Lee Morof's Real Estate Blog

The President’s stimulus plan has offered hope and a ray of sunshine to a gloomy Troy Michigan real estate market. Here are some ways the Southeast Michigan real estate market can benefit from the plan:

• The mortgage industry will receive a financial boost which will help buyers with new housing loans.
• First-time home buyers will receive a tax incentive that results in a huge tax break.
• There will be 50 billion dollars targeted at bailing out failing mortgage institutions.  This will part of the stimulus plan will bring home buyers financial opportunities.

Besides the stimulus plan, Troy Michigan home sellers are looking at more creative ways to sell their real estate.  Sellers need to insure their properties have good curb appeal to attract buyers.  Insure your home is in great condition both inside and out.  Selling your Troy Michigan real estate will be faster with less headaches if your home is appealing to buyers…and that mean more profit to you.  

Home Seller Tips

• Get rid of the clutter in your home.  Donate or throw away things you don’t need. Most of us have way more in our Troy Michigan homes than we use. If you don’t want to throw items away, put them in storage for use in your new home or condo.  
• Freshen it up. A new coat of paint and a good steam cleaning for the carpets will help make your home more appealing to potential buyers.
• Create curb appeal. Don’t lose a buyer because your home exterior is unattractive and the yard is full of clutter.  Make sure your landscaping is top notch by mowing your lawn, trimming the bushes and trees away from the house.  Your front door and entrance should be clean and painted if necessary, to give a welcoming look.  Update your home’s exterior inexpensively with new hardware on the doors, add new house numbers, and light fixtures.  
• Price your home right. Ask a professional Troy Michigan real estate agent for his opinion on what a good price would be for your home. In the current housing market you want to price your home to sell.  

Want to find a Troy Michigan real estate professional who can help sell your home or condo faster and for top dollar?  Call me today at 248-514-2640 or email info@NorthWoodwardHomes.com.

Lee Morof
RE/MAX Showcase Homes
Birmingham, Michigan
www.NorthWoodwardHomes.com
info@NorthWoodwardHomes.com
Call:  248-514-2640

The stimulus, the stimulus—it is hard to go to a news site or blog now without seeing something about the stimulus plan, good or bad. The one thing that seems to be a common thought is everybody hopes it works whether they like the plan or not. There are many ways the stimulus plan might affect Troy Michigan real estate condo buyers and sellers.

Buyer Incentive

The biggest boon to both buyers and sellers is the proposed tax break for any first-time buyer purchasing a home (including condos) in 2009. That last part is the one down point in the plan. Homes must be purchased in the current year, retroactive to the beginning of 2009, and ending December 31st. That should, however provide a decent impetus to get things moving again. While it is short lived, it could boost the market long enough so that the forward motion continues past this year.

Mortgage Incentive

Not for the buyers and sellers in particular, the banking and finance industry is set to receive the biggest portion of the stimulus plan. That can only help both buyers and sellers of Troy Michigan real estate, as it will mean buyers will once again have the ability to get mortgage loans.

More expensive luxury homes and condos will also be given lower interest rates and affordable mortgage loans. There does seem to be some argument over whether the stimulus plan will raise or lower mortgage rates so that remains to be seen.

Are you thinking about buying or selling Troy Michigan real estate in Southeast Michigan? If you want to take advantage of the stimulus plan, I can help.  Call me at 248-514-2640 or email me at info@NorthWoodwardHomes.com for more information.

Lee Morof
RE/MAX Showcase Homes
Birmingham, Michigan
www.NorthWoodwardHomes.com
info@NorthWoodwardHomes.com
Call:  248-514-2640

Your Bloomfield Hills REALTOR® may say that you must provide earnest money when making an offer on Bloomfield Hills real estate. It’s usually in the form of a check, and the funds will be verified by your mortgage company prior to final approval of the loan.

This earnest money reassures the home seller you’re indeed serious about the offer you’re making.  Once the terms of the deal are worked out between you and the seller, the earnest money is placed in an account held in trust until your loan closes.  Then the money will be used for your down payment and closing costs. 

