Ann Arbor Area Real Estate

Are "Stated-Income" Loans a Thing of the Past?

2008-12-02T21:21:00.005-05:00

Realtors and other self-employed people are finding it harder to get a mortgage even when they have a substantial downpayment. In the past many self-employed took out "stated-income loans," which don't require borrowers to fully document their income. Defaults were low. But as lenders loosened their lending practices and began offering these stated-income loans to other than affluent professionals, they became known in the industry as "liars' loans." Today many banks will not offer them at all.

Underwriting criteria for the self-employed have swung from a simple process to being tighter than any in modern times. The changes are increasingly frustrating a group of borrowers that banks once coveted: affluent self-employed professionals such as doctors, accountants, lawyers, and small business owners.

Banks say they have concerns documenting the self-employed's cash flow due to the deductions and write-offs that the self-employed show on their tax returns. And there are no W-2s to support their income. Lenders are also cautious because the non-salaried can have greater volatility in their annual income.

So as the Feds try to ease the housing crisis, thousands of good borrowers are frozen out of the market.

Credit or a Loan? What About the Benefit?

2008-11-21T09:43:00.003-05:00

Many have questioned the first-time home buyers credit, saying it's nothing more than a loan, and thus dismissing it. Technically it is a tax credit, but it does operate as a loan as it must be repaid. BUT, the important thing is to look at the benefit.
The majority of first-time buyers leave the closing table and have little left in savings after the purchase of their home. As new homeowners, they are now facing a mortgage payment that exceeds what they had paid in rent. They have a home to furnish, with more rooms to fill with furniture than their apartment in most cases. They may also need to spend money on painting, some redecorating, carpeting and window coverings. In addition, there are other home ownership necessities such as a lawn mower, ladder, garden tools and the like that must be purchased, not to mention the expense of making any costly repairs or improvements the home may require.
More often than not these purchases are made with a charge card, with interest rates that are upward of 17%. These additional monthly expenses for home-related purchases are in addition to the large monthly mortgage payment they now have. So why wouldn’t a buyer be excited about obtaining the $7,500 tax credit, and having the benefit of repaying it over 15 years without interest?
What if a first-time buyer really liked a home they saw that needed some major repairs or renovation, a home that represented a great buying opportunity? But after much consideration, they decided against buying it. They just didn’t have the financial resources after the closing to accomplish the type of repairs required, such as a new furnace or new roof or new siding or new windows. Wouldn’t the opportunity to obtain $7,500 in an income tax refund possibly be the answer to this type of concern?

Do You Understand the First-Time Homebuyer Credit?

2008-11-11T20:21:00.006-05:00

There's a lot of confusion about the new first-time homebuyer tax credit. The fact that it's called a 'credit' is a good part of the confusion. It's not an outright credit since one must repay it. It's more like an interest-free loan. But the loan repayment term is generous - one has 15 years to repay the credit, which can be as high as $7,500.

The reason for the term 'credit' is that the money can be received as a credit against your federal income tax. That is, the $7,500 can be used to reduce your tax liability, or if you have none, or have already paid your taxes through withholding or estimated tax payments, then you will get the money sent to you.

Only homes purchased on or after April 9, 2008 and before July 1, 2009 are eligible for the credit. There are income limits for eligibility: up to $75,000 for single taxpayers and up to $150,000 for married couples. A first-time homebuyer is anyone who has not owned a home the previous three years, and the home you purchase to qualify for this credit must be used as a principal residence.

Any questions? Please feel free to call me at 734-439-8405.

Cool Telephone Techie Tip!

2008-10-02T10:28:00.002-04:00

In a hurry? Need to leave a message but don't have time to talk right now? You know if the other party picks up the phone you won't have time to do everything that's on your plate at the moment, but you really need to call and leave a message. So assure yourself of being able to just leave a message this way.

And The Sky Did Not Fall!!!

2008-09-30T19:55:00.001-04:00

I certainly don't have the answers for fixing our nation's financial difficulties, but I'm glad the first rushed 'rescue' bill did not pass. It appears there was not such a huge urgency after all as the stock market plummeted yesterday and then rebounded a good ways back up today.

I think everyone in power needs to think this through carefully and listen to the varied 'experts' and then hopefully craft a bill that makes good sense. Or better yet, maybe they can undo or modify the accounting rules that caused the banks' balance sheets to plummet in value and liquidity to shrink in the first place.

In the meantime I've sold 2 properties in the past 10 days and in conversations with other Realtors I find they are selling also. And yes, these buyers are getting mortgages. We are even seeing multiple offers on some of the properties now. It's been my belief for some time now that our housing market in this area of Michigan has bottomed and that we are bouncing along that bottom and it's just a matter of time before we begin to see the market start to edge up.

KISS Approach in Real Estate

2008-09-15T08:58:00.000-04:00

Keep It Simple-- One-stop-shopping is desireable in all walks of life. It is especially valuable when buying a home. With Real Estate One you can find all the necessary services under one roof. We have our own mortgage lender, our own title company to handle the title search and the closing, and our own insurance company for your homeowners insurance. With an integrated operation, there is far less likelihood of an issue arising at closing time.

It stands to reason that obtaining all of your home-buying services from one source makes the process easier and less burdensome for the consumer.

Need to Get Rid of "Stuff"?

2008-09-13T10:45:00.000-04:00

When it's time to move, we all realize we've been hanging on to stuff we no longer need and now we suddenly want to get rid of it fast. This can at times be difficult to do.

Putting good smaller items on the curbside the day before trash pickup can be simple - seems there's always someone to pick up useful items for their den or garage. This is actually my favorite method of recycling! I love seeing an eager soul jump from their car to snatch a tricycle or lamp or small table, knowing that my castoff is still useful to someone.

