Buy that sinking house before it totally submerges into the foreclosure process! That’s our advice to home buyers looking for homes in Canton and Plymouth, Michigan.

Home buyers usually ask us to search specifically for foreclosed houses thinking this is where the best bargains are.

Savvy buyers look for houses that are in danger of foreclosure but have not gone into that process yet

Understanding the stages of the foreclosure process can help you gauge when to buy. Once foreclosed, the price you may get on a house may not be the best. The reasons are varied but usually have to do with rules and regulations concerning each stage of the foreclosure process.

You can find great deals on homes at any stage in the foreclosure process – preforeclosure, the foreclosure auction, or post-auction (from banks and investors) – but it’s often a case of the early bird getting the juiciest worm. By purchasing the property directly from the homeowner in preforeclosure, you reap several benefits, including the following:

•           A lower price, because you’re not competing against other investors in open bidding.

•           An opportunity to inspect the home, because you can make your offer conditional upon the home passing inspection. (When you buy at auction, the homeowners may not let you inside prior to the auction to inspect the home.)

•           Assurance that you are buying the home and not just a mortgage. When you bid at a foreclosure auction, you are buying a mortgage, not a home. If you bid on a second mortgage by mistake and do not also buy the first mortgage, you could lose your stake in the home and any money you paid for that mortgage. Buying directly from the homeowner assures you that you are buying the home.

•           Security that you won’t lose the home in redemption. In Michigan homeowners have the right to redeem their home (buy it back) after the sale. You could lose it to the homeowners or to another investor (working with the homeowners) even if you win the auction. If the homeowners sell to you, they have no right to redeem.

You can find homes in preforeclosure by reading the foreclosure notices every week they are published. By law, foreclosure notices must be published for a number of consecutive weeks prior to the sale in a local newspaper or county legal news publication. Check with your county’s register of deeds to find out in which publication(s) the foreclosure notices appear, and then subscribe to at least one of those publications.

To reduce the competition even more, you may want to consider learning about preforeclosures even earlier in the process – before the foreclosure notice or notice of default is published and becomes public knowledge. To obtain early notice, try the following techniques:

•           Network with attorneys who work with distressed homeowners in bankruptcy, foreclosure, divorce, and probate. These attorneys often have to help their clients liquidate assets.

•           Network with other real estate and mortgage professionals.

•           Tell everyone you know that you are an investor who purchases homes for cash. Better yet, create your own business card and give it to everyone you meet. People will know they can turn to you if they ever need to sell in a hurry.

•           Treat distressed homeowners with compassion and a sense of fairness and do a good job rehabbing the home. By treating people right and doing good work, you earn a reputation that speaks well of you. People who need to sell their home in a hurry will come to you rather than another investor who has a less stellar reputation.

•           Advertise that you buy houses for cash. You can post an ad in the local newspaper and hang fliers and signs around town (assuming this is acceptable in the area where you want to buy homes). Before you advertise, however, make sure you have the financing and resources in place to handle several properties at once.

Remember to choose your investments wisely. You won’t get every house you see, nor should you want every house you see. You can afford to be picky and patient – wait for the right opportunity to come your way. And do your homework to make sure it is the right opportunity for you.

For more information ask Ralph R. Roberts, GRI, CRS. An experienced real estate investor and consultant and the author of Foreclosure Investing For Dummies (John Wiley & Sons).

Because of our marketing and longevity in the Detroit western suburbs many homeowners contact us us for advice when they reach the early stages of foreclosure. Our goal is to help people faced with foreclosure by strategizing how to get their home sold with as little damage to their finances as possible. This usually requires a short sale or some other avenue that involves bank refinance or work out. We maintain a database of these houses and with seller permission we have sold several homes before they even reached the market. If you are interested in obtaining a list of these homes call us at 734-459-2600 and ask for the "PreForeclosed Hot List".

Several of our clients have asked why not. Manufacturers and retailers often offer cash back deals or rebates as further enticements to purchase anything from computers to automobiles. In recent years, such cash back deals are growing in popularity in the real estate market. Unfortunately, when applied to real estate, these cash back deals are illegal.

