1.22.2010

6 High Impact, Low Cost Updates

1. Tidy up kitchen cabinets.
Potential buyers do open kitchen cabinets and look inside.
2. Add or replace tile.
Every city has stores that offer $1 to $2 tile, so home owners have to pay only for the low-cost tile and labor to replace a dated backsplash, add a new one or update bath tile.
3. Add a breakfast bar.
When a wall separates a kitchen from a family room, cut out an opening to create a breakfast bar & add light to the room
4. Install granite tile instead of a slab.
Home owners can put in 12-inch granite tiles for about $300 in materials and get very high impact for little money.
5. Freshen up a bathroom without retiling.
Put in a new medicine cabinet for $100 to $150, light fixtures for about $100, a faucet for $50 to $75, and a vanity for $200 to $300.
6. Freshen up the basement.
With cement block or poured concrete walls in the basement, have a contractor fill in cracks with hydraulic cement and then paint with waterproofing paint, then add a top coat to add color. Also paint the basement floor with a good floor paint, which spiffs it up. The basement may not be finished, but it’s no longer a damp dungeon.

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1.17.2010

Foreclosures Soar Despite Effort to Delay Them

This is an excerpt recent Free Press (Jan 14th) article that includes our company president's remarks about the effect more foreclosures coming on the market may have on the numbers of buyers looking for properties in 2010. Experience has shown that these buyers are often disappointed by the condition of foreclosed properties and once they have decided to buy, will look to private owned properties for their purchase.

Foreclosure filings in Michigan jumped last year even with a freeze on foreclosures, suggesting that 2010 could be another rough year in a state where one out of every 38 households is in foreclosure. Michigan ranked 1/8 nationwide for its foreclosure rate in 2009. ( national rate of 1 foreclosure /45 households).

Properties heading for a sheriff's sale shot up 55% last month from the previous month, indicating some of those homeowners initially helped by the moratorium were headed toward a bank repossession, anyway.

RealtyTrac data indicates that more than 900,000 properties nationwide are held by banks, but 450,000 of those are not on the market for sale.

In Michigan, housing inventory has fallen from a high of about 60,000 homes on the market in the spring of 2008 to about 31,000 for sale now, according to Dan Elsea, president of brokerage services for Real Estate One in Southfield. Elsea said a significant portion of the reduction in inventory comes from fewer bank-owned homes on the market. He said he expects up to 10,000 additional foreclosures to hit the market this year. "The good news is as inventories rise, more buyers come out to play, so we can expect that to increase sales activities over what would have normally occurred," Elsea said.
http://www.freep.com/apps/pbcs.dll/article?AID=/20100114/BUSINESS06/1140412/1318/Foreclosures-soar-despite-effort-to-delay-them&template=fullarticle
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1.16.2010

Home Buying Trends in 2010

Smaller in Size, But Big on Amenities

Today’s inventory of homes includes a wide selection of styles, price points that cater to the growing trends of smaller size, but with more amenities.

Current home buyers are searching for homes that reflect their own personal lifestyles. At the same time, they must be a great value with a thoughtful floor plan. High performance and quality matter over quantity.

What Do Most People Want in a New Home?
Open Floor Plans – 1st Floor Masters – Updated Appliances – Granite Countertops – Updated Baths - Cozier – More Organized – More Economical in Terms of Operating Costs

Now, That’s Entertainment!
Basements have become entertainment showplaces, where custom built-in bars, theater areas, exercise rooms and guest suites give friends and family an open invitation to stay for a while. Homes have become a source of entertainment for owners who want to trade in a night on the town for take-out and a movie on the flat screen.

New Home Buyers are Willing to Pay for Energy-Efficiency
According to industry experts, home buyers are becoming more aware of how their home functions and are willing to invest more upfront on products to make their home more energy efficient.

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1.15.2010

Signs of Improvement Make 2010 a Promising Year, but more challenges are yet to come

But more challenges are yet to come . . .

2010 looks to be another year of low sales prices & fierce competition from other sellers. Foreclosures at bare-bones prices continue to give sellers plenty of competition.

Fortunately, today’s buyers are looking for move-in ready homes which excludes many foreclosures that are not in the best shape when they hit the market. Preparing your home for sale -- which can include cleaning, making repairs, making upgrades and staging -- can help your home stand out from the foreclosure down the street and get you a higher sales price.

