Ann Arbor Area Real Estate

Are "Stated-Income" Loans a Thing of the Past?

2008-12-02T21:21:00.005-05:00

Realtors and other self-employed people are finding it harder to get a mortgage even when they have a substantial downpayment. In the past many self-employed took out "stated-income loans," which don't require borrowers to fully document their income. Defaults were low. But as lenders loosened their lending practices and began offering these stated-income loans to other than affluent professionals, they became known in the industry as "liars' loans." Today many banks will not offer them at all.

Underwriting criteria for the self-employed have swung from a simple process to being tighter than any in modern times. The changes are increasingly frustrating a group of borrowers that banks once coveted: affluent self-employed professionals such as doctors, accountants, lawyers, and small business owners.

Banks say they have concerns documenting the self-employed's cash flow due to the deductions and write-offs that the self-employed show on their tax returns. And there are no W-2s to support their income. Lenders are also cautious because the non-salaried can have greater volatility in their annual income.

So as the Feds try to ease the housing crisis, thousands of good borrowers are frozen out of the market.

Credit or a Loan? What About the Benefit?

2008-11-21T09:43:00.003-05:00

Many have questioned the first-time home buyers credit, saying it's nothing more than a loan, and thus dismissing it. Technically it is a tax credit, but it does operate as a loan as it must be repaid. BUT, the important thing is to look at the benefit.
The majority of first-time buyers leave the closing table and have little left in savings after the purchase of their home. As new homeowners, they are now facing a mortgage payment that exceeds what they had paid in rent. They have a home to furnish, with more rooms to fill with furniture than their apartment in most cases. They may also need to spend money on painting, some redecorating, carpeting and window coverings. In addition, there are other home ownership necessities such as a lawn mower, ladder, garden tools and the like that must be purchased, not to mention the expense of making any costly repairs or improvements the home may require.
More often than not these purchases are made with a charge card, with interest rates that are upward of 17%. These additional monthly expenses for home-related purchases are in addition to the large monthly mortgage payment they now have. So why wouldn’t a buyer be excited about obtaining the $7,500 tax credit, and having the benefit of repaying it over 15 years without interest?
What if a first-time buyer really liked a home they saw that needed some major repairs or renovation, a home that represented a great buying opportunity? But after much consideration, they decided against buying it. They just didn’t have the financial resources after the closing to accomplish the type of repairs required, such as a new furnace or new roof or new siding or new windows. Wouldn’t the opportunity to obtain $7,500 in an income tax refund possibly be the answer to this type of concern?

Do You Understand the First-Time Homebuyer Credit?

2008-11-11T20:21:00.006-05:00

There's a lot of confusion about the new first-time homebuyer tax credit. The fact that it's called a 'credit' is a good part of the confusion. It's not an outright credit since one must repay it. It's more like an interest-free loan. But the loan repayment term is generous - one has 15 years to repay the credit, which can be as high as $7,500.

The reason for the term 'credit' is that the money can be received as a credit against your federal income tax. That is, the $7,500 can be used to reduce your tax liability, or if you have none, or have already paid your taxes through withholding or estimated tax payments, then you will get the money sent to you.

Only homes purchased on or after April 9, 2008 and before July 1, 2009 are eligible for the credit. There are income limits for eligibility: up to $75,000 for single taxpayers and up to $150,000 for married couples. A first-time homebuyer is anyone who has not owned a home the previous three years, and the home you purchase to qualify for this credit must be used as a principal residence.

Any questions? Please feel free to call me at 734-439-8405.

Cool Telephone Techie Tip!

2008-10-02T10:28:00.002-04:00

In a hurry? Need to leave a message but don't have time to talk right now? You know if the other party picks up the phone you won't have time to do everything that's on your plate at the moment, but you really need to call and leave a message. So assure yourself of being able to just leave a message this way.

And The Sky Did Not Fall!!!

2008-09-30T19:55:00.001-04:00

I certainly don't have the answers for fixing our nation's financial difficulties, but I'm glad the first rushed 'rescue' bill did not pass. It appears there was not such a huge urgency after all as the stock market plummeted yesterday and then rebounded a good ways back up today.

