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Metro Detroit Snow Record Coincides with Warming of Real Estate Market

Metro Detroit Snow record

Alas, none of us were around in 1881 to live through the old record for snow fall, but having lived through this winter, I can’t even imagine what it was like to have that much snow back then. At least there were no paved roads, so they didn’t have the pothole problem!

With the exception of last night’s seemingly freaky weather (71 degrees on Monday morning, 3 inches of snow on Tuesday morning), the recent shift to warm weather has also brought out the buyers who went into hibernation mode this winter. And I can’t really blame them. Who wants to see houses in a constant state of blizzard? We’re happy to welcome the buyers back to the market, and we’d be even happier to see a few more sellers out there to accomodate demand. Listings in our area are at a record low, which has pushed up prices nicely and helped us to restore value lost during the recession.

We’ve got a very positive outlook for the year ahead, though some upward pressure on interest rates and tightened loan underwriting guidelines could restrict the market a bit.

Troy High Area Home Needed

As I said in an earlier post, I get emails daily from agents who are looking for homes for their clients. I am posting some of these. If you are a seller and your home is not on the market with an agent, drop me a note, or give me a call.

Here is the latest message:

I have a wonderful buyer family who is solid and we need the Troy High attendance area…2700+ sq ft with finished basement would be great. They like many neighborhoods, and simply wish for a more architecturally/structures being homogeneous neighborhood not one where there are several decades between years built of the homes, and they don’t want to back to a parking lot nor have loud road noise…Call your clients in Troy…my people are renting a townhome in Somerset so could wait for your people to shop for a downsize or figure out where they’re going to move for their retirement. Just need to own it in time for registering for new school year, ideally. 4 bedrooms would be ideal, however, if basement finished, could possibly make a 3 bedroom work. Talmer Bank conventional solid pre-approval and ready to go…

Sellers Wanted for These Buyers

In a new twist on the market, I get daily requests from buyers and agents for homes that are not currently for sale (yet).  Pickings are slim right now, unlike a few years ago when the situation was completely reversed.

So a thought just came to me.  I am going to post some of these requests.  If you would consider selling your home and it potentially fits the buyers needs, give me a call.  I cannot, however, help you if your home is already listed with a REALTOR.   If I can help you to work out something with future buyers you could be spared some of the inconveniences of having your home on the market.

So here is the starter list.    Be on the look out for more on a frequent basis:

1) Must be within 15 to 20 minutes to the Palace and Birmingham, prefers a lake lot ( motor lake), 4/3/1, 3 car garage and needs to be close to a Catholic School. Sgft min 3200 priced from $500k to $1m. He will take a fixer upper in right location. Also, he will look at a lake lot to build on up to $250k.

2) Non Motor lake in Bloomfield, prefers Gilbert lake or Endicott lake area. They will buy a lot up to $750k or a newer home (Built in 1995 or after) up to $1.8m, 4/3/1 and 3 car, with walk out basement preferred.

3) Birmingham schools a must, preferred areas, B’ham and Bloomfield Village area. 4/2/1, 2 car garage. Would like a move-in home but is willing to spend up to $75k to fix it. Price range up to $750k, sgft min 2800 and lot size can be on the smaller side.

4)Beverly Hills or Birmingham area, apx 1250 sgft, 3/1/1 with 1-car. Will do minor cosmetics but must be in somewhat move-in condition. Price range up to $235k

5) Condo Buyer in the Hidden Ravines off Southfield Rd, unit must be on the ravine, will pay up to $575k.

6) Lot or teardown needed with Birmingham schools, in Bham, Troy or Bloomfield, price range up to $275k

7)Birmingham or Beverly Hills, Bloomfield fixer upper, must have Birmingham Schools, price up to $400k

8) Beverly Hills, Birmingham, Franklin, Bingham Farms or Bloomfield’s, west of Woodward Ave. 4/2/1 min 2900 sgft, 2 car, prefers newer built, price range up to $500k

9) Franklin, Beverly Hills, Birmingham, Bloomfield’s, Huntington Woods, Bingham Farms, lot must be at least .50 acre, 4/2/1, 2 car, will take a fixer upper or a move-in home, ranges $300k to $600k, prefers Birmingham schools but will take Bloomfield schools for right home.

 

Justice Diane Hathaway’s Admissions of Bank Fraud: We Are Her Victims

AP file photo of Diane Hathaway

AP file photo of Diane Hathaway

In a short sale the lender (or lenders) agree to forgive a portion of the debt, typically because they see little or no prospect of repayment from the borrower.  Over the last 6 years, banks have been inundated with pleas for leniency and forgiveness from distressed borrowers.  And some not so distressed borrowers.

