Lakeside (my office), has arranged for a representative from Bank of America to come to our office and teach a workshop about Equator. This workshop is free, and space is limited. ALL agents regardless of company affiliation are invited to attend.   I urge you to RSVP soon if you would like to attend.   Please see information below for details:

Tom Kotzian has scheduled the short sale seminar many real estate professionals have requested with Bank of America. Bank of America is now handling all of Countrywide’s REO properties.  This is a very beneficial program to your current business practice.

This workshop is a must for anyone doing business with Bank of America or former Countrywide foreclosed properties.

WHEN:        Monday, May 10, 2010

WHERE:      KW Lakeside (45609 Village Blvd, Shelby Twp.)

TIME:          9:00 am - 12:00 Noon

WHAT:        Scott Parker, Chief Liaison
Short Sale Department
Bank of America - New “Equator Program for Short Sales”

Please call Tom Kotzian at 586-532-0500 begin_of_the_skype_highlighting 586-532-0500 end_of_the_skype_highlighting to reserve your seat, or email Tom at Tom@KWLakeside.com

Finally. No more hype, no more “Hurry it’s going to end!” articles.  Those home buyers in Macomb County who rushed last week to make offers to purchase on a home before the end of the first time home buyers tax credit will breath a sigh of relief.  They got it done, (so far) and now have to work on getting their homes to the closing table before the end of June.

What about the rest of the home buyers?  That’s one of the big questions that many home sellers in Macomb County, and real estate professionals have that will need time to analyze over the coming months in order to be able to answer.

My guess-timate? Those who are serious about owning a home will buy a home.  They won’t need a subsidy from the Federal government to commit to home ownership.  I also believe that we’ll start to see a bit of a stabilizing in home prices as there won’t be a rush of people to buy a clean well priced home the first day it hits the market.

In the next few days I’ll have the data from home sales in April and will have that on hand to compare with the months coming.  We will all have a much better idea of how the loss of the 1st time home buyers tax credit will affect housing sales by June or July.  Look for upcoming articles about this as I know it is something that impacts and interests so many of us in Macomb County.

~Kris Wales~  A partner for your real estate needs in Macomb County MI
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For those of you who recently purchased a home please double check and make sure that you turned in your Principle Residence Exemption (if it applies to you) on or before this coming Friday, April 30th.

If you need a form, or are unsure if this is something you should be filing, please don’t hesitate to contact me and I’ll be happy to help you if I can.

Also, if you purchased a home and have your previous home on the market for sale, you should be able to qualify for the “Conditional Rescission Exemption” that was implemented by the State of Michigan 2 years ago.  This means that you can keep the homestead status on your previous home and take the exemption on your current home if you qualify.   VERY important if you are trying to sell your previous home as it keeps it in a more comfy taxable status for a potential buyer.

~Kris Wales~  A partner for your real estate needs in Macomb County MI
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Last week I received an email from a past client who purchased a home in St. Clair Shores several years ago.  She wanted to know how sales were going in her area, and if we are seeing signs of market recovery yet.

What I found was actually rather encouraging: A couple of homes similar to hers had sold within the last 90 days that were not distressed sales (foreclosures or short sales).    Having a few “normal” homes sell helped to boost up the average sales prices for that 90 day window and will most certainly help future home sellers in her St. Clair Shores neighborhood.

Also in March of this year it’s been reported by Realcomp II™ that the median sales prices in Macomb County for non-distressed sales was $99,000 compared to $54,950 for foreclosure sales prices.   That’s a huge difference, and one that will help to stabilize the market and bring appraisals back up for homeowners who wish to sell in the near future.

If you’d like to know what the sales prices were like in your specific neighborhood over the past 90 days please don’t hesitate to contact me. No pressure - no sales pitch.  I promise.

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

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