100 Acres Woods Road, Clare County - SOLD!

Great Hunting Camp that can also be sold as 60 acres, 40 acres and 18 Acres in NE Clare County!

SOLD!

Are you looking for a secluded hunting camp with lots of rolling acreage, mature trees, food pots, established hunting blinds and lots of wild game? Then you may have just found it! This beautiful property is a hunters delight with several food plots, trails and blinds. Lots of deer in the area. 

The sellers had a professional deer management person come in and prepare the deer habitat. Several small clear cuts were made to promote desirable deer habitat, but it also great for turkey, grouse, woodcock and other local wildlife. There is also a small pond near one of the food plot areas to provide water to deer. There is a nice log sided cabin with a bunk room, wood stove and a kitchenette area. Great place to make hunt camp memories with family and friends. You can make this your own!

Serious Buyer

Inventory is dramatically shrinking and it is commonplace in many markets to have multiple offers on a home. While the sellers would prefer to be able to choose the best offer for them, it can be incredibly frustrating for the buyers who might consider the following tips to get their offer accepted.

1. Remove the uncertainty that you may not be approved for a mortgage by having a pre-approval letter from your mortgage company.
2. Show your sincerity by increasing the normal amount of earnest money customary for the area and price of the home. The earnest money will be applied toward your down payment and closing costs. Consider placing even more money in escrow when the contingencies have been met.
3. Specify a closing date in the contract but acknowledge that you can be flexible to accommodate the sellers moving date. If it becomes an issue, it still must be mutually agreed upon.
4. Make the contingency periods shorter if possible to make the seller feel that they’ll know sooner that the offer is solid.
5. If the contingency really isn’t important to you, leave it out of the offer. The more contingencies included in a contract, the more the seller will feel might happen to keep it from actually closing.
6. Write a personal note to the seller explaining why you like and want their home. Consider including a picture of your family and pets.
7. Physically sign the offer with a felt tip pen of contrasting color. You’d be surprised how this adds a personal touch to the offer.

Offer a fair price for the property in your initial purchase agreement. It shows sincerity and good faith that you’re actually trying to purchase the home and not trying to take advantage of the seller. The old adage that you can always go up later may never happen if there are multiple offers on the property in the beginning.

Renters Want to Buy

Fannie Mae, in a recently released study, states that consumer attitudes continue to be favorable about homeownership, particularly with the younger generations, ages 18 to 34. Slightly over half of them think that owning makes more sense than renting when comparing the financial and lifestyle benefits.

90% of aspiring owners expect to purchase a home someday and slightly over half think they’ll do it within five years. The primary challenges are having sufficient savings and the difficulty of getting a mortgage today. Younger renters see renting as a temporary stepping stone toward homeownership.

Homeowners are far more likely than renters to be “very positive” about their housing experience. Some of the benefits identified are:

• Having control over what you do with your living space
• Having a sense of privacy and security
• Having a good place for your family or to raise your children
• Having the best investment plan
• Living in a nicer home
• Building up wealth
• Saving for retirement
• Living in a place where you and your family feel safe
• Feeling engaged in your community

To satisfy a buyer’s doubts about qualifying for a mortgage, make an appointment with a trusted mortgage professional. If you’d like a recommendation at no cost or obligation, please contact me at iviebaker@kehoerealty.com.  Check out this Rent vs. Own to see the real cost of owning a home.

For more information about the Fannie Mae survey in presentation form, Click Here.

 

What's It Worth?

How much is a one carat diamond worth? Anyone who has shopped for one knows that the price could have a significantly wide range of value. It's been said that purchasers  should consider the color, cut, clarity and carat size to compare stones but when it gets down to decision time, buyers still want to know “how much is it worth?”

Real estate valuation can be equally as confusing to the public. There are three commonly used tools that today’s home buyers rely on to make decisions but they vary significantly in the methods used to make the determination as well as the possible final consideration.

Appraisals are an opinion or estimate of value based on specific guidelines made by individuals who are licensed and possibly certified. Buyers and sellers may be reluctant to engage an appraiser because there is a fee of several hundred dollars that must be paid in advance even if no sale is ever consummated.

A Broker’s Price Opinion (BPO) as defined by the National Association of REALTORS® is an “estimate of the probable selling price of a property.” The Dodd-Frank Act describes a BPO as “an estimate…that details the probably selling price of a particular piece of real estate property and provides a varying level of detail about the property’s condition, market, and neighborhood, and information on comparable sales, but does not include an automated valuation model.”

A Comparative Market Analysis (CMA) is a commonly used tool of salespeople to provide information to buyers and sellers to facilitate a sale. In most cases, it would be difficult to distinguish a CMA from a BPO because the steps considered are essentially the same and practitioners commonly use the terms interchangeably.

