What the new TILA-RESPA rules mean for the buyers or sellers

July 26, 2015

Every now and then I post something here that concerns my real estate business. This is one of those posts and it concerns the upcoming changes to the mortgage process and the closing process that will have impact on all buyers and sellers. In any profession, there are usually lots of acronyms used by the practitioners of that profession both as a form of shorthand for long, unwieldy terms and sometimes as a way to sound more important and knowledgeable in front of “lay people”. The upcoming TILA-RESPA changes are an example of that and an example of how changes usually cause concerns whether they are warranted or not.

man under papersWhen any major changes occur within industries that impact their current systems there is always a bit of “the sky is falling” reaction to them. The changes to the disclosure and closing documentation requirements for real estate transactions are no different. You have likely already seem newspaper stories about the coming TILA-RESPA changes. You may hear your Realtor® talking about it, but it primarily impacts the mortgage lenders and the title companies. Your Realtor should be able to explain things to you as well, but the primary source for information about how this might impact you should be your mortgage agent.

Here’s the gist of these rule and documentation changes.  The Consumer Financial Protection Bureau (CFPB) was created under the Frank-Dodd legislation that was aimed at cleaning up the financial industry mess after the housing industry collapse that brought on the Great Recession. One of the actions that the CFPB took on was to clear up the confusion caused in real estate transactions by the differences in the Good Faith Estimate that the buyer got from their mortgage rep at the front end of a real estate transaction and the closing documents, including the Buyers’ and Sellers’ Closing Statements and the HUD-1 document, that the buyers and sellers got at the closing table.

Buyers often noticed differences in what they expected their costs to be and the actual costs at closing. In addition, sad looking manthe mortgage industry fell into a practice of not getting the closing information to the buyers in a timely fashion before closing (many times buyers saw the closing docs for the first time at closing). It was sometimes very difficult for the buyer to even determine how much he should bring to closing, since he did not have the final documents.  There was a need identified to standardize the information that was presented to the buyer at the front end and what they eventually see at the closing table, as well as controlling the changes that might be allowed between those two times. There was also a need to get the final closing information to the buyer well in advance of the closing date, so that they could react to any changes and know how much to bring to closing.

Based upon those needs the CFPB produced the new, consolidated TILA-RESPA documents. TILA stands for Truth in Lending Act, which was the original law that set up the requirement for the Good Faith Estimate at the front end of the deal. RESPA stands for Real Estate Settlement Procedures Act, which defines the rules and documentation requirement for the closing of the sale. The CFPB decided to create new rules and documents for both ends of the sale and initially stated that they would impose those rules in August of 2015. The new document that the lender will give you at the front end is called the Loan Estimate. The new closing document packet is called the Closing Disclosure and clearly presents all of the information that used to be on the Closing Statements and the HUD-1. Best of all the Loan Estimate and the Closing Disclosure use all of the same terms and data fields (although the Closing Disclosure has some data fields concerning the cost of the sale and tax rebates on it that the loan officer would not have known at the front end) and they look very much the same. It is possible to lay them side by side and see what, if anything changed from the front to the back ends of the sale.

Based upon an outcry of the real estate industry that they didn’t want to try to implement these new things during the height o the busy real estate season, the implementation was delayed until Oct 3, 2015. All mortgage loan officers are being trained, as are all title company people and most Realtors. Your first line of questioning should probably be your mortgage rep; however,  the CFPB has also created a new Home Loan Toolkit for buyers, so that they have a clear reference guide to the new documents and the new process.  In the Toolkit are examples of the new documents as well as helpful forms to help you choose the right mortgage product and to compare mortgages if you choose to shop at more than one mortgage company.

changesOne of the other areas to pay attention to in the Toolkit and with your lender is the changes that are allowed between the initial Loan Estimate and the final Closing Disclosure. Those changes can and do occur because of changes in things like rates or closing dates or other factors; however, they are limited by the new TILA-RESPA rules and can cause the whole process to be re-set to zero if they are too large. Another new rule concerns the timing requirements on the lenders and title companies to get the Closing Disclosure documents to you. The new rules require that you have them in-hand three days prior to closing. That not only gives you time to get the necessary funds ready, but also to review and challenge any changes that you see that you don’t understand of maybe don’t agree with your lender about. Keep in mind, however, that any changes that may be made during that three day period may reset the clock and push back the closing. There are exceptions which define acceptable last minute changes, but they are few and relatively minor, compared to some of the “closing table surprises” that used to take place under the old system.

