On St. Patrick's Day morning our office held a short sale "roundtable" and I wanted to share some of the conversation with you.  With over 400 Short Sales Closed, there are some real experts in this roundtable at Remerica Hometown One!

The Subject:  What Will Short Sales "Climate" Be in Southeastern Michigan in 2010?

-We all agreed that short sales will be around for at least another 3-4 years, representing about 35% of the market as a high and ranging downward to 10% in 48 months.

-The new incentives being put in place April 5, giving $1000 to First Mortgage, up to $3000 to the Second Mortgage and $1500 to the Seller upon short sale work out should help! (Look up Home Affordable Foreclosure Alternatives, HAFA)

-We all think that Realtors need to review the HAFA plan.  Here is an explanation; please review and check with a Realtor and your own mortgage company for details and updates.    https://www.hmpadmin.com/portal/programs/foreclosure_alternatives.html

-Inventory in Western Wayne, Oakland and Washtenaw Counties is diminishing and will continue to.  Buyer pressure on homes has increased measurably.  Bank owned, short sales and "normal' transaction listings that are in good condition are met with multiple offers, some for over asking price.

-Low appraisals despite the multiple offers and diminishing inventory are still an issue with short sales.  Mortgage companies need to stop pressuring for lower appraisals in Southeastern Michigan.  Let the natural "organic market" take shape.  The result will be a steady, healthy, slow ticking up of values.

-Slow bank response time to short sale offers, and slow processing time still hampers the market, causing buyer huge "buyer drop out" rates on these transactions. Replacing the buyer takes additional time and may damage a Seller's chance of a short sale as time might be running out towards foreclosure in many cases.

-Third Party short sale companies to assist in the short sale work out (charging the lender for the service) have been met with mixed reviews.  Realtors have been using these services to save themselves time and resources.  Unfortunately, if the success rate is lower with the Third Party Vendor, many Realtors are disappointed with the outcome.  You don't save time if the transaction never closes.  Realtors mentioned that it is the inconsistency of the lenders that cause the process to break down, and these inconsistencies are still in play with the third party vendors.  Most Realtors are choosing to become proficient at the short sale process themselves.  We will keep monitoring, and look forward to feedback from the Realtors at Remerica Hometown One as to the effectiveness of some of the Third Party vendors. 

-Improper uses of the status of "Contingent Continue to Show (CCS)" on the local multiple listing service was a heated conversation.  If a home is sold, signed by Seller, contingent upon Seller's mortgage company approval of the short sale, it would seem to be under a status of "pending" as the buyer and seller have come to terms.  Too many agents are using CCS as a way to keep a property active on Realtor.com and other sites, as well as to continue to collect leads.  Our suggestion is to have the MLS Service create a status called "Short Sale Contingent (SSC)" that would give an accurate description of the status, and allow SSC to be considered "active" so the home would remain in MLS as active, on Realtor.com and other sites, but with "SSC" so Realtors and the public have accurate information.

-The number of times a Realtor needs to call a short sale "loss mitigator" on behalf of the Seller is; once a week at the onset of the short sale, escalating to 3 times a week two weeks before short sale approval and closing.

-A cool tip to create short sale efficiency was to create label sheets with the Seller name, property address, and loan number and stick the label on every document sent to the short sale mortgage company.  This little tip has led to some time shortening for the Seller client.

In closing, the frustration by the Realtors as to the lack of efficiency and standardization by the mortgage companies continues.  Resourceful Realtors will always find a way to help their clients, and the short sale process is no exception.  There are many success stories with short sales.  All of them involve a burning desire to "not give up"!  This desire has to be there for the Seller as well as the Realtor.  Sellers who cooperate and complete all the bureaucratic steps have a tremendous advantage over Sellers who remain "inactive" in the process.  Realtors have found that they are capable of handling short sales when they take the time to learn the process, stick to the process and never give up!  Many have been able to keep real estate as their career by mastering the short sale process.  As home owners or Realtors, wherever you work, or live in Michigan, Remerica Hometown One would be glad to help you with short sale questions.  The better we all become, the better the real estate world becomes!

Just a quick note to remind all of us that many of our Michigan Resident home Sellers would qualify for an exemption to the property transfer tax, even if they already paid it, you can request a refund.

