Ann Arbor Real Estate Talk

What if Your Ann Arbor Home Does Not Appraise?

The first thing to do if you Ann Arbor home doesn’t appraise is not to panic. When we are representing buyers on a the purchase of the home in Ann Arbor, we write into the contract, “the purchase price must meet the appraised value of the home.” (even if you are paying cash.)

You are excited and have made an offer on a Ann Arbor Home for sale, and your now you are in the process of obtaining financing for your new Ann Arbor home. The bank or mortgage broker is going to want an appraisal on your home to guarantee that the home is worth what you are paying.

In this market, seriously… many homes do not come in at the Purchase price on the contract for Appraised Value.

How does a low appraisal affect you?

If the home does not appraise, then there is room for more negotiation with the sellers.

If the appraisal comes in lower than purchase price, you have some options

1) You can walk away from your Ann Arbor Home, because the appraisal contingency is part of the contract, and if the property does not appraise, that is a contingency that you can use to end the contract.

2) Another option for you would be to renegotiate the purchase price – by offering the sellers to pay the price that the property was appraised at. If you really want the property, that is a consideration. Offer the appraised value to the seller, and see what their response is.

3) You “may” want to consider paying more than purchase price – bring cash to close the deal. This is NOT something that I recommend for my buyers who are purchasing  Ann Arbor Real Estate.

Keep in mind, if you are obtaining a loan on your property, then it is imperative that is appraises. Your lender will NOT loan you money to purchase the home if it doesn’t appraise. Even for cash buyers!!

Issues with Ann Arbor Appraisals

One of the biggest issues we have with homes appraising in the Ann Arbor Market Area is that appraisers are being hired by banks that do NOT live in the Ann Arbor area. Not knowing Ann Arbor, the schools, they often do not use the right home comparables.

This is not the market to pay over appraised value, and I would advise my clients against this. I would not recommend paying more for the property than it appraises for.

If I can answer any question about Ann Arbor homes for sale, or Ann Arbor real estate, please contact me. 734-926-9707

From the high of a University Michigan victory of the U of M football team over Notre Dame last night to the sadness of today, remembering the victims and tragedy of 9-11.

Remembering 9-11 Tragedy

When John Kennedy was shot I was in Choir Practice, in 5th grade at St. Thomas More in Paducah, Ky. when we immediately went to the alter and prayed for our President. I went home to find my mother crying, I will never forget that day.

On Sept. 11, 2001, I was in a business meeting at RE/MAX Community Associates when my Broker kept getting calls from his son in Washington, D.C. Another co-worker kept getting calls from his son who worked in the Pentagon. Neither answered right away. Finally my co-worker got up and left the meeting and he returned with a radio. He said nothing.

Putting the radio down on the table, we listened.

One by one we got up and left in silence.

By the time I got to my home in Saline, a few minutes later, the 2nd tower was hit by the second plane.

Never the same after the tragedy of 9-11

The world or at least our world changed on 9-11.  Today I remember all the victims who lost their lives, their families and their loved ones on 9-11.

I will always remember the tragedy of 9-11, and the day President Kennedy was shot.

Michigan football, is all about the team, the team, the team.

Bo’s speech is inspiring to me, because it is spoken from the heart, in the passion only he can do.

GO BLUE!

Ann Arbor home sellers, did you know there is a tax of 3.8% tax increase included in the Obama Health Care bill when you sell your home after January 1, 2013?

How the 3.8% Tax Works on the  Sale of your Ann Arbor Home

Here is how the 3.8% tax increase will work, if you have a gain of less than $250,000.00 for single payers and $500,000 for joint payers you will not be taxed. It does NOT override the Federal Income Tax Law.

However, if you have owned your home for many years, and make $600,000.00, then your taxes would be increased 3.8% on the gain from the sale of your home starting January 1, 2013 . In this scenario you would pay 3.8% or  $3,800.00 on the gain over $500,000. For a single filer it would be anything over the $250,000.00 level.

If you purchased your home for $200,000. and are single, and sell it for $300,000. then your additional 3.8% tax liability could potentially be $3800.00 used to fund Medicare.

I know the tax increase doesn’t apply to that many people, less than 2% nationwide,  but for Ann Arbor home sellers, it is still a tax increase written into the Health Care Bill that many Ann Arbor home sellers may not know about. We live in a fairly wealthy community in Ann Arbor so this 3.8% tax increase will potentially apply to more.

 The 3.8% tax increase is for Medicare

The revenues generated from this 3.8% tax increase will be allocated to the Medicare Trust Fund that is part of the Social Security System. That fund is currently on shaky financial footing.