So, the sky is not falling. From the perspective of the buyer or seller, these rules and document changes are a good thing and hopefully will make life easier. The mortgage and title company people will adapt, even while grumbling about all of the extra work and time involved (it will likely add about a week to the process). I recommend that you go download the CFPB Toolkit if you will be in the market for a house this fall. Read through it so that you will be an informed consumer who knows what his/her rights are and what to expect in the process.


Is walkability important to you?

February 26, 2015

How walkable is the area that you live in? Is walkability important to you in your choice of a new home? How do you find out how walkable a location is? I can’t answer the middle question, but I can help you find the answer to the first and last questions. There is a great site now owned by Redfin – https://www.redfin.com/how-walk-score-works – that rates neighborhoods all across the country. If you go there you can put in an address – either where you live now or where you are thinking about moving to – and find out its Walkscore.

walking manThe Walkscore web site gives grades on a scale of 1 to 100 for the walkability of the area surrounding the address that you provide. The site looks at a lot of different factors, but it all boils down to evaluating what you can walk to within a reasonable distance. Things that the site looks for are stores, restaurants, libraries or other cultural venues within walking distance and what that walk might involve. The Walkscore will be higher is there are sidewalks and a good layout, such as the grid structure that is found in most large cities vs. the lack of sidewalks and  winding streets with lots of cul de sacs that are found in  most modern subdivisions. You can go to the Walkscore site for a more complete explanation of the factors that they evaluate to come up with a Walkscore for any given area.

In the past (through the 1950’s at east) most cities and towns were laid out in grid patterns and had sidewalks. The advent of the suburban subdivision in the 1950’s changed all of that.  Many of the early subs still had sidewalks, but those eventually went away, too. People moved further out and became much more dependent upon getting into their cars and riving to get to anything. Subdivisions quickly evolved from any sibilance of a grid structure into free flowing curves and cul de sacs. The term “bedroom communities” was coined to refer to these developments where the only thing that one could do there was sleep; anything else meant getting into the car.

There are still great walkable cities like New York, Boston or Chicago available; wherecity street with people living quarters are interspersed with businesses, stores and amenities and where one can still walk to a great many things. Newer cities tended to be built mainly for business and seem to empty out at night, leaving little to walk to for those who might live there. It’s actually kind of eerie at night or on weekend in many of those cities – like being in a ghost town.

So, why is all of this of any importance? I suppose one could start by pointing out the obvious health benefits of getting out and walking to things; but there is also an environmental benefit – you’re not driving and creating pollution or using up fuel. There is also usually a social a side benefit. When you are out walking you will likely encounter others in the neighborhood doing the same and, because you are walking, it is easier to stop and say “hi” to them and maybe even have a conversation. Try that while driving your car.

You may be much more likely to make use of local libraries, museums or other cultural amenities if it’s a short walk, rather than a drive, to get to them. Walkable areas usually also have lots of neat little restaurants and locally owned shops. You may find that you don’t have to jump in the car and drive to the mall to get what you need. A side benefit is mostly psychological –  you don’t feel trapped in walkable areas, because you know that, even if you’re without a car, you can just walk to most things if you want to.

Skippy and Sadie for calendarI moved from one of those “bedroom communities” in the suburbs that had a Walkscore of 15 into Milford, Michigan, a small village where I’m just 2 blocks from downtown; and I see a Walkscore of 62 when I check it. I can literally walk to most that I need, with a few exceptions where I would have to get in the car and go to a mall or superstore. It’s great and we love it. Plugging in downtown addresses in neighborhoods in Boston, New York or Chicago might turn up Walkscores that are
Front of Palatemuch higher than that. Try it and see what the Walkscore is for your current home’s location.

So, if you’re in the market for a new home, how important is the walkability of an area to you? If you have 3-4 areas that you are considering for a new home location, plug them in to the Walkscore.com site and see what their Walkscores come out to be. You don’t necessarily have to move back into an urban setting to get into a walkable, but it is more likely that small towns offer more walkable environments than most suburban subdivisions. If you happen to be looking in Southeastern Michigan, call me and I’ll help you find a great walkable area to live in.

 


Why Milford for Generation “Y”?