I think everyone in power needs to think this through carefully and listen to the varied 'experts' and then hopefully craft a bill that makes good sense. Or better yet, maybe they can undo or modify the accounting rules that caused the banks' balance sheets to plummet in value and liquidity to shrink in the first place.

In the meantime I've sold 2 properties in the past 10 days and in conversations with other Realtors I find they are selling also. And yes, these buyers are getting mortgages. We are even seeing multiple offers on some of the properties now. It's been my belief for some time now that our housing market in this area of Michigan has bottomed and that we are bouncing along that bottom and it's just a matter of time before we begin to see the market start to edge up.

KISS Approach in Real Estate

2008-09-15T08:58:00.000-04:00

Keep It Simple-- One-stop-shopping is desireable in all walks of life. It is especially valuable when buying a home. With Real Estate One you can find all the necessary services under one roof. We have our own mortgage lender, our own title company to handle the title search and the closing, and our own insurance company for your homeowners insurance. With an integrated operation, there is far less likelihood of an issue arising at closing time.

It stands to reason that obtaining all of your home-buying services from one source makes the process easier and less burdensome for the consumer.

Need to Get Rid of "Stuff"?

2008-09-13T10:45:00.000-04:00

When it's time to move, we all realize we've been hanging on to stuff we no longer need and now we suddenly want to get rid of it fast. This can at times be difficult to do.

Putting good smaller items on the curbside the day before trash pickup can be simple - seems there's always someone to pick up useful items for their den or garage. This is actually my favorite method of recycling! I love seeing an eager soul jump from their car to snatch a tricycle or lamp or small table, knowing that my castoff is still useful to someone.

For other items or when the weather is just too nasty for putting stuff outside, try these resources:

Friends in Deed at 734-484-7607 They were recently willing to take mattresses and bedding which is very hard to give away and not welcome out on the curb.
Purple Heart at 734-728-4560
Dawn Farms at 734-485-8725
Dr.Raymond Molano at 734-429-2737 who I've heard will take clothes (often hard to find someone to take)
Salvation Army at 734-668-8353 or 734-761-7750

In fact, if you are even thinking of moving, start that clearing out process now - it's less to do when the actual move comes up! Need any other help with your move? Do call me at 800-923-3245. I've lots of resources for all the moving issues!

Furnished Rentals - Hard to Find!

2008-09-12T15:05:00.000-04:00

I've spent many hours trying to find a short-term furnished rental. A filming crew is coming to Ann Arbor to stay for 4-5 months and needs a fully furnished place to stay. They are willing to pay $2500-3000 per month.

I may have found a good opportunity for them, but I had no idea just how difficult it would be or how many emails and phone calls I would be making to accomplish this.

One of the many real estate challenges we come across in this line of work! You have to like challenges to do this job!

Government Bailout of Fannie Mae and Freddie Mac

2008-09-08T16:43:00.000-04:00

The government takeover of Fannie Mae and Freddie Mac is good news for the real estate industry. This will have the effect of stabilizing the mortgage industry. It's also anticipated that in the next week or so mortgage interest rates will drop some, possibly as much as 1/2 percent, thus adding a little stimulus to our real estate market. Our current average mortgage rate is 6.35% for a standard 30 year fixed rate loan.

This takeover and the ensuing trimming of operations and expenses won’t help struggling borrowers to refinance, but it will guarantee mortgage money availability for qualified borrowers. And it's also possible that some of the borrowers' costs associated with financing will go down.

Fannie Mae and Freddie Mac play a critical role in the mortgage market. They buy mortgage loans from banks and package those loans into securities that they either hold or sell to U.S. and foreign investors. That allows traditional lenders like Bank of America, Wells Fargo and Washington Mutual to make more loans.

Together, Fannie and Freddie own or guarantee about $5 trillion in home loans, about half the nation’s total. But an alarming number of those loans started going into default, draining the companies’ financial reserves and sending a chill through credit markets worldwide. As investors grew more skittish, borrowing costs started rising.

By placing Fannie and Freddie into a conservatorship, the government is promising investors that the companies’ debt is as safe as the Treasury Department’s.

