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!

Save Money by Repairing Windows

Article From HouseLogic.com

By: Dave Toht
Published: March 09, 2010

Repairing worn windows, rather than replacing them, can save you thousands of dollars.

Perhaps your wood sashes are cracked, peeling, and prone to rattle in the wind. Or the insulated glass in your vinyl casement is "blown"-filled with foggy condensation. Maybe your aluminum slider gave up sliding years ago. You've got a window problem, and you know it's going to cost you.

Confronted with such ills, many homeowners leap to the conclusion that it's time to replace their windows. That's an expensive proposition: A double-hung 3x5-foot vinyl replacement runs about $525 installed. While it's an investment that'll pay off if you sell your house (a 77% return, according to Remodeling Magazine's Cost vs. Value Report (http://www.remodeling.hw.net/2009/costvsvalue/national.aspx) ), not every household can afford the initial outlay. Is there another way?

Fact is, none of the symptoms mentioned above necessitate new windows. By repairing windows with a few dollars and some sweat equity, most problems can be remedied. In addition, you're likely to improve the energy efficiency of the windows you fix. You can avoid the cost of window replacement by addressing some of these scenarios.

All-wood windows

When maintained, wood windows can last 100 years or more; if left unpainted, they quickly degrade. However, even after years of neglect, the damage is often superficial, looking worse than it is. There's no need to assume the window must be rebuilt. Areas of rotted wood can be renewed with penetrating liquid epoxy. Fill holes in sills and sashes with epoxy putty--it sands easily and is paintable.

Cost: About $20 for enough epoxy putty to mend a 3x5-foot window, $10 for paint and primer to protect your work. Allow three to six hours per window for the restoration.

Because sashes and stops wear with age, wood windows are prone to gaps where air can penetrate. Popular spring bronze weather stripping has a V-shape cross section. The flexible shape applies continual pressure against the window sash and permanently seals gaps while allowing sash movement. Other weather-stripping solutions include tubular vinyl and adhesive foam.

Cost: About $21 for enough spring bronze weather stripping to seal a 3x5-foot window. Allow an hour per window for installation.

Older double-hung wood windows have counter weights to assist raising the sashes. These can be repaired to working order, but the real problem is that the weights and pulleys require a sizeable cavity in the wall that's not insulated. This void contributes to heat loss. New replacement lifting mechanisms attach to the sash, allowing the cavity to be filled with expandable foam.

Cost: $38 for a replacement lifting mechanism, $4 for spray foam insulation. Allow four hours per window for installation.

Non-wood windows

Windows made of vinyl, fiberglass, and aluminum will last at least 20 years. Unfortunately, the gaskets that seal their sashes don't have the same life expectancy. Repair holes and small rips with by removing the sash and applying silicone sealant to the damage. To replace the gaskets, contact the window manufacturer or a specialty supplier for replacements.

Caulk any punctures or cracks in vinyl- or aluminum-clad windows to prevent water damage to the wood core. Repair loose aluminum sashes by tightening the screws at the corners; try coating the screw threads with a dry-locking compound made for especially for screws.

Cost: A few dollars for silicone or replacement gaskets and parts. Allow an hour or so per window.

Energy savings

Any repairs that improve the ability of your windows to seal against air leakage will yield energy savings. The worse shape your windows are in, the greater the potential savings on your fuel bill-a Vermont field study (http://www.homeenergy.org/archive/hem.dis.anl.gov/eehem/97/970908.html) suggests that sealing a single loose window can save $14 to $20 annually.

But don't expect more than a couple hundred dollars overall-even some total replacements don't yield more than that. The real savings is the money you didn't spend on replacement windows.

Glass issues

In most wood windows, glass is "glazed" in place, held with small metal pieces called points and sealed with putty. Even when the glass is sound, cracked and missing putty should be replaced. Glazing takes practice but is well worth the trouble.

Cost: $6 for points and putty; $32 for two pieces of single-pane glass to refit a 3x5-foot window. Allow three hours per window.

Replace cracked single-pane glass. To remove the old glass from a vinyl window, pry away the vinyl stop with a putty knife. On aluminum windows, the glass is wrapped with a rubber gasket and held by a metal strip. Remove both to free the glass. To re-install, a bead of silicone seals the glass on a vinyl window; for a metal window, clean and reuse the rubber gasket.

Cracked or fogged double-pane windows should be resealed or replaced by a glass fabricator-find them in the Yellow Pages or online directory.

Cost: $175 for double-pane glass to refit a 3x5-foot window.

Hardware failures

Before replacing a balky cranking mechanism on a casement or awning window, try cleaning it and lubricating with white lithium grease. If that doesn't do the trick, replace the mechanism.

Cost: About $3.50 for lithium grease; $40 should you need a new mechanism. Allow a half hour for lubrication per window; two hours for replacement.

Broken or paint-encrusted sash latches should be replaced.

Cost: From about $10 for a standard brass latch to $40 for an antique reproduction. Latches come in a range of finishes, from brushed metal to colored enamel. Allow about 15 minutes for the switch out.

Dave Toht has written or edited more than 60 books on home repair and remodeling, including titles for The Home Depot, Lowe's, Better Homes & Gardens, and Reader's Digest. A former contractor, Dave was editor of Remodeling Ideas magazine and continues to contribute to numerous how-to publications. He has glazed more windows than he cares to remember.

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.