#1: More Buyers Entering the Market
The First-Time Homebuyers credit extension and expansion to existing homeowners with higher incomes should encourage more 1st time buyers to purchase a home or move-up buyers to make the move.
#2: More Foreclosures to Come
Home values may be stabilizing in some markets, but challenges still lie ahead. Between rising unemployment rates, a backlog of homes already in the foreclosure process and many adjustable rate mortgages scheduled to reset next year, more foreclosures are expected to hit the market in 2010.
In an attempt to mitigate the effect of these new foreclosures, Fannie Mae has come up with a potential solution: The mortgage giant will allow some people losing their homes to foreclosure to lease those properties back for up to a year at market rental rates. (D4L or “Deed for Lease” program)The agency hopes this program will help stabilize neighborhoods by keeping more people in their homes. https://www.efanniemae.com/sf/servicing/d4l/
#3: Lending Standards Still Tight
According to the Federal Reserve, fewer banks tightened their lending standards in the third quarter of 2009. However, that doesn't mean lending standards have gotten looser, either. In 2010, banks will continue to keep the subprime mortgage debacle in mind and require extensive documentation and stellar credit from borrowers.
#4: Rising Mortgage Rates
In 2009, the Federal Reserve bought up a massive amount of mortgage-backed securities, keeping mortgage rates at historic lows for much of the year. However, the Fed is scheduled to end those efforts in March 2010, meaning mortgage rates could jump as much as a full percentage point next year. If you're considering buying a home, now would be the time to take advantage of historically low interest rates. If you're a current homeowner thinking about refinancing, act now.
#5: Tricky Appraisal Rules
Ridiculously inflated home prices in many markets contributed to the housing crisis, motivating the federal government to pass the Home Valuation Code of Conduct (HVCC) -- a set of rules that determines how appraisals should be made -- in May 2009. The law aims to distance appraisers from the real estate transaction so they can provide an unbiased, objective analysis of a property's market value.
Real estate agents argue that the system is flawed and deals are falling through because of the ever-changing, lengthy maze of rules. Long story short: With the new rules in place, appraisals now take longer, are more expensive and are often conducted by appraisers unfamiliar with the local market.
#6: Smoother Short Sales
In 2010, this problematic process should become much smoother. Lenders and real estate professionals alike are working on ways to streamline the short-sale process. More real estate companies are training their agents to do these specialized sales, and lenders will be more open to processing them.
#10: Cash Is King
If you plan on buying a home in 2010, especially a low-priced foreclosure or short sale, be prepared for competition. Demand is high for these properties, so it's not uncommon for bidding wars to break out over them. Real estate investors are particularly tough for regular buyers to contend with: Many investors are making all-cash offers, and banks -- who are often more concerned with making a speedy sale than with getting the highest price possible -- are accepting these offers over higher-priced offers where loans are involved. To stand out from the competition, make your offer as attractive as possible. That means saving up a sizable amount of cash for a down payment and making an offer that's close to -- or even above -- asking price.

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1.10.2010

2010 Trends In Home Decor

It is interesting how the economy effects how we arrange our home around us and what feels comforting depending on which way the economy is trending. With the economy in a downward trend, people are getting back to basics. Homemade, homegrown & recycled are the buzzwords these days. In addition to seeking out more economical lifestyles, people seem to be going back to times they remember as "better". The following predicted trends demonstrate that back to home desire.
To Grandmother’s house we go:

Patricia Shackelford thinks we’ll see more patchwork quilts, hooked rugs, needlepoint and chintz. “On ‘Top Design,’ a contestant (Ondine Karady) was criticized for being too ‘grandma’ for using a crocheted throw,” Shackelford said. “Actually, she was on to the next trend.” Shackelford said it’s the return of Sister Parish design, using heirlooms or pieces with history. “It’s a way to bring comfort to formality,” she said.

Graffiti furniture:

Antiques in recent years have become more affordable, but some pieces can be unwanted, drab even, and call for help. “Antiques don’t always have to be these sacred things,” Keith Johnson said. “They can be reinterpreted.”

Made in the U.S.A.:

In 2010 and beyond, a “made in the U.S.” label will resonate strongly with buyers, because people want to strengthen the economy. Buying more local items also is better for the environment.

Homestead chic:

More of us are growing vegetables, crafting our own cheeses and battling city hall to keep chickens in our backyards. Just as we’ve been reconnecting with the land, look for that bond to strengthen in the rest of the home. We’ll use more locally harvested wood and reclaimed barn wood. We’re becoming fonder of burlap-style grain-sack and rustic linen pillows. The fabrics follow on the heels of the classic rural European look popularized by Belgian designer Axel Vervoordt. He sparingly mixes industrial furniture with worm-holed unstained wooden pieces.

Flea market frenzy:

Many homeowners made their first visits to flea markets and thrift stores in 2009, a trend that will get even bigger in the New Year. “People aren’t doing the full-scale bathroom and kitchen re-dos they were a few years ago,” Dunham said. “But they can easily perk up a room with textiles or a new lamp.”


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1.05.2010

D4L (“Deed for Lease”) Program Criteria

· The mortgage loan is a first lien mortgage loan secured by a one- to four-unit property. All property types are eligible. Second lien mortgage loans are not eligible.

· The mortgage loan is not guaranteed or insured by a federal agency (FHA, HUD, VA, or Rural Development).