At the Closing Table

2008-08-30T13:06:00.000-04:00

Sometimes there are tears of sadness at the closing table, but mostly joy. Just 3 days ago Deb, a very happy young woman, closed on a delightful 3 bedroom home in our area.

The story of how this came about is interesting. Deb has a friend who knows a Realtor friend of mine and this Realtor friend called me while I was recently on vacation. He said a young woman who worked at Eastern University really needed help. He told me Deb had been working with a Realtor for 8 months trying to buy a house! She felt everything had gone wrong in her relationship with the other Realtor and wanted to start fresh.

Immediately I called Deb and discovered she already knew which house she wanted to buy. She and her friend had even visited the owner one day long ago and had seen it and liked it. So with a call to Deb's lender, a call to my business partner Dennis, and a call to the listing agent, I set up a new showing, got a verbal agreement on an offer, emailed all the necessary paperwork to my partner Dennis, and we had this home under contract all in the same day! I love it when real estate deals come together like that!!!

It's times like this when the experience of 20 years in the business, makes a huge difference. I knew exactly who to talk to, how to make this come together, and got to a smooth closing, all done very efficiently. If you know someone who's struggling with any real estate needs, please do let me know and see if I can help. I can always be reached at 800-923-3245.

Do You Have a Tenant in Your Listed Home?

2008-08-14T12:37:00.000-04:00

There are great tenants and there are difficult tenants. If you still want to sell your home but need to rent it out during the listing for the cash flow, be extra careful in choosing a tenant. I have a listing right now which is being totally controlled by the tenant, and we are almost never able to show the house, and when we do, it is a mess! This is a tenant who clearly does not want this house to sell.

Within your lease agreement you need to spell out the terms of showing. By law we always have to give 24 hours notice to any tenant before we can show the home, but it should be possible to show with reasonable notice whether the tenant is present or not, just the same as we do when homeowners are still living there.

So, if you are in the position of wanting to rent but also wish to sell, be sure you get some good legal advice and a good lease contract.

Ideally you want to stage a vacant home and leave it vacant, but in these times we are seeing much more renting than in the past, and we can work well with those arrangements when they are properly set up. Call me at 800-923-3245 if you have any real estate questions.

Improvement in the Ann Arbor Real Estate Market

2008-08-12T18:56:00.000-04:00

Is it possible the strong buyers' market is changing? Washtenaw County stats released by the Ann Arbor Area Board of Realtors August 12, 2008 indicate an upward trend in the number of sales and sale prices. The year-to-date residential listing inventory declined by 23% from the same period a year ago, and the average sale price for July rose 2% compared to a year ago. Pending sales, increased 12.39% compared to a year ago.

Everything points to continued improvement in our county's real estate market for the rest of this year. So, if you've been waiting to buy, get out there now and seriously consider making a home purchase before we really move off from the "bottom" of the market.

Call me at 800-923-3245 if you wish more specific information on any area within the county.

Which is Better, a Mortgage Broker or a Lender?

2008-06-24T18:55:00.000-04:00

Here's interesting commentary on this subject from a California newsletter. Click here to read more on this subject.

wish to talk more about home-buying? Call me at 800 923-3245. Barbara

Rent vs. Buy Calculator

2008-06-18T16:48:00.000-04:00

Click here to compare renting versus buying a home. It will take you only a minute and the results are very interesting!

Stay Cool and Save

2008-05-31T17:14:00.000-04:00

Summer is just around the corner, and as the temperature rises so does your energy bill. The cost of running air conditioning and fans on top of the cost of running your every day appliances eats away at the money you can spend on enjoying your summer adventures. However, you don’t need to spend the $1, 900 dollars that the Environmental Protection Agency says the average household spends each year. All you need to do is follow these eight easy steps to year round energy efficiency.

1. Upgrade Your Thermostat.
It’s hot outside we all understand that, but if you aren’t home twenty-four seven then why waste your money cooling any empty house. Just invest a little bit of money in a programmable thermostat, which will automatically keep your at different temperatures at specific times. This way you can have your house nice and cool when you get home from work, and not waste money keeping it cool when nobody is home.