Another method called Automated Value Model (AVM) use software to search available data on the Internet to arrive at an approximation of value. Zestimates found on the Zillow site use this method. AVM’s may not consider all the market activity such as MLS sales and active listings. They can’t make adjustments based on human experience and market knowledge.

For what it’s worth, a buyer or seller might want to acquire as much current and factual information as possible from a trusted real estate professional familiar with the market before making a decision on the largest single asset most people acquire.

Will the "Good Life" Be Ready When You Are?

The Life of Riley was a TV show from the 50’s starring William Bendix but the title’s origin came from an expression meaning that a person was living the “good life.” Most people envision themselves living the good life by retirement but don’t really have a plan to get there.

There’s a rough rule of thumb used to estimate how much net worth a person would need by the time they retire to generate a certain income. The target annual income is divided by a safe, conservative yield to determine the investable assets needed.

A person who wanted $100,000 annual income generated from a 5% investment would need investable assets of $2,000,000. If a person had $500,000 now, they would need to accumulate $1.5 million more by the time they retire. If it was estimated to be 15 years away, they would need to save about $100,000 a year, each year until retirement.

It is a sobering example that could be depressing without a plan. It might be easy to say, “I should have started sooner” which may be true but there is still hope.
Gradually, over the next several years, accumulate rental property and allow the tenant to retire the debt for you. The equity in each property will grow from the amortization of the loan each time a payment is made. It also grows as the property increases in value due to appreciation.

Single family homes as rentals offer the investor an opportunity to meet their retirement and financial goals for the following reasons:

• The ability to borrow large loan-to-value mortgages
• At fixed interest rates
• For long terms (easily up to 30 years)
• On appreciating assets
• With significant tax advantages
• And reasonable control not offered by alternative investments.

 

Breathe Easy

The benefits of regularly changing the heating and air-conditioning filters are obvious to homeowners; the real challenge is creating a system to make sure it gets done. 

A reasonable schedule would be to replace it with a new one-inch pleated filter every 60-90 days. Households with shedding pets should consider replacing them every month. Some people change their filters every month when they pay their electric bills.  A simple system would be to set a recurring appointment on your calendar like Outlook or Google.

Filters trap dust, mold and bacteria which can directly affect the air quality and play havoc with your allergies. When a filter is dirty, it prevents proper airflow and allows dust, dirt and allergens to blow through your home. Changing your filter regularly helps to avoid maintenance, improves equipment life and produces increased energy savings.

When shopping for filters, it’s understandable to look for the best bargain but the cheapest price may not be the best choice. When purchasing, recognize that HEPA-rated and HEPA-type filters are not the same thing. HEPA stands for high-efficiency particulate air. A HEPA filter meets or exceeds standards for efficiency set by the U.S. Department of Energy. Most HVAC contractors recommend HEPA filters.

Some filters need to be changed monthly and other types have manufacturer recommendations of every three months. An alternative to disposable filters are the permanent, washable types. These will cost more initially but because you can clean them and re-use them, eventually, you’ll recapture the cost and realize savings.

 

Whose Commission Is It?

One of the most common reasons buyers want to deal directly with the seller is because they feel they can save the commission. It’s a valid consideration but interestingly, it’s the same reason the seller isn’t employing an agent.

Both parties cannot save the commission. The buyer feels they have earned it because they’ve had to find the home, determine its value and negotiate with the seller. They had to arrange their own financing, title and inspections.

The seller equally feels that they have earned the commission because they too have had to research value, financing and title work.  They have incurred all of the marketing expenses and have invested hours upon hours to be available to show the property, hold open houses and answer inquiries. 

There is certainly value in all of the things that buyers and sellers are willing to do.  However, only one person can save the commission assuming the buyer and seller can reach a written agreement.

The Profile of Home Buyers and Sellers survey reports that 14% of sales were For-Sale-by-Owners in 2003 and 2004 compared to just 9% in 2012. The trend shows that agent-assisted sales rose to 88% in 2012 from 82% in 2004.

The three most difficult tasks identified by for-sale-by-owners is attracting potential buyers, getting the price right and understanding and performing the paperwork. When surveyed, sellers most value the home selling in an anticipated time frame and for an expected amount.

Experienced, third-party advocates helping buyers and sellers is a valuable contribution to the transaction which may determine whose commission it is.

"Please take our offer..."

It’s interesting that the housing climate has changed so quickly. Some buyers, who think they’re still in the driver’s seat, find the market is now going up and they’re losing the home that they really want.

Multiple offers are increasingly more common and buyers are frustrated because even full-price offers don’t guarantee that they’re going to get the home. In an effort to personify a contract offer and add emotional appeal, buyers are including a personal letter to the seller.

In most cases, the seller wants to maximize the net proceeds from the sale by getting the highest price with the least expenses and an assurance that the home will actually close on time without surprises. When a seller is faced with multiple offers that may be close to the same net, an emotional appeal might make the difference in them accepting a particular offer. That’s where the letter comes in play.