For other items or when the weather is just too nasty for putting stuff outside, try these resources:

Friends in Deed at 734-484-7607 They were recently willing to take mattresses and bedding which is very hard to give away and not welcome out on the curb.
Purple Heart at 734-728-4560
Dawn Farms at 734-485-8725
Dr.Raymond Molano at 734-429-2737 who I've heard will take clothes (often hard to find someone to take)
Salvation Army at 734-668-8353 or 734-761-7750

In fact, if you are even thinking of moving, start that clearing out process now - it's less to do when the actual move comes up! Need any other help with your move? Do call me at 800-923-3245. I've lots of resources for all the moving issues!

Furnished Rentals - Hard to Find!

2008-09-12T15:05:00.000-04:00

I've spent many hours trying to find a short-term furnished rental. A filming crew is coming to Ann Arbor to stay for 4-5 months and needs a fully furnished place to stay. They are willing to pay $2500-3000 per month.

I may have found a good opportunity for them, but I had no idea just how difficult it would be or how many emails and phone calls I would be making to accomplish this.

One of the many real estate challenges we come across in this line of work! You have to like challenges to do this job!

Government Bailout of Fannie Mae and Freddie Mac

2008-09-08T16:43:00.000-04:00

The government takeover of Fannie Mae and Freddie Mac is good news for the real estate industry. This will have the effect of stabilizing the mortgage industry. It's also anticipated that in the next week or so mortgage interest rates will drop some, possibly as much as 1/2 percent, thus adding a little stimulus to our real estate market. Our current average mortgage rate is 6.35% for a standard 30 year fixed rate loan.

This takeover and the ensuing trimming of operations and expenses won’t help struggling borrowers to refinance, but it will guarantee mortgage money availability for qualified borrowers. And it's also possible that some of the borrowers' costs associated with financing will go down.

Fannie Mae and Freddie Mac play a critical role in the mortgage market. They buy mortgage loans from banks and package those loans into securities that they either hold or sell to U.S. and foreign investors. That allows traditional lenders like Bank of America, Wells Fargo and Washington Mutual to make more loans.

Together, Fannie and Freddie own or guarantee about $5 trillion in home loans, about half the nation’s total. But an alarming number of those loans started going into default, draining the companies’ financial reserves and sending a chill through credit markets worldwide. As investors grew more skittish, borrowing costs started rising.

By placing Fannie and Freddie into a conservatorship, the government is promising investors that the companies’ debt is as safe as the Treasury Department’s.

At the Closing Table

2008-08-30T13:06:00.000-04:00

Sometimes there are tears of sadness at the closing table, but mostly joy. Just 3 days ago Deb, a very happy young woman, closed on a delightful 3 bedroom home in our area.

The story of how this came about is interesting. Deb has a friend who knows a Realtor friend of mine and this Realtor friend called me while I was recently on vacation. He said a young woman who worked at Eastern University really needed help. He told me Deb had been working with a Realtor for 8 months trying to buy a house! She felt everything had gone wrong in her relationship with the other Realtor and wanted to start fresh.

Immediately I called Deb and discovered she already knew which house she wanted to buy. She and her friend had even visited the owner one day long ago and had seen it and liked it. So with a call to Deb's lender, a call to my business partner Dennis, and a call to the listing agent, I set up a new showing, got a verbal agreement on an offer, emailed all the necessary paperwork to my partner Dennis, and we had this home under contract all in the same day! I love it when real estate deals come together like that!!!

It's times like this when the experience of 20 years in the business, makes a huge difference. I knew exactly who to talk to, how to make this come together, and got to a smooth closing, all done very efficiently. If you know someone who's struggling with any real estate needs, please do let me know and see if I can help. I can always be reached at 800-923-3245.

Do You Have a Tenant in Your Listed Home?

2008-08-14T12:37:00.000-04:00

There are great tenants and there are difficult tenants. If you still want to sell your home but need to rent it out during the listing for the cash flow, be extra careful in choosing a tenant. I have a listing right now which is being totally controlled by the tenant, and we are almost never able to show the house, and when we do, it is a mess! This is a tenant who clearly does not want this house to sell.

Within your lease agreement you need to spell out the terms of showing. By law we always have to give 24 hours notice to any tenant before we can show the home, but it should be possible to show with reasonable notice whether the tenant is present or not, just the same as we do when homeowners are still living there.

So, if you are in the position of wanting to rent but also wish to sell, be sure you get some good legal advice and a good lease contract.

Ideally you want to stage a vacant home and leave it vacant, but in these times we are seeing much more renting than in the past, and we can work well with those arrangements when they are properly set up. Call me at 800-923-3245 if you have any real estate questions.

Improvement in the Ann Arbor Real Estate Market

2008-08-12T18:56:00.000-04:00

Is it possible the strong buyers' market is changing? Washtenaw County stats released by the Ann Arbor Area Board of Realtors August 12, 2008 indicate an upward trend in the number of sales and sale prices. The year-to-date residential listing inventory declined by 23% from the same period a year ago, and the average sale price for July rose 2% compared to a year ago. Pending sales, increased 12.39% compared to a year ago.

Everything points to continued improvement in our county's real estate market for the rest of this year. So, if you've been waiting to buy, get out there now and seriously consider making a home purchase before we really move off from the "bottom" of the market.

Call me at 800-923-3245 if you wish more specific information on any area within the county.

Which is Better, a Mortgage Broker or a Lender?

2008-06-24T18:55:00.000-04:00

Here's interesting commentary on this subject from a California newsletter. Click here to read more on this subject.

wish to talk more about home-buying? Call me at 800 923-3245. Barbara

Rent vs. Buy Calculator

2008-06-18T16:48:00.000-04:00

Click here to compare renting versus buying a home. It will take you only a minute and the results are very interesting!

