Lee Morof's Real Estate Blog

When considering whether you should purchase Southeast Michigan real estate, you want to take into consideration the five-year rule. That’s the minimum number of years many experts believe you need to own a home in order to break even on it when you sell it.  Some experts are now suggesting seven years, but in this article I’ll be talking about the five-year rule.

What happens if you own your Southeast Michigan home for less than five years? Often, you’ll lose money because:

1. You pay thousands of dollars in closing costs each time you buy Southeast Michigan real estate. That money does not build equity or increase the value of your home in any way.
2. In the first five years of your home loan, a much higher percentage of your monthly mortgage payment goes toward interest than toward paying down the principal of the loan balance.

How do you beat the five-year rule?

1. Purchase a property you intend to fix up and rent it out at a rate equal to or higher than the mortgage payment.
2. Buy towards the lower end of what you can afford, and make extra payments to pay down the principal.

Why own for five years minimum?

1. After five years, due to the structure of amortized mortgages, the cost of owning a home equates to the cost of renting.
2. The five-year mark is where you typically start to build equity in your home.
3. Rental prices continue to rise; eventually your mortgage payment could be less than a rent payment.

If you’re interested in learning more about home ownership and want to look at Southeast Michigan real estate for sale, 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
www.NorthWoodwardHomes.com

Whether you’ve decided to purchase a new home or list yours for sale, you’ll need to hire an experienced Southeast Michigan real estate agent. Selling and buying homes can be stressful, so you need to be able to trust and rely on your Southeast Michigan real estate agent to do what’s in your best interest, even if they’re acting as a dual agent.

While ‘dual agent’ might be a confusing term, it’s quite simple — the real estate agent is working for both the buyer and the seller of the home. As both parties will have a lot at stake, this could be perceived as a conflict of interest. Below we’ve outlined some of a dual agent’s obligations.

• An agent should disclose dual agency – As soon as a real estate agent realizes that a buyer is seriously interested in a property on which they have a signed contract, they should immediately be honest with both parties about the possibility of dual agency.
• Dual agents should represent both parties fairly – real estate agents are ethically obligated to treat both the buyer and the seller equally should a dual agency occur.
• Dual agents cannot disclose personal information – A dual agent cannot tell the other party about any personal issues associated with the selling or buying of the house, such as a divorce or financial distress. This is important because one party should not have the upper hand during negotiations.

If two Realtors within the same agency represent the buyer and seller, the transaction is still considered a dual agency. It’s completely normal to be a little wary of a dual agency when it comes to selling or purchasing a home with a Southeast Michigan real estate agent. However, it is fairly common, and as long as all parties are treated equally, it usually works out quite well.

If you’re getting ready to sell your home or purchase a new one and have questions about working with a dual agent, please call me 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
www.NorthWoodwardHomes.com

Mobile devices have joined desktop computers in helping us search for Bloomfield Hills real estate.  Below are the top apps for your Android, iPhone or iPad:

1. Trulia Real Estate for iPads. Designed specifically for iPad, Trulia HD makes finding your next home easy and fun. Search for Bloomfield Hills real estate for sale or rent with full-screen interactive maps, neighborhood-specific details, high-resolution photos, and more.
2. Zillow Real Estate. Find home values, Rent Zestimates, homes for sale, homes for rent and more as you walk or drive through neighborhoods using the Zillow iPhone App or Zillow Android App featuring built-in GPS technology, plus a mortgage calculator.
3. Realtor.com. It is possible to find your dream home without surprises and heartbreak. Trust the official REALTOR.com® App for your iPad, iPhone or iPod Touch – the most accurate and most up-to-date real estate mobile search experience.
4. Real Estate Genie SP. Did you ever wish you had your own Genie to assist you in your real estate decisions? This app from Apple contains a financial calculator designed for real estate; extensive loan amortization, mortgage payment and refinance tools; and balloon payment and capital gain analysis for selling property.

If you prefer to have a professional do the searching for your Bloomfield Hills real estate (or at least help with the searches), give me a 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
www.NorthWoodwardHomes.com

You’ve probably heard the terms real estate agent, broker, REALTOR®, listing agent and buyer’s agent. But do you know what they mean and the differences between them?

