Ann Arbor Real Estate Talk

Every day, I am seeing more and more homes listed in the MLS with the remarks, “subject to a short sale” or “subject to third party approval.” Some neighborhoods are loaded with them. Some communities are loaded with them.

What does a “short sale” mean?

A short sale is when the homeowner, can not sell their home in the current market conditions at the price of what they owe the bank on their house or condo. Therefore they ask the bank or lender to accept an offer on the property that is less than the amount owed. This is called “selling short.”

Before selling a home “short”, the homeowner must have missed payments on the home and the house must be listed.

When I do a listing presentation and must tell a homeowner that their home will not be able to sell at the price they owe, we discuss “short sale” as an option. Not everyone will be able to sell their home as a “short sale”. If the homeowner has a good job, lots of assets in the bank or investments it is unlikely that the bank will agree to it.

The first thing I do as a Realtor is to have the homeowner or myself, ( must have the authorization form) signed by the homeowner for me to speak with the lender and order a short sale package from the bank or lender. It usually takes 72 hours for the bank to process the authorization form and for me to be in their system so that I am allowed to speak to them about the homeowners situation.  At that point I can find out how much they owe, explain the homeowners situation and try to work out a plan. Included in the package called a “loss mitigation package”, is the requirements for a short sale.

The homeowners must write a “hardship letter”, explaining why they need to sell, and the reasons for the hardship.

When I see a home listed as a “short sale”, the first thing I do is call the Realtor and ask, what has been done to move the sale along. If they have done nothing, then it is best for my teams buyers to move on and find another house or condo.  It takes the patience of Job to wait on a response to a short sale offer. If the package has not been ordered, assests, bank statements, W2’s and the hardship letter written you are in for an even longer wait. If a buyer needs to be in a home in 30 to 60 days, it is best to find a home that can be closed within that time period.

We have been waiting three months on a lake house, the seller was trying to sell “short”. The lender would not accept a short sale, the home went to foreclosure and is now with another company, which still does not have the paper work from the servicing institution. Fortunately, this is a second home so our buyer can wait it out.

I’ll post more later on why banks let homes go into foreclosure and why they would rather do this than accept a “short sale”.  If you are a buyer and looking at writing an offer on a short sale, make sure your Realtor is familiar with doing them, make sure the loss mitigation package is ordered, make sure the Realtor has permission to speak with the bank and make sure the hardship letter has been written.

If the listing agent is not able to say “YES” to all of the above, it is best to find a different house.

As more and more homeowners are asking the banks for short sale relief, it is critical to work with an agent who is knowledgeable in understanding and working the short sale process. Just because a home or condo is listed in the MLS, as “short sale” or “third party approval”, doesn’t mean the agent or the bank has agreed to it and the necessary documents are gathered.

The Mortgage Forgiveness Act was signed into law in January 2007,  read the document in it’s entirety as it applies to the Principal Residence Exemption on selling a home short.

***Begin your home search here.***

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Walking in Ann Arbor is a top priority for many homeowners. People wanting to live in the downtown area, Old West Side, Burns Park and Ann Arbor Hills area, have chosen to live there because they enjoy walking to parks, coffee shops, University of Michigan, and grocery stores.

I found a nifty little tool that will help new home buyers see how close the walking distance is to the above. It is called Walk Score. 

Go ahead put your address and in and see how close everything is to your house.

For buyers check out the true walking distance before you purchase.

There are currently 130 homes on the market in Ann Arbor where the listing agent has used the remarks, “downtown”. Ten of those are under contract, so 120 available. They are priced from $134,000 to $350,000.

Email me if you want a the list of homes available: Missy@MissyCaulk.com

Search for homes in Washtenaw County.

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The FHA Loan, has come back into style after years of being hidden with most people using the 80/20 or 80/10/10 loans. Two years ago the FHA made adjustment to the FHA appraisals and inspections. They have loosened their inspections requirements and are really only concerned about the safety of the buyers.

FHA Loans are not credit score driven, there is no minimum credit requirement. You do not have to be a U.S. Citizen to get an FHA loan. The down payment required is only 3% and can be negotiated with the sellers with a good offer.

The Department of Housing and Urban Development (HUD) has updated their web-site to reflect the new FHA loan limits for Michigan indicating a floor amount of $271,050 and a maximum lending limit of $345,000 depending on the county (including Washtenaw County). In Washtenaw County we can get you qualified to finance up to $345,000.

HUD FHA Mortgage limit web-site: Click Here A brief refresher on FHA:

• • Flexible Debt to income ratios of 31/43.
  • Minimum cash investment by purchaser of only 3%.
  • 97% Loan to Value financing.
  • Seller financing concessions/contributions can be 6% of sales price.
  • Cash reserves are not required for the purchase of a single family residence.
  • Gift Funds- All funds can be gifted if originating from an approved source.
  • Loans are assumable to a qualified individual.
  • Down Payment Assistance Programs (DPAs) are available. (combine with Seller paid closing cost and prepaids = 100% financing)
  • There is no pre-payment penalty.
  • FHA loans are not credit score driven; there is no minimum FICO requirement.
  • Citizenship is not required.
  • Non-occupying co-borrower allowed.
  • No LTV restrictions for “soft market” or “declining market” areas.
  • Seasoning for Chapter 7 bankruptcy is just 24 months (shorter possible for extenuating circumstances)
    
  • You can check the HUD website for approved tradition condos by city or zip code.)

