Lee Morof's Real Estate Blog

If you’re a potential buyer of Southeast Michigan real estate, when scanning the listings of homes for sale, you may see references to Southeast Michigan “short sales.”  You may hear vague warnings about avoiding short sales from some people, while others tout the advantages.  So who is right?  Well, it depends…

Short Sales Defined
First, what is a short sale?  A short sale is a situation in which the current market price of a home would not, in fact, cover the amount the home owner owes on the mortgage.  Yes, that’s what people mean when they say they are “underwater” – they owe more on their home than it is worth.

Since the mortgage can’t be paid off by the sale of the house, short sales become an option, albeit a complicated one. The seller and the bank (or banks, as is sometimes the case if there are multiple mortgages on the house) become, if the bank agrees, essentially co-sellers of the house.  Any offers considered by the seller have to be approved by mortgage holder(s).

Seller Short Sale Advantages
Short sales can be a win-win situation for the seller and the mortgage company. The seller is relieved from his debt without the greater stigma of foreclosure attached to his credit standing. The mortgage company often gets more money than it would in a foreclosure auction, and without the time and expense of the foreclosure process.

Buyer Short Sale Advantages
For potential buyers, short sales can have some advantages. The biggest possible advantage is a better price. Keep in mind though that short sales are seldom amazing deals. The bank will usually do an analysis on comparable properties in the neighborhood, and will likely turn away any offers that fail to come in that range.

What you are more likely to get with a Southeast Michigan short sale purchase is a home that has been cared for and recently lived in.  Short sales are still officially owned by the seller, not the bank (as in foreclosures), and so someone is more likely to be living there, mowing the lawn, cleaning the kitchen and making repairs.

Short Sale Buyer Complications
The bad news on Southeast Michigan short sales is time and administrative detail. With the companies holding the lien having final say on the process, their review can delay acceptance of short sale offers, sometimes for months. And, of course, if there are multiple lien holders, the time can increase dramatically. A short sale can take three months – not much longer than a standard closing – but they can also take six months or longer.  If that level of timing uncertainty doesn’t work for you, you might want to consider other options in your quest for Southeast Michigan real estate.

Whether you’re considering buying or selling a short sale, as a Certified Distressed Property Expert I can help. Give me a call today at 248-514-2640 or email me at info@NorthWoodwardHomes.com for more information.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

Flyers, open houses and stagnant real estate web sites don’t cut it anymore. Property buyers and sellers are more technologically savvy than they’ve ever been, and they rely on social media’s instant communication forums for information, advice, suggestions, and reviews to guide their decision-making processes.

Real estate agents’ roles within the industry have evolved — they’re no longer just gatekeepers.  Now, they need to be interpreters between their clients and the constant stream of social media information.

To determine if a Southeast Michigan real estate agent is socially savvy online, ask the following questions:

• Strategy – Before signing a listing agreement with an agent, find out what marketing strategies he or she usually implements. Is he or she using any social media platforms to promote their properties or gather feedback from buyers?
• Following – Ask about how many people and organizations he or she reaches on a regular basis. The number of Facebook “Likes” or Twitter followers is a direct correlation to how many people could be exposed to your home for sale.
• Activity – Ask how often he or she updates and posts on social media sites. Having 2,000 followers does nothing if the agent isn’t active on the social media site. A constant flow of information and communication is essential to effectively promote a property. If he or she just has a stagnant Facebook page with a biography on it, that doesn’t benefit you in any way.

From sending out tweets about houses for sale to posting new listings on Facebook walls, social media platforms are one of the quickest and most targeted ways to reach potential buyers. To achieve your real estate goals, seek out a Southeast Michigan real estate agent who uses social media as a tool to build loyal followers and promote properties.

If you’re looking for a Southeast Michigan real estate agent who successfully uses social media as a marketing tool, call me at 248-514-2640 or email me at info@NorthWoodwardHomes.com.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

Investing in real estate is not a get rich quick scheme by any means.  Late night infomercials claim to show you how to retire in months after trying their methods for investing in real estate. Unfortunately, the only one getting rich is them.