It should be a relatively short letter that gets to the point. The tone of the letter should be humble while positive and definitely, shouldn’t mention that you may have lost other homes due to multiple offers.

1. Try to identify a common feature or characteristic of the home that is important to the seller and you.
2. Don’t criticize the home or tell them about all of the improvements you need to make to justify your offer.
3. Do verbalize why living in this home is important to you and your family.
4. Assure the seller that you can indeed qualify for the home and that if they accept your offer, the sale will be consummated.

After writing the letter and eliminating the non-essential parts, read the letter a few times to your spouse or friend. Polish the verbiage and check the spelling and grammar. If your handwriting isn’t attractive and easy to read, print it. Use nice paper to appeal to the tactile senses. Attach the letter to the offer so they’re considered simultaneously.

Being pre-approved with good credit, adequate financial resources, good employment, sufficient earnest money and a reasonable offer with minimum contingencies will favorably position you. A personal letter might be the deciding factor in your favor.

5369 Jerry, Gladwin MI - FORECLOSURE by Grass Lake

Nice Cabin with Knotty Pine Interior

2 Bedrooms, 2 Baths

Just $12,500

Click Here for More Information and Photos!

Nice cabin/cottage for a getaway. Open floor plan and knotty pine walls in living room/dining area/kitchen. Has 2 bedrooms and 1 bathroom. Across the street from access and view of the lake. Near thousands of acres of state land. Has shed in back yard. Centrally located between Gladwin and Houghton Lake. In a great recreation area. Sold "AS IS

Cut Refinancing Expenses

Every single day, homeowners who are excited about lowering their rate have a tendency to ignore the refinancing costs because they’re being rolled back into the new mortgage. If the payment is lower than what they’re currently paying and there’s no money out of pocket, it seems like a good deal.

Refinancing your home because a lower rate is available is one thing but the closing costs associated with that new loan could add several thousand dollars to your mortgage balance. By following some of the suggestions listed below, you may be able to reduce the expense to refinance.

•  Tell the lender up-front that you want to have the loan quoted with minimal closing costs.
•  Check with your existing lender to see if the rate and closing costs might be cheaper.
•  If you’re refinancing a FHA or VA loan, consider the streamline refinance.
•  Shop around with other lenders and compare rate and closing costs.
•  Credit unions may have lower closing costs because they are generally loaning deposits and their cost of funds is less.
•  Reducing the loan-to-value so that mortgage insurance is not required will reduce expenses.
•  Ask if the lender can use an AVM, automated valuation model, instead of an appraisal.
•  You may not need a new survey if no changes have been made.
•  There may be a discount on the mortgagee’s title policy available on a refinance.
•  Points on refinancing, unlike purchase, are ratably deductible over the life of the loan.
•  Consider a 15 year loan. If you can afford the higher payments, you can expect a lower interest rate than a 30 year loan and obviously, it will build equity faster and pay off in half the time.

A lender must provide you a list of the fees involved with making the loan within 3 days of making a loan application in the form of a Good Faith Estimate. Every dollar counts and they belong to you.

 

1975 Meadowview, Gladwin MI - SOLD!

Large Home on over 4 Acres with Lake Access to Lake Four!

4 Bedrooms, 2 Bath

SOLD

Spacious rambling ranch on nearly 5 acres near Lake Four. Home has 4 bedrooms, 1.5 bathrooms, family room and living room. Lots of room for a large family and large yard for the kids to play outside. Enjoy nature out your back door. Sold "As Is". Possible mortgage to qualified Buyer. Addendums and Proof of funds/Pre qualification Letter along with Sales Contract with all offers.

4959 Ruby, Gladwin MI - SOLD!

Beautiful Waterfront Chalet on 2 Waterfront Lots with a LARGE BEACH!

3 Bedrooms, 2 Bath, 2 Car Detached Garage, plus a 30x40 Pole Barn

SOLD!

You will fall in love with this beautiful home on an extra large double lot, with a stunning view of Island Lake. This property features a large sandy beach, This Chalet is nestled in a wooded setting with lots of shade tress. Enjoy watching sunrises while watching Loons, Bald Eagles and a variety of other wildlife. This home also features a beautiful kitchen with granite counter tops and ash flooring in the kitchen, light birch cabinets, lots of windows, hot tub and sauna in the basement, oversized open deck, pole barn, two car garage with an upper storage area that could be converted into a guest loft. 

All of this sits on the west side of Island Lake, which is a no gas motors lake (elec motors ok), which is approx a 58 acre lake with approx 290 acres of association shared acreage that can be used for hunting, hiking and ATVing. Home is being sold with a ONE YEAR HOME WARRANTY!

Shifting Debt to Tax Deductible

The Mortgage Interest Deduction is available to homeowners for up to $1,000,000 of acquisition debt on the combination of their first and second home.  They can also deduct interest on up to an additional $100,000 of Home Equity debt.

