Lee Morof's Real Estate Blog

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 Home owners are novices at pricing homes, their information is typically out of date, they don’t have access to the sales prices of all homes in the area, and they don’t have the technology needed to accurately process the data.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

You’ve reviewed your finances and have decided you can afford to and want to help your child buy Bloomfield Hills real estate.  Is lending the money to your offspring your best option?  Here are some questions to consider when making this decision.

1.  Will you need the money later?

If there’s a chance that you might need the money to live on at some point, lending the money to your child is a better option than giving it to them.  You can always forgive part of the loan later on, if you find you don’t need the money to live on.

2. How much should you lend?

Depending on your financial situation, you can lend part or all of the down payment or part or all of the purchase price of the Bloomfield Hills real estate.

If you have enough money to lend the entire mortgage amount, consult with your financial planner to determine if this is the best option for you. Lending the entire amount often offers you more income than you’d get from a bank and gives your child an even lower interest rate than he or she would get with a traditional mortgage.  It also allows your child to deduct the mortgage interest because the loan is secured by the property.

3. Who will receive the mortgage payments?

Decide if you want to receive the monthly mortgage payments or if you’d prefer to have a third party service the mortgage.  If you want to know more about employing a third party to draw up the mortgage contract and accept the monthly payments, look into companies that handle intra-family loans.

4. How much interest should you charge?

As part of the loan agreement, you’ll want to charge an interest rate equal to the IRS-approved Applicable Federal Rates (AFRs). The AFR is the lowest interest rate you can charge without causing any unwanted tax complications.  Work with your financial and legal experts to ensure the loan agreement is in the best interest of both you and your child.

Let me help you find the Bloomfield Hills real estate that meets the needs of you and your child and get it at a great price.  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

With appealingly-low home prices and historically-low mortgage rates, you know this is an ideal time to buy Southeast Michigan real estate. What about your adult child who doesn’t have the down payment needed to buy his or her first home? Should you help him or her take advantage of this opportunity?

Many parents are asking themselves this question. According to a survey done by the National Association of REALTORS®, 36% of first-time buyers received help with their down payment from family or friends – typically parents – in 2010.  That was up 28% from 2009.

Can you afford it?

The first thing to ask yourself is whether you can afford it. Are you on track to reach your financial goals for retirement? If you are not, you cannot afford to help your child buy Southeast Michigan real estate.  Additionally, some financial experts suggest that you should not tie up more than 3% to 5% of your assets in family loans.

Are you prepared to lose the money?

Your offspring may fully intend to repay you, but his or her ability to do so could change quickly in today’s financial environment.

To reduce the possibility of your child falling behind on payments or defaulting, create a contingency plan.  If the amount you’ve lent is small enough, you might decide to give it to them as a gift. If not, work out a schedule of repayment. For instance, you could reduce the monthly payment. Just make sure you get some type of payment on a regular basis, even if it’s only symbolic.

Will your other children be accepting?

Your other children should know that you are providing this aid, if you intend to also help them financially, and if not, why you made that decision. If helping one of your kids finance a home will cause a major rift in your family, you may not want to move forward with it.
Can you do the deal and then back off?

Helping your son or daughter buy Southeast Michigan real estate in Oakland County, Michigan can be a positive for all of you. But you don’t want to be the type of parent who helps and then spends the next decade dictating how to decorate the home and dropping in to visit any time you please.

If you’d like to find a home to purchase for your child, I can help.  Give me a call today at 248-514-2640 or email me at info@NorthWoodwardHomes.com for additional 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

As the need for home loan modifications has increased, so has the number of home loan modification scams.  Like all scams, they aren’t always easy to detect.  To help you identify loan modification scammers, here are five things to watch out for:

1. Asking for payment up front. This can be masked as a house payment, insurance payment or a deposit. No matter what they tell you it’s for, do not give it to them in advance of work being performed and Bloomfield Hills real estate contracts being signed.  If you do give payment up front, at best, you’ll pay for work that could have been done for free through other non-profit organizations or loan modification assistance programs. At worst, no work will be done, you’ll never see your money again, and you’ll no longer have time to save your Bloomfield Hills real estate from foreclosure.
2. Guaranteeing a loan modification. Legitimate lenders and HUD officials never guarantee they can do this for you.  They only tell you they will do their best to help.  Do your research.  Type the name of the company into a search engine along with the word scam.  The results may surprise you.  Call the Better Business Bureau to see if the company has any complaints against them.
3. Telling you to send your mortgage payment somewhere other than to your lender. Never ever send your Bloomfield Hills home mortgage payment to anyone other than your mortgage lender. As soon as you have trouble making your monthly payment, contact your mortgage lender.
4. Offering government-based loan modifications. Government agencies do not make calls like this. Contact your mortgage lender and ask whether you qualify for any government programs to prevent foreclosure.
5. Asking you to give out personal or financial information.  Do not give this information over the phone or the internet without verifying this is a company you are familiar with. Don’t click on a link sent to you in an email – find and type the web address in for yourself. Don’t give info to someone who initiates a phone call to you – look up the number yourself and call them.  Most scams happen via the phone or the internet; however, some scammers visit you at your home, so don’t give your information to anyone knocking on your door, either.

You can learn more about how you can protect yourself from loan scams at LoanScamAlert.com.