Overall, the short sale process has been anything but short, and generally quite frustrating for all involved.  

Last month Dmitry and I helped both buyers and sellers to finally close on a short sale purchase of a condo in Birmingham that I first listed in December of 2010!  This, the third buyer, waited more than a year for the lenders to finally make determination that the short sale should be granted to the seller.  Two previous buyers decided they could not wait out the indecisive bank, and who could blame them?

So why is Michigan Supreme Court Justice’s Admitted Mortgage Fraud NOT a Victimless Crime?

On January 29th, former Michigan Supreme Court Justice Diane Hathaway pleaded guilty to mortgage fraud in connection with the sale of a home that she owned in Grosse Pointe Park.   She and her husband owned a home in Florida that was free and clear of mortgage debt and they transferred it out of their names into the names of one of their adult children just prior to applying for the short sale.  After the short sale was approved the home was transferred back.

Diane Hathaway resigned amid the allegations.

But it’s not just Mrs. Hathaway’s lenders who lost out here.

  • Her neighbors suffer her decision.  Short sales typically sell for less than traditional sales to make up for the aggravation and uncertainty that accompanies attempting to buy one.   Appraisers and don’t throw out those lower values when they are trying to establish the value of a neighboring home for a refi or purchase loan.  While they might be given some consideration, the sale pushes down the value of neighboring properties.
  • Grosse Pointe Park loses out.  Lower property values mean lower taxes collected to fund things like schools, police, fire fighters, libraries and parks.
  • Future home buyers in Grosse Pointe Park lose.  What if the house they want to buy doesn’t appraise because of her transaction?  Then the buyer either needs to bring more cash to the table or try to get the seller to lower the accepted offer price.
  • Bank customers lose.  Banks are focusing their efforts needlessly on clients like Diane Hathaway who may not have even needed a short sale.  In the meantime they slowed down in processing short sales for borrowers who are truly distressed.
  • Bank shareholders lose.  The bank is supposed to work to limit it’s charge offs to protect it’s shareholders.
  • The American Taxpayer loses.  Many of these defaulting loans are actually backed by Fannie Mae and Freddie Mac.  So the losses on many short sales are passed along to taxpayers in the end.

A supreme court justice violated the public trust and left a stream of victims in her wake, not just ING Bank.

 

Why You Shouldn’t Use Trulia and Zillow in Your Home Search in Birmingham, Bloomfield Hills and Beverly Hills MI

No zillow or truliaI know what you are thinking.

Your Realtor is hiding the really good homes from you.  Or you can find things that your Realtor can’t because you are more motivated.  Certainly there has to be more for sale out there, right?!?  So you head over to Zillow and Trulia where you unearth a bevvy of beauties that have never appeared on your agent’s daily or hourly updates. Gotcha!

I hate to debunk a good conspiracy theory, but the fact is that those “finds” you are tracking down on Zillow and Trulia are not actually for sale, in spite of the appearance that they are available.  

How could that be?  It’s simple.  Zillow and Trulia take information from sources that are not updated.  I know because I get calls all the time about homes that sold two years ago but buyers are still finding them on line.  Our local MLSes, Realcomp and MiRealSource are the two most accurate sources of current inventory.  Zillow and Trulia have access to those sources, but they also aggregate data from sites that are not updated with the same strict standards as the MLSes.  So mistakes slip through and remain to confuse buyers and sellers alike.

Furthermore, they include confusing listings from paid advertisers like RealtyTrac in their home searches.  RealtyTrac attempts to get consumers to pay for access to their paid services to search for potential without much transparency.  In truth, most of the homes we see listed on Realty Trac will never actually be available for consumers to purchase.  Just because a homeowner is in some stage of default, does not mean the home will be sold to the public at rock bottom prices.  The allure of paying $250,000 to snag a desirable new home worth $1,500,000 in Birmingham’s prestigious Quarton Lake Estates neighborhood baits consumers to pay RealtyTrac’s monthly subscription fee to gain access to the next great deal.  But they will never catch that deal, I assure you, because it really does not exist.

Your Realtor works on a commission.  Hiding the “good houses” will prevent her from making her livelihood.   Ask her how she can help you to access the best data sources available to you and what other services she can offer to help you find your next home.  And in the meantime, don’t be tempted by the “shiny objects” offered on Zillow or Trulia.  You are certain to be disappointed and frustrated.

So what’s a buyer to do?  To be continued in an upcoming post…

 

The Season to Sell Your Birmingham, Bloomfield Hills, Beverly Hills Home

Selling your Birmingham Bloomfield home

The time to sell is here

Dmitry and I started in the real estate industry in 2001, and got our licenses a few days before the national tragedy of 9/11. I had been out of the Metro Detroit area for nearly 20 years and Dmitry was altogether new to US living when we returned from Ukraine earlier that spring to get married. After we chose real estate as our future profession we were quick to go out and absorb as much information as we could as we went about building our new business together. One of the conventional pieces of wisdom at the time was that spring was the time to sell a home. Spring and summer have always been our busiest seasons since the day we began, but the rest of year has always kept us busy too.