Stay Cool and Save

2008-05-31T17:14:00.000-04:00

Summer is just around the corner, and as the temperature rises so does your energy bill. The cost of running air conditioning and fans on top of the cost of running your every day appliances eats away at the money you can spend on enjoying your summer adventures. However, you don’t need to spend the $1, 900 dollars that the Environmental Protection Agency says the average household spends each year. All you need to do is follow these eight easy steps to year round energy efficiency.

1. Upgrade Your Thermostat.
It’s hot outside we all understand that, but if you aren’t home twenty-four seven then why waste your money cooling any empty house. Just invest a little bit of money in a programmable thermostat, which will automatically keep your at different temperatures at specific times. This way you can have your house nice and cool when you get home from work, and not waste money keeping it cool when nobody is home.

2. Be Green.
Planting at least three shady trees around your house can cut $100 to $250 off your annual heating and cooling bill, and it will also improve your yards appearance. However, if you really aren’t the type do go planting you can still save energy by pulling the shades or closing your curtains.

3. Keep Your Air-Conditioning Unit Clean.
You can save money just by keeping your AC unit clean and in prime performance. Another great idea is to give your unit a professional tune up before summer gets into full swing. Even if you don’t have air-conditioning it’s wise to get your air filters checked every month or so to clean or replace them. Dusting off your refrigerator’s condenser coils is yet another great energy saving idea as this will make it run more efficiently.

4. A Better Bulb.
The kind of lamps and light bulbs you use are actually important. Traditional incandescent light bulbs and halogen lamps require far more energy then your typical compact fluorescent light bulb, and CFL bulbs last ten times as long. Halogen lamps are also dangerous fire starters. As CFL bulbs come in a variety of sizes they can fit any lamp, and they also come in a wide variety of colors. Using CFL’s with the Energy Star label don’t buzz or hum like other CFL’s do. This is a switch that can save you tons of money. Replacing just four 100-Watt incandescent bulbs with equivalent 23-Watt CFL bulbs can save you between $120 and $200 over three years.

5. Fans.
Adding a ceiling fan to a room can help balance out the room’s temperature, so you can turn down the AC and still feel cool.

6. Unplug.
Some appliances in your home continue to suck energy even when they have been turned off. The worst of these energy wasters are televisions, VCRs, DVD players, stereos, phones, and microwave ovens, although, just about anything with a clock, remote control or on/off light is wasting energy. One solution to this huge drain on your pocket buck is to plug everything that can actually be turned off into the same power strip and then use that as your on/off switch.

7. Fight Leaks.
Leaky windows and ducts allow your cooled air to escape into the outside, which means that your AC has to work harder to keep rooms the temperature you want them and cost you money. Ducts are often installed with leaks, so if you believe that your ducts are faulty then you should have them check out by a HVAC (heating, ventilation and air-conditioning) technician. Making sure that your ducts are properly sealed and insulated could save you up to 10% in energy costs.

8. Be a Smart Shopper.
The best way to save money is to invest in energy-efficient appliances. Always look for the Energy Star label when you’re looking to buy an appliance. Even though replacing appliances does require an upfront cost if you are replacing an old model appliance for a new energy efficient one then the appliance will pay for its self by saving you money on your bills.

Protect Yourself From Pesky Mosquitoes

2008-05-24T14:08:00.000-04:00

It's May and summer is approaching fast. Even if you haven't noticed them yet every Michigander's favorite insect, the mosquito, is out there and they aren't going away any time soon. So what can you do about it? Well, you could sit inside all summer or you could follow some simple tips on how to avoid being bitten and decrease your chances of catching any nasty mosquito-born diseases.

1. Try to avoid shaded areas where mosquitoes may be resting. Also try not to schedule any outside events around dusk or dawn, as mosquitoes are more likely to be active during these times.

2. Use special "Bug Lights" to illuminate your patios or decks. These lights don't have to be mosquito repellent to be effective. It's enough to just find light bulbs that simply don't attract mosquitoes like every day incandescent lights do.

3. Keeping a large fan running on your deck or patio will cut down on the number of mosquitoes.

4. Wearing protective clothing such as long pants and long sleeved shirts while you're outside will keep you from being bitten.

5. It's always a good idea to use insect repellent when you're outdoors. Particularly, look for those products with DEET, Picaridin, and Oil of Lemon-Eucalyptus, which are proven to be the most effective repellents. However, keep in mind to always follow the instructions on the label when you use a repellent as they can be harmful to YOU if you use them incorrectly.

6. Make sure to fix or replace any window or door screens with holes or tears in them. Also put 16-mesh screening or hardware cloth over any vent outlets on your roof.

7. Keep emergent vegetation to a minimum in any ponds and streams around your home.

8. Mosquitoes will use any standing water as breeding grounds, so try to eliminate these around your house.
- Keep your swimming pool chlorinated and clean.
- Repair leaky outdoor faucets.
- Dispose of any tires.
- Keep your roof gutters clear of debris.
- Change the water in birdbaths, plant pots, and pet water dishes regularly.
- Keep things like boats, small pools, and canoes turned over so water can’t collect inside them. Make sure to avoid allowing water to collect on pool or boat covers.
- Plug tree holes and stumps.
- Keep the shrubbery, weeds, and grass in your yard trimmed.
- Fill in or drain ruts and puddles in your yard.

Even small containers can breed hundreds of mosquitoes, so don’t leave standing water in containers of any size.

9. Keep ponds well stocked with mosquito fish, but first be sure to consult local fish and game personnel to see if you require a permit. It’s also wise to maintain steeply graded pond margins to keep any predators from eating these fish.

