Scott Petersen - Canton - Plymouth - Real Estate

When I am traveling with my children, the phrase "Are We There Yet" is muttered several times during the trip. This question is asked, just as it has been obligingly asked for hundred maybe thousands of years. However, now I am hearing it from my clients, "Are We There Yet?" Are we at the bottom of the market yet? From my vantage point this summer could be defined as the season we hit the bottom for this Real Estate Market. I am seeing 3-12 offers per house on Bank Owned properties. This tells me that there are buyers out there.. they are just looking for bargains. Who can blame them with as many deals as there are on the market. There are three streams joining together to create the RIVER that is washing away the value of Real Estate in this Michigan market:

 1.  Auto industry uncertainty and decline. Job loss = population decrease = vacant properties = lower sales prices. It's that simple. High gas prices are compounding this issue.

 2. Mortgage Crisis. The few buyers that are in the market are finding it very difficult to get approval for a mortgage.

 3. High Inventory of homes. The record number of Bank Owned foreclosed homes are causing a bidding war to the downside as banks compete with other banks to rid themselves of their inventory. Banks have no magic number as many homeowners do.. as to what they MUST sell their home for. To the banks the home is just one of hundreds in a portfolio that must be liquidated at all costs.

If one of these streams can be dammed, we will see improvement. If all three can be stopped, a true rebound will start immediately. With the good news oil prices dropping along with commodities, hopefully we will see the first stream improve. The other two may take longer, but there is hope that this may be our exit and we may be there and not know it yet.  

Tips to Warm Up Your Winter

1. Color your world. You can change the look of

a room in a matter of hours with paint, and we’re

not just talking about the walls. Ceilings, trim,

and chair rails can be punched up, and there are

many faux finishing techniques that are perfect

for the do-it-yourselfer.

2. Update window treatments. If your windows

need a makeover, lighten them up with simple

drapery panels. Lowe’s has a collection of drapes,

blinds, shades and swags in the latest colors and

fabrics.

3. Rearrange the furniture. Create a new look

without spending a dime! Map things out on paper

before you start moving pieces around, especially

the heavy ones.

4. Re-purpose a room. Do you have a living

room or extra bedroom that’s not being fully

utilized? Turn it into an office, gym, media room or

playroom for the kids.

5. Accessorize! Little details can make a big

impact. If your current accessories have lost

their luster, replace them with decorative books,

candles, and interesting pieces that reflect your

personality and hobbies.

6. Don’t forget the floors. Nothing beats the smell

of fresh carpet, to give your home that “new

house” feel.

7. New countertops can transform a kitchen or

bath, without having to remodel the entire room.

And you don’t have to spend a fortune: affordable

laminates now come in styles that look amazingly

close to real granite, marble and quartz.

8. Think spring. Add fresh cut flowers and new

house plants to green up your living spaces, and

remind you that spring is on its way!

9. Decorative moulding can add instant

glamour to any room, and it’s easier to install

than most people think.

© 2008 by Lowe’s®.

Contrary to the conviction of deeply confused civilians and reports by lazy news media, mortgage rates are unchanged, about 5.75 percent for the lowest-fee 30-year paper.

If you don't believe me, visit www.freddiemac.com and its weekly survey. It is unbiased by sales jive, although it suffers from "survey lag" (early-week data released on Thursdays always misses real-time reality), and assumes a fractional origination fee. Last week's "5.48 percent" captured the one-day hysterical bottom when the industry could not log onto rate-lock Web sites. Yesterday's "5.68 percent plus 0.4 percent origination" is still about right, and all but identical to the prior week's "5.69 percent plus 0.5 percent."

Yet, the media refer constantly to "dramatically lower mortgage rates." They are better, but ... drama? Freddie's average for the whole of 2007 was 6.34 percent. A half-percent drop is nice for buyers, and a help to a few refinancers, but no fire sale.

"How can it be the same ... !?!" says the client, after a cumulative 1.25 percent cut at the Fed in only eight days? Answers follow.

Brand-new January economic data are not that bad. They're not bad enough to justify the Fed's panic, let alone to anticipate more cuts. Payroll growth slipped to flat in January (negative 17,000 is within the huge range of error and revision), unemployment down to 4.9 percent in a workforce statistical quirk -- soft, but hardly a recession. The purchasing managers reported their first gain in six months, likewise soft, but with persistent strength in foreign orders. Fourth-quarter GDP grew by a mere 0.6 percent; however, aside from a temporary drawdown of business, inventories grew at 2 percent.

The Fed's form is disturbing to long-term investors. Central banking is not figure skating, but Fed Chairman Ben Bernanke has departed his predecessor's 17 years of gradualism for lurching on the rink. A Fed that will lurch down will lurch up.

Investors bought long Treasurys and mortgages at these levels 2002-2004 because former Fed Chairman Alan Greenspan said after every meeting into 2006: Excessive monetary stimulus most likely will be "removed at a measured pace." Translation: You're safe for now, and we'll give you time to get out before we kill you.

In those late Greenspan years, deflation was the problem. Today, inflation is rising all over the world: Australia at a 16-year-high of 3.8 percent core; Europe at a 14-year-high of 3.2 percent; U.K. at 2.6 percent core; China at 6 percent-plus; and an economy completely out of control beginning to export inflation to us. Each time the Fed has lurched to a catch-up ease, all the way back to August, it has rescued stocks, commodities, oil, gold, and tanked the dollar.

I have chewed on the Fed for its inaction and credit-wreck oblivion. However, this situation is NOT a monetary problem: It is a banking-system near-insolvency that may morph into a recession, each making the other worse. The crying need for six months has been transparency of credit loss and bad-asset firewall. Cuts in the overnight cost of money may intercept recession, but inflation means that these cuts cannot be maintained or removed at a measured pace.