Here are the definitions of terms you may encounter on your Bloomfield Hills real estate agent search:

1. Real estate agent: Agents are licensed sales people. They are not real estate brokers. In fact, they must work for an employing broker and cannot work independently. An agent works under the broker’s guidance and legal protection. Real estate agents are required to undergo education pertaining to real estate law and ethics.
2. Real estate broker: A real estate broker has more education than an agent, they can work independently, and they can hire other real estate agents. While many of the responsibilities of an agent and a broker are interchangeable when it comes to customers, the role and qualifications for each are incredibly different. Typically, a broker is more of a manager for a real estate company. Brokers have to undergo more extensive education than agents in relation to business management.
3. REALTOR®: Not all agents are REALTORS®. A real estate agent becomes a REALTOR® when he or she joins the National Association of REALTORS®.  The term “REALTOR®” is a registered collective membership mark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION OF REALTORS® and abides by its strict Code of Ethics.
4. Listing agent: They are also known as seller’s agents because they represent the seller.  A listing agent can be a real estate broker, a real estate agent and/or a REALTOR®
5. Buyer’s agent: Buyer’s agents represent the buyer. They can be a real estate broker, a real estate agent, and/or a REALTOR®

Basically you want to find out which side the Bloomfield Hills real estate agent you are talking to is on — the buyer’s or the seller’s.  Then you will understand where their loyalty lies.  You always want someone on your side that will look out for your best interests.

If you’re looking for a Bloomfield Hills real estate agent to help you buy or sell a home, please contact me. I’d love to be considered for the job. You can reach me at 248-514-2640 or info@NorthWoodwardHomes.com.

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

Are you unsure about buying Southeast Michigan real estate in Oakland County? Warren Buffet was recently quoted as saying, “If I had a way of buying a couple hundred thousand single-family homes…I would load up on them and… take mortgages out at very, very low rates…it’s a leveraged way of owning a very cheap asset now, and I think that’s probably as attractive an investment as you can make now.”

Homeownership in the United States is dropping and we are becoming a society of renters, according to a Morgan Stanley Housing Market Insights report.  Why is this happening?

• It’s harder to get mortgages: Banks have made it more difficult for people to become homeowners. If they have marginal credit or small down payments, they won’t get approved.
• Some have a fear of buying: The economic and real estate market collapse caused many people to fear buying a home. Many who could buy Southeast Michigan real estate right now are sitting on the sidelines waiting for the market to recover. If your credit is good and you have the money for a down payment, all reports are saying, do not wait!

Here are a few tips to help you make the most of this real estate market:

• Act now: Savvy investors know the market has started to recover. If you wait for the media to say it’s ok to start investing in Southeast Michigan real estate again, it’ll be too late.
• Earn rental income: If you buy a second (or third or fourth) home or a home you don’t want to live in, rent it and generate income. Large investors are saying single-family real estate is the way to go right now.
• Take advantage of low prices: Prices have fallen dramatically in a lot of markets, while rental rates are increasing.

To find single-family investment properties or your own new home, call me today at 248-514-2640 or email me at info@NorthWoodwardHomes.com. I’ll help you find the property that meets your investment goals.

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

Oakland County MI short sales are used by homeowners to prevent losing their homes to foreclosure.  When you see an advertisement for a short sale, the home is in pre-foreclosure.

What is a short sale? It is an agreement between the sellers of a home in the beginning stages of foreclosure and their lender which allows the home to be sold for less than the existing loan balance. If an agreement is reached by all parties, a short sale could save the sellers’ credit by avoiding a foreclosure.

A short sale is not a short process, however.  It is a lengthy process with many legal and financial aspects.

The basic short sale process flows as follows:

• The seller contacts the lender to discuss the possibility of a short sale.
• The seller issues a letter authorizing release of the loan and property information to the buyer or escrow agency.
• A settlement statement is reviewed by the lender. The statement includes the proposed selling price, the amount left to be repaid and itemized expenses.
• The seller completes a hardship letter for Oakland County MI short sales, including a description of all the financial difficulties the seller is going through.  The lender validates and confirms all financial difficulties.
• The seller provides the financial documents including paycheck stubs, bank statements, a personal financial statement, monthly budget assessment and anything else required by the lender.
• Once approved, the buyer can proceed with the purchase.

What are the benefits of a short sale?  The seller is relieved of the debt they cannot afford, a foreclosure proceeding by the lender is avoided and the buyer purchases the home at a discounted price.

Whether you’re a seller who is interested in selling your home as a short sale or a buyer who wants to purchase a Oakland County MI short sale, I can help. Please 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
www.NorthWoodwardHomes.com

There are many ominous superstitions associated with Friday the 13th. From black cats to broken mirrors, bad luck can stem from almost anywhere and many sellers like to blame it for their Bloomfield Hills real estate sitting on the market for too many months.