And remember, even if you follow these methods of mosquito prevention you may still get mosquitoes from an uninformed neighbors property, so don’t keep these tips to yourself. The more people you tell how to prevent mosquitoes the fewer mosquitoes you will have to worry about.

Where Do Ann Arbor Buyers Find Their Homes?

2008-05-14T13:02:00.001-04:00

The Internet continually gains ground in bringing together buyers and sellers. Something like 82% or 83% of all buyers search the Internet even before contacting a Realtor. As for finding the house they end up buying, here are the statistics from the 2007 National Association of Realtors study.

The percentage of buyers who found their home through
Their Realtor was 34%
On the Internet 29%
From a Yard Sign 14%
Home Builder or Their Agent 8%
Friend, Relative, or Neighbor 8%
Print Newspaper Advertising 3%
Knew the Sellers 3%
Home Book or Magazine 1%

Those buyers who found the home they wished to buy on the Internet, or from a sign, or otherwise, typically still worked with a Realtor for the benefit of an arm's length transaction, to have a skilled negotiator working on their behalf, and to insure a smooth closing.

Enlighten Your Kitchen

2008-04-28T18:51:00.000-04:00

Studies show that the kitchen is a major gathering spot, so why not make it look the best it can? It doesn't require a million dollar remodeling job just try making one or two lighting changes.

Track lights allow you to direct light anywhere and, with their multiple fixtures they can perform many different purposes. You can even use specialized fixtures to create mood lighting or task lighting.
Combining them with a typical kitchen fixture gives you a variety of choices for lighting your kitchen. You can use them to provide traditional lighting during the busy part of the day, and then to provide dim lightning during the evening.
Track lighting also helps you to see the hard reach spots in your kitchen so you can clean them to your satisfaction.

Recessed Lighting is particularly useful for highlighting new cabinets or artistic wall designs. It is also helpful for illuminating dark cabinets so that they can be cleaned more proficiently.

Under Cabinet Lighting help illuminate overshadowed countertop space making it easier to prepare food and sit and read while you eat. Lights should be installed uniformly, near the front of the cabinet. You can use either halogen or fluorescent lights. The first won’t last as long, but will create a white light that is easier to work by. Fluorescent lights

Rough Weather, Beautiful Deck

2008-04-12T23:41:00.002-04:00

Weather in Michigan is radical. Whether it's winter or spring you never know what to expect. Sun, rain, and snow can be detrimental to the condition of an outside deck. However, it turns out there is a way to protect your deck from showing the season.

You start off by thoroughly cleaning your deck to remove dirt, mold, mildew stains and weathered gray surface wood. This can be done with an acid-free, biodegradable deck cleaner. Be careful if you use chlorine bleach as a cleanser as it tends to degrade the structure of the wood.

Maybe you want to refinish your deck, or just give it a new look. If so, all you have to do is use a stain and finish remover.

Once you have cleaned and restored your deck it's time to protect it. Use a stain or finish that will repel water and that contains a UV-blocking pigment to protect against damage by the sun's rays. You can even use a transparent oil finish, which will give your new or weathered wood a beautiful oil sheen. Oil finishes will also protect against the rot and decay caused by mildew and fungi growth.

Protecting your deck from the elements may take a little work, but your neighbor's awe is worth it.

Say Goodbye to Flat Boring Walls

2008-04-02T14:50:00.004-04:00

Bring new life to your walls by using texture to add style and dimension. Textured stencils are quick and easy to use, and can be bought from any paint or craft store. The only trick is trying to decide which stencil is best for the surface you wish to revitalize.

Once you've made your decision all you need are some painters' tape or repositionable spray adhesive, measuring tape, a metal trowel, and a texturing medium. Before you begin to use the stencils you must make sure your previously painted or primed surface is clean, dry, free of dust, and sound enough to work with.

As soon as you have all your tools together, you just follow the reference guide on the stencil. Using painters' tape or repositionable spray adhesive, position the stencil onto the chosen area on the wall and press down firmly.

If you want to give your walls a multi-dimensional look, Modern Masters recommends that you use Modern Masters Texture Effects Multi-Purpose Texturing Medium instead of ordinary latex paint. Texture Effects is very useful as an all-over wall texture and for stenciling. It can also be used to create raised reliefs and heavily distressed textures. Durable and versatile, this painting marvel can also be tinted to any color with universal colorants or at a local paint store.

Perhaps you want the ultimate texture look for your walls. In order to achieve this effect you must first use Texture Effects to create an all-over wall texture. Once this has dried, you use your texturing medium to add a stenciled look. Finally, you trowel Texture Effects over and through the stencil at a flat angle. Be sure to do this with a light even pressure, like you would to ice a cake, otherwise the material will be pushed under the stencil and your texture will be ruined.

After you have smoothed and evened out your chosen texture, you can remove the stencil. To do this, carefully lift the stencil and pull it straight away from the wall. Repeat this pattern and texture throughout the surface, and then be ready to invite everyone you know to admire your beautifully textured walls.

Everyone in Ann Arbor Needs a Shredder!

2008-03-08T07:38:00.001-05:00

Today's Ann Arbor News has an interesting, tho a bit scary, article about identity theft. Ann Arbor was ranked 3rd among metropolitan areas in the state for fraud complaints and 2nd in Michigan for identity theft complaints.

You've heard it before, but again - shred all documents, including those frequent solicitations for opening new charge accounts; do not give any personal info to strangers over the phone; check your credit report occasionally.

To read the full Ann Arbor News article click here.

Having Trouble Making Your Mortgage Payments?