What if the Deal Falls Through?

If the deal falls through at any time, any cancellation fees are paid out of the earnest money. The remainder of the money continues to be held in trust until you and the seller agree on the disbursement of the money.  If the deal is canceled early in the process, it’s usually a simple matter of the seller signing over the deposit to you.

What if You Cancel the Transaction?  

If the transaction is canceled by you, the buyer, some sellers mistakenly believe that the earnest money is forfeited to them.  That’s not likely to happen because no buyer is going to let the seller just have the earnest money.  Because the money is held in a trust and both parties must sign a release of escrow, no one can make you give the earnest money away.  In this situation, work with your Bloomfield Hills real estate agent to help you negotiate the return of your earnest money.

What if an Agreement Cannot Be Reached?

If the buyer and the seller are unable to come to an agreement about the earnest money, the broker holding the funds in trust can make a written judgment and disburse the money.  If the broker is unable to make a determination, he or she can turn the money over to the State’s real estate commission to make a decision.  Rarely does a court of law have to be involved.

For more information on earnest money or answers to any other questions you have about buying Bloomfield Hills real estate, call me at 248-514-2640 or email info@NorthWoodwardHomes.com.

Lee Morof
RE/MAX Showcase Homes
Birmingham, Michigan
www.NorthWoodwardHomes.com
info@NorthWoodwardHomes.com
Call:  248-514-2640

If you’re wondering if it’s the right time for you to buy Troy Michigan real estate, you might want to think about the pros and cons of renting versus buying.  Here are a few of them, which might help you make up your mind:
 
Let’s first go over the advantages of renting a home

• You don’t have to worry about finding a mortgage lender
• You don’t lose equity as the real estate market rises and falls; then again, you don’t gain equity either.
• You don’t have to put down as much money up front
• You have fixed rental fees that won’t fluctuate during the length of your lease
• All you have to do is leave when your lease is up.  You don’t have to worry about selling your home.
• You don’t have to pay for maintenance of the home other than normal cleaning.  

Now let’s go over the disadvantages of renting

• Your investment never goes up. You never gain equity.
• You don’t gain an investment, in which you can use the equity for other things as you grow older.
• You’re generally not free to do your own maintenance.
• You can’t decorate or renovate your rental home any way you want.
• You can’t receive some great tax breaks that go with homeownership.
• It’s possible for the home to be sold out from under you – sometimes with little warning.

Both renting and buying a Troy Michigan home has its advantages.  Whether you buy a home really depends on your personal life, and factors like job stability and personal finances.  Some people are more than ready to have a permanent place to call their own, and others just don’t mind moving about.

One thing is sure – most Americans don’t want to spend their entire lifetime renting.  At some point, buying a home is going to be a good investment and create equity for your future. 

 If you’re considering buying one of the Southeast Michigan homes for sale, there’s no better time to do it than now with home prices and interest rates at their lowest in decades.  Let me show you some of the great home buying opportunities available in today’s Troy Michigan real estate market.  Call me at 248-514-2640 today or email info@NorthWoodwardHomes.com now!

Lee Morof
RE/MAX Showcase Homes
Birmingham, Michigan
www.NorthWoodwardHomes.com
info@NorthWoodwardHomes.com
Call:  248-514-2640

If you’re putting up your Troy Michigan real estate for sale, you’re probably thinking about what you need to do to get it sold.  Here is a list of do’s and don’ts to help you along your way:

Do’s

• DO take pictures of every room of your house.  Look each picture over with a fresh eye; see what needs to be done to the rooms.
• DO clean, clean, clean.  What may look like “family clutter” to you may turn potential buyers off.
• DO replace hinges that are broken or worn, tighten doorknobs, etc.  Buyers going through the house will open doors and cabinets.  Having a doorknob come off in your hand is a definite deterrent to buying.
• DO fix cracks and watermarks.  You don’t want to give buyers the idea that you have plumbing problems.
• DO take the time to stage your Troy home before putting it on the market.  This can significantly shorten the time it takes to sell, as well as raise the asking price.  I would be happy to send you the FREE book, “Staging Tips to Prepare Your Home for Market.”  There are absolutely no strings attached!