While Acquisition Debt is used to buy, build or improve a principal residence, the Home Equity Debt can be used for any purpose.  It can be used for educational or medical expenses, to purchase a personal car or boat, consolidate debts or pay off credit cards.

A homeowner with $15,000 of credit card debt at 19% and sufficient equity in their home could replace it with a home equity loan at much lower interest rate. Not only would the interest rate on the home equity loan be about 1/3 of the rate paid on the credit card, it’s would now be tax deductible.

If the taxpayer was in the 28% bracket, the net interest on a 6.5% loan would be 4.68% after tax benefits are considered.
Shifting personal debt to Home Equity debt can result in an interest deduction and probably, a lower interest rate. For more information see IRS Publication 936 page 10 and consult your tax professional.

When to Sell the Temporary Rental

Some homeowners, who were not able to sell during the recession, chose to rent their homes instead.  In some cases, they didn't need to sell their home at the depressed prices and opted to rent it until the market recovered.

It's a valid strategy but there are time restrictions that could have serious tax implications for some homeowners.

The section 121 exclusion for gain in a principal residence requires that the home is owned and used as a main home for at least two years during the five year period ending on the date of the sale.  This allows a homeowner to rent their home for up to three years and still have some part of the exclusion available.

The sale of a home with a $200,000 gain that qualifies as a principal residence would result in no tax being paid by the owner.  Comparably, a rental property with the same gain could have a $30,000 or higher tax liability depending on the length of ownership and tax brackets of the investor.

The housing market has dramatically improved in the last year.  If you have a gain in a home that has been your principal residence and it has been rented less than three years, you might want to consider selling it while you qualify for the exclusion.

If you are considering a sale on your principal residence that has been rented, consult with your tax professional for advice on your specific situation.  For additional information, see IRS Publication 523.

Boomerang Buyers

It's estimated that 10% of the homes sold in 2013 will be to buyers who lost a home in the past five years.  Approximately 500,000 buyers who may have thought they wouldn't own a home anytime in the near future will be homeowners again.

It's estimated that several million of these previous homeowners will purchase again in the next eight years.  This kind of activity will contribute significantly to the housing recovery.

Some people thought that the housing crisis would cause a shift in values placed on owning a home but the boomerang buyers definitely don't support that theory.  Having a home of your own, where you can raise your family, share with your friends and feel safe and secure is still part of the American Dream.

The rising rents, increasing prices and low, low mortgage rates are also influencing buyers into the market.  In many cases, it is cheaper to own that to rent.

All new buyers, including those who have experienced foreclosures or bankruptcies, must have good credit history and the ability to repay the loan.  It just may not take as long to reestablish the credit as some would-be buyers might have thought.

Read more about Bidding Wars This Spring, Spring's Wild Card and Boomerang Buyers.

Bunch Your Taxes and Save

One of the drawbacks to low mortgage rates is that the total interest and property taxes paid for the year may be lower than the standard deduction.  A little planning might be able to help you at least every other year.

Most homeowners know they can deduct their qualified mortgage interest and property taxes on their Schedule A of their 1040 tax return or to take the standard deduction if it is greater.  See Your Deduction...Your Choice.

Deductions are taken in the year that they're actually paid.  If a homeowner paid their 2012 property taxes in 2013, they would not be deductible on their 2012 tax return.  Then, if the 2013 property taxes were paid in 2013, both the 2012 and 2013 taxes could be deducted on the 2013 Schedule A.

By delaying the payment of the 2012 taxes until 2013, the combination of the 2012 and 2013 taxes might exceed the 2013 standard deduction and provide a higher deduction. 

Other Schedule A expenses such as charitable contributions and medical expenses may be bunched also.  From a practical standpoint, since most mortgage payments are due monthly, the mortgage interest would not be bunched.

This information should be discussed with your tax advisor to see how it might apply to your individual situation.  The key is you must be aware of the strategy early to be able to use it.

701 ANCHOR ST, Gladwin MI - SOLD!

Ready to Move Right Into! Cute Home on a Large Lot.

Property adjoins the Gladwin City North Park

1 Bedroom, 1 Bath, and Small Outbuilding with additional bathroom.

SOLD!

Attention investors and anyone downsizing! Move in ready! Cute and cozy describes this efficient 1-2 bedroom home on the outskirts of Gladwin. Quality remodel in 2009. Updates include new roof, windows, doors, vinyl siding, blown-in attic insulation, natural gas hot water heating system with pex plumbing, wood and ceramic flooring, oak kitchen cabinets, countertops and all appliances. Includes a metal shed for lawn equipment and an 11x15 outbuilding with a 1/2 bath and electric currently used for storage, that with some TLC, could be used as a guest house. Located on a large double lot, just 300 feet from North Park and the Cedar River walking trail, you'll enjoy the quiet neighborhood and the deer that stop regularly at the apple tree. 