2008-03-03T09:54:00.001-05:00

You are not alone. Our recent housing boom led to a record homeownership rate of nearly 70%, but some homeowners are now facing problems making their mortgage payments and cannot refinance their loans. But, for many, there is help. Read more

FHA News in the Ann Arbor Area

2008-02-04T14:49:00.000-05:00

It appears that the Senate will pass the FHA stimulus package this week. The timing of the President’s signing of the bill will depend on whether the Senate makes any amendments to the stimulus bill. There are no amendments expected on the mortgage limits. If the Senate passes amendments to the tax incentive portion of the bill, it will require the House and Senate to have a conference before the final bill can then be passed by both Houses of Congress and sent to the President for signature.

At this time, it is anticipated the FHA maximum loan limit in Washtenaw County will increase to $344,875.00. I will keep you updated as more information becomes available.

Foreclosures and the Mortgage Meltdown

2007-10-18T08:28:00.000-04:00

You've no doubt read that Michigan is 4th in the nation in foreclosures. The following article is interesting in that it explains how so many people got caught in this situation at this time. Click on this link to read more http://rismedia.com/wp/2007-10-17/a-mortgage-meltdown-quiz/.

Free Water Testing

2007-09-07T08:16:00.000-04:00

Residents of Washtenaw, Monroe, and Lenawee Counties who rely on groundwater to supply their drinking water are offered free water testing and nitrate screenings through the Michigan Groundwater Stewardship Program. Although your groundwater may come from a deep well, actions above ground may still impact it.

The EPA (Environmental Protection Agency) recommends that well water used for drinking should be tested once a year for nitrates, nitrites, and bacteria. Your well can be contaminated by nitrates and phosphates from fertilizers, septic waste, fuels from storage tanks, and pesticides. Since many contaminants are colorless and odorless, they are not detectable except by testing.

For a free water quality risk assessment, call Aistis Tumas at the Washtenaw Conservation District 734-761-6721, ext.101. This assessment will evaluate your house and property for pollution and health risks relative to your water supply.

What Are Home buyers Looking For?

2007-08-09T18:11:00.000-04:00

The National Association of Realtors 2007 Profile of Buyers’ Home Feature Preferences has been recently released and shows some interesting changes in Home Buyers’ preferences.

Since the last survey in 2004, oversize garages saw the biggest growth in terms of what recent buyers considered very important in a home, gaining 16 percentage points to 57 percent. Among buyers who purchased homes without this feature, 56 percent of them said they would have paid more for an oversize garage, compared to only 6 percent in the 2004 survey.

Other priorities for today’s home buyers include air conditioning, with three out of every four respondents ranking this as “very important,” and a walk-in closet in the master bedroom, which was very important to 53 percent of respondents. Hardwood floors and granite countertops each gained 7 percentage points from the 2004 survey, with 28 percent and 23 percent, respectively, of buyers viewing these features as “very important.” Gaining 6 percentage points was cable/satellite TV-ready, at 46 percent.

The survey reports responses from buyers who purchased homes in 2006. Home buyers were asked about 75 features and room types to assess the importance of each.

“Realtors® see hundreds, if not thousands, of houses with their buyer clients every year and know exactly what buyers are looking for in a home,” said NAR President Pat Combs, of Grand Rapids, Mich. “This insight is one more way Realtors® add value to the real estate transaction and why nearly eight out of 10 recent buyers used a real estate professional when buying their home.”

According to the survey, nearly six out of 10 recent home buyers took on remodeling or home improvement projects within three months of their purchase. Close to half of home buyers who remodeled or made improvements updated their kitchen, and nearly half remodeled or improved their bathroom. New homeowners spent a median of $4,350 on home improvement or remodeling projects undertaken within three months of purchase.
More than half of home buyers believe their home has high investment potential, and another four out of 10 believe it has moderate investment potential. Only 3 percent felt their home’s investment potential was low.

“The fact that a majority of home buyers quickly remodel key areas of their homes ties into the fact that their home is a good, long-term investment,” said Paul Bishop, NAR manager of real estate research. “Regardless of market conditions in the short term, when purchased for the long term, housing is one of the safest investments consumers can make.”
Energy efficiency was more important to new-home buyers than buyers of existing homes, with 65 percent of new-home buyers saying it was very important compared to 39 percent for buyers of existing homes. Older buyers placed a higher priority on energy efficiency than did younger buyers – 63 percent of buyers 75 and older said it was very important, but only 32 percent of buyers who were 18-24 agreed.

The survey identified some regional preferences in home features. For home buyers in the South and Midwest, central air conditioning was a priority, with 91 percent and 81 percent, respectively, saying this feature was very important. Sixty-six percent of buyers in the South thought a walk-in closet in the master bedroom was very important, while 61 percent of Midwesterners valued an oversized garage. In the Northeast, the highest percentage of buyers placed a premium on a backyard or play area (53 percent), followed by central air conditioning at 41 percent. Two-thirds of buyers in the West want oversized garages (66 percent), followed by central air conditioning at 59 percent.

Age was the biggest differentiation in what buyers were looking for in a home. Buyers 75 years old and older wanted a single-level home (74 percent) that was less than 10 years old (43 percent) with a walk-in closet in the master bedroom (74 percent). Most buyers between the ages of 25-34 wanted a backyard or play area (60 percent). More than half of buyers over 65 wanted a separate shower enclosure in the master bathroom, compared to only one-fourth of buyers ages 25-34.

For those who purchased a home without it, 65 percent of buyers said they would be willing to pay a median $1,880 extra for central air conditioning. One out of four buyers was willing to pay a median of $4,760 more for waterfront property.

Homes are getting bigger, but have fewer bedrooms. From 2004 to 2006, the size of the typical home purchased increased by about 100 square feet to 1,840 square feet, while the median number of bedrooms dropped from four to three during the same period. The median home age reported in the current survey is 12 years, down from 15 years in 2004.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing more than 1.3 million members in all aspects of residential and commercial real estate.