· The borrower resides in the property as a primary residence or has leased the property to a tenant who uses the property as a primary residence. Second homes or vacation homes are not eligible.

· At least three payments have been made since origination or since the last modification.

· At the time of the referral to Fannie Mae for the D4L, the borrower is not 12 or more payments past due on the mortgage loan.
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NEW PROGRAM - RENT & AVOID FORECLOSURE

D4L (“Deed for Lease”) program allows qualifying borrowers of properties transferred through deed-in-lieu of foreclosure (DIL) to remain in their home and community by executing a lease of up to 12 months in conjunction with a DIL with possible month-to-month extensions.

This is a program designed to minimize family displacement, deterioration of neighborhoods caused by vandalism and theft to vacant homes, and the effect these have on families, communities, and home price stabilization.

It also helps save money because the lender does not need to complete the often lengthy and time-consuming foreclosure process.

Fannie Mae executives said the rental program is designed to help delinquent homeowners who don't qualify for a loan modification, but still want to stay in their homes.

The plan could be particularly attractive in our area where homeowners are stuck paying large mortgage payments on properties that are now worth less than they paid for them.
At the same time, rents have been falling in the area. A homeowner could wind up paying far less every month by renting their current home.
Still, the effort is likely to attract a relatively small number of homeowners. In the first nine months of 2009, Fannie Mae took ownership of nearly 2,000 properties through a process known as a deed-in-lieu of foreclosure. That pales in comparison to the 90,000 foreclosed properties the company repossessed in the period.
For further information: https://www.efanniemae.com/sf/servicing/d4l/
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1.03.2010

A HIGHER PRICE WILL BRING A HiGHER OFFER?


Many home owners believe: We should price the house higher, because we can always lower the price right away if we don’t get an offer.”

THIS IS A MYTH!

Once upon a time, buyers first saw your house through a newspaper ad, magazine ad or maybe a flyer in front of your house. Now, most buyers start on the internet. Even if your house has the basics of what they are looking for, if it is not priced “competitively”, they will click on to the next house.

Once a buyer has selected a variety of houses they are interested in actually going out to looking at, they will call an agent. While talking with an agent, they will find that agent knows the current inventory and what properties will fit their needs – especially in the price range they are qualified for.

Buyer’s agents are not swayed by advertising. They know the needs of the client and the price range. If your house is overpriced, agents will show similar houses that are priced more attractively. Your listing will get passed over.

“New” listings get an agent’s attention. Buyer’s agents are constantly on the lookout for new properties coming on the market that meet their buyer’s criteria. Your listing will get passed over if it is overpriced. Your property is only “NEW” on the market once.

"But I'm willing to negotiate!"

Buyers are not thinking in advance about how much you are willing to negotiate. They don’t want to fall in love with a house that is not within a range they can qualify for. They are comparing your asking price to other asking prices.

Price your house competitively from the beginning based on the condition, location, and current market. Statistics indicate your first offer is often the best offer. Correct pricing will expose your house to as many buyers as possible who are looking for a house just like yours!
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1.02.2010

Be wary if you build, remodel a home


This is a great article published in the Free Press for those who are considering doing some updating or remodeling to their home.


Thousands of Michigan consumers who build or remodel a home could face higher costs and a greater risk of legal problems because of the insolvency of a little-known Michigan fund.
The Michigan Homeowner Construction Lien Recovery Fund has operated since 1982 to protect homeowners from having liens slapped on their property for work they've paid for. The fund pays subcontractors for work they've performed when a developer or general contractor doesn't pay his or her workers.


With the nationwide real estate crash, many developers and general contractors have gone broke, leaving subcontractors unpaid. Those subcontractors in turn have swamped the state fund with claims to the point where the fund is broke.


With no way to get paid for past work, subcontractors either will make consumers pay more up front or slap liens on consumers' homes -- which means a homeowner could face a bill of several thousand dollars that already was paid to the general contractor. Moreover, the house can't be sold until the lien is taken care of.


Claims exhaust builders fund


Lumber dealer Robyn Beckett of Warren has gotten squeezed by the depressed real estate market just like thousands of other suppliers and subcontractors in the state. Not only are sales down, but she's not getting paid by many longtime customers. "I have 6-foot-2 guys sit at my desk, crying. They say, 'I know I owe you the money and I want to pay you, but I have no work,' " she said.


Over many years, a State of Michigan fund cushioned such hardship for suppliers and subcontractors by paying for work when a developer or general contractor stiffed his or her workers. The fund protected consumers, too, because subcontractors didn't have to slap liens on homeowners' property for work the owners had already paid for.


But now, the Michigan Homeowner Construction Lien Recovery Fund is broke -- a victim of too many claims stemming from the nationwide real estate crash.


The result of the fund's insolvency: Even more construction industry contractors and suppliers are likely to go bankrupt, and more liens and lawsuits are likely to be filed. Both outcomes could further chill Michigan's already depressed real estate markets.

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