Archive for January, 2012

Legislature Considers Modifications to Principal Residence Exemption

Friday, January 6th, 2012

by Kelly Sweeney, CEO, Coldwell Banker Weir Manuel

Due to the number of bank owned and other non-homestead properties being sold today, the May 1 deadline for filing for the Principal Residence Exemption (PRE) has become problematic. Many would be purchasers cannot qualify for a mortgage loan without the significant property tax reduction available under the PRE.

Currently, a purchaser must file for the PRE before May 1 to receive the tax reduction on the following July and December property tax bills. Purchasers closing a sale after May 1 must wait for an entire year to file and will pay much higher property taxes during their first year of ownership. Mortgage lenders must use this high property tax amount when calculating loan qualification ratios. The home lending industry reports that the May 1 filing deadline is preventing many first-time and repeat buyers from getting mortgage loans and, therefore, completing home purchases.

The Michigan Association of Realtors is supporting legislation which will eliminate the May 1 deadline and allow purchasers to file at anytime throughout the year. The legislation is known as House Bill 4446 and Senate Bill 349. Senate Bill 349 has passed the Senate Finance Committee and is on the Senate floor for consideration.

Although this legislation is being opposed by many local governments due to purported administrative problems, the economic benefit to our economy has been recognized by the state legislature and adoption is likely.

Posted in Coldwell Banker Weir Manuel, Michigan Legislature, Michigan Real Estate Market, coldwell banker, homestead properties, non-homestead properties, real estate, real estate market, taxes | Comments Off

Homeownership and your retirement

Friday, January 6th, 2012

By Donna Levos Coldwell Banker Weir Manuel

Recently our CEO Kelly Sweeney shared a quote in his sales meeting address about renting vs. buying:   
 
“If you buy a home, you get to make mortgage payments for 30 years and then you get your money back through the asset you own. If you pay rent for thirty years you get to keep paying rent for the rest of your life!”

 

Have your clients considered homeownership as part of their retirement strategies?

Regardless of age, our clients should be thinking about retirement. Do they want to able to retire when and how they want? If so, they should consider the following factors:

Homeowners dodge rent inflation

Let’s talk about inflation. If rents increase annually at the typical 3.2%, a $1,500 rent payment will cost a renter $900,000 over 30 years. A homeowner paying that same amount in a fixed-rate mortgage payment would pay $540,000 and would be finite with the final mortgage payment.

Homeowners build equity over time

A renter will build no equity by writing that rent check for years. In contrast, a $300,000 home appreciating at a conservative 1% growth rate over 30 years will gain a $100,000 nest egg for the homeowner.

Homeowners get tax help

Consider the tax benefits involved in homeownership. By writing off your mortgage interest and property tax deductions, you are taking advantage of additional opportunities to save money.

Homeownership as a legacy

Finally, there are some things you can’t put a price tag on. For some people, the satisfaction of leaving their home to their loved ones is priceless. Additionally, unlike their renting counterparts, homeowners are able to customize, decorate and make improvements to their homes.

Just remember: long–term home ownership can provide retirement security through the growth of equity.

Posted in Coldwell Banker Weir Manuel, Investing in real estate, Michigan Real Estate Market, buy a home, coldwell banker, commercial real estate, real estate, real estate market, retirement strategy, sell a home | Comments Off

Multiple Offers: Multiple Points of View

Friday, January 6th, 2012

Our local market has a low supply of move-in ready homes, and many serious buyers with pent-up desire to purchase. These conditions are the perfect storm for a seller to receive multiple bids. How well you weather that storm as a buyer’s or seller’s agent depends on how well you communicate and set your clients’ expectations.

Let’s take a look at multiple bids from both the buyer’s and seller’s points of view:

The Seller’s Agent:

Your seller is excited that there are multiple offers on his home. You offer suggestions such as negotiating with the other agents to make the weaker offers stronger, or asking all of the buyers to bring back their ‘highest and best’ offers. But in the end, your role is to communicate the potential risks and rewards involved in accepting any of the offers, and leave the decision to your seller. You may also want to caution the seller that while he sits in the driver’s seat, dragging out the process may alienate his buyers.

The Buyer’s Agent:

This is probably the more emotional end of the deal. Your buyer has fallen in love with a house and has written an offer, only to find that the seller is entertaining multiple bids. Your buyer needs to be patient, have a thick skin and set limits about how high he is prepared to bid based on his budget. Good communication and a solid strategy can help alleviate emotions and keep everyone focused on the goal: getting the house.

Cash Is King:

Buyers that can bring cash into a multiple bidding situation have a serious leg up on the competition. In December, a CBWM agent showed a $445,000 house to his clients on a Saturday, knowing that all offers had to be in by the following Monday. His clients immediately wrote an offer for $458,000 with 40% down. They were dismayed when another buyer won the house by offering less, but paying with cash. A cash offer is often more attractive to the seller because it poses the least amount of risk.

Some strategies to help your buyer make a competitive offer:

 

  • Present your client’s pre-approval letter and make sure it includes a verification of income, credit and assets
  • Encourage flexibility about occupancy (many buyers are offering 30 days occupancy)
  • Suggest that your buyer put down an earnest money deposit (at least 3%)
  • As a last resort, a buyer can appeal to a seller by writing a letter explaining how interested he is in the home.

 

Time is of the essence:

While time is always of the essence in real estate, it is especially true in today’s market. As real estate professionals, we would be remised if we did not instill the proper sense of urgency in our clients. This sense of urgency is important whether your client is the one making or accepting an offer.

Consider this quote when advising your clients: “The house you saw today that you want to think about tonight and make an offer on tomorrow, was seen by someone yesterday who is writing an offer on it today.”

Tags: , ,
Posted in Coldwell Banker Weir Manuel, Michigan Real Estate Market, Multiple Bids, Multiple Offers, buy a home, coldwell banker, homes for sale, housing, real estate, real estate market, sell a home | Comments Off

Great Job Bankers Title! Testomonial from one of our trusted advisors to our own Bankers Title Agency

Thursday, January 5th, 2012

Betsy and Cheryl-

I want to take a moment and thank you and your team for showing up the other title company and handling this short sale closing so smoothly. YOU SAVED THE DEAL!

Even the other agent at Pru was impressed (he should be!) and the buyer and seller were not only grateful, but relieved that they were now able to close and move on.

Glenn Champion and his office were prudent to think ahead and few months back and instruct us all regarding the strident Freddie Mac Short Sale Addendum form that so many other smaller title companies genuflect away from, and stop the transaction cold. We overcame that obstacle and are now able to deal with such a difficult form. Thank goodness for this real estate company and umbrella of services and teams of excellence.

Anyway- I hope that you continue to be the bench mark of what a forward thinking title company is, especially in today’s hostile real estate environment.

Tally-Ho.

Bob Bowden
Realtor
Macomb Office

Posted in real estate | Comments Off