Lani's July 2010 Real Estate Update

Optimism – “a disposition or tendency to look on the more favorable side of events or conditions and to expect the most favorable outcome"  As the economy recovers, so does the real estate market, buyer optimism and our biggest investment – our homes. This month’s News You Can Use! newsletter contains articles about a glass half full!  To view the newsletter, click on: http://www.lanisussman.com/

To Subscribe to Lani's Monthly Newsletter: respond to lani@maxbroock.com

Our Current Real Estate Market

Sales of Houses in Birmingham, Bloomfield Hills,

Franklin, & W. Bloomfield

JULY 2010 -- 110 Houses Sold - 29% Were Forclosures/Short Sales
Lowest: 2250 Island View - List $35,00 -- Sold $35,250
Highest: 1016 Lake Park - List - $2,748,000 --Sold-$2,450,000
JULY 2009 -- 121 Houses Sold - 54% Were Forclosures/Short Sales
Lowest: 6725 Cooley Lake - List $43,500 -- Sold $34,000
Highest: 360 Woodbridge - List - $2,999,000 --Sold-$2,350,000

THE 2% RULE

The "2% Rule" states that you should never refinance your mortgage unless your new mortgage rate is at least 2% lower than your existing home loan’s rate. That no longer applies. Deciding to refinance a mortgage should be done on a cost/savings basis.
Evaluating your refinancing options tells you how long it will take to recoup your expenses and makes it easier to recognize and avoid junk fees. How do figure out how long it will take to recoup your expenses when refinancing?
1. Figure out what your new monthly payment will be using a basic home mortgage refinance calculator.
2. Subtract your new lower payment from your old payment and you’ve got your monthly savings .
3. Total up all of your closing costs including any loan origination fees you’re paying the person arranging your new mortgage.
4. Divide this total by your savings and you’ve got the number of months it will take you to recoup your expenses from taking out a new mortgage loan.

HIGHER END HOMES BRING MULTIPLE OFFERS

Metro Detroit buyers in the $500,000 plus market are finding in hard to buy "move-in" ready homes. Houses in good condition often bring multiple offers. If they are persistant, they can find a house with all the "extras", but in many cased these houses need some work. The inventory includes many foreclosed and short sales house where the fixtures have been stripped or the condition of the house requires some work. For a great article on this subject, visit "Good deals are at the high end, but finding them takes some work"

What You Should Know Before You Refinance Your Mortgage

It all depends on three factors on a sliding scale:
1. How much you can reduce your interest rate.
2. How much you’ll pay in closing costs.
3. How long you plan to live in the home.
The real key is the break-even point. That’s the number of months you should plan to keep the home after refinancing in order to recover your closing costs. For example, if you pay $3,000 in closing costs and you manage to lower your mortgage payments by $150 a month, you would reach the break-even point in 20 months. As long as you plan to live in the home longer than that, refinancing could be worthwhile. It’s a sliding scale. The smaller your savings, the longer you need to stay put.
There are a couple strategies to tweak the sliding scale by minimizing the price of closing costs when you refinance.
1. Ask your current lender to refinance you. In order to keep your business, your lender may be willing to waive certain closing costs.
2. Ask for the "reissue rate" on your title insurance, a savings of 40 to 50 percent.
3. Ask for an automated or drive-by appraisal, which is cheaper than a full-fledged one.
4. Get your lender to skip the credit check. After all, the company is intimately familiar with your payment record.

REFINANCING - How to Make It Work

If you have decided that refinancing makes sense for you, follow these tips to make sure you do it wisely:
1. Shop around for interest rates. The Internet is a good place to comparison shop, but be wary of unknown companies.
2. Hold the line on closing costs. Some lenders are taking advantage of low interest rates to jack up their closing costs.

3. Start with the bank that currently holds your mortgage. They may give you a good deal just to keep your business.
4. Avoid paying points. When you refinance, you can deduct only a portion of the points each year.
5. Don’t try to outsmart the market and wait for interest rates to hit their low point. If the numbers make sense, jump in!

ZERO COST REFINANCING

Don’t have the ready cash to close on a refinanced loan? Ask the lender to absorb your closing costs by raising your interest rate by an eighth or quarter percentage.
Benefits are:

1. No upfront costs.

2. Immediately cut interest rate & monthly payment with no out-of-pocket expense.
Drawback:
You don’t get lowest possible interest rate.

JULY EVENTS ON THE WATER

Over the past 10 years, “Quake on the Lake” has gained a reputation as one of the premier summertime events in/around Oakland County, Michigan.
The “Quake” has become a “must attend” event for North American Inboard Hydroplane owners and drivers; and since its inception, nearly 350,000 people have witnessed world-record racing performances from the top teams in the business. The event is the proud recipient of 17 American Power Boat Association (APBA) world speed records being set in 5 different racing classes making Pontiac Lake one of the fastest one-mile race courses in the country!

New for 2010 the “Quake” will feature an awesome carnival complete with midway and over 15 amusement rides such as the Enterprise, Space Loop, Spin Out and Mulligan Wheel as well as national musical recording artists headlining the stage on Friday and Saturday evening

The 16th annual Meijer St. Clair Riverfest will be a three-day extravaganza held Friday, July 23- Sunday, July 25, 2010. Located on the banks of the St. Clair River in beautiful downtown St. Clair, MI. http://www.quakeonthelake.org/

Meijer St. Clair Riverfest

started in July of 2006 in conjunction with the St. Clair River Classic formed over 15 years ago by the Blue Water Offshore Racing Association. This event combines the power of Offshore Racing with National Recording artists performing on two of the three nights culminating with spectacular Offshore racing on the St. Clair River. The Riverfest has grown into the largest event in St. Clair County with it drawing well over 100,000 visitors annually since it began. http://www.stclairriverfest.com/

FARMINGTON FOUNDERS FESTIVAL

Founders Festival!
July 15, 16, & 17

Downtown Farmington invites you to Go Play in the Streets for a weekend of music, food, and fun activities geared for all ages. Go stroll through the Crafters Marketplace and Farmers and Artisans Market. Visit the Main Stage for great music and catch a Movie Under the Stars. Cheer on a parade, make crafts with the kids and run around the Go PlayGround. There's lots to see and do.