Priced Out: New FHA rules may exclude some homebuyers

Fox and Friends | Fox News

Costly Changes in FHA Loans starting June 1st, 2013! BUYER BEWARE! Mortgage Insurance to be paid for the life of the loan! (Click link above to view the update by Bob Massi with Fox News)

Maintaining Comfort

Some people refer to the heating and air conditioning systems as the "comfort systems."  If you've ever had to be without one in the dead of winter or the heat of summer, lack of comfort may be an understatement.  Simple maintenance with a HVAC checklist is something that every homeowner can perform.

Periodically

• Change your filter every 90 days; every 30 days if you have shedding pets.
• Maintain at least two feet of clearance around outdoor air conditioning units and heat pumps.
• Don't allow leaves, grass clippings, lint or other things to block circulation of coils.
• Inspect insulation on refrigerant lines leading into house monthly and replace if missing or damaged.

Annual, in spring

•  Confirm that outdoor air conditioning units and heat pumps are on level pads.
• Pour bleach in the air conditioner's condensation drain to clear mold and algae which can cause a clog.
• Avoid closing more than 20% of a home's registers to keep from overworking the system.
• Replace the battery in the home's carbon monoxide detector.

Even with the attention that perfoming this list will provide, it is recommended that you have your units serviced annually by a licensed contractor.  Furnaces can be inspected for carbon monoxide leaks and preventative maintenance may help avoid costly repairs.  Click Here if you'd like a recommendation.

Home prices finally returning to normal - Mar. 5, 2013

Home prices finally returning to normal - Mar. 5, 2013

"2012 was the first year since 1997 that the housing market has resembled something [close to] normal"

Your Deduction...Your Choice

Taxpayers are allowed to decide each year whether to take the standard deduction or to itemize their deduction when filing their personal income tax returns.  Roughly, 75% of households with more than $75,000 income and most homeowners itemize their deductions.

The 2012 standard deduction, available to all taxpayers, regardless of whether they own a home, is $11,900 for married filing jointly and $5,950 for single taxpayers.

Let's look at an example of a homeowner couple with a $150,000 mortgage at 3.5%.  The standard deduction would give them $2,650 more than the total of their interest paid and property taxes of approximately $9,250.  If they were in the 28% tax bracket, the actual tax savings would be $742.00.

When mortgage rates were considerably higher, many people expected the interest and property taxes to easily exceed the standard deduction but with today's low rates, a comparison is certainly justified.

There are other things that could come into consideration like charitable contributions, medical expenses and casualty losses.  Tax professionals will compare available alternatives to find the one that will benefit the taxpayer most.

For more information, see www.IRS.gov and consult a tax advisor.

 

 

 

 

 

Low Inventories Indicate a Trend

Low inventory is a relative term depending on how you're comparing it.  Would the comparison be to total number of homes on the market last year, homes in a certain price range or homes in a certain area?  In some situations, it's a combination of all of those things.

In any given market, inventories will fluctuate based on area and price range.  The National Association of REALTORS® considers a balanced market to be six months' supply of homes.  If it takes longer than six months to sell, it is thought to be a buyer's market and less than six months, a seller's market.  Most buyers and sellers probably feel inventory equilibrium is more like three month's supply of homes.

Inventory has a direct impact on price.  During the housing bubble, demand decreased, supply ballooned to four million houses and prices dropped dramatically.  Increased inventories due to foreclosures, bank' revised lending practices and builder's lack of new housing starts each contributed to the dramatically lower prices.

As the market has recovered, economic conditions have improved, banks have loosened their requirements, interest rates have remained low, foreclosures have slowed and gradually, the inventory has been reduced to approximately two million houses.  When demand is constant but inventory is reduced, price tends to increase because the same number of people are trying to buy a smaller than normal number of homes.

Based on the low mortgage rates that have been inching up each week in 2013 and an improving consumer confidence level, most markets are experiencing some increase in demand.  With inventory decreasing, buyers in the marketplace can see that prices are increasing.

Just as signs of spring can be seen to be just around the corner, it should be recognized what direction prices will be moving.  Hindsight is 20/20 but we can't purchase or sell in the past.  We need to make decisions today on what we think will happen in the future.

If you're curious to know what inventory conditions are for your specific market, send me an email with the price range and area and I'll send you a report.  iviebaker@kehoerealty.com

1109 Ritchie Road, Gladwin MI - SOLD

1 BR (with potential to be 2 BR), 1 Bath home on Approx 5 acres.

SOLD!

5 acres of land comes with this 1.5 story home. Currently set up as 1 bedroom but has potential of being a 2 bedroom if you finish the upstairs. There is a sun room that needs a lot of finish work as well. Home needs work. No heat source in the home. Good for someone looking for a fixer upper. Sold AS IS. Additional addendums to be signed and submitted with all offers along with proof of funds/pre approval letter.