Illegal???!!!

Yes, illegal.

Many homeowners, home buyers, real estate professionals, and even attorneys who should know better will tell you that getting cash back when you purchase real estate is legal and perfectly acceptable. People do it all the time. It’s a great deal for everyone involved. The buyer simply pays a little more for the property, and the seller agrees to kick back the surplus cash to the buyer. The buyer gets some cash to pay off outstanding credit card debt, cover home repairs and renovations, or whatever. The seller unloads the house at close to or better than the asking price. The real estate agent gets a bigger commission. The mortgage broker earns a commission on the loan. And the lender scores a larger loan and stands to earn more interest over the life of the loan.

These cash back deals also inflate house prices, property taxes (which are based on property values), and insurance, making homes less affordable. Over time, they increase foreclosure rates resulting in deflated property values. As homeowners leave, neighborhoods

If you are selling your home, refuse to go along with any deal in which the buyer is receiving cash back at closing. If you’re having trouble selling your home, you may need to hire a professional stager to make your home look more inviting, hire a top-producing agent to market your property more effectively, or drop your asking price. Going along with a cash-back arrangement is no way to attract a buyer.

If you are buying a home and stand to receive cash back in any way, shape, or form, put a stop to the transaction immediately. Many sellers will try to cover their tracks by offering cash back in other forms, such as lease back payments (for investment properties), paying you for an option to buy the property back (when they have no intention of ever buying the property back), cash for repairs and renovations, or even free furniture or a car or a vacation package.

We stopped everything and bolted to the groomer while calling our Veterinarian, Dr. Mark Alsager’s Animal Care Center, for advice.

When we got there poor little Daphne was having severe seizures and just barely responded to anything. Noel immediately took her onto her arms and we rushed her to the vets’ clinic.

 Both Niles and Daphne had had their issues lately. Niles protracted an immune deficiency disease about 2 years ago and had been almost totally crippled at one point. After many visits to the specialists at Oakland Veterinary Clinic, exploratory surgery, and dozens of drug treatments we still can’t figure out what exactly is going on with him but he seems to be getting around okay.

 Last year we took them in for a teeth cleaning and Dr. Alsager informed us that he could not treat Daphne because they discovered her liver enzyme levels were extremely high. 

Treatments began immediately to bring her levels down but to no avail. So it was off to the specialist at Oakland Clinic again but this time for Daphne. Now we had two little sick dogs on our hands but Daphne never showed any outward signs of illness. She remained spunky as ever. We were almost in disbelief that there was anything wrong with her. But, each examination brought disappointing results however and no matter what we tried, her liver levels stayed stubbornly at their dangerously high levels.

Dr. Alsager prepared the serum and Noel just lost control.  I am a bit less emotional but I could not hold back the dreadful feeling knowing this was the end. We said our final goodbyes to Daphne as the serum was administered. She seemed to just stare at us as if to say goodbye and thanks for everything you have done for me.

It took less than a minute and our little baby was gone.  Our Daphne left us while we held her little head and stroked her face. The sinking feeling I had was incredibly severe. I have had many pets before but Daphne held a special place in my heart that I feel can never be filled. Noel never had a pet before.  Noel was out of control the rest of the night.  The next day was terrible not having Daphne around running from window to window and barking at everything in sight.  Noel went for a very tearful run the next morning. She totally broke down crying like a baby as she approached the front porch knowing her little baby would not be there to greet her at the door.  During Noel’s post-run stretches Daphne would lick the sweat off her face so very happy to see her Mama come home.  Noel said she ran extra hard that morning as if to compensate for any suffering that she felt Daphne went through.  Noel always told Daphne that she was the little girl she never had. There are so many "firsts" without her and so many reminders of her everywhere.  How do you make the pain go away?  

Thank you, Dr Alsager and staff for all that you have done for her and the precious paw print memento you made for us.  Noel keeps it on her night stand and kisses every night.

Getting the highest price for the sale of your home is usually a seller’s primary objective. But even if you sell the house at a high price, it still has to appraise or it will never make it to closing.

