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

I’ve heard it so often that I cringe each time I hear it from a potential home buyer: “So-and-so told me to never offer more than 50% of the list price” or some version of that sentence.

My response? If the homes list price is double what the market value is, then by all means an offer of 50% off the list price is justified.   Otherwise, expect your offer to be rejected. Most homes in the Macomb County area that are for sale are already market value priced.  It doesn’t matter whether the home is a foreclosure (bank owned), a short sale (lien holder negotatied sale) or a private non-distressed home for sale.  In order to compete with todays market values home owners are pricing their homes to sell. It’s as simple as that.

The 1300 square foot brick ranch in Chesterfield Township that once sold for $180,000 in 2001 is now listed (and selling) for $90,000 to $125,000 depending upon the condition of the home.

If you listen to “So and so” and offer $45,000 for the home without taking in to consideration the condition of the home, the current market values for the neighborhood and the buyer activity in the area then you are setting yourself up to be rejected.  Over and over and over again.

Be smart. Hire a buyers agent to work for you and to assess market value that is current.   This is your best shot at receiving value in your new home purchase, not listening to “So and so” who are not in the trenches every day.

Kris Wales – Macomb County MI real estate agent
586-536-5453 cell

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In the last month or so I have received more phone calls about an article I wrote last year that warned Macomb County MI home buyers about “tagged” homes and the certificate of occupancy that is needed before they can move in.

There are 2 things I have learned from these calls:    1) Some buyers agents aren’t doing their due diligence when representing home buyers in their purchases of foreclosures and other homes that have been vacant and tagged by the cities for certification. 2) Some home buyers don’t believe it applies to them because they have had their own home inspections and an appraisal performed before they purchased the home.

My advice? If you are a home buyer and have a buyers agent to represent your interests, ask your agent to help guide you through the certificate of occupancy process.  If your agent doesn’t know what the city requires, he/she can go to the city offices and find out for you.  You should also call the city office prior to writing your offer to purchase to find out if a certificate of occupancy will be required.   This could make a difference in the offer you write, better to know upfront than later on when you have a legally binding contract in place.

Keep in mind that your own home inspection and your appraisers report isn’t going to be satisfactory to the city building inspector.  If the city requires an inspection for a certificate of occupancy you will have to arrange for it and repair or replace any items that the inspector cites before you will be allowed to move in to your home.

Kris Wales
A partner for your real estate needs in Macomb County MI
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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
Ask me about buyers agency in Michigan.
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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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