February 20, 2014

I’ve been reading a lot lately about the tastes and preferences of the so-call Gen “Y”, Aka the Millennials. Many articles contain the same characteristics of what they are looking for when they are looking for a new home:

  1. Something smaller and less pretentious – Gen “Y-ers” are not your typical McMansion buyer.
  2. Green, energy efficient homes, whether through design or updates.
  3. Homes with some character – older, small homes, like bungalows
  4. Homes in walkable areas – they would prefer to be able to  walk to the restaurant or store
  5. Areas that are culturally diverse and/or which offer a rich cultural environment
  6. Areas with things going on – availability of both indoor and outdoor activities
  7. Areas with a friendly and welcoming sense of neighborhood
  8. Areas with strong local commitment to giving back

As I thought about it, it became clear that the Village of Milford meets most of those needs. We certainly have our share of McMansions, although most are around the periphery of the Village and most are not really on small lots. While many of the available houses in the Village were built years ago, most have been updated with newer windows and insulation. Most of the smaller and much more affordable homes in the Village were built in the 50’s and 60’s. The small homes built in the 50’s and 60’s almost all have hardwood floors and there are plaster walls and coved ceilings in the 50’s built houses. Most of these homes are in the 900 – 1,100 Sq Ft range, with three bedrooms. Some have finished basements and many, but not all have detached garages. It’s also nice that, if you live within the Village; you will be on city water and septic, both owned and operated by the Village

The Village of Milford is one of the most walkable towns in the area. You can check that out at the Redfin site –https://www.redfin.com/how-walk-score-works . Milford has some of the best area restaurants and a downtown that still has stores where you can buy things that you really need and not just antiques or knick-knacks. The sidewalk system in the Village encourages walking and for many events, especially those held downtown or in Central Park, most people actually walk to them. There are three major parades a year that Villagers can walk downtown to see, as well as several minor parades( the little leagues parade of teams and the homecoming parade to name two)and events that close off Main Street – the biggie is our Milford Memories Street Fair in August every year.

The Village is more culturally diverse than most people realize and offers art, music and other cultural programs through groups like the Township Parks and Rec board, the Huron Valley Council for the Arts, the Village Fine Arts Association and the Milford Historical Society. There are concert series and artists showing going on every month. In the summer there are concerts in Central Park and 2-3 movies in the park, too, for the kids. We even have a great little movie house, right here in the Village.

Indoor and outdoor activities are abundant with organizations like Kensington Metro Park, The Carl’s Family YMCA, the Milford Library and Huron Valley Adult Education and Recreation offering activities throughout the year. Go to my web site www.movetiomilford.com for a complete rundown on all of the activities and events in the area.

There are parks to visit (one with a huge play structure) and waterfalls to see. There’s a historic Powerhouse to see and visit that was designed by Albert Khan and a home in the Village that was owned and lived in by a Hollywood and TV actress (Mary Jackson, one of the Baldwin sisters on the Walton’s Mountain TV show). There’s a river that runs through it with active canoe and kayaking groups and bike trails that run all the way out to Kensington Metropark. There are mountain biking trails nearby and an active mountain bike club. There’s even an annual Crit held in Milford for those into bicycle racing.

Finally there’s the sense of neighborhood that is unavoidable in the Village. People identify with their own sub or neighborhood, but everybody in the Village identifies with being a Milfordite. Milford is a place that people are proud to invite their friends and family to visit. Every year in September the Historical Society conducts the Milford Home Tour so that 4-5 Milford homeowners can share their homes with the world.

Milford also has many very active local groups and clubs dedicating themselves to giving back to the community and to the area at large. The Milford Chamber of Commerce is one of the strongest and most active in this part of Michigan and is a key player, along with the Milford Rotary Club, in the push to build an amphitheater in Central Park as a new venue for concerts and other activities. The HVCC is also the presenter of Milford Memories and the annual Christmas Parade (one of the three big parades). The Downtown Merchants Association sponsors several shopping oriented events during the year, including two “Ladies Night Out” events.

The Carl’s Family YMCA has programs for all ages and runs summer outdoor activities for children, too. The Huron Valley School District has the Adult Education and Recreation program which runs year around programs for the whole family. The local VFW post is quite active and is the presenter of the annual Memorial Day Parade (another of the three big parades). The Milford Historical Society runs the Milford Historical Museum on Commerce Rd (just a block from downtown) and is the presenter of the final of the big three parades – the 4th of July Parade. There’s also a strong Optimist Club in the area, as well as a KofC club, a Zonta chapter and the Milford Garden Club. Finally, there’s a strong base of churches in the community, with 6 right in the Village and more just outside. There are always church-sponsored events going on or events by other groups being held at the churches.