This year, in my opinion, all bets are off on the traditional spring market. Certainly, it should be strong. If more homes come on the market, that is. We’ve faced a shortage of inventory in our backyard, the “B burbs”, for nearly 18 months. We aren’t altogether unique as the National Association of Realtors is reporting shortages around the nation.

  • In Oakland County, our median sales price rose 21.1% in December 2012, when compared with December 2011. Our inventory fell by almost the same amount – 20.6%. So those houses that did come on the market, sold and in a shorter period of time than previous years.
  • Interest rates remain historically low, but there is no guarantee this will last. In fact, some are predicting increasing loan rates this year.
  • Demand remains strong. Yes, we are trying to find houses for our buyers and the competition is fierce.
  • Supply remains low
  • The builders are coming back and invariably the shiny new construction property is more desirable than a resale home. While I don’t think that builders are likely to again flood the local market any time soon, as one might say they did immediately prior to 2008, there plenty of proof that housing starts are up again and a number of strong builders are seizing on the opportunities presented to them in today’s market.

Which brings me back to Spring. If you are ready to put your home on the market, do it. In April, many more people will be putting their homes up and you will face more competition than you do today. Today you are guaranteed what is likely the highest value for your home that you have seen in at least 5 years. Buyers have come to know that they’ll need to be patient on terms like closing dates and possession, giving the seller time to solidify future living arrangements.

Photo available under creative commons license from Vennerlabs

Yes, we have snow in Bloomfield Hills

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But here comes the sun!

Merry Christmas

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Wishing you and yours a wonderful holiday season!

Birmingham Bloomfield – Where are the Sellers?

Beverly Hills MI Homes

Reality is setting in of today’s “new normal” in the Birmingham Bloomfield real estate market. A shift took place over the last 18 months, and with few exceptions, we are in a buyers market. Certainly we still see a few homes sitting out there longer than 90 days, but it is more common to see a race for keys and lock box codes on the first day a new home is listed. With record price appreciation in the last year, sellers have finally started to see a return of the equity lost between 2007 and 2011.

One of the most encouraging signs we’ve seen is a return of the builders. When I was looking for a new spec home for one of the Detroit Tigers in 2008 there was very little for us to chose from. Everybody had stopped building. The few projects that remained were the last batch of spec homes we would see in this market until this year. Now the chain link construction fences are back in every neighborhood in Birmingham and we have a huge home going up down the street from us in Bloomfield Village.

Buyers need to head into this market well prepared. The basics are still important.

  • Get pre-approved (by a LOCAL lender). After hearing horror stories from neighbors and friends who had issues with buyers financing or buyers appraisals in recent years, sellers are more cautious in reviewing the buyer’s proposed financing. We’ve seen more loans being made by a small circle of local lenders who are active in this market. These lenders have more control over the appraisal process and the underwriters are sit across the hall from them. In some cases, they walk down the hall to the bank President’s office to see if a loan can work. Especially in a situation where there are competing offers, the financing can matter a lot, so do what you can to put your best foot forward.
  • Be prepared for appraisal issues. Both sides of the transaction need to know where bumps in the road might occur. Dmitry and I have been luck to experience just a handful of appraisal problems over the last few years, but we’ve certainly heard horror stories from our peers. As sellers agents we attend appraisals to make sure the appraiser is familiar with the market and is armed with the comps we want them to have. We are prepared to discuss the differences between our property and the comps we provide. As buyers agents we are not likely to be on hand for the appraisal but we will discuss comps with the listing agent and offer to accompany if they cannot. If the number comes in lower than we are all expecting then we need to come up with a strategy for resolving the issue.
  • Negotiating with Win-Win as the goal. Sellers spent the last few years being beaten up. Almost literally. Buyers could find themselves with similar feelings of powerlessness with a shortage of inventory. Decide what is truly important and keep negotiations on a positive note.
  • The early bird gets the worm. This old adage plays so true for buyers today. We spend lots of our time looking for homes that are not yet on the market. Thankfully, we have lots of great local contacts with Realtors around the Birmingham, Bloomfield, Beverly Hills area and we show many homes before they ever hit the MLS. Last week I went out and took photos of a home before it hit the market for out out town buyers and shared an album with them so they could decide if they needed to make it here to take a look.
  • It will take a little extra patience and strategy, but it will be well worth the effort. Happy home hunting!

    Winter Markt

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