Our experience in home sales in the Detroit, Michigan suburbs is that sellers, with the help of their agents, usually price a property too high. This results in a lower appraisal and an unsold house after weeks or even months of being off the market.

This blog provides the first in a series of house pricing clinics that you can use to objectively set the correct asking price for your home that will net you the most dollars after all is said and done at the closing table.

Low appraisals are becoming more common in our correcting market, and it’s adding to the frustration levels of sellers, agents and even the appraisers. However, there are steps that sellers and agents can take to possibly improve the appraisal. In the cases where they cannot, they can at least minimize the disruption a low appraisal can cause.

The first step in avoiding a low appraisal is setting the price right the first time and getting a sale at a price that will appraise at current market conditions. Click here for advice on how to set the price right. 

Secondly, in our market where the price is decreasing, you’ll want to get the house sold as quickly as possible. Staging the house is crucial to getting it sold quickly at the right price. We often tell our clients who we represent in the sale of their home "We are in a price war and a beauty contest". Not only does the house have to be priced right, it also has to look great. Our home staging checklist will help in taking you through the things that must be done before putting your house on the market.

If you set the price right and made the house look like a gem, chances are you will get a sale in a reasonable time period. Once that happens it is crucial to get an appraisal fast. We work diligently with the selling agent and bank to get the appraisal fast. Every day the house is off the market is a loss to the seller if the appraisal comes in low. We want to know about appraisal issues right away so we can get the house back on the market if the issue is unresolvable. An added benefit is that often there were other buyers for the house that may still be in the market to buy. We want to resurrect them if possible

A low appraisal does not have to kill the deal. Remedies include getting a second appraisal, renegotiation of the price, or the buyer can increase the down payment to cover the shortage. Regardless, the marathon process of selling requires stamina. Therefore, when you run the race in the conditions we face, run it once. If you have to start over because of a low appraisal, the sooner off the starting line you find out, the better.

If you are ready to put your house on the market call us and ask for a detailed Marketing Market Analysis (MMA). Most agents will provide a Comparative Market Analysis (CMA) which prices the house based on recent sales. Our MMA prices the house using recent sales and our Marketing systems to help you obtain the best price based on today’s market. Setting that initial price is the first step to getting the best price.

Subscribe to this site and watch for more blogs on pricing your house in today’s challenging market.

First, realize that you have the power to make the calls and letters stop. According to the Federal Trade Commission’s Fair Debt Collection Practices Act, you can stop the harassing phone calls and letters by writing a letter to the debt collection agency asking them to stop. Once they receive the letter, they can contact you only once more to notify you that they will no longer contact you and to inform you of any actions they intend to take to collect the debt. This puts a stop only to the phone calls and letters – it doesn’t erase the debt.

Another way to put an end to the calls and letters, at least temporarily, is to file for bankruptcy. This is not to say you should file for bankruptcy, but if you have a lot of unsecured debt (such as credit card debt as opposed to a mortgage, which is secured by your home), filing for bankruptcy could be the best option. Upon filing for bankruptcy, the courts declare an automatic stay. This means that your creditors can no longer contact you regarding your debt. If they do call you, simply tell them that you filed for bankruptcy. They then have to work through the courts to collect their debt, rather than collecting directly from you.

Knowing that you have the power to make the phone calls and letters stop can give you some breathing room, but often the best option is to simply come clean with your creditors and find out from them what your options are. The longer you wait, the less time you have to negotiate a reasonable solution and payment plan.

When discussing your options with the bank’s representative, remain calm, rational, and respectful, but firm. Advocate for yourself without becoming abusive. Otherwise, the person you’re dealing with may choose not to cooperate with you. Keep detailed notes of who you talked to, when, and what was said, so you can refer back to these notes if needed.

Ralph R. Roberts, GRI, CRS and his team of foreclosure experts regularly assist families facing foreclosure and have authored Foreclosure Self-Defense For Dummies (John Wiley & Sons).

During the last few years Noel and I have helped dozens of families through their foreclosure woes. Additionally we have closed over 50 short sale transactions. To successfully close these kind of transactions we have had to develop an expertise in dealing with banks and lending institutions.

If you are having foreclosure problems call us for free advice on how to handle your communications.