One of the primary local charities – Community Sharing – offers unique services and food help to area residents who are in need and well as running the states only pet food pantry to provide for the pets of family who may not be able to afford to feed them right now. People in the Village of Milford also strongly support Meals On Wheels and the Special Olympics (Milford has its own team that competes in SO events).

When I sum all of that up, I can honestly ask – why would you not want to live in such a great community?


Divorce and real estate – it takes a team

January 30, 2014
Divorce

Divorce

When things go south in a marriage and divorce seems to be the only way out, the people involved may think of calling their priest or pastor and they may call friend s to commiserate; they may even have already called a lawyer; but, they seldom think of calling a Realtor® and they should.

Divorce is an extremely emotional process, filled with remorse, doubts, regrets and sometime (maybe too often) distrust and hate. It is a time of great vulnerability for all parties involved and a time when there are many decisions to be made, none of which should be made in haste or in hate and without professional advice.

While it may not be top of mind at the time, making good decisions about the single largest asset that most married couple have – their home – is critical for the future of both parties. Make bad or hasty and ill-advised decisions and they might haunt you for years, as you try to rebuild your life.

There is so much complexity surrounding the real estate (and other assets) that may be involved in a divorce that you really need to assemble a team to help you and your Realtor can be the person who does that for you. On the team, you’ll need a good divorce lawyer, your Realtor, your insurance agent,  a tax/financial adviser, an appraiser and a mortgage adviser. Your Realtor can probably make recommendations or assemble the rest of this team.

Why all of those folks? Well, each one will either be providing you with advice about products that you already have (insurance, for instance) or products that you will need to get (a new mortgage) in order to move on with life. You need to understand your current homeowners policy – who’s listed as the policy owner (s) and who as the beneficiaries? What happens to that insurance when the divorce is final? Who needs to be listed then and who will be paying for it? As for the tax adviser or financial adviser (it probably will take two people for this), you need to understand the tax consequences of the divorce and make sure that you can file for your fair share of things after the final decree. You may need a good value appraisal if the family home is to be sold as part of the decree. You also need to understand the consequences on any long-term financial plans or policies or shared assets that you had in place. And, when the dust settles, you may need to get a new mortgage, in order to move on with life. How will this divorce leave you in terms of qualifying on your own for a mortgage? Can you do anything until your name is off the old mortgage or that mortgage has been discharged? Where will you go may be an easier question to answer than how will I afford it?

So, why I’m I writing about this? Because I care, for one, and because I have the team members already in mind to be able to help, from one of best family and divorce lawyers that I know, to a great insurance person, to a very thorough financial adviser and a great tax accountant and a mortgage rep that can make it possible for you to move on in life. These are people that I’ve worked with and trust to advise you on the aspects that go beyond my real estate capabilities. More importantly they are people that I trust with your fragile emotional state during this very trying time. I can introduce you to a team of professionals that will work with you through this process in a caring, respectful and empathetic way that will lift a lot of burdens from your shoulders and let you start the healing process.

So let’s start off by agreeing that divorce sucks and try to go forward from there the best way that we can, with a caring professional team of people on your side who can make sure that you make the right decisions during the process to come out whole on the other side. Call me and put my team to work for you. If you already have some people for some of these roles, great; let’s just add them to the team. If you don’t even know where to start; call me quickly so that you don’t spend another day by yourself in this process.


Problem solving ability and turning experiences into knowledge

January 6, 2014

“Experience is something you don’t get until just after you need it.” – Steven Wright

I like that little saying that I saw on a blog somewhere. A corollary might well be, “Knowledge is something that you don’t get until after an experience.”   In real estate this is particularly true. The barrier to entry into the real estate business is relatively low. Just about anyone with a few hundred bucks and the ability to learn and be tested can get a real estate license. That and a few bucks more will get you a coffee at Starbucks, but you still won’t be a Realtor®.

Realtors work within a proven system. The most important component of the system is the brokerage, which is responsible for taking the newly minted real estate agent and turning him/her into a Realtor.  Of course there is also the local Multi-List Service, the local Realtor Association, perhaps a state association and the National Association of Realtors. All of these groups provide bits and pieces of the system that the Realtor must learn to work within. That is a part of the experience that the beginner gets, which hopefully starts the process of the accumulating knowledgeaccumulation of knowledge.