Without casting a single spell, you can banish bad luck this month and sell your Bloomfield Hills real estate fast by ensuring you’ve fixed all the pesky problems that inspectors focus on. Below is a list of problems to address to help you turn your bad luck to good.

• Electric shock – Faulty wiring, which is especially common in older houses, might spook some inspectors into suggesting that the entire electrical system needs to be replaced. Have your wiring checked and update what you can before putting your house on the market.
• Structural damage – While damage can be minor and not of immediate concern, you can be sure the inspector will point out potential long-term issues. Repair problems early, so that prospective buyers will feel at ease knowing you’ve taken the necessary precautions.
• Water and air infiltration – This is probably the easiest and most inexpensive way to avoid scaring off a buyer. Just replace the caulking around windows and doors.
• Hazards to health – If you live in an older house that contains asbestos or lead-based paint, before you put your house on the market, determine if these are a direct health hazard. If so, check with your insurance provider to see if any of the renovation costs will be covered.

Be proactive and banish bad sales luck this Friday the 13th. Fix the little issues that spook Bloomfield Hills real estate property inspectors. You’ll sell your house quickly and take good luck with you to your new Bloomfield Hills home. If you could use more information on problems inspectors love to hate, please call 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 www.NorthWoodwardHomes.com

Your home is usually the most important and sizable investment you will ever make. Whether you’re buying a starter home or the home of your dreams, you can’t afford to invest in Bloomfield Hills real estate that won’t steadily increase in value over time.

In order to assess a home’s potential and maximize your profit when it comes time to sell, we’ve compiled a list of five helpful questions to ask when choosing a property.

1. Are businesses investing locally? Ask your potential neighbors about new businesses in the area and check the local papers. If businesses are investing, it’s a good sign that the neighborhood will continue to enjoy financial stability.
2. What amenities are in the area? Buyers will pay a premium to be near amenities such as parks, civic centers and swimming pools. If current amenities are lacking, ask if there are any plans for future development. If not, it might be better to consider a neighborhood with more to offer.
3. Does the neighborhood look like it’s being maintained? It’ll be tough to ask top dollar for your home, no matter how well you maintain it, if the neighborhood looks like it’s in decline.
4. Are there a lot of foreclosures and rental properties? Be wary of neighborhoods seemingly devoid of homeowners. If other buyers aren’t actively investing in the community, home values are likely to decrease.
5. Is there an active homeowner association or neighborhood organization? Communities with active residents tend to have the most growth potential and therefore the most stable home values.

Whether you plan to stay in the home for just a few years or for the rest of your life, don’t jeopardize your financial future by investing in Bloomfield Hills real estate that has little prospect of improving in value. If you’re getting ready to buy a home and want to make sure it’s a solid investment, please call 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
www.NorthWoodwardHomes.com

You’ve found the perfect Royal Oak Michigan home for sale that you know should be well within your budget. Now all you need to do is secure the loan — but you’re turned down by bank after bank. In today’s economy, many buyers are facing this exact issue. They have the means to meet their potential mortgage payment. Unfortunately, an issue in the past damaged their credit score and it’s preventing them from getting a loan.

If you’re contemplating purchasing one of the Royal Oak Michigan homes for sale, especially if you’re a first-time buyer, you need to do everything you can to boost your credit score. This will make it more likely that you’ll qualify for a loan and will help you secure a lower interest rate. Below are a few steps to get you started:

• Get a free credit report. You can do this at https://www.annualcreditreport.com once a year. This site is maintained by the FTC and is the only site that provides a truly 100% free credit score. There are other sites with similar names, but they are not to be trusted because they are not maintained by the FTC. If you prefer not to use the web, you can also get your free credit report by calling 1-877-322-8228.
• Check your credit score. A score of 780 is excellent; however, you should be able to secure a loan with a score of around 720. If your score is low, you might want to consider renting for another year while you work to improve it.
• Ensure there are no errors. If a credit card company has you defaulting on bills for a card you never opened, you could be a victim of identity theft. Start working to have any errors removed immediately — they’ll be more difficult to fix the longer you wait.
• Pay down debt quickly and on time. Paying off your debt as quickly as possible and on time will help to steadily increase your credit score.

Working to maintain and improve your credit score will make purchasing a new home, or refinancing your existing one, much easier on your pocketbook and your sanity. Also, shop around and check with multiple loan agencies, such as a national bank, a local bank and a credit union because they might yield very different interest rates based on your credit score.

If you’re ready to purchase a Royal Oak Michigan home for sale, I can help.  Please 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
www.NorthWoodwardHomes.com