Don’ts

• DON’T spend a lot of money on major upgrades unless you have to.  While you may have to replace a water heater that’s trying to quit, you don’t have to replace a carpet – just get it cleaned.
• DON’T get stuck on one sales price.  The real estate market changes constantly.  Having a set price may be the reason your home languishes on the market.
• DON’T use your tax appraisal as an estimate for your home’s value.  Compare your home to those in the neighborhood that have sold for a better estimate.
• DON’T pack until the buyer’s loan is approved.  You can begin packing then, but pack smaller things and hide the boxes or store them off site until the sale is complete and you’re ready to move. 
• DON’T follow the potential buyers through the house.  This can cause them to feel they need to move through quickly, which lessens the chance of them buying.  So…give them their space, and if possible, arrange to be gone during the showing.

Putting up your Troy Michigan real estate for sale can be hard, especially if you’ve lived there for a long time.  However, following these tips can help make the process a little easier so you can Sleep Good at Night.

When you’re ready to sell your home, learn how you can maximize your profits by “Selling to the Max.”  I can help you prepare your Troy home so it sells faster and for top dollar.  Call me today at 248-514-2640 or email me at info@NorthWoodwardHomes.com now!

Lee Morof
RE/MAX Showcase Homes
Birmingham, Michigan
www.NorthWoodwardHomes.com
info@NorthWoodwardHomes.com
Call:  248-514-2640

When buying Troy Michigan real estate in southeast Michigan, you may come across the option to set up an impound account.  If you don’t know what it is, you could end up passing on a good thing.

An impound account is also known as an escrow account.  The mortgage lender sets up a separate savings account to pay the taxes and insurance you owe on your Troy Michigan real estate.  Each month, you pay the lender 1/12 of the total amount due for the year, along with your regular principal and interest payment.  The total payment is known as your PITI – your principal, interest, taxes and insurance payment.

For instance, let’s say your property taxes are $2400 a year and your homeowner’s insurance is $600.  You would pay the lender $250 a month, instead of having to pay in one lump sum.

Impound accounts can be set up at the same time as your mortgage loan, but the initial sum will be larger than what you’ll pay on a monthly basis.  You’ll have to pay a few months and the insurance premium up front.  The overage amount is used as a reserve in the case of shortages; as much as eight months reserve could be required.

There are several reasons that a shortage can happen:

• Your property taxes increase and you need to make up the difference
• Your insurance policy coverage can change, raising the cost
• Your lender didn’t calculate the initial cost correctly

This means that you won’t have paid enough money into the impound account (or escrow account) and the bills on your Troy Michigan real estate won’t be paid in full.

Account shortages will happen, no matter how careful you are, so it’s best to know your options before that happens.  You can look for less expensive insurance, pay the difference in cash, or agree to pay the increased amount.  You can also get less insurance coverage, but it isn’t recommended.

You can also set up your own impound account, but you have to be disciplined enough to do so or hire an accountant. If your loan is 80% more than the value of your Troy Michigan real estate, the lender may not let you set up an account.  You also have to pay any shortages in one lump sum if your taxes go up at the end of the year.

Do you have any questions about buying Troy Michigan real estate?  No matter how big or small your questions are, I’d be happy to answer them for you.  Just drop me an email at info@NorthWoodwardHomes.com now or give me a call at 248-514-2640.