Good brokerages will have extensive training programs and perhaps a mentoring program that pairs the newbie with an experienced agent. The broker himself (or more likely the local office manager in larger, multi-office brokerages) will be responsible for the training of the new agent and for monitoring his/her work through their first few real estate transactions. The broker (or manager) serves as both a manager and counselor during this start-up phase. Most brokers and managers have years and years of experience and tons of knowledge about the real estate process.

One can often tell very quickly how successful the new agent will be by watching how he/she uses this important resource. Those who fail and leave the business are most often those who try to go it on their ownhelping hand and don’t leverage the resources of their office to help them over the start-up hump. Many of them get into deep trouble by not asking for help. Conversely, those who cling too tightly to this help and are afraid to try things on their own are also doomed to failure or a career of mediocrity. One must be able to wean oneself from the security of never making a decision on one’s own. A real estate agent is an independent contra

A key to turning the experiences that one has into knowledge is the ability to stop and look back over the experience to see what one can learn from it. Maybe the knowledge gleaned is “I’ll never do that again” or perhaps it is. “OK, I see what I did wrong and how to avoid that problem in the future or work around it if I hit it again.” Both are correct, but the latter is more valuable knowledge because it contains the thought process of learning from the experience and not just avoiding similar situations.ctor, after all, and must eventually become independent.

There is something to be said for seeking out an experienced Realtor, but if you happened to encounter a relatively new agent that you otherwise think is a nice person; ask them how they get help within their office and perhaps ask to meet with their manager or broker. Let that manager know that you expect that they will be assisting the new agent with any issues that come up during your client relationship and see what they say. A new agent will be eager to please you and probably work very hard; you just need to be sure that they understand how to work within the support system that they have around them to get help when they need it.

knowledge funnelA final note is that time on the job alone does not assure that the person putting in the time has gained the knowledge that they should have from the experiences that they’ve had. I’ve met way too many “experienced” agents who still did not fully understand the process or have the ability to work through issues. Many times, one agent or the other in the normal scenario where there are two agents involved (a seller’s agent and a buyer’s agent) will have to take on tasks for both sides in order to get the deal closed; even if both sides are represented by “experienced agents.” Just because an agent can say, “I’ve been in the business for 10-15-20 years”, doesn’t necessarily mean that they’ve accumulated a lot of knowledge during that time or that they can handle situations that may come up well.

Unfortunately there isn’t any easy way that you can really test the knowledge base and problem solving ability of agents whom you might interview before signing up with them. An in-depth interview that focuses more on how they do business than just how long they’ve been in the business or how many transactions they closed last year is probably the best thing. Asking to talk to 1-2 past clients might also help (assuming that you aren’t the first client) or reading their reviews from past clients, if the company does that sort of thing. You can also ask questions like; “What was your toughest sale/client and how did you handle that?” You should then listen for their problem solving approach and their honesty about the situation and how they handled it. They should be sharing the knowledge that they gleaned from that experience.


DIY only of you are capable…

December 16, 2013
DIY Stock Image By cooldesign

DIY Stock Image
By cooldesign

I see many homes that the owners would like to sell that have terrible Do-It-Yourself (DIY) jobs that were botched by the homeowners themselves. In general the bigger and more complex the job is, the more a normal homeowner should reconsider a DIY approach.

Painting a room is simple enough and many homeowners can handle that task; however, for some even painting is a challenge. For most other jobs in the home you should ask yourself several questions before tackling the task:

1. Do I have the necessary tools?  Many jobs that you see professionals doing also involve professional tools that the normal homeowner likely doesn’t have. If your toolbox consists of a hammer, a couple of screw drivers and a pair of pliers; then almost all of the jobs in your home should be farmed out to professionals.

2. Do I have the necessary skills? Even if you took a Saturday class at Home Depot on how to install tile around a bathtub; think twice (maybe thrice) before tackling such a highly visible and difficult job. Maybe you can put tile down in your small laundry room to test your skills. At least it is not in a highly visible area if you mess it up. Don’t try your skills first in your front foyer.

3. Do I have the time and patience? Most DIY jobs that homeowners attempt will take far longer than initially planned (or what the guy at Home Depot told you it would take) and many will offer challenges to your patience and persistence. If you have any Attention Deficit Disorder left in you from childhood, DIY projects can be very frustrating.

4. Do you have a good sense of style? Sometimes called fashion sense, this is your ability to put colors or shapes together in a way that is pleasing to the eye, not jarring or glaring. This is a tough one for many, since few people have a good feel for their own sense of fashion or style. Some have a sense of style, but it is so off-kilter that it puts off others. I have often seen what passes for a sense of Victorian Style in some homeowners turn into nightmarish jumbles of colors and eclectic furniture pieces.

