Scott Petersen

Buyer Tax Credit

Scott Petersen — Wed, 03 Jun 2009 01:00:00 GMT

The annoucement recently that the 10% Buyer Tax credit - up to $8000 will be allowed to be applied towards the down payment. This should really help buyers that do not have the downpayment.

"The Federal Housing Administration (FHA) laid out the details of a new policy [Mortgagee Letter 2009-15] on Friday that will allow first-time homebuyers to apply the $8,000 federal tax credit toward the purchase costs of an FHA-insured home. HUD Secretary Shaun Donovan said he expects the action to stimulate home sales across the country.

The American Recovery and Reinvestment Act of 2009, enacted under President Obama, offers homebuyers a tax credit of up to $8,000 for purchasing their first home before December 1, 2009, but the credit can only be accessed after filing an amended tax return with the Internal Revenue Service (IRS). However, the new FHA rules allow first-time homebuyers using FHA-backed financing to obtain a short term loan from state housing finance agencies and certain non-profits for 10 percent of the home's price, up to the full amount of the tax credit."

Are we there yet?

Scott Petersen — Tue, 05 Aug 2008 15:45:00 GMT

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.

Homes Are Selling!

Scott Petersen — Tue, 10 Jun 2008 04:09:00 GMT

Contrary to what many people are thinking, homes are selling! Now, many are Bank Owned and REAL DEALS. But, homes are selling. In fact it was reported by the AP today that "Pending home sales unexpectedly increased in April to the highest reading since October, an industry group said Monday, but they remain more than 13 percent below a year ago.

The National Association of Realtors’ seasonally adjusted index of pending sales for existing homes rose to 88.2 from a March reading of 83.0, the lowest since the index was started in 2001. The index stood at 101.5 in April 2007.

Wall Street economists polled by Thomson/IFR had predicted the index would remain steady at 83.

NAR Chief Economist Lawrence Yun noted that pending sales contracts have ticked up in areas with the largest price declines such as Detroit and Las Vegas.

“Bargain hunters have entered the market en masse,” he said. “Sharp price reductions are leading to a quicker discovery of price equilibrium points.”

Yun forecasts that the median price of an existing home will drop 8.4 percent in the first half of the year before stabilizing. In 2009, prices will rise 4.4 percent to $213,900, he predicts.

Existing home sales this year are expected to total 5.40 million and then increase to 5.74 million next year, Yun said."

This may very well be the bottom that we have been looking for... If it is, it will be all up hill from here!

9 Hot Home Decorating

Scott Petersen — Wed, 27 Feb 2008 03:27:00 GMT

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.

2 Story For Sale in Wayne County Sub No. 8

Scott Petersen — Thu, 14 Feb 2008 19:05:00 GMT

• 1,583 sq. ft., 2 bath, 4 bdrm 2 story - MLS® $177,900

Wayne County Sub No. 8, Westland - Looking for that perfect house? Look no more! This incredibly maintained home ON A QUIET STREET features: New VINYL SIDING (LFTIME WARR), NEW 50 YR ROOF, NEW FURNACE & CENT. A/C, NEW REMOD KIT., ANDERSON WINDOWS, NEW GARAGE DOOR, NEW HOT WAT HEAT., REFIN. HD WD FLRS, ULTIMATE KID BACKYRD W/TREE FORTS, FIN. BSMT... THE LIST GOES ON AND ON. SHOWS WELL! BA TO VERIFY ALL INFORMATION.

Property information

What Fed cuts really mean for mortgages

Scott Petersen — Wed, 06 Feb 2008 02:44:00 GMT

Lou Barnes
Inman News

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.

Invest in Foreclosures

Scott Petersen — Sat, 11 Aug 2007 15:55:00 GMT

It is hard to miss plethora of foreclosures in Michigan and beyond. Banks are becoming increasingly willing to sell these properties cheaply to get the non-performing mortgages off their books. Here are a few tips that I have personally learned in investing in "REO" bank foreclosures.

(1) The asking price is just the asking price. Don't be afraid to offer much less.

(2) Don't underestimate your costs in owning the property. Objectively estimate repairs, fees, holding costs (taxes, insurance, utilities). Bring in contractors early to help with this process.

(3) Know what your "After Repair property Value" will be.

(4) Have mutilple "EXIT" strategies. Be open to selling, renting, selling on land contract.... the more options you have, the better off you will be.