Follow-up on the "Pop-Up" Tax

2007-05-09T18:01:00.000-04:00

Many of us were hopeful that our State legislators would put a moratorium on the "pop-up" tax to help give a boost to home sales. It now appears the bill is going nowhere fast.

"I wouldn't say it is dead, but it is definitely on the slow track," state Sen. Nancy Cassis, R-Novi, said. "It would cost the state too much."

The state House had earlier passed House Bill 4440 to suspend the pop-up tax for anyone buying a house from March 1 to Sept. 1, 2008. It would basically let the new buyer inherit the property tax rate of the current owner rather than suffer a re-assessment, which typically adds thousands of dollars to annual property taxes.

"The treasury department said it would cost $90-$100 million over three years and Cassis adjourned the meeting," said Bill Martin, chief executive officer of the Michigan Association of Realtors. "It was over that fast. The state didn't do a dynamic study, which takes more talent. If it had, the Senate would have heard that the housing market can stimulate the entire economy."
Martin said the average home buyer spends $40,000 within a year on items such as furniture, wallpaper and wood to build that new deck. Add all that up, and the $90 million deficit could turn into a profit for area businesses, he said, still hopeful something will get done before the spring selling season ends.

"It's basically dead, but that could change tomorrow given the situation in Lansing," Martin said. "It's the craziest I've ever seen it."

With all our budget issues, the pop-up tax isn't a top priority right now, Martin said. "The Association of Realtors estimates the high property taxes in Michigan decrease home buying power by about $50,000, meaning sellers get less for a house, too. I know in our market area, both sellers and buyers are constantly complaining about the high taxes, particularly within the City limits of Ann Arbor, Saline, Ypsilanti, and Milan.ovtakj

Short Sales

2007-04-04T13:39:00.000-04:00

Michigan is now 5th in the country with numbers of foreclosures. This is partly due to our struggling auto industry, partly due to too much easy borrowing and re-finances, and partly due to our economy in general and a high 7.2% unemployment rate.

Banks are never happy about getting more real estate on their books. Thus it is now more possible than ever to effect a short sale rather than go through a foreclosure. So if you or a family member are "upside-down" with your mortgage, that is, owing more on your home than it is worth in today's market, and you have to sell, call me at 800-923-3245 or email me at barbara@bgaines.com. Perhaps I can help you with your situation.

A short sale means listing and selling your home for less than the mortgage owed on it and having a negotiated agreement with your lender to take this lesser amount. As a result of doing this, you the Seller end up with a minor "blip" on your credit record. If you had to go through with a foreclosure, that stays on your credit record for TWELVE years. And during that time if you try to get a new mortgage on another home, you will pay above average interest rates.

The "Pop-Up Tax"

2007-03-19T10:14:00.000-04:00

Representative Andy Meisner introduced legislation for Speaker Dillon’s proposed 18 month moratorium on tax uncapping upon real estate transfers, otherwise known as the “Pop-up Tax.” House Bills 4440 and 4441, introduced last week in the Michigan House, represent a vision for boosting Michigan’s economy and its housing market. The House Democrats held a press conference earlier this week to roll out their plan. House Bill 4440 passed out of the House Commerce Committee early Tuesday. House Bill 4441 is expected to be taken up later this week in House Tax Policy committee.
The Michigan Association of Realtors is concerned about the cliff at the end of the 18 months, and is working closely with legislative leadership in both the House and the Senate on the community ratio plan to ease the prospective drop off in activity. Currently, the Senate Republican Majority supports the idea of a moratorium, but is working on a long term proposal as well. I will continue to update you with any news or progress.

Proposed Tax Break for Homebuyers

2007-03-13T15:09:00.000-04:00

There's a proposed tax break in Lansing that may help our real estate market. Lawmakers are discussing an 18-month moratorium on stepping up the taxable value and the taxes when a residence sells. What happens presently is that when you buy a resale home, it may have fairly low taxes because of several or many years of capping the taxable value. Typically, upon transfer, the taxable value is stepped up to 50% of the sale price, thus causing a sometimes very significant increase in taxes that the new homeowner must pay.

What is being proposed is to retain the present taxable value on the residence for the first 18 months of ownership by the new owner. This change would apply to any home purchase agreement since March 1, 2007 and before September 1, 2008. Keeping the taxable value cap could mean significant savings for a home buyer. This proposal has the potential to really boost our sagging real estate sales, and when real estate is selling well, that boosts the entire economy.

I'll be watching this development, and will report when I hear more!

Annual Survey of Vacancy Rates for Office Space in Ann Arbor

2007-02-09T06:53:00.000-05:00

For the past 14 years Swisher Commercial has surveyed the vacancy rates for office and flex space in the Ann Arbor area. To read about the results of their survey for 2006, click here.

Timing Is Everything

2007-01-29T10:31:00.000-05:00

Selling your home and buying another is a challenge, but with the help of a professional it can be done without ever becoming "homeless." With our current market here in southeastern Michigan, with an abundance of listings for sale, it is important to get your present home listed for sale before you even start a serious home search for your new home. Obviously, you need to have talked to a Realtor and done some online searching to be sure you can affordably make the move to the area you desire, before you put your present home up for sale.

It's helpful to have a Realtor come into your current home and suggest ideas to make your home more marketable and competitive. Certainly pricing is a key element. Your Realtor can give you insight into the real estate market and show you listings comparable to yours and how they are priced. For example, what is the typical selling period? Likewise, look for the types of homes currently for sale. Educating yourself about market conditions will make the process less stressful for you.

You then need to explore whether you would be comfortable renting for a period of time if your home should receive an offer before you've found a home to buy. If not, your Realtor will work with you and add language to your contracts to sell and to purchase to coordinate the two closings.