2. Be Green.
Planting at least three shady trees around your house can cut $100 to $250 off your annual heating and cooling bill, and it will also improve your yards appearance. However, if you really aren’t the type do go planting you can still save energy by pulling the shades or closing your curtains.

3. Keep Your Air-Conditioning Unit Clean.
You can save money just by keeping your AC unit clean and in prime performance. Another great idea is to give your unit a professional tune up before summer gets into full swing. Even if you don’t have air-conditioning it’s wise to get your air filters checked every month or so to clean or replace them. Dusting off your refrigerator’s condenser coils is yet another great energy saving idea as this will make it run more efficiently.

4. A Better Bulb.
The kind of lamps and light bulbs you use are actually important. Traditional incandescent light bulbs and halogen lamps require far more energy then your typical compact fluorescent light bulb, and CFL bulbs last ten times as long. Halogen lamps are also dangerous fire starters. As CFL bulbs come in a variety of sizes they can fit any lamp, and they also come in a wide variety of colors. Using CFL’s with the Energy Star label don’t buzz or hum like other CFL’s do. This is a switch that can save you tons of money. Replacing just four 100-Watt incandescent bulbs with equivalent 23-Watt CFL bulbs can save you between $120 and $200 over three years.

5. Fans.
Adding a ceiling fan to a room can help balance out the room’s temperature, so you can turn down the AC and still feel cool.

6. Unplug.
Some appliances in your home continue to suck energy even when they have been turned off. The worst of these energy wasters are televisions, VCRs, DVD players, stereos, phones, and microwave ovens, although, just about anything with a clock, remote control or on/off light is wasting energy. One solution to this huge drain on your pocket buck is to plug everything that can actually be turned off into the same power strip and then use that as your on/off switch.

7. Fight Leaks.
Leaky windows and ducts allow your cooled air to escape into the outside, which means that your AC has to work harder to keep rooms the temperature you want them and cost you money. Ducts are often installed with leaks, so if you believe that your ducts are faulty then you should have them check out by a HVAC (heating, ventilation and air-conditioning) technician. Making sure that your ducts are properly sealed and insulated could save you up to 10% in energy costs.

8. Be a Smart Shopper.
The best way to save money is to invest in energy-efficient appliances. Always look for the Energy Star label when you’re looking to buy an appliance. Even though replacing appliances does require an upfront cost if you are replacing an old model appliance for a new energy efficient one then the appliance will pay for its self by saving you money on your bills.

Protect Yourself From Pesky Mosquitoes

2008-05-24T14:08:00.000-04:00

It's May and summer is approaching fast. Even if you haven't noticed them yet every Michigander's favorite insect, the mosquito, is out there and they aren't going away any time soon. So what can you do about it? Well, you could sit inside all summer or you could follow some simple tips on how to avoid being bitten and decrease your chances of catching any nasty mosquito-born diseases.

1. Try to avoid shaded areas where mosquitoes may be resting. Also try not to schedule any outside events around dusk or dawn, as mosquitoes are more likely to be active during these times.

2. Use special "Bug Lights" to illuminate your patios or decks. These lights don't have to be mosquito repellent to be effective. It's enough to just find light bulbs that simply don't attract mosquitoes like every day incandescent lights do.

3. Keeping a large fan running on your deck or patio will cut down on the number of mosquitoes.

4. Wearing protective clothing such as long pants and long sleeved shirts while you're outside will keep you from being bitten.

5. It's always a good idea to use insect repellent when you're outdoors. Particularly, look for those products with DEET, Picaridin, and Oil of Lemon-Eucalyptus, which are proven to be the most effective repellents. However, keep in mind to always follow the instructions on the label when you use a repellent as they can be harmful to YOU if you use them incorrectly.

6. Make sure to fix or replace any window or door screens with holes or tears in them. Also put 16-mesh screening or hardware cloth over any vent outlets on your roof.