2228 Oberlin, Gladwin MI - SOLD!

Cute 2 bedroom Farm House Near Town.

Situated on approximated 4.36 acres.

2 BR, 1 Bath, 2 Car Detached Garage

SOLD!

Very cute 2br, 1ba home on 4.36 acres that was totally remodeled in 2004. Includes appliances, gas-log fireplace, hardwood and ceramic tile floors, cathedral pine ceiling in kitchen and dining area, and a 2 car detached garage. Beautiful country setting!! 

Refinancing Again

We're constantly bombarded by lenders to refinance our mortgage under a variety of programs. The volume of offers can almost make you numb to the rational consideration.

There are common rules of thumbs that homeowners and agents use such as not refinancing more often than every two years or there must be at least 2% savings from your previous mortgage rate may not always be accurate.

The reality is that if you can refinance for a lower rate and you'll be in the home long enough to recapture the cost of refinancing, it should be considered. The costs of previous refinancing that haven't been recaptured by monthly savings may need to be added to the costs of the new refinance.

Take a look at the chart that shows the average rates according to Freddie Mac for 2012. They are lower today than they were in January of 2012 and for the ten years before that.

Refinancing may save you a substantial amount of money, especially if you're going to be in your home for a long time. It is definitely worth investigating. To get a quick idea of what your savings could be, use this refinancing calculator.

It It Shows Better... - 2/18/2013

If it shows better, it will probably sell faster and maybe for more money. Once your home is on the market, it's time to look at it like a commodity and through the eyes of potential buyers. In all likelihood, you'll need to take care of these items eventually, so do them now to help it sell sooner.

1. Make repairs - it doesn't matter if it's been that way since you bought it. You need to fix it so that the buyer doesn't think that the rest of the house is about to fall apart.
2. Not too personal - you may have bought your home to express yourself but if the buyer can't see themselves in the home for all of your things, it's going to take longer to sell than you want.
3. Drive-up appeal - the old saying "you never get a second chance at a first impression" applies to your home too. They may never even get out of the car to come inside.
4. The nose knows - it may not smell like home but it shouldn't smell like a place they would never consider living.
5. Neutral colors, decor, etc. - these are not decorating tips you'll see in magazines but the truth is that bold colors and designs are difficult for most people to see beyond. They'll imagine their things better in neutral surroundings.
6. Less looks like more - removing some of the non-essential things from your home will eliminate clutter and make the home feel larger. The same suggestion applies to cabinets and closets.

A confused mind will not make a decision. Identify and eliminate items that could derail a potential sale. The preparation you make in the beginning will help the presentation to your buyers.

More Expensive Than Expected

The 3.5% down payment on FHA loans could be more expensive for buyers than expected. Beginning April 1, 2013, the mortgage insurance premium will go up by .1% to 1.35% which may not even be noticeable to most would-be homeowners.

The staggering increase will occur on 6/3/2013 when FHA's policy on the duration of the required mortgage insurance will be increased for the life of the mortgage. It basically doubles the amount of total MIP if the loan is paid to term.

Example: Purchase Price $175,000 with 3.5% down payment at 4% mortgage rate on 30 year term
	Current	After 6/3/13
MIP duration	78% of original loan	Life of mortgage
Cumulative premium	$20,838.24	$42,447.93

Currently, the MIP is required for approximately 9 years 9 months with normal amortization. The new program would require the MIP for the life of the loan. In this example, the initial monthly MIP is $196.88 which decreases based on amortization.

There are buyers that qualify on income and credit who may not have the necessary additional down payment required for 80% and 90% conventional loans. The 3.5% FHA program has provided a great vehicle to get into a home with a minimum amount of cash.

For homeowners that expect to stay in their home for ten years or less, the new changes might not have much financial impact. Homeowners who expect to be in their home long term can refinance with a conventional loan without mortgage insurance once the equity has increased due to amortization and appreciation.

For buyers to avoid these increases, they will need to act now to get the FHA commitment issued prior to these change dates.

Before You Leave Home...

The last thing you want to do while you're on a trip is to worry about someone burglarizing your home. Use this checklist to add some peace of mind to your travel plans.

• Ask a trusted friend - to pick up your mail and newspaper and keep the yard free of trash and advertisements.
• Stop your mail but maybe not your newspaper - you can easily handle this online by going to the US Postal Service's Hold Mail Service. A recent story implicated an employee from a major newspaper who was passing customer hold requests to burglars.
• Don't post about your trip on Facebook and Twitter until you return - some burglars actually look for this type of announcement to schedule their activities.
• Do notify police and/or neighborhood watch - especially if you're going to be gone for more than just a few days. Let your monitoring service know when you'll be gone and if someone will be checking on your home for you.
• Light timers make it look like someone is home - use several set for different times to better simulate someone at home.
• Do unplug certain appliances - TVs, computers, toaster ovens that use electricity even when they're off and to protect them from power surges.
• Don't hide a key - burglars know exactly where to look for your key and it only takes them a moment to check under the mat, above the door, in the flower pot or in a fake rock.