The Medicare tax hike would for the first time incorporate filing status into each person’s Medicare tax liability, and also for the first time, the Medicare tax will not apply just to wages but also to investment income such as income from capital gains, dividends, interest and rental property. In its first year of application, 2013, the new Medicare tax will hit approximately the top-earning two percent of families.

According to the National Association of Realtors, “The new 3.8% Medicare tax includes in the Health Care bill is assessed only when Adjusted Gross Income (AGI) is more than $200,000/$250,000. AGI includes net income from interest, dividends, rents and capital gains, as well as earned compensation and several additional forms of income presented on a Form 1040 Income Tax Return.

The tax is NOT imposed on the total AGI, nor is it imposed solely on the investment income. Rather, the taxable amount will depend on the operation of a formula. The taxpayer will determine the LESSER of (1) net investment income OR (2) the excess of AGI over the $200,000/$250,000 AGI thresholds. Thus, if net investment income is the smaller amount, then the 3.8% tax is applied only to the net investment income amount. If the excess over the thresholds is the smaller amount, then the 3.8% tax would apply only to the excess amount.

If you would like me to I would be glad to send you a pdf file published by the National Association of Realtor where you can read about different scenerio’s for investment properties, vacation homes etc..

Just send me an email or leave it in the comments below. There have been a lot of rumors circulating about this 3.8% tax increase on the sale of your home, let me know if you need the document.

Rentals in Ann Arbor are scarce.

Currently rentals on the market for single family homes in Ann Arbor are slim to none.

• Between the range of 500-850 a month there are only 2 rentals in Ann Arbor and I know one of them has a lease application on it.
• Between the range of 855-1200 a month in rent there are also only two rentals in Ann Arbor;one at 980.00 and one at 1050.00

Ann Arbor is a transient community in many ways, we have Dr.’s, Fellows, Residents that come in for 2-5 years, many just want to rent due to the uncertainty of the Michigan market. Plus the students that are looking to rent homes together which changes each semester.

Why are Rentals Scarce In Ann Arbor?

One reason that the rental market is scarce in Ann Arbor is due to the amount of Short Sales and Foreclosures of people that can not get a mortgage right now.

Another reason the rental market in Ann Arbor is scarce is consumers don’t have a lot of confidence that they won’t loose money if they are only going to live here a short time.

Scarcity of Rentals Creates Higher Prices

If you are a seller that has not been able to sell your home, now would be a great time to rent your Ann Arbor home. When the Missy Caulk Team takes a listing contract, it is put in the Ann Arbor Area MLS, we obtain a rental application from the potential tenants, one application for each person renting the property, we pull their credit so you can make a good decision on who you want to rent your home too.

Rental Options

Renting with an option to buy in Ann Arbor is also a great opportunity for both buyer and seller.The seller can rent out the home for a couple of years and when the tenant is able to get a mortgage they can proceed with the purchase. We get calls on this all the time.

Rentals in Ann Arbor are scarce but they don’t have to be with creative thinking in todays market.

Recently MSN named Burns Park as one of the top neighborhoods for grown-ups located in college towns. Burns Park is located within walking distance to the University of Michigan, with tree lined streets, and homes that are turn of the century.

Most people that live in Burns Park don’t really mind the smaller back yards because Burns Park is so beautiful and is attached to Burns Park Elementary school.

A little North East of the park is Ives Woods which is one of the most expensive neighborhoods in Ann Arbor.

West of Packard is an area called “Lower Burns Park”, that has student rentals, sorority and fraternity houses.

To add to the charm and desirability of Burns Park, each year they have their own 5 and 10K run and their own theater group the Burns Park Players.

According to MSN, “For every 10,000 Ann Arbor residents, 555 were crime victims, the FBI says. Burns Park, southeast of downtown, is safer than 87% of other U.S. neighborhoods, NeighborhoodScout.com says.

This slice of Ann Arbor ranks below the national average in six of nine crime categories tracked by RelocationEssentials.com, a moving-assistance website, including aggravated assault and burglary.”

At the time of this post their are 26 active homes on the market in Burns Park, ranging in price from $158,000. to $1,395,000.00.

Forty-six homes sold in the last year in the Burns Park area.

If you are looking for homes for sale in Ann Arbor, and/or the Burns Park area, start your search here, with Google Maps, Satellite Images, and multiple photos.

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Post from: Ann Arbor Real Estate Talk

Burns Park One of Top College Neighborhoods for Grown-ups in Ann Arbor