If you’d like to talk about options for selling your Bloomfield Hills real estate (whether as a traditional sale or as one of the Southeast Michigan short sales), as a Certified Distressed Property Expert, I would be happy to help. 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

More than likely, you’ve cooked dinners, you’ve played games and you’ve made thousands of memories within the personally decorated walls of your home — and now you think you’re ready to move on. No matter the reason for selling your Southeast Michigan real estate, getting emotional is normal. However, you need to keep those emotions in check, because they could be detrimental to closing the deal.

Emotional calls constantly get sellers in troubling situations that make them regret their split decisions. A snide remark, too-low offer or fixer-up request can strike a personal cord, but you need to set your feelings aside in order to do what’s best for your financial future. Below are emotional mistakes that can stop negotiations and put you in housing hot water!

• Overpricing faux pas – Just because your sweat is worth a lot to you doesn’t mean that your property’s value will reflect the years of hard work, cleaning, upgrades and love you’ve put into it. Do your research. If there are comparable houses in your neighborhood at lower price points, reduce your listing price so that you’ll be a contender for buyers.
• Negative negotiating – Even though you may not want to entertain low offers, listen to your Southeast Michigan real estate agent. He or she has been through hundreds of negotiations and is your best bet for closing the deal at a fair price.
• Personal injuries – Don’t let buyer biases get to your personal ego and cause you to reject a potential purchaser all together. Remember, you are selling this house and moving on; they’ll be able to do whatever they want once they own it anyway.
• Mourning the sale – The memories go with you, so don’t have any second thoughts. Concentrate on making new happy moments in your future home.

Don’t let sentimental seller’s syndrome cause you to blow a fuse, have seller’s remorse, or worst of all, lose a sale. Eliminate emotions from the sale process in order to draw in buyers, get your money’s worth and sell quickly.

If you need help selling your Southeast Michigan real estate in Oakland County, 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
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

Before you put your home on the market, you want to make certain that it’s in tip-top condition to ensure a quick sale. The key to listing your home at a competitive price and guaranteeing you have what buyers are looking for is to think like a Bloomfield Hills real estate agent.

To get your home ready to sell, here are five easy and inexpensive home improvements this Bloomfield Hills real estate agent recommends:

1. Layout – Take an objective look at your home and stage accordingly. Remove clutter and rearrange so that potential buyers can envision each room for its purpose. Also, store any obtrusive furniture that disrupts walking flow or makes rooms look smaller.
2. Hardware – Update all hardware. Changing out door handles, drawer pulls and light fixtures is an easy way to modernize your home while costing little money.
3. Charm – Play up the unique features of your home. Refinish hardwood floors if scuffed, remove excess objects from built-in bookshelves and clean unique light fixtures. It’s these irreplaceable elements that make your home stand out from other homes and hook buyers.
4. Scent – Eliminate all bad odors like pet scent, stale cooking odors and cigarette smoke.  Just lighting candles or spraying air freshener won’t work.  Clean, deodorize and get rid of rugs or other cloth objects that still smell bad.
5. Curb Appeal – Spend some time sprucing up the yard of your Bloomfield Hills real estate. It’s the first impression buyers will have of your home, and although the house might be in mint condition, a lots-of-work lawn could instill a negative notion before they even step a foot inside your home.

Buyers’ needs vary in every market. However, buyers will always consider these five features before they buy. So, stay one step ahead of the game and ensure your house is up to par with buyers’ expectations.

If you’re getting ready to sell your home and are looking for a Bloomfield Hills real estate agent who can help you sell your home fast and for top-dollar, I’d be honored to be interviewed for the job.  Give me a call today at 248-514-2640 or email me at info@NorthWoodwardHomes.com to schedule an appointment.

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

Today’s economy has been rough on most everyone’s pocketbooks, and when it comes to prioritizing payments, mortgage payments can take a hit. If you find yourself in a bind, owe more than your home is worth and can’t afford your current mortgage, then you might want to consider talking to a real estate agent, one who is a Certified Distressed Property Expert, and bank about the possibility of a Southeast Michigan short sale.

To help you prepare for those conversations, here are the basics about Southeast Michigan short sales:

• What is a short sale? A short sale is an agreement that your real estate agent negotiates between you and your bank to sell your home for less than you still owe. The bank absorbs the loss so that the seller doesn’t have to repay the balance of the mortgage.
• Why would you do this? Your home is now worth less than you owe, which is called being underwater, and you have a financial hardship. There are a number of reasons that could put you in financial hardship and have you considering a short sale — such as unemployment, job transfer, illness, under employment and divorce.
• How does it work? A real estate agent lists your home at its current market value. Then a buyer places an offer that is usually much less than the amount required to pay off the loan. The seller or agent (if the seller has given written permission for the agent to do so) takes the short sale purchase agreement to the bank holding the mortgage in hopes that they’ll accept it.
• What do you need? Basic guidelines usually include a hardship letter about why you need a short sale, bank statements for the last three months, two years of tax returns and permission for your real estate agent to negotiate short sale terms with your bank.
• How should you proceed? Most accountants agree that a short sale is better for your credit score than a foreclosure. Talk to your real estate agent who is a Certified Distressed Property Experty and have him or her refer you to an accountant who can evaluate your situation and help you take the steps necessary to secure a good financial future.

There’s a lot more to short sales than I’ve outlined here, but it gives you a starting point.

If you’re finding it difficult to meet your monthly mortgage payments and still owe more than your home is worth, then you might want to consider a Southeast Michigan short sale. It can decrease your debt and release you from that monthly financial burden. 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
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com