Thumbs up for all the positive things about home sales in Detroit, Michigan suburbs that are not getting reported by the media!

It is true that home sales are at an all time low here in Canton, Plymouth, Northville, Livonia and pretty much all of southeastern Michigan.  The media remind us of foreclosures, short sales, and the slowdown in home sales in general almost daily. The mantra is mind numbing, especially if you are a home buyer, seller, or in the real estate sales profession like Noel and I are.

I have always been taught to look on the positive side though and thought I would outline some of the reasons for optimism concerning the present state of affairs in the real estate market. I gathered these statistics concerning home sales in America. Remember these are for the country as a whole but we can expect to see similar results in our market. Also remember our home sale slowdown occurred a year or two prior to the rest of the country. This was due to the slowdown of the Michigan economy that the country did not experience. In fact the slowdown of home sales in the rest of the country is due mainly to the price bubble that occurred due to speculation and easy money as opposed to job losses for example.

The Reasons for Optimism:

The following list describes the most basic qualifications you need to get started:

Although many people who flip houses fly solo, you do not have to take that approach. In fact, you can often flip more homes and do a better job of it by building a team, complete with an agent, home inspector, mortgage broker, attorney, and handyman/contractor. This approach is particularly beneficial for those who are just learning the ropes.

The real estate and mortgage fraud cases that dominate the headlines usually have to do with fraud for profit. A ringleader conspires with industry insiders – usually a real estate agent, appraiser, and loan officer – to obtain mortgage loans they have no intention of ever repaying.

Another form of mortgage fraud is also common – fraud for housing. According to an FBI source, "Fraud for housing represents illegal actions perpetrated solely by the borrower. The simple motive behind this fraud is to acquire and maintain ownership of a house under false pretenses. This type of fraud is typified by a borrower who makes misrepresentations regarding his income or employment history to qualify for a loan."

Some people argue that fraud for housing is a victimless crime. After all, the person applying for the mortgage loan really wants to keep the house and has every intention of making the monthly payments and paying off the debt. However, that’s beside the point. The real issue is that when people commit fraud for housing, they mislead the lender into approving a loan that is riskier than the lender would otherwise consider. It contributes to increases in foreclosures and the cost of mortgages to all consumers.

 Ralph R. Roberts, GRI, CRS is a real estate and mortgage fraud forensics expert and author of Protect Yourself from Real Estate and Mortgage Fraud: Preserving the American Dream of Homeownership (Kaplan Publishing).

To alleviate the loss in tax revenue the Michigan Transfer Tax Act was amended to increase substantially the tax levied when a homeowner sells their property.

With property values and corresponding SEV declining due to the struggling economy, many home owners and real estate agents took notice of the exemption’s possible applicability under the state transfer tax. However, absent an official interpretation, there was little awareness of its proper application.

As an example of how the exemption works let’s say you bought a house in 2007 for $220,000. You have lived in it as your primary residence and you registered the home with your city as a homestead property. You sold the property in 2008 for $180,000. Unfortunately, a typical situation in today’s market.

The SEV when you bought was $110,000 (half of purchase price) and let’s say your current SEV is $95,000. This scenario would satisfy the first two criteria above.

The true cash value in 2008 is 2 times the SEV or $190,000. Since the sale price is less than the true cash value the third criteria above has been met and you would be eligible for the tax exemption.

The Attorney General’s opinion provides immediate relief to home sellers already faced with the reality of declining value on their single greatest asset. The opinion also provides a uniform reading of the exemption that is necessary to provide consistent application among the various Registers of Deeds across the state as they are already receiving filings for the exemption.

Sellers should be cautioned that a request for the exemption that fails to meet all three criteria could bring a penalty equal to 20% of the tax assessed in addition to the tax due. Additionally, no similar exemption exists in the County Real Estate Transfer Tax Act.

email us at team@bittinger.com for more information. To apply for the exemption you must submit Michigan Department of Treasury form 2796.

Did you sell recently? Is your house up for sale now or are you about to put it on the market. This knowledge will help you save a bundle as our sellers are experiencing. Leave a comment below for more ways to save money in your next real estate transaction.