7. Keep emergent vegetation to a minimum in any ponds and streams around your home.

8. Mosquitoes will use any standing water as breeding grounds, so try to eliminate these around your house.
- Keep your swimming pool chlorinated and clean.
- Repair leaky outdoor faucets.
- Dispose of any tires.
- Keep your roof gutters clear of debris.
- Change the water in birdbaths, plant pots, and pet water dishes regularly.
- Keep things like boats, small pools, and canoes turned over so water can’t collect inside them. Make sure to avoid allowing water to collect on pool or boat covers.
- Plug tree holes and stumps.
- Keep the shrubbery, weeds, and grass in your yard trimmed.
- Fill in or drain ruts and puddles in your yard.

Even small containers can breed hundreds of mosquitoes, so don’t leave standing water in containers of any size.

9. Keep ponds well stocked with mosquito fish, but first be sure to consult local fish and game personnel to see if you require a permit. It’s also wise to maintain steeply graded pond margins to keep any predators from eating these fish.

And remember, even if you follow these methods of mosquito prevention you may still get mosquitoes from an uninformed neighbors property, so don’t keep these tips to yourself. The more people you tell how to prevent mosquitoes the fewer mosquitoes you will have to worry about.

Where Do Ann Arbor Buyers Find Their Homes?

2008-05-14T13:02:00.001-04:00

The Internet continually gains ground in bringing together buyers and sellers. Something like 82% or 83% of all buyers search the Internet even before contacting a Realtor. As for finding the house they end up buying, here are the statistics from the 2007 National Association of Realtors study.

The percentage of buyers who found their home through
Their Realtor was 34%
On the Internet 29%
From a Yard Sign 14%
Home Builder or Their Agent 8%
Friend, Relative, or Neighbor 8%
Print Newspaper Advertising 3%
Knew the Sellers 3%
Home Book or Magazine 1%

Those buyers who found the home they wished to buy on the Internet, or from a sign, or otherwise, typically still worked with a Realtor for the benefit of an arm's length transaction, to have a skilled negotiator working on their behalf, and to insure a smooth closing.

Enlighten Your Kitchen

2008-04-28T18:51:00.000-04:00

Studies show that the kitchen is a major gathering spot, so why not make it look the best it can? It doesn't require a million dollar remodeling job just try making one or two lighting changes.

Track lights allow you to direct light anywhere and, with their multiple fixtures they can perform many different purposes. You can even use specialized fixtures to create mood lighting or task lighting.
Combining them with a typical kitchen fixture gives you a variety of choices for lighting your kitchen. You can use them to provide traditional lighting during the busy part of the day, and then to provide dim lightning during the evening.
Track lighting also helps you to see the hard reach spots in your kitchen so you can clean them to your satisfaction.

Recessed Lighting is particularly useful for highlighting new cabinets or artistic wall designs. It is also helpful for illuminating dark cabinets so that they can be cleaned more proficiently.

Under Cabinet Lighting help illuminate overshadowed countertop space making it easier to prepare food and sit and read while you eat. Lights should be installed uniformly, near the front of the cabinet. You can use either halogen or fluorescent lights. The first won’t last as long, but will create a white light that is easier to work by. Fluorescent lights

Rough Weather, Beautiful Deck

2008-04-12T23:41:00.002-04:00

Weather in Michigan is radical. Whether it's winter or spring you never know what to expect. Sun, rain, and snow can be detrimental to the condition of an outside deck. However, it turns out there is a way to protect your deck from showing the season.

You start off by thoroughly cleaning your deck to remove dirt, mold, mildew stains and weathered gray surface wood. This can be done with an acid-free, biodegradable deck cleaner. Be careful if you use chlorine bleach as a cleanser as it tends to degrade the structure of the wood.

Maybe you want to refinish your deck, or just give it a new look. If so, all you have to do is use a stain and finish remover.

Once you have cleaned and restored your deck it's time to protect it. Use a stain or finish that will repel water and that contains a UV-blocking pigment to protect against damage by the sun's rays. You can even use a transparent oil finish, which will give your new or weathered wood a beautiful oil sheen. Oil finishes will also protect against the rot and decay caused by mildew and fungi growth.

Protecting your deck from the elements may take a little work, but your neighbor's awe is worth it.

Say Goodbye to Flat Boring Walls

2008-04-02T14:50:00.004-04:00

Bring new life to your walls by using texture to add style and dimension. Textured stencils are quick and easy to use, and can be bought from any paint or craft store. The only trick is trying to decide which stencil is best for the surface you wish to revitalize.