Obviously all of these requirements for a good job can usually be assured by hiring professionals to do the design and installation work for whatever project one has in mind. Sure, it’s more costly to have a pro do the job; however, in the long run it may actually save you money, when it comes time to sell. Would be buyers make lists (mental or otherwise) of all of the things that they will need to tear out and redo. Most of the time those are lists of things that were poorly executed DIY projects. That list of projects for the buyer drives their offer pricing, since they subtract those costs from what they might have offered, had the jobs been done right at the time.

The other issues on some projects are health and safety. Many DIY projects that involve tackling the home’s electrical or plumbing systems can result in either, or both, health or safety issues. Improperly installed electrical outlets or switches can be a fire or shock hazard. Plumbing that is not properly installed almost always leaks and those leaks can cause many problems, such as mold.

Getting back to the simple task of painting a room; even this little DIY job has a whole list of skills and tools and sense of fashion involved that may be beyond the average homeowner. Certainly, just the prep work that should be done before the brush or roller ever touched any paint will test your patience and persistence. It takes professional painters years of practice to be able to use a brush to paint along the wall-ceiling interface of around a window frame in a nice straight line, without overlapping from one surface to another. Most DIY’ers use painter’s masking tape; which is OK if you get a good quality tape and have the patience to apply properly. I see messy looking DIY paint jobs all the time in houses that the owners were trying to prep for sale.

So, am I saying that the homeowner should never do it themselves? No! I am saying that the homeowner needs to take stock of their inventory of tools, skills, mental state and fashion sense before tackling each job that they see needs to be done. Homeowners are all over the spectrum in those four categories. If you have all four for the task at hand, go for it. If not, call a pro. You’ll be happy that you did and some future buyer of your home will be, too.


Buyers, don’t leave home without one…

November 16, 2013

Realtors® would always prefer that you let them do the searching for you and then have them show you each house that you like. That really doesn’t happen in real life. Buyers today are more independent and many seem to enjoy driving around to see what they can find in areas that they may like. They are also much more into technology, especially mobile apps on their smartphones.

I understand that and so I always advise buyers that I work with to download one of the great smartphone apps that exist for buyers. You can find these at the Apple App Store or at your Android App Store. The two that I recommend are from Real Estate One and from Realtor.com (search on Real Estate One or Realtor at either store). If you live in Michigan, especially in the Detroit Metro area you really can’t beat the Real Estate One mobile app. If you live anywhere in the United States (including Michigan) the Realtor.com app will work for you and is just as good. The Real Estate One app only works for Michigan-based properties.

smartphonesThe great thing about both of these apps is that they are location sensitive. They are GPS enabled, so they know where you are when you turn them on. They both have very good, very up-to-date data bases of the homes that are for sale anywhere in the country. Unlike some apps from national real estate oriented sites, both of these apps are kept up-to-date. The databases for both are updated multiple times during the day. That means that you won’t waste your time calling on a house that was sold last week or last month, like you can with those big national sites.

As you drive around both apps will interactively show you on a map display what homes are for sale all around you. You can set the range of the display, so that you only see homes within a mile or within 5 miles (or more). Both give you a very cursory display initially – you know the format from other location-based apps- a little pin with a street address and the price. Touch on the pin and the information expands to show you more, including a picture of the property. Touch again and you can see the entire listing. It’s sweet. All the stuff you need to know to decide whether or not to head over to that address to take a look at the house from the street.

Both apps will also let you do searches that are criteria based rather than location based – things like price, number of bedrooms and more.  The Realtor app has a nice, unique feature that lets you search within a school district, if you have your heart set on a particular district. You’ll have to play around with both apps to see all of the search options, but both are extensive and both put you in charge of the data.

Once you have enough information available from either app and maybe have done a drive-by, you can call and set up an appointment to go see the  listing. And, if you’re in the Southeast Michigan area, you can set the Real Estate One app up with me as your preferred agent and then it will make it easy for you to call me when you want to see a house. I like that part. These are apps that any serious house hunter should have on their phone. Don’t leave home without one.

Here’s a link to a video about the Real Estate One app.