Lee Morof
RE/MAX Showcase Homes
Birmingham, Michigan
www.NorthWoodwardHomes.com
info@NorthWoodwardHomes.com
Call:  248-514-2640

You may have heard the term Private Mortgage Insurance (PMI) when looking to finance Southeast Michigan real estate.  What is PMI, and how do you know when you need to purchase it?  The answer can be hard to find among all the real estate jargon you’re hearing lately.  Here is the short version of what you need to know about it:

What Is Private Mortgage Insurance? (PMI) 
PMI is an extra insurance required by some lenders to offset their risk of you defaulting on your home loan.  When you put down less than 20 percent of the real estate’s value, your lender may tell you that you have to buy PMI.  It is usually added into your monthly mortgage payment until the equity in your Southeast Michigan real estate reaches 20 percent.

Under the current law, the PMI will be canceled automatically at 22 percent equity, if you are current on your payments.  If you aren’t current, the lender does not have to cancel the insurance because the loan is high-risk.  After getting caught up on your payments, the PMI will be cancelled.  Any money that you have overpaid must be refunded to you within 45 days.

What If Your Southeast Michigan Real Estate Increases In Value?
With a conventional loan, it may take as many as 15 years of a 30-year loan to pay down 20 percent.  But, if property values in your area rise, you might be able to cancel the PMI sooner.

Some lenders may be willing to consider the new value of your home to determine the equity in your home.  You may be responsible for any fees like an appraisal that may occur.  You’ll have to weigh the costs of the appraisal against the savings of the PMI premium.  In most cases, you’ll find that the added expense is worth it. 

Private mortgage insurance is a good thing if you can’t afford to pay 20 percent of the cost of your real estate as down payment.

Are you a first-time home buyer?  Now is a great time to buy Southeast Michigan real estate. Call me today at 248-514-2640 or email info@NorthWoodwardHomes.com to find out why.

Lee Morof
RE/MAX Showcase Homes
Birmingham, Michigan
www.NorthWoodwardHomes.com
info@NorthWoodwardHomes.com
Call:  248-514-2640

You may have heard of points when looking for Troy Michigan real estate.  Maybe your loan officer told you that you can trade points for a better interest rate.  That sounds good, but just what are points? Let me give you a better idea of just what points are and how they work.

What Are Points?
Points, more specifically discount points, are a percentage of the total loan amount for the house that is pre-paid to the lender.  Each point is worth one percent.  Your lender may offer a lower interest rate for your mortgage loan if you buy discount points.

What do Discount Points Cost?
The cost of each point is equal to one percent of the loan amount. For instance, for a $200,000 loan one discount point equals $2,000.

For example, you are trying to buy Troy Michigan real estate worth $200,000.  The lender may tell you that if you buy 2 points at $2,000 each, you’ll get an interest rate two percent better. 

Should I Buy Discount Points?
Some lenders will allow you to purchase discount points to be approved for the loan.  By buying a discount point, you’ll get a lower interest rate.  This can reduce your monthly payments, which could put your credit to debt ratio in the right range.
 
You have to know how long you’ll live in the house or you could lose money purchasing the discount points.  If you sell or refinance before you reach the break even point, you’ll wind up with a net loss.  Use an online mortgage point calculator to help you determine if buying discount points is a money saving proposition for you.

Points may be a good way for you to save money on your Troy Michigan real estate if you plan to stay in your home for a long time.  Want one more benefit?  Discount points are tax deductible in the year in which they’re paid.

Need help understanding mortgage and real estate terms?  Subscribe to my blog now.  You’ll get easy to understand information like this sent straight to your email a couple of times a week.  And it’s free!

Are you ready to sell your southeast Michigan real estate?  I’d like to show you my 30-Day Marketing Plan that sells 85% of homes listed with me.

If you’re a buyer there are lots of good deals on Troy Michigan real estate and interest rates are low.  Give me a call at 248-514-2640 or contact me now! 