But, you can build for your future by investing in the right Bloomfield Hills real estate and in the right way. Here are five tips to give you some guidance on how to buy that second, third or even fourth piece of real estate as an investment:

1. Shop smart. Look for homes or land in desirable neighborhoods or in up-and-coming neighborhoods.
2. Keep your property. You should not buy Bloomfield Hills real estate for the purpose of flipping it.  That was a short-lived fad that ended up costing many people thousands of dollars and more.  Instead, buy real estate with the intent of holding on to it.
3. Buy rental property. Rental property can be a great way to add to your income and give you the means to do things you might not have been able to do on your current income.  It is also a great way to set your children up for the future by giving them their first home. You don’t want to be a slumlord so be prepared to invest some time and money into the upkeep of your Bloomfield Hills real estate.
4. Exchange properties without paying capital gains. You don’t have to fear the tax man if you decide you want to get rid of one property for another.   By using a 1031 exchange, you can sell one property and buy another without paying taxes on the first one. This is not something you want to do as a “For Sale By Owner;” you need to use a real estate professional who is skilled in the 1031 exchange.
5. Enjoy your free time. You don’t have to give up all your free time to manage your investment property. There are professional property management companies that can handle some or all of the day-to-day tasks for you. There is a fee for their services but it is often well worth the cost.

For more information on buying investment properties or 1031 exchanges, contact me at 248-514-2640 or by email at info@NorthWoodwardHomes.com.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

Halloween is a fun and exciting time, especially for children. To ensure youngsters and your Royal Oak Michigan home for sale make it safely through the festivities this year, follow these Halloween safety tips:

1. Eliminate trip hazards. Remove bikes, toys and garden hoses from your Royal Oak Michigan home for sale front yard and porch. Sweep and rake leaves.
2. Replace burned out lights. Trick-or-treaters have a hard enough time seeing through their masks; don’t increase the danger by keeping them in the dark.
3. Restrain pets. You don’t want your pet to jump on a trick-or-treater, or even worse, bite someone.
4. Use a flashlight or glow stick to illuminate your carved pumpkin. Lit candles are dangerous, especially around small children or crowds of people.
5. Practice candle safety in your Royal Oak Michigan home for sale. Keep indoor jack-o-lanterns with lit candles, and any decorations with open flames, away from curtains and other furnishings that can easily ignite.
6. Apply makeup as a mask. A loose-fitting mask might restrict breathing or make it difficult to see. Instead, draw on a mask using makeup. If a mask is used, make sure it fits securely and has large eyeholes so the child can see.
7. Choose flame-resistant costumes. Many Royal Oak Michigan homes use lit candles as part of their exterior Halloween decorations. A child’s costume could accidentally brush against the flame. Purchase costumes with flame-resistant labels. If a costume is homemade, spray it with a non-toxic fire retardant.
8. Add a few strips of reflective tape to costumes and treat bags. This helps drivers see the children. It’s also helps to have trick-or-treaters carry flashlights – both to see and be seen.
9. Limit where children go. They should only knock on the doors of homes with a porch light on. Instruct them to never enter a home or a car for a treat. Teach them to stick to well-lit streets, stay on sidewalks and never cut across yards, use alleys or dash between parked cars.

Wishing you and your loved ones a fun and safe Halloween!

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

When a buyer makes a Southeast Michigan short sale offer on your home, it’s impossible to know for sure if the offer will be accepted by the lender.  Even when you’ve negotiated the offer with the buyer and come to an agreement that meets both of your needs, there’s still no guarantee that the lender will say yes to the short sale.

Here are three tips to help get Southeast Michigan short sale offers on your home accepted by the lender:

1. Convince the lender that you have a legitimate hardship. Submit a hardship letter,  paystubs, bank statements, monthly budget and profit and loss statement to demonstrate that you cannot make your monthly payments and have no disposable income. Here are examples of hardships to mention in your letter:
   a. lost your job
   b. reduced hours/pay at current job
   c. have to move more than 75 miles from home to get a new job
   d. death of a borrower
   e. divorce
   f. onset of a disabling illness
2. Negotiate with the buyer to exclude terms and contingencies that complicate the sale. Lenders do not like to accept short sales when they include time contingencies or when the short sale is contingent on the sale of a home.
3. Submit paperwork as a complete package. Ask your lender for a list of all documents needed. Fill out the paperwork and collect all other documents required. Make copies of everything. Put together a complete package including all the documents your lender requested, and only then send the entire package to your lender. If the lender later tells you they can’t find a particular document, don’t waste your time arguing about it, just resend the information – it’s easy to do because you already have copies prepared!