Meeting Criteria

• 1. The property must have been occupied as a principle residence, classified as a homestead property.
• 2. The property's State Equalized Value for the calendar year in which the transfer is made must be less than or equal to the property's SEV for the calendar year in which the transferor acquired the property (bought it), and
• 3. The property cannot be sold for more than the true cash value (established by municipality) in the year it is sold

Example.  If the SEV of the principle residence when acquired in 2006 is $74,000 and the SEV when transferred in 2008 is $72,000. Then criteria one and two above are satisfied.  You can establish the true cash value by doubling the SEV at the time of transfer.  In this case the true cash value is $144,000.  If the sale price in 2008 is $140,000 then the sale does not exceed its true cash value.  All three criteria are satisfied and the exemption would apply.

 Your client can contact the Michigan Dept. of Treasury for up to 4 years after the closing to request a refund if TT was paid. 

Thank you to Brian Westrin J.D. from Michigan Association of Realtors for this explaination.

Ok, so my 8 year old son Sammy had to write a quick essay on "Something Beautiful" for 2nd grade, and here it is...

Something Beautiful

My something beautiful is my family.  I love to spend time with my family and go out and have fun with my family.  I like when our family gets along with each other and we all get together and play a board game.  I like when we sit down at the dinner table and have a great dinner.  I like when we go up north and try to estimate what time it will be when we pull into the driveway.  I like when we go on the boat together.  But the most thing I love about my family is spending time with each other.  - the end

Wow, can I learn a lot from this short paragraph from my young 8 year old son.  It's time! Love is time!  My young son doesn't love his toys, or his favorite hockey team, he doesn't mention his Nintendo Wii, his dirt bike, wow, not even his friends (yet).  He could have written about anything.  What my child thinks is beautiful is... TIME with those he loves!  I have to believe most children feel this way, I am just fortunate to be given a reminder in black and white.  Hope you enjoyed reading this half as much as I did.  Time is beautiful!

We watch the news and hear about all the homes for sale, just like our clients do.  We go to work as Realtors, we prospect and perform at top level, we attract qualified buyers, counsel them to look at the homes we are sending them, pick out their favorites and then go show the properties to them.  But wait, where are the new listings, where is the "glut" of quality homes for sale?  In Metro-Detroit and Ann Arbor area, with prices still compressed, Realtors are finding it hard to find homes suitable for their clients.  Since the beginning of 2010, a well appointed home hits the market, and if priced to "today's market" you will find yourself in multiple offer situations, with sale prices often times exceeding the asking price.  It is occurring in all price ranges, (although 600k and up is experiencing this less) and all forms of sales; short sales, bank owned and human owned (with equity).  Despite the lack of quality inventory, which is down over 45% from beginning of 2008, and the multiple offers on homes, the appraisal still comes in below sale price. 

In terms of market frustration, it creates a perfect storm.  Lower than expected inventory, appraisal guidelines from the lenders that discourages value growth, and a buyer market that has a new found appetite for purchasing homes.  In a normal situation this would create healthy, moderate, incremental price increases.  In this market, because Sellers are unable to put their homes into the mix due to high loan balances, the renewed buyer interest is not met with Seller interest in selling.  Sellers are not even teased by slightly increasing values, because appraisers (through lender guidelines) are squashing that natural occurrence.  I can only speak to my experiences in Southeastern Michigan, but I bet it is not that unique.

The National media has often reported that there is a glut of bank owned properties being held off the market.  Well, in Metro-Detroit and Ann Arbor, we have been through at least 3 waves of bank foreclosures since the beginning of 2005.  I have talked with many in banking and the waves of foreclosures seem to be worse in other states.  Michigan has already been raked over the recession coals for longer than any other state, so it makes perfect sense that we are ahead of the curve in getting rid of our foreclosure inventory.  That said, if the banks have property in the hopper, now is the time to release it.  Why wait until interest rates go up, put it out there now.  We have buyers who need a home now, or are you afraid your appraisers won't give you the value?  Ah, just kidding, kind of.   

John McArdle

John is the Broker of Remerica Hometown One in Plymouth and Canton Michigan.  John is active at the local, State and National level of real estate issues and is a member of the National Association of Realtors.

Great Article on Holiday Safety. 

Holiday Fire Safety Tips

Article From HouseLogic.com

 By: Pat Curry
Published: November 18, 2009

The holiday season is one of the most dangerous times of the year for household fires, so take note of these tips to reduce your risk.