If you have any questions regarding starting to invest in real estate don't hesitate to call or e-mail me.

Pricing - Pricing - Pricing

Scott Petersen — Sat, 11 Aug 2007 15:46:00 GMT

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.

Get Creative

Scott Petersen — Sat, 11 Aug 2007 15:14:00 GMT

When you think of the word creative, real estate is probable not the first thing that comes to mind. However, creativity is a big part of real esate, especially today! I am finding the smart buyers and sellers of real estate today are finding creative ways to buy and sell their homes. Here are some of the creative ideas I am seeing:

SELLERS

6 Months Free! I will pay your mortgage for 6 months.
Free Flat Screen TV to buyer
Lease to Own my home! Lease it for a year and then I will help you buy it!
I will pay for closing costs.. buy this home and it will cost you nothing!
$3000 bonus to Realtor who sells my home in the next month!
Seller will look at all offers between $180,000 - $230,000

BUYERS

Land Contract and Lease Option are back for buyer who can't get approved for a mortgage just yet.
Getting all the closing costs paid for
Asking for repairs to be made.

SHORT?

Scott Petersen — Sat, 11 Aug 2007 14:24:00 GMT

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".

FHA Bonus

Scott Petersen — Mon, 16 Jul 2007 04:09:00 GMT

A few days ago I blogged about FHA mortgages and how I felt that these mortgages would be the wave of the future for borrowers with tight credit. I thought I would add another bonus to FHA that I did not mention. I receive a lot of calls and e-mail from people that are wanting to purchase a REO (bank owned) home that needs work. Through FHA, there is a program to receive the funds needed to purchase the home, as well as repair and rehab the home. The program is called 203k. The 203K program is administered through HUD and is designed for homes that need to be rehabilitate. This is a little known program that can be difficult to apply for and comply with. To cut through the red tape, I recommend using a 203k consultant who is approved by HUD who will assist with receiving quotes from contractors, applying for the loan, and complying with the guidelines. This service is well worth the $500-600 fee. The 203K is the perfect loan for someone looking to purchase a REO that needs to be repaired. Contact me for more information about this program.

NEW LISTING: 33490 Kirby in Farmington Acres

Scott Petersen — Sat, 14 Jul 2007 18:53:00 GMT

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

Not your Fathers FHA

Scott Petersen — Tue, 10 Jul 2007 16:08:00 GMT

When you hear the words FHA mortgage, most people think of a mortgage process nighmare from years past. Like with everything times change.. and so do mortgage products. I believe that FHA may be the mortgage choice of many in the future. Many buyers today are not qualifying for loans due to the Sub Prime collapse. In the past few years, mortages for buyers with 500 fico scores and no documentation were common. Today, this is almost impossible. So, what do buyers with recovering credit to do? Go FHA! Today's FHA is not based on a credit score. 480, 500, 550.... it doesn't matter. The only factor FHA mortgage underwriters look at are debt to income and open collections. So, if a buyer with a low fico score because of a job loss a year ago applies for a FHA mortgage, as long as there are no open collections and the debt to income ratio is 31/43 the loan is approved. The greatest thing about the new FHA's is the interest rate, which is usually only 1/4 point higher then conventional mortgages. This can save a borrower thousands over the term of the loan. The new FHA also have relaxed the inspections as well. This is definately not your fathers FHA!

Get A Home Inspection

Scott Petersen — Tue, 19 Jun 2007 14:22:00 GMT

I have talked with several home inspectors lately who have told me that home inspections are way down. It is not just because homes are not selling as quickly, people are cutting back when it comes to this added expense. In my opinion this is a BAD IDEA! When purchasing a home, a home inspection is only a fraction of a fraction of the cost. In comparison of what an inspection can save you, it is the best kind of insurance. I personally have had home inspectors save me THOUSANDS upon THOUSANDS when their diligent inspection found something that I missed. I consider myself to me skilled at home construction, having worked as a contractor for 11 years. But, I still miss things. A good home inspector can find problems that we mere lay people will miss.

Below is an article I found helpful about home inspectors:

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

Open House 2-4PM on Sunday, 20029 Rensellor in Livonia

Scott Petersen — Tue, 19 Jun 2007 03:24:00 GMT

Argonne Subdivision, Livonia - We invite everyone to visit our open house at 20029 Rensellor on June 24 from 2:00 to 4:00 PM.

Property information