If you’d like more information on the possibility of selling your home as a Southeast Michigan short sale, give me a call today at 248-514-2640 or email me at info@NorthWoodwardHomes.com.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

You might be scratching your head right now wondering why in the world you would want to hire a real estate agent when you’re buying a Royal Oak Michigan home for sale by owner (FSBO). You may even have the misconception that real estate agents can’t work for you if you want to buy a FSBO.  That’s not true.

Real estate agents can represent your best interests when purchasing FSBOs, just like they do when purchasing homes listed with a real estate agency. You get the same service from your agent whether he or she is helping you buy a traditional Royal Oak Michigan home for sale or a FSBO.

Here are three benefits to working with a real estate agent when buying a FSBO:

1. It could save you thousands of dollars.

Most people consider buying a FSBO because they fall in love with the house, not because it’s a great price. In fact, the majority of FSBOs are priced at or above the actual market value of the home. Why is this? Home owners are novices at pricing homes, their information is typically out of date, they don’t have access to the sales prices of all homes in the area, and they don’t have the technology needed to accurately process the data.

When you hire an agent, you gain a considerable advantage over the seller when negotiating the price. Agents are experienced negotiators, and they have the sales statistics to support their requests.

Some proponents of selling your Royal Oak Michigan home for sale by owner argue that you’ll pay more because you have to pay the agent’s commission. In this buyer’s market, all homes including FSBOs take longer to sell. If a homeowner is serious about selling, and the home has been on the market for a while, the seller more often than not agrees to pay all of part of the real estate agent’s commission.

2. It’ll save your sanity.

Sellers have an emotional and personal attachment to their homes. They frequently take it personally when buyers want to negotiate. Without an agent, it’s you and the seller pitted against each other. Emotions often flare, which could prevent you from getting the best deal possible or could cause you to lose the opportunity to buy the house altogether.

3. All legal issues and paperwork will be handled by the agent.

The process of buying a house is complex. Your agent will guide you through the entire process including the negotiation, inspection, re-negotiation (based on findings during the inspection) and closing.  He or she also will make sure all legal issues are considered and handled appropriately, and all paperwork required to buy the home is properly completed.

If you’re interested in buying a home, whether or not it’s a FSBO, I’d like to help you.  Call me today at 248-514-2640 or email me at info@NorthWoodwardHomes.com.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

In today’s precarious job market, many luxury homeowners are finding they can’t afford their massive, custom-designed properties any longer. As the once rich are having to quickly sell or abandon their Southeast Michigan real estate, you might be able to snag a good deal on a distressed luxury home.

There are many horror stories associated with national and Southeast Michigan short sales and foreclosures, but if you do your research, are patient and can act quickly, you might be able to purchase the home of your dreams. If you want to take advantage of this sour market, then consider the following guidelines — and happy house hunting!

• Find an agent who has experience with distressed real estate. Interview Southeast Michigan real estate agents to find out their history of dealing with foreclosures and Southeast Michigan short sales.
• Research comparables. Investigate to make sure it’s actually a good deal by looking at other luxury homes that have sold in the area. Your agent can give you invaluable information on comparables.
• Be patient. It’s easy to get anxious when it comes to making such a large purchase, but remember that these properties are in turmoil — which can take some time to resolve.
• Hire a home inspector. If you’re going to be investing big bucks, pay a home inspector up front to check out the home. Just because it’s a luxury property doesn’t mean that it hasn’t been neglected for the past couple years. You’ll want to know what kind of damage and repairs you’ll be dealing with.
• Make an offer quickly. Other potential buyers and real estate investors will be keeping an eye out for enticing properties, so be ready for competition.
• Have your finances together. Pay as much as possible in cash. It will be more enticing to the lender, who actually makes the final decision on a short sale or foreclosure.

If you want to purchase luxury Southeast Michigan real estate at a great price, consider distressed properties going to a short sale or foreclosure. As a Certified Distressed Property Expert and Attorney, I can help you navigate any type of real estate transaction.  Call me at 248-514-2640 or email me at info@NorthWoodwardHomes.com, if you’re ready to start looking or would like more information.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

Real estate has a language of its own, and I don’t just mean phrases like closing costs, short sales and foreclosures.  What I’m talking about are buzz words used to advertise Royal Oak Michigan homes for sale.