Residential fires during the holiday season are more frequent, more costly, and more deadly than at any other time of the year. The U.S. Fire Administration (USFA) reports more than double the number of open-flame fires on Christmas Day than on an average day, and about twice as many on New Year's Day. And when those fires occur, they do more damage: Property loss during a holiday fire is 34% greater than in an average fire, and the number of fatalities per thousand fires is nearly 70% higher. When the source of the fire is a highly flammable Christmas tree, the toll in property and lives is even greater.

To keep your household from becoming a holiday fire statistic, here are some safety tips to follow.

Cooking

Cooking is the top cause of holiday fires, according to the USFA. The most common culprit is food that's left unattended. It's easy to get distracted; take a pot holder with you when you leave the kitchen as a reminder that you have something on the stove. Make sure to keep a kitchen fire extinguisher that's rated for all types of fires, and check that smoke detectors are working.

If you're planning to deep-fry your holiday turkey, do it outside, on a flat, level surface at least 10 feet from the house.

Candles

The incidence of candle fires is four times higher during December than during other months. According to the National Fire Protection Association (http://www.NFPA.ORG), four of the five most dangerous days of the year for residential candle fires are Christmas/Christmas Eve and New Year's/New Year's Eve. (The fifth is Halloween.)

To reduce the danger, maintain about a foot of space between the candle and anything that can burn. Set candles on sturdy bases or cover with hurricane globes. Never leave flames unattended. Before bed, walk through each room to make sure candles are blown out. For atmosphere without worry, consider flameless LED candles.

Christmas trees

It takes less than 30 seconds for a dry tree to engulf a room in flames, according to the Building and Fire Research Laboratory of the National Institute for Standards and Technology (http://www.NIST.GOV). "They make turpentine out of pine trees," notes Tom Olshanski, spokesman for the U.S. Fire Administration (http://www.USFA.DHS.GOV). "A Christmas tree is almost explosive when it goes."

To minimize risk, buy a fresh tree with intact needles, get a fresh cut on the trunk, and water it every day. A well-watered tree is almost impossible to ignite. Keep the tree away from heat sources, such as a fireplace or radiator, and out of traffic patterns. If you're using live garlands and other greenery, keep them at least three feet away from heating sources.

No matter how well the tree is watered, it will start to dry out after about four weeks, Olshanski says, so take it down after the holidays. Artificial trees don't pose much of a fire hazard; just make sure yours is flame-retardant.

Decorative lights

Inspect light strings (http://www.houselogic.com/articles/holiday-lighting-checklist/), and throw out any with frayed or cracked wires or broken sockets. When decorating, don't run more than three strings of lights end to end. "Stacking the plugs is much safer when you're using a large quantity of lights," explains Brian L. Vogt, director of education for holiday lighting firm Christmas Décor. Extension cords should be in good condition and UL-rated for indoor or outdoor use. Check outdoor receptacles to make sure the ground fault interrupters don't trip. If they trip repeatedly, Vogt says, that's a sign that they need to be replaced.

When hanging lights outside, avoid using nails or staples, which can damage the wiring and increase the risk of a fire. Instead, use UL-rated clips or hangers. And take lights down within 90 days, says John Drengenberg, director of consumer safety for Underwriters Laboratories. "If you leave them up all year round, squirrels chew on them and they get damaged by weather."

Kids playing with matches

The number of blazes--and, tragically, the number of deaths--caused by children playing with fire goes up significantly during the holidays. From January through March, 13% of fire deaths are the result of children playing with fire, the USFA reports; in December, that percentage doubles. So keep matches and lighters out of kids' reach. "We tend to underestimate the power of these tools," says Meri-K Appy, president of the nonprofit Home Safety Council (http://www.HOMESAFETYCOUNCIL.ORG). "A match or lighter could be more deadly than a loaded gun in the hands of a small child."

Fireplaces

Soot can harden on chimney walls as flammable creosote, so before the fireplace season begins, have your chimney inspected to see if it needs cleaning. Screen the fireplace to prevent embers from popping out onto the floor or carpet, and never use flammable liquids to start a fire in the fireplace. Only burn seasoned wood--no wrapping paper.

When cleaning out the fireplace, put embers in a metal container and set them outside to cool for 24 hours before disposal.

Pat Curry is a former senior editor at BUILDER, the official magazine of the National Association of Home Builders, and a frequent contributor to real estate and home-building publications.