These easy-to-handle suggestions may protect your belongings while you’re gone while adding a level of serenity to your trip.

What's It Going to Take?

How much evidence is needed to make a decision to get out of the rent race and become a homeowner?

Compare your rent with a mortgage payment on a similar size property. If you want a larger home than your current one, use the rent that property would require instead of what you're currently paying. If it's considerably cheaper, you may not need any further encouragement.

By the time you consider the principal reduction, appreciation and tax savings, your monthly cost of housing could be much less than the rent you're paying.

The principal reduction included in each payment is like a forced savings account that increases as your mortgage balance decreases. Your equity in the property will also grow due to appreciation. The equity is part of your net worth and an investment in your family's future.

The income tax savings can be an additional financial consideration if the combined interest and property taxes exceed the allowable standard deduction.

Trends are showing that both tenants and homeowners are staying in their homes longer. It's been said that whether you rent or own, you're paying for the home. Do you really want to buy the home for your landlord? Check out your numbers on a Rent vs. Own.

59 Acres Brushaber Road, Beaverton MI - SOLD!

Are you looking for an affordable large hunting parcel?

You may have just found it!

59 WOODED ACRES in SE Gladwin County!

SOLD!

Exceptional hunting parcel with nice woods and a nice open area towards the center of the property. There is a trail that leads all the way to the back of the property. Fabulous deer hunting and turkey country! If you are looking for an affordable hunting parcel, you may have just found it. Either build or camp towards the front and hike back to hunt. It's also located on a county maintained road. 

Selecting the Right Color

Have you ever picked a color from the myriad of paint samples available, put it on the wall and decided that it was all wrong? It shouldn't have to be that difficult but trying to pick the perfect color from those little swatches is just not that easy.

Painters and decorators suggest you buy a small amount of the colors you're considering. Your paint store should be able to mix them in any brand and any color. Once it's on the wall, it will be easy to determine if it needs to be lighter or darker or if it's completely wrong.

Take them home and paint a 2' x 2' area on the wall. If you're concerned about testing the colors on your wall, you can paint some sample boards that can be easily moved around to see how they'll look with the furniture, floors and other items in the room.

Instead of guessing what it's going to look like, you'll actually see how it looks during different times of the day, in natural and artificial light.

While $30 to $40 a gallon for paint may seem like a lot of money, the cost in time and labor to put it on the wall is even more. It's worth taking the time to test the color on the wall before you buy all the paint needed

Sooner is Better than Later

Buyers who have delayed purchasing a home due to concerns about what might happen to the tax laws affecting home ownership should feel comfortable about getting back in the market. The recent legislation passed by Congress and signed by the President continues to value homes as a favored investment.

For a summary of specific real estate provisions in the "Fiscal Cliff" bill, click here.

Whether the delayed purchase is for a home to live in as your principal residence or to use as rental property, taking action sooner is better than later.

Reasons to buy now:

1. The house payment with taxes and insurance is probably cheaper than the rent.
2. Rents will continue to rise making the difference even greater in the future.
3. Lock-in the principal & interest payment with a fixed-rate mortgage.
4. 30 year mortgage terms are available to most borrowers.
5. The mortgage interest deduction is intact for the majority of taxpayers.
6. The capital gain exclusion for principal residences up to $500,000 remains in place.
7. Prices are going up due to lower inventories and several years of low housing starts.

Contact me about any specific questions you have or information you need.

Get Your Offer Accepted

As the market shifts from a buyer's market, it's good to know how to improve your chances to have the seller accept your offer.

Once you decide on a home, don't waste time; write an offer and submit it as soon as possible. Competing with another buyer happens more frequently than you'd expect. Multiple offers are a seller's advantage but here are some tips to level the playing field:

• Realistic offer - don't give the impression you're trying to "steal" the property. Submit comparable sales that justify your offer.
• Pre-approval letter - this satisfies seller's biggest concern that an unqualified buyer will unnecessarily take the home off the market and the seller will lose other opportunities.
• More earnest money - it shows you're serious and makes the seller feel like the contract will actually close.
• Minimize contingencies - from a seller's standpoint, each contingency is one more reason why the sale won't go through. They feel the home is "off the market" and they're in limbo.
• Shorten inspection period - your agent can help you set a reasonable date but let the seller know you're willing to close prior to that if possible.
• Write a personal letter to the seller telling them why you want their home - this can be the emotional connection to the seller that makes the difference in you getting the home.

A seller wants to feel confident that the offer they accept will actually close so they can plan for their next move. Following tips like these can definitely affect negotiations and help put together an offer that is more likely to be accepted.