Lee Morof
RE/MAX Showcase Homes
Birmingham, Michigan
www.NorthWoodwardHomes.com
info@NorthWoodwardHomes.com
Call:  248-514-2640

You’ve finally decided you want to buy a piece of Troy Michigan real estate.  What do you do now?  Here are a few tips to get the best deal for your money:

Check Out Your Credit
The first thing you’ll want to do is order a copy of your credit report from the three major credit bureaus:  Experian, TransUnion, and Equifax.  Look for inaccuracies in:

• Name
• Address
• Creditors
• Late Payments
• Delinquencies

After you’ve reviewed your credit report and know your credit score, you’re ready to make improvements to your report.  You can send a written “Notice of Correction” to the credit bureaus.  It can be up to 200 words.  If needed, you can explain why you fell behind on a particular debt, and every time a lender accesses the report, they’ll see your explanation.

It can take several months to for your credit score to go up.  However, it’s well worth the effort to get a better interest rate.  It can save you thousands when you’re ready to buy Troy Michigan real estate.

What’s Next?
Before you start looking at properties, it’s a good idea to get a pre-approval letter from a lender.  The lender will take into consideration your income and credit history.  Then they’ll determine what loan amount you can be approved for.

Most pre-approval letters list the maximum amount that you are approved for, not necessarily the amount you can afford.  Look carefully at your budget so that you don’t get too excited about the number and get into more house than you can afford.
 
A pre-approval letter will give you and your agent an idea of what houses to look at, and no time is wasted seeing properties that you can’t afford.  Prospective sellers may also give your bid more weight if you have a pre-approval letter.

Are you a first-time buyer?  You have just made a fabulous decision for your future.  There are tons of great buys in the Troy Michigan real estate market. I’m a real estate specialist in this community and would love to help you buy the home of your dreams.  Call me now at 248-514-2640 or drop me an email at info@NorthWoodwardHomes.com today!

Lee Morof
RE/MAX Showcase Homes
Birmingham, Michigan
www.NorthWoodwardHomes.com
info@NorthWoodwardHomes.com  
Call:  248-514-2640

You’ve decided to sell your Troy Michigan real estate but you want to sell it quickly and for top dollar.  Have you considered providing owner financing, also known as seller financing?

Why Isn’t The Buyer Getting Bank Financing?
Usually a buyer gets bank financing when buying a home.  If the buyer approaches you with a deal that involves you doing the financing, you should ask why!  Maybe the buyer can’t afford a big down payment, and can’t be approved for a loan without it.  Or, they may not be able to get financing at all, due to no credit or poor credit.

In that case, you’ll want to evaluate if you can afford to take the risk of owner financing.  Can you make the monthly mortgage payment in the event they default? If you determine that the deal isn’t too risky, you can finance the home yourself for a greater profit.  But, there are some instances when you won’t be able to owner finance your Troy Michigan real estate home.  

When Can’t I Owner Finance My Home?
You may not know that in order to finance your home yourself, you have to be able to pay off your current mortgage in full prior to making the sale.  If you can’t afford to make the full payment, you won’t be able to owner finance the property.

If you already own the house outright, you’ll be able to finance the property.  You may decide to owner finance part of the sale price at a higher interest rate.  This would be an ideal situation for a buyer who can qualify for a bank loan for most of the sale price, but is unable to be approved for a higher loan amount to get the rest.

After a year of making payments to the bank, the buyer may be able to finance the remaining amount, and then you’ll receive a lump sum for that amount. 

What Else Do I Need to Know?
There are a lot of things to take into consideration before deciding if owner financing is right for you.  Be sure to do your homework and understand there are benefits and risks when you owner finance. 

It is also wise to consult with a real estate lawyer and a professional real estate agent.  As a licensed real estate broker and lawyer, I’m uniquely qualified to help you make this important decision….and I’ll keep you from making a costly mistake.

Listing your Troy Michigan real estate for sale and offering owner financing can sound like a daunting task.  Let me help you determine if owner financing will benefit you.  Call me now at 248-514-2640 or send me an email at info@NorthWoodwardHomes.com right now!

Lee Morof
RE/MAX Showcase Homes
Birmingham, Michigan
www.NorthWoodwardHomes.com
info@NorthWoodwardHomes.com
Call:  248-514-2640