If you are moving out of the area, to another State for example, ask your Realtor to search for a Certified Residential Specialist (CRS) who works in that new area. A CRS is a proven leader in residential real estate - only 4% of Realtors nationwide hold this designation. A CRS can offer you a great deal of insight into the new area before you ever go there for a visit to look at homes.

Tax Planning

2006-12-01T14:29:00.000-05:00

Upon opening my mail today and seeing the December real estate tax bill, I started thinking about year-end tax planning. For starters I need to catch up with loading my year-to-date check register from my bank so I can see my income and expenses for the year. I'll go over this and meet with my accountant to make some year-end decisions.

If you find yourself with more income this year than anticipated, and a significant tax liability, you should consider prepaying some items this year. For example,
- if you have a December tax bill, as I do, that is not due until February '07, you could pay it prior to the end of 2006 to get that deduction for this year.
- if you make state estimated tax payments, consider paying the fourth quarter installment in December '06 instead of waiting until the due date of 1/15/07.
- make your January mortgage payments on all real estate holdings in December '06 instead of waiting until January '07.
- if you have a business and need any new equipment, the current year write-off for these purchases is $108,000.
- clean out your closets now and donate unwanted household items and clothing. The I.R.S. allows donations only for items in good condition. You may wish to photograph your donations for proof of condition and then also be sure to get a receipt for these donations. Be sure to check this year's limit on charitable givng.
- if you have a post-secondary student in school, there is the Hope Credit and the Lifetime Learning Credit that applies to some taxpayers.

Following are some useful websites to provide you with additional info:

--- www.irs.gov - get up-to-date forms and information
--- www.justgive.org - find out where to donate unwanted belongings
--- www.intuit.com - download Turbo Tax software
--- www.microsoft.com - download Money software

At Last --- Good News for Real Estate!

2006-07-22T14:11:00.000-04:00

The recent announcement from Google that they plan to come to Ann Arbor may bring some badly needed relief to the real estate market as well as help out in many other business arenas in this area. Google plans to expand its advertising division, Adwords, and anticipates hiring over 1000 or more employees over the coming 5 years. The best part is that they plan to begin operations here in the Fall of 2006 even if that means renting temporary quarters.

Google's presence is likely to spur other IT developments in this area too - all in all, a big boost for our economy and our spirits which have been flagging of late.

Time to Crank Up Your AC

2006-05-11T21:05:00.000-04:00

It's not really time to turn on your AC yet, but maybe in another month . . . When you do, you might want to check your SEER rating. Back in January '06 the U.S. Department of Energy changed the requirements for manufacturers of air conditioners and heat pumps to produce equipment that has a Seasonal Energy Efficiency Rating of at least 13.

SEER is the number used by DOE to measure the efficiencyof the equipment. SEER is to air conditioning what the R factor is to insulation. The higher the number, the more energy efficient the product.

Previously the minimum SEER number was 10, but the U.S. government wants us to use less fuel to cool our homes. The nearly 1/3rd increase in the minimum standard is projected to reduce energy bills for homeowners by up to 30 percent.

If you have an older unit with less than a 12 SEER rating, no one will make you replace it. It may, however, become harder to buy replacement parts if your unit needs repairs. If you find our summers to be too humid for you, you run your air conditioning constantly, and also plan to be in your home for a while, you may want to buy a new AC now. The higher the SEER rating the better. It will also be more costly as the SEER rating goes up, but you'll be money ahead in the long run. And you'll be preserving our precious natural resources! The new products are also quieter, and they use an environmentally sound refrigerant.

For more home improvement tips and information, go to www.onthehouse.com.

Ways to Improve a Credit Score

2006-03-08T12:05:00.000-05:00

First, a little background on credit scores: Your credit is based on something called a FICO score which is used by mortgage lenders and others in the credit industry. The typical FICO score is based 1/3rd on your payment history, another 1/3rd on the amount of your debt, and the balance is based on other factors such as the length of your credit history, the amount of your new credit, and types of credit in use.

Second, scores range from 350 to 850. The higher your score, the better the interest rate you will receive when you do any type of borrowing, plus with a higher score you have more financing options. Ideally you want your score to be over 650, and a really good score is 760.

You can get a free credit report and learn your score by going to www.annualcreditreport.com or call 1-877-322-8228. There are 3 nationwide credit reporting companies and their information is consolidated at this site. Once a year you can get a free credit report at this site.

To improve your credit . . . First, review your credit report for accuracy. Mistakes on your credit report should be corrected. Second, make sure you are current on your bills, and continue to pay your bills on time. Third, keep balances low on revolving credit card accounts. Fourth, pay off debt rather than moving it between credit cards. Fifth, if you're buying a home, allow me to connect you with a preferred mortgage lender who can help prepare the best loan package for your circumstances. Even with a lower credit score, buyers are often surprised to discover how the lender can help to improve that score and also find a particular program to help them get the home of their dreams!

If you have any questions about the Fair Credit Reporting Act, please do not hesitate to contact me by email (barbara@bgaines.com) or phone (800-923-3245).

Deferring Taxes on the Sale of Your Personal Residence

2006-02-14T20:22:00.000-05:00

One cannot repeat this information too often. I gave a talk today at the local Women's Club and discovered again (as I do in almost any large gathering) that some folks still do not realize that one can sell his or her personal residence and exclude the gain on the sale from taxation. So here goes the outline of my talk today ---

Sale of a Personal Residence and Exclusion of Gain

In selling a personal residence, the seller may be able to exclude from tax up to $500,000 ($250,000 if the seller is single or otherwise does not file a joint return) of the gain on the sale. Please note that this exclusion is not available for vacation or second homes.

To qualify for this exclusion, a number of factors must be considered:

Principal Residence

The residence must have qualified as the principal residence of the taxpayer for an aggregate of two years during the past five years prior to the sale.