Resolutions

After spending the holidays with family and friends, this is a time of the year to start thinking about changes to make in our lives, both personal and in business.  We wanted to share one of ours with you.

Our goal is to become your REALTOR® for life.  We want you to think of us first when you need to buy or sell and that you’ll recommend us to your friends too.  That kind of trust has to be earned and we’re committed to helping you be a better homeowner even when you’re not buying or selling.

The strategy is simple.  A well-informed homeowner will make better decisions.  We’ll periodically offer information through articles and social media on a wide variety of home-related topics like maintenance tips, tax law changes, financing suggestions, insurance, equity building strategies, and rental property investments. 

Please contact us if you need a recommendation on a service provider.  Our experience has built a list of reputable and reasonable contractors that you can rely upon.  When you have any kind of home-related questions, I hope you’ll have the confidence to call us.

Happy New Year.  We sincerely look forward to helping you or your friends.

REALTORS® Expect All States to Post Price Gains in Next 12 Months

REALTORS® Expect All States to Post Price Gains in Next 12 Months

Michigan is on the list of states expected to see good increases in real estate values in the next 12 months.

Avoiding Unexpected Expenses

It's common for sellers to consider offering and buyers might find it an incentive, but a growing number of homeowners are purchasing the home warranties themselves to limit the unexpected expenses of repairs and replacements.

A home protection plan is a renewable service contract that covers the repair or replacement of many of the components in a home. Some homeowners especially like the convenience that it organizes a qualified service provider as well as the cost of the items.

There are a variety of companies that offer home warranties and the coverage may differ but the majority of things will include heating, air conditioning most built-in and some free-standing appliances, as well as other specific items. Additional specific coverage may be available for other things like pool and spa equipment.

Some investors are even placing this coverage on their rental properties to limit the amount of maintenance repairs during the year. It is a viable alternative to managing the financial risk and the stress dealing with unexpected expenses.

If you're interested in home warranties, I'll be happy to send you more information.

Let Your Tenants Send Your Kids to College

Most people have lots of things to save for but not always enough discretionary income after the family essentials have been met.

A relatively small investment in a rental home can control a good home that will easily rent, generate positive cash flows and pay for itself. The borrowed funds create leverage that earn a return on the total value of the home and not just the amount of cash you have invested.

The strategy is simple. Find a slightly below average priced home that will rent well. It will appeal to a larger group of people while it's rented and when it's ready to be sold.

Rent the home and maintain its condition over the years. As the loan amortizes and the value increases, the equity will grow. When your student is ready to start college, you'll actually have several options.

You can sell the property; pay the tax on the gain at the reduced capital gains rate and fund the education. Another option would be to refinance and take the proceeds to pay for the tuition. This would allow you to continue to own the asset but would free your equity and under current tax laws is a non-taxable event.

Regardless of whether you're trying to plan for your children's education or your own retirement, rental property offers many solid investment opportunities. Contact me if you want more information.

Foreclosure Redemption Period for Larger Land Parcels Changed

QUESTION: I am representing a seller whose house was foreclosed and purchased at a foreclosure sale by the bank on February 10, 2012. Their house is on a 3 ½-acre parcel of land. It is my understanding that the redemption period for parcels over 3 acres is one year. Am I correct?

ANSWER: NO. The law has been changed. The one-year redemption period now applies to property that is used for “agricultural purposes.”

There is a presumption that land is being used for “agricultural purposes” if prior to the sheriff’s sale, the property owner provides the lender with proof that the property owner filed a federal income tax form 1040 Schedule F for the preceding year. The property owner must also record an affidavit with the register of deeds for the county in which the property is located stating that such proof has been delivered to the
lender.

This new law was applied to all sheriff sales after February 1, 2012.

FHA to Cost Borrowers More

FHA has announced a major change to its loan program which allows borrowers to cancel the mortgage insurance premium (MIP) when their unpaid balance reaches 78% of the original purchase price. While no specific date has been set for the change, sometime in 2013, new FHA loans will require the mortgage insurance for the life of the loan.

At existing rates, the monthly MIP on a $168,875 mortgage is $178.99 per month. Under the current rule with normal amortization, the MIP would no longer be required in 9 years and 9 months. However, under the new rule, it would last for the entire 30 year term.

They also announced that the annual MIP will also be increased from 1.25% to 1.35% at some point in the near future. HUD, the parent agency for FHA, is making the changes to restore the capital reserves of the program that are needed to fund failed loans.

People that can close a FHA loan before the change takes place will fall under the old rules for canceling MIP and the lower rates. Since no date was announced, it is not known exactly when the changes will take effect.

While this information will probably not make the evening news, it will have a big impact on borrowers planning to use an FHA loan. Please pass it on to anyone you know who might be considering purchasing or refinancing with a FHA loan.