A central bank chairman must be prepared for the ultimate sacrifice: No tough inflation problem was ever solved by slow growth. It takes a recession. It takes higher unemployment and crushing the commodity spiral. To get long-term rates down, Bernanke must get the good out of this slowdown: He must let it get ugly. Instead, he has rescued inflation-pushing markets again and again.

Two non-Fed forces holding up mortgage rates: Credit fear about Fannie and Freddie has the spread between mortgages and the all-defining 10-year Treasury (3.57 percent today) over 2 percent for the first time ever. Second, somebody by accident may arrive at an effective credit-wreck bailout: The giant bond insurers, Ambac and MBIA, may be resolved in days. If no collapse, then credit fear will give way to inflation fear.

The Fed's cuts have had a dramatic effect on ARM adjustments, and should revise estimates of housing doom to the better -- also reducing bond-market fear. This month, common one-year Libor-floating loans will adjust DOWN to 5.125 percent.

Lou Barnes is a mortgage broker and nationally syndicated columnist based in Boulder, Colo. He can be reached at lbarnes@boulderwest.com.

***

What's your opinion? Send your Letter to the Editor to opinion@inman.com.

Copyright 2008 Lou Barnes

It has been said that the dictum of real estate is location, location, location. This is still true, but there is an addition today of another trinitarian proverb: Pricing. I am seeing properties in prime locations languish on the market for months and even years. It is not their condition nor location that is causing the home to not sell, it is the price. The buyer's psychology of this market is that the housing market is ON SALE! And the buyers are right.

I think that I have found a solution to the pricing delima of how to price a home so that buyers will be interested, but not underprice the home so that the seller loses thousands. The key to this market is finding the few buyers out there and beginning a dialogue with them. My pricing technique accomplishes this. I am pricing my homes that I have listed with this technique and I will keep you informed about how succesful we are! Feel free to contact me to learn more.

Listing after listing in today's market reads, "Subject to Short Sale". I have taken this term for granted for years, as it has been a popular technique for investors to buy homes. Rrecently, however someone called me and asked, "what is a short sale" and I realized that Realtors were making the simple complex again. So, I will attempt to define Short Sales, simply.

A short sale is nothing more than an agreement from a mortgage company to forgive a portion of a loan to allow it to be sold before being foreclosed on.

Many homeowners in this market are selling their home while asking for short sales from their mortgage companies, The short sale allows the homeowner to list and sell their home for it's current value. Many ask why would a mortgage company forgive $10,000 - 100,000 from a loan through a short sale. The answer is it is good business. The average loss to a mortgaege company for a foreclosure is $80,000. So, if a mortgage company can short sale a loan for $50,000, they just saved $30,000. For the seller who receives a short sale, their credit is damaged less from a short sale than a foreclosure, and for the buyer they purchase a home for the current value or less. So, short sales can be a "win-win" for all. This is why many listings in this declining valuation market are being sold "Subject to Short Sale".

Farmington Acres, Farmington Hills  -  Announcing a NEW LISTING on 33490 Kirby, a 2,532 sq. ft., 2 bath, 4 bdrm 1 1/2 story. Now MLS® #27127865   $215,000 - Like New Construction!.

Property information

Sellers should always get home inspection

If you don't, be prepared for legal troubles and long time on market

Tuesday, June 19, 2007

By Barry Stone
Inman News

Dear Barry,

The other day, my father mentioned that if he sells his house he will not allow a home inspector on the property. This sounded pretty rash to me. If he forbade a home inspection, what would he be required to disclose? If defects were discovered after the sale, wouldn't he be liable? --Mary

Dear Mary,

Home inspections have come to be regarded as a reasonable and routine procedure when buying a home. In fact, most real estate purchase contracts specify inspections as a buyer's option, thereby obligating sellers to accommodate this normal disclosure process. If your father were to refuse a home inspection of his property, he would not only violate that contractual provision but would foster an air of suspicion in the minds of most buyers. Even if he had nothing to hide, his position would appear suspect.

Worse yet would be his legal posture if undisclosed problems were to arise after the close of escrow. Even if he had no prior knowledge of existing defects, who would trust the denials of a seller who had stood in the way of the standard discovery process.

If your father wants to conduct an as-is sale, this can be done without prohibiting a home inspection. In fact, the safest approach would be to hire a home inspector of his own to provide thorough disclosure of defects and to demonstrate that there are no intentions to withhold vital information about the condition of the property.

As to which conditions he, as seller, should disclose, the best practice is to tell all. Anything and everything that could possible warrant concern on the part of a buyer should be fully divulged. This is the best way to avoid liability after the deal is consummated.

Dear Barry,

Our home has an addition, built without a permit before we owned it. Until recently, there were no problems, but lately we've noticed settlement cracks in the foundation and a slight sloping of the floor. My husband says this is not a big deal, that most homes in the area have cracks because of the clay soil. If we paint the house and sell it, do you think the small cracks in the foundation would hinder the sale? --Linda

Dear Linda,

In today's litigious business environment, the last thing you want to do is paint and sell. Foundation cracks and an uneven floor may or may not be signs of serious structural problems. But a definite determination should be made prior to selling the property. If you were to sell the house, and a major foundation problem were later discovered, you could spend three years and large numbers of dollars in needless litigation. The safe and sensible approach is to hire a licensed structural engineer to fully evaluate these conditions. If the cracks and sloping indicate no significant problem, you'll have engineering documentation to assure buyers and to protect yourselves from future liability. If a serious problem does exist, you'll be able to disclose it to buyers or have it repaired prior to sale.

To write to Barry Stone, please visit him on the Web at www.housedetective.com.

***

What's your opinion? Send your Letter to the Editor to opinion@inman.com.

 

Copyright 2007 Barry Stone