Once you've made your decision all you need are some painters' tape or repositionable spray adhesive, measuring tape, a metal trowel, and a texturing medium. Before you begin to use the stencils you must make sure your previously painted or primed surface is clean, dry, free of dust, and sound enough to work with.

As soon as you have all your tools together, you just follow the reference guide on the stencil. Using painters' tape or repositionable spray adhesive, position the stencil onto the chosen area on the wall and press down firmly.

If you want to give your walls a multi-dimensional look, Modern Masters recommends that you use Modern Masters Texture Effects Multi-Purpose Texturing Medium instead of ordinary latex paint. Texture Effects is very useful as an all-over wall texture and for stenciling. It can also be used to create raised reliefs and heavily distressed textures. Durable and versatile, this painting marvel can also be tinted to any color with universal colorants or at a local paint store.

Perhaps you want the ultimate texture look for your walls. In order to achieve this effect you must first use Texture Effects to create an all-over wall texture. Once this has dried, you use your texturing medium to add a stenciled look. Finally, you trowel Texture Effects over and through the stencil at a flat angle. Be sure to do this with a light even pressure, like you would to ice a cake, otherwise the material will be pushed under the stencil and your texture will be ruined.

After you have smoothed and evened out your chosen texture, you can remove the stencil. To do this, carefully lift the stencil and pull it straight away from the wall. Repeat this pattern and texture throughout the surface, and then be ready to invite everyone you know to admire your beautifully textured walls.

Everyone in Ann Arbor Needs a Shredder!

2008-03-08T07:38:00.001-05:00

Today's Ann Arbor News has an interesting, tho a bit scary, article about identity theft. Ann Arbor was ranked 3rd among metropolitan areas in the state for fraud complaints and 2nd in Michigan for identity theft complaints.

You've heard it before, but again - shred all documents, including those frequent solicitations for opening new charge accounts; do not give any personal info to strangers over the phone; check your credit report occasionally.

To read the full Ann Arbor News article click here.

Having Trouble Making Your Mortgage Payments?

2008-03-03T09:54:00.001-05:00

You are not alone. Our recent housing boom led to a record homeownership rate of nearly 70%, but some homeowners are now facing problems making their mortgage payments and cannot refinance their loans. But, for many, there is help. Read more

FHA News in the Ann Arbor Area

2008-02-04T14:49:00.000-05:00

It appears that the Senate will pass the FHA stimulus package this week. The timing of the President’s signing of the bill will depend on whether the Senate makes any amendments to the stimulus bill. There are no amendments expected on the mortgage limits. If the Senate passes amendments to the tax incentive portion of the bill, it will require the House and Senate to have a conference before the final bill can then be passed by both Houses of Congress and sent to the President for signature.

At this time, it is anticipated the FHA maximum loan limit in Washtenaw County will increase to $344,875.00. I will keep you updated as more information becomes available.

Foreclosures and the Mortgage Meltdown

2007-10-18T08:28:00.000-04:00

You've no doubt read that Michigan is 4th in the nation in foreclosures. The following article is interesting in that it explains how so many people got caught in this situation at this time. Click on this link to read more http://rismedia.com/wp/2007-10-17/a-mortgage-meltdown-quiz/.

Free Water Testing

2007-09-07T08:16:00.000-04:00

Residents of Washtenaw, Monroe, and Lenawee Counties who rely on groundwater to supply their drinking water are offered free water testing and nitrate screenings through the Michigan Groundwater Stewardship Program. Although your groundwater may come from a deep well, actions above ground may still impact it.

The EPA (Environmental Protection Agency) recommends that well water used for drinking should be tested once a year for nitrates, nitrites, and bacteria. Your well can be contaminated by nitrates and phosphates from fertilizers, septic waste, fuels from storage tanks, and pesticides. Since many contaminants are colorless and odorless, they are not detectable except by testing.

For a free water quality risk assessment, call Aistis Tumas at the Washtenaw Conservation District 734-761-6721, ext.101. This assessment will evaluate your house and property for pollution and health risks relative to your water supply.