Watch the donut…

November 14, 2013

“As you go through life, make this your goal. Watch the donut, not the hole.” (Burl Ives)

donutThat would be good advice for real estate as well as for life. Too often both the sellers and the agent involved in marketing the house put too much time in on watching the hole – things that aren’t there; instead of things that are. There are almost always shortcomings in most houses, whether it is the design and layout, a smallish kitchen, small bathrooms, no garage or whatever.  Those are the holes that can’t easily be changed or fixed. What needs to be the focus is the donut. That might be the great location, the cozy warmth of a smaller place, the features of character that may not be found in newer homes.

You and your Realtor, working together, can figure out how to best show the donut and minimize the attention paid to the holes. Some Realtors give staging advice themselves and some may bring in a stager. It’s amazing what someone with an eye for furniture placement and accessories can do to make the donut look so great that you don’t even see the hole. Sometimes it may require a little paint to change the character of a room or just removing some of the stuff in the room to make it feel bigger. Little things, like adding knobs to kitchen cabinets can change the look of the whole kitchen and is a relatively cheap update. Just doing a deep clean on your bathrooms to make the tile and grout sparkle can change your view about that room. There are many other small and inexpensive tricks that your Realtor will be able to suggest.

One way to make the holes disappear is to take care of all of those little maintenance things that you’ve been putting off. That broken switch plate or missing plug cover is a hole in your donut. The piece of door molding that your cat has used as a scratching post for the last few years is a hole in your donut. That water stain on your ceiling from a leak that happened before you got the roof replaced is a hole in your donut. That wobbly bottom step on the front porch or the loose hand railing are holes in your donut. You may have grown comfortable living with those things, but a buyer will just see them as holes in your donut. Fixing them lets the buyers keep their eyes on the donut.

So, while it is good advice to stay positive and keep your view on the donut; when the time comes to sell you’ve got to fix those holes that you’ve been living with.  Ask your Realtor to help you by walking through and helping you make a list of the holes that need attention. You may be surprised at the number of things that he/she sees that need attention and that you’ve just gotten so used to that you don’t even notice them anymore. You want your home to come across as a crème puff and not a stale old donut.


If you want to sell; let visitors see the house.

November 13, 2013

Here’s a quote by a famous actor from the past that I’d like to apply to real estate:

“My father used to say, ‘Let them see you and not the suit.’”  (Cary Grant)

What the heck can I do with that? How does that apply to selling your house? Well, let’s just pervert it a little bit –

“My Realtors says, ‘Let them see the house and not your stuff.’” (Norm Werner)

One of the tougher things for me to get across to sellers is the concept of their house as a product and no longer their home. Sure, they may still be living there; but, as soon as it goes on the market, it is a product competing with all the other products out there for the attention of the buyers. Buyers aren’t interested is seeing your wall of family photos or all of the sports trophies that you kids won in high school. Buyers could care less about the miniature teacup collection that you have from all of the places that you’ve visited or the Hummel collection of cute (if somewhat dusty) figurines that you have in the corner cupboard. They aren’t very understanding when they open a closet and half of the sports equipment that you are still storing for your kids tumbles out at them. These are not selling points for your house.

Most people are pack rats, whether they admit it or not; they just keep too much stuff. If you have closets that are stuffed to the brim, you are a pat rat. If you have stacks of papers or magazines or things you have clipped out to get to later; you are a pack rat. If you have boxes of tools and shelves full of half full bottles and cans of stuff you can no longer remember buying; you are a pack rat. If you have boxes full of items that you used to collect and display but no longer do; you are a pack rat. If you have boxes up in the attic or out in the garage that are still unpacked from your last move; you are a pack rat. So, admit it – you are a pack rat- and then let’s get on with life.

When it comes time to sell your house it is time to deal with your problem. Get rid of stuff! Hold a garage sale. Load up the car and head to the nearest Salvation Army drop-off location.  Rent a storage unit, if you just can’t bring yourself to part with your treasures; but, get it out of the house. People need to be able to see the house and not just your stuff. You may well find this exercise in getting rid of stuff to be very liberating. All of that excess stuff is like baggage that you may have been dragging around for a long time.

And what about the precious memories that have become a part of the house? Who didn’t have the kitchen doorway or wall with the little ruler marks and dates on the wall or doorjamb that marked the passage of time and the growth of various family members? Paint it over! Buyers might think it is cute initially, but then it just becomes another update project on their list and something that they will take off money for to cover the paint. And what of the stars on the ceiling mural in the Princess room, lovingly placed to warm the heart of your little princess? Get rid of them and paint the ceiling. Take down the bead curtain on the closet, too, and put the door back. It might be little Tommy’s room next. Finally, there’s the Hunter Red family room that seemed so cool when you had it all decorated with your daughter’s Dressage pictures from the equestrian team.  Paint it neutral and deep six the horse pictures.