You can begin your home search for all homes in Washtenaw County here.

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What houses are selling in Ann Arbor and the surrounding area’s in Washtenaw County?

Bottom line, the houses that are priced right. Just this weekend, two of my buyer agents were going to write offers on two different houses, one is Saline and one in Ypsilanti Township.

Both already had multiple offers.

Multiple offers, here?

Yes here. One house was in foreclosure in a very good neighborhood in Saline. The one in Ypsilanti Township was owned by a relocation company.

Both of the houses were priced very well. Relocation companies don’t want any more houses in their inventory so they are very negotiable. Banks don’t want any more homes in inventory they are negotiable.

However, if you are looking at a foreclosed home, short-sale or relocation house, make a good clean offer or you may lose out, like our two clients did this weekend. If you like the house,  chances are someone else is going to like it too. Value is determined by the market.

If you are looking at 10 homes to buy, you will pick out the one that has the most “perceived value” as will others.

Here is an example: Two homes in the same subdivision, one is priced at 185,000. One is priced at 220,000. Same square footage, same sub. Home number one is owned by a bank or relo company. Home number 2 is owned by the sellers and can’t go any lower due to what they owe on the house.

Which would you buy?

A rhetorical question…

Those are the homes that are selling first. Home number 2 is actually helping sell home number one because of the price. Last Spring and Summer, the Pfizer homes sold first in every subdivision. They were priced to sell and below the other houses listed in the sub. We still get calls from people, “I want a Pfizer home.”

Sorry but there are very few left. If you see house that meets your needs, my advice is don’t wait. Chances are it won’t be there when you come back or you will compete with multiple offers.

You can begin your home search here at Search Ann Arbor Houses.

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Having been a Realtor in the greater Ann Arbor Area for 13 years, I have many clients that need to sell their homes. Perhaps their Residency is over at University of Michigan Hospitals, they got a job transfer to another state, they are retiring to warmer places, they lost their job.

Many people NEED to sell in Ann Arbor Area and for a number of good reasons. It saddens my heart when sellers bought their homes when the market was at peak. Somehow, Ann Arbor had always escaped most down-turns in Michigan.

You know… “24 miles surrounded by reality”.

Unfortunately, we have been hit with declining home values too. There is almost a 14% decrease in prices in homes throughout Washtenaw County. That is the average. Average means, certain townships have taken larger hits. Ann Arbor City has seen less of a decline. Townships like Ypsilanti have seen the largest decline, with up to 20%. They have also been the highest hit with forclosure’s.

Currently, there are 720 homes listed in the Ann Arbor MLS. Of the 720 homes listed, there are 55 under contract, either waiting to close or under a limited time clause. So in reality there are 665 homes available to purchase. Last year, in 2007, 1159 homes closed in Ann Arbor. The absorption rate is not too bad. (The absorption rate is determined when you take the number of homes available and divide number of homes sold in a given time period to determine how many months it would take to absorb the inventory, given no other houses come on the market)

I have been asked a lot lately? “We are thinking about selling our house, what do you think, is it a good time?”

What I think… depends on why they are selling. If they are not moving, or are not in a HAVE TO SELL situation, it might be better to wait. If they NEED to sell, then now is the time to sell and price it to SELL. I was out showing condo’s last weekend, all in the same condo community, and my buyers asked me,

“Why is there such a difference in price?” They are all basically the same floor plan.

“Motivation of the seller”, was my response.

Some people really need to sell, others don’t need to sell, but want to.

Motivation is extremely important when pricing your property and determing the time to sell. Life would  be great if we all had a crystal ball and I could say, this time next year or in 2010 the market will come back. Unfortunately, that is not the case. No one really knows.

Sellers, ask yourselves, “Do I need to sell or do I want to sell?” Those sellers that need to sell are homes priced the most appropriately throughout Washtenaw County.

Want to check what homes are listed at in your neighborhood, you can search all the active listings on Search Ann Arbor Houses.

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Ann Arbor, Saline, Milan, MI. Condos and homes for sale, from 124,900 to 439,900.

If you don’t see anything, here visit my Search Ann Arbor Houses site, where you will find over 5,000 homes to buy with Google Satellite Images, Google Maps, Virtual Tours.

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“What’s that smell?”

“I smell a cat?”

“A smoker lives here”.

These are some of the first questions out of a buyers mouth when they enter a home in Ann Arbor, they are viewing as a possible purchase.

 Be careful of odors in your home. If your family room smells stuffy and stale, or if your cat or dog has left a distinctive odor in the hallway, take action by eliminating the source of the odor rather than merely treating the effects.

Smells have a powerful effect on the way people react to a house, and no amount of room freshener or vanilla on the light bulbs can mask a serious odor problem.

In fact, such remedies may draw attention to the problem. We have seen homes in Ann Arbor with an odor problem languish unsold on the market for months or sell for significantly less than comparable homes in the neighborhood.

I once had to tell a client who had lived there all her life and smoked that we needed to have then entire house painted and carpet replaced. I didn’t like to do that, but better to hear if from me first, since I knew what the feedback would be and how long it would take to sell.

If you are getting ready to put your home on the market, make sure it smells good. Buying a home is an emotional decision and a bad odor can turn a perspective buyer off.

Bad odors = lower price, longer marketing time.

Fresh and clean odors= higher price, shorter marketing time.

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