-To be a personal residence, it must have been owned and used by the taxpayer during the two year period.

-In the case of a husband and wife filing a joint return, the exclusion will apply if either satisfies the ownership requirement.

-If the residence is received from a former spouse in a divorce or separation proceeding, generally the ownership of and use by the former spouse will, subject to certain limitations, be attributed to the taxpayer.

-If the taxpayer during the five year period resides partly in a nursing home, that period will be treated as using the principal residence if the taxpayer actually uses the residence for an aggregate of a year.

-If the failure to meet the two year period is attributable to employment, health and other unforeseen circumstances, then a proportionate part of the exclusion will apply, which proportion is based generally on the percentage of the two year requirement met.

Limitations on Use

-Two Year Limitation. The exclusion applies to one sale every two years only.
Note that if you own a second home, vacation or rental property, you could sell your principal home now and avoid the taxes on the gain, then move into your second home and stay for 2 years and then sell that also as your principal residence and avoid the taxes on the gain on that one also.

-Depreciation Recapture. Any depreciation deductions taken on the residence after May 1997 will be recaptured and gain recognized.

Note: This information is supplied by Barbara Gaines, a Realtor with Real Estate One. Barbara is not an attorney nor an accountant, so it is advisable to seek opinions from both your attorney and accountant prior to relying upon this information.

If I can answer any real estate questions for you, please feel free to call me at 734-439-8405.

Seller Incentives in New Construction

2006-02-03T09:09:00.000-05:00

I had lunch with a real estate sales rep for a large developer yesterday and visited with another sales rep for a different large subdivision last week. Both spoke of the incentives they now offer. It used to be . . . you went to a new development neighborhood and paid the posted price for the house you wanted and paid the list price for all the upgrades. If you couldn't or wouldn't, you went elsewhere. Not today - now the salesperson may offer as much as a $10,000 incentive in upgrades. If you have a definitive price point but want lots of stuff, they may say, "Well, let me discuss this with the builder, and we'll get back to you."

What does all this mean to you current Sellers with your homes on the market? You need to get aggressive with your pricing and get competitive. You have to show your home in clean tip-top shape. If you are downsizing, you may have to take a loss if you've lived in your home only a few years and bought in a hot Seller's market. Take it sooner rather than paying an additional 6-8 months house payments hoping you'll get lucky! If you are a move-up Seller, don't worry. The lower price you may have to take to sell today will be replicated when you buy your bigger house, but in bigger dollars, so you come out ahead!

And if you are a first-time buyer or an investor, jump in the market now! It's a fantastic market for Buyers! Call us today at 800-923-3245.

State Supreme Court Clears Way for Toyota

2006-01-24T20:09:00.000-05:00

Reported today in Crain's Detroit Business -

"The Michigan Supreme Court has cleared the way for the state to sell 690 acres in York Township to Toyota Technical Center USA Inc. for $11 million. The company plans to build a $195 million, 400,000-square-foot technical center on the site in Washtenaw County.
The high court Tuesday killed a lawsuit by West Bloomfield Township-based DPG York L.L.C., which had offered $25.2 million for the land. The developer claimed that the state had unfairly passed over its bid when the State Administrative Board last April approved an agreement for Toyota to buy the land for the lower price. " Full story

While the State of Michigan has its economic problems, here in Washtenaw County we are in better shape than in many parts of our State. Having Toyota's Technical Center come in will bring an estimated 300+ new jobs to this area plus boost other development in and around York Township.

Downtown Development in Ann Arbor

2006-01-23T20:50:00.000-05:00

Last Thursday the City Planning Commission approved 3 new multi-use projects in downtown Ann Arbor. If the City Council also approves these projects, as presented, they will add 288 units to downtown. The biggest project is the William Street Station which is to be on the site of the old YMCA between Fourth and Fifth Streets. The project is to include 100 low-income housing units to replace the low-income housing of the former YMCA and another 45 units will be affordable residential designed to house low-income professionals.

Recent projects such as Kingsley Lane apartments, Loft 322 near Seva restaurant on Liberty Street and the redevelopment of the Eaton plant into Liberty Lofts have been approved in the past couple of years. The majority of these units were reserved even before work began.

Housing values rose in Ann Arbor, increasing 129 percent from 1990 through 2004, according to figures from the U.S. Census and Washtenaw County. In 1990, the median home value was $116,400. By last year, the figure rose to $266,051. Where average square foot pricing in homes throughout ann Arbor may be at $200 per square foot, in the downtown condominiums one sees more like $300-350 per square foot.

Cost vs. Value of Remodeling

2006-01-14T10:28:00.000-05:00

Just released by NAR (National Association of Realtors), the "Cost vs. Value Report" shows the home remodeling projects that will yield the best return at re-sale. This report is the result of a compilation of surveys from across the country.

For the fourth consecutive year, the four projects that have the greatest return are the bathroom remodel giving a 102% return, vinyl siding replacement with a 95% return, a major kitchen remodel with a 91% return, and window replacements giving a 89% return.

Keeping up with the Joneses can turn out to be a savvy investment. But, truly, the best reason for a remodel is to enjoy it!

2006-01-11T09:28:00.000-05:00

After a really "down" fall and winter in the Ann Arbor Area real estate market, January 2006 has started off looking positive. The phones are ringing and showings on listings are up. There's still an oversupply of listings and not enough buyers, but with the slowdown on housing starts, the numbers are not as bad as during the fall.
Mortgage rates are still exceptionally good, typically 6.25% on a 30-year fixed rate mortgage. If you were a homeowner in the 1980s, when rates were 14-20%, you can appreciate how great our rates are today!

Welcome

2006-01-10T20:13:00.000-05:00

Welcome to my blog. I am a Realtor in the Ann Arbor area.