When you understand the typical meaning of these code words, you’ll be better able to determine which Royal Oak Michigan homes for sale are worth looking at in person.

• Cozy: Look at this home if you don’t mind a much smaller than average home.
• Rustic: If you want a home in the country (or one that looks like it should be in the country), take a look at this one.
• Move in Ready: Usually means it’s vacant.
• Starter: It’s smaller and less expensive than average homes in the area.  If you’re in the market for a starter home, this is the phrasing you want to look for.
• Needs TLC: It probably needs more than just a little work.  If you don’t mind that, check it out for yourself to see how much work it really needs.
• Handyman’s Special: Needs more work than TLC, which probably means you’ll need to hire professional contractors to get at least some of the work done.  If you like the home, have a home inspection to find all the problems and then negotiate for a good price.
• Investor Special: Best use of this property is to rent it out.
• Investment in Land: If there’s a house on the land, this means you’re probably wisest to tear down the home and rebuild.
• I’m Beautiful Inside: The interior is nice, but something about the exterior is unappealing.  It could be something easy to fix like old siding and cracked concrete or something impossible to remedy like being on a busy street.
• Honey, Stop the Car: This is a must-see home, if it fits your budget and needs.

If you’re looking at Royal Oak Michigan homes for sale, let me help you crack the code.  I’ll help you find a home you’ll love and use my negotiation skills to get it at a great price.

To get started with your home search, give me a call at 248-514-2640 or email me at info@NorthWoodwardHomes.com.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

You know that you can lend money to your child to help him or her buy Bloomfield Hills real estate.  But you’d like to explore some of the other financial arrangements to determine which option is the most advantageous for you and your child.

Here are four additional ways to help your child buy Bloomfield Hills real estate:

1. Give the down payment as a gift.

Before deciding whether to make the money a gift, consider what moral message you may be sending.  You don’t want your child to develop a sense of entitlement and take for granted that he or she can come to you any time they need money.

If you decide you do want to give part or all of the down payment as a gift, consult with your financial adviser to determine the amount you can give away without incurring tax liabilities.

2. Co-sign the bank loan.

This could be all the help your child needs to get a mortgage. It might make sense if he or she is close to graduating college and already has a job lined up or has a solid but irregular income that would disqualify her or him from getting loan approval.

However, there are big risks associated with co-signing a loan. You’re responsible if your child fails to keep up payments, which means the bank will come after you for the money. If your child is late with a payment, it impacts your credit score. If you want to get another loan for a home or some other big expenditure, you may find the co-signed loan uses up your borrowing ability.

Before co-signing a loan, get legal and financial advice.  Also, if your child is married, be sure to have his or her spouse sign the loan and any other written documents that provide the terms of your agreement.

3.   Set up a shared-equity arrangement.

In this arrangement, everything is open to negotiation.  Typically, a written contract spells out that the child (as the homeowner) is responsible for mortgage payments and gets the tax deduction that comes with it, and you (as the investor) are responsible for providing the down payment.

Some of the conditions you’ll want to agree on before finalizing the agreement are who pays the property taxes, whether or not your name will be on the loan and when the investment will be paid back through either selling or refinancing the Bloomfield Hills real estate.

Because of the flexibility inherent in this type of arrangement, it’s crucial to involve your lawyer and have a document drawn up that spells out everything in detail.

Set up a lease-to-own agreement.

Basically, you buy an investment property and rent it to your child.  You can set the terms of the agreement, but here’s how lease-to-own arrangements typically work:

The renter is buying the right to purchase the house later for a given price.  There’s often a large upfront option fee of 1% to 3% of the home’s purchase price.  Or, the option fee can be added to the monthly rent. Usually, some or all of the option fee is credited as a down payment on the purchase of the house.

During the rental period, you still own the home and are legally responsible for it, but your child maintains the property as his or her own. Be sure to have a legally-reviewed contract signed by all parties involved.

If you’re interested in purchasing Bloomfield Hills real estate in Oakland County, Michigan for your adult child or as an investment, I can help.  Give me a call today at 248-514-2640 or email me at info@NorthWoodwardHomes.com for more information.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com