The real point of all of this is not to call into question your tastes while you were living here, but to drive home the point that you have made the decision not to live here anymore and now you need to present the house in as neutral and unobtrusive way as you can. If the new owners want a Hunter Red room, they’ll paint one that color. If they want to put up soccer pictures of their kids, they can. If they have a little Princess, too, let them create their own fairy land bedroom. If they don’t want any of that stuff they certainly won’t want your old hand-me-downs.  People looking at houses need to be able to see the house well enough to imagine their stuff in it and not be distracted by all of your stuff.

I know that this is a tough point to get over for some home sellers, but it is an essential point. Once you can get past the issue of your home becoming a product – a house competing against other houses of similar size and cost – then you can join you Realtor as a more effective partner in making that sale happen. What was your home will always be there in your memories. You will remember lining the kids up for the annual marks on the doorjamb, even if the marks are no longer visible. No one can take away your memories of the house as your home, but now it’s time to let someone else take your house and make it their home.


Appraisal issues a never ending battle…

November 8, 2013

As much as the market has been straining to break out of the recent recession and regain lost property values, one component of the market has been acting as an anchor, holding back or at least significantly slowing the positive progress. That component is the dreaded appraisal. I say dreaded, because it has become the biggest obstacle to sales these days. The house can be house valuein move-in ready condition with a clean bill of health from the home inspection and still have the sale queered by a low appraisal. That’s happening a lot these days. Why is that?

One of the constant battles that go on in the real estate market is that between the Realtors involved in listing the houses and the appraisers over what the market value of the house should be. Appraisals can be the cold splash of reality in the face for many sellers. Appraisals take all of the emotion out of the process of putting a market value on your property.  The battle over market value is one that is likely to continue forever, just due to the different natures of the two sides in this arguement.

Realtors, especially listing agents, tend to be optimistic and they also tend to bake the direction of the market into their listing pricing. In a rising market, like we have now, it is quite easy to miss the market on pricing, either low or high. If the listing agent prices the property too low, it might sell quickly; but, the seller will not have gotten the most out or the sale. If, on the other hand, the listing agent is too aggressive with pricing the property for a rising market, he may price it too high and it will just sit there, waiting for the market to catch up.

Appraisers go at value pricing from a different perspective. They are required to use sold Appraisercomparable properties as a barometer of the market; thus their data is always trailing the market, sometimes by as much as 6 months. In a rapidly rising market that almost always means that they miss the value on the low side. For a long while appraisers were also forced to include the sales of foreclosed and short sale properties in their comparable properties. Fortunately much of that business is behind us now, but there are still a few of those types of sales that were done in the last few months that can affect appraisals.

Another major factor in many appraisals is something that the seller can’t do anything about – the style of the house. House styles come and go, with each decade usually having some dominant style. There are a few “classic styles” – ranches and colonial, for instance, that never really go out of style, but which might be less desirable than a more modern architectural style. For the past couple of decades the 1 ½ -story or Cape Cod seems to be the preferred style. Split levels, which were all the rage in the late sixties and seventies, have really fallen out of favor as a style. Those style preferences show up in the appraisals. Bi-levels, tri-levels and quads definitely appraise lower than ranches, colonials and Cape Cods of the same size. Homes that were sometimes classified as modern or contemporary when built can also fall out of favor, since many of them have very unusual floor plans.

What can you do about all of this as a homeowner who wishes to sell? Not much about the style issue; but you can make sure that your house is the best one of whatever style that it is on the market. A house in great, move-in ready condition will still attract buyers. Another thing that sellers can do is to compose a list of the updates and upgrades that they have put into the house, hopefully not too long ago. It is not obvious to the appraiser exactly when the roof was replace or a new furnace put in, but those things make a difference. Some updates, like granite countertops will be obvious, but many others may benefit from being pointed out for the appraiser. Taking care of the many little “deferred maintenance” items that you may have been putting off can also help by removing those value detractors.

Another thing to do is seek professional advice. Get a good Realtor to do a Market Analysis for your home and then follow his/her advice. You don’t need to fight with both the Realtor and the appraiser. Call me and I’ll help you understand more about the market value of your home and what you can do to improve it.