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Tom Gilliam

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Selling Your Novi House: a Tool Called PST!


If you see the letters “PST!” in connection with selling a house in Novi, don’t think it’s someone whispering to get your attention (that would be spelled “psst!”).

The selling-a-house kind of “PST” isn’t something whispered by a black marketeer to keep an off-the-books deal under wraps. There’s no need to speak in hushed tones about PST in polite conversation. When speaking about selling your Novi house, its meaning is right out there in the open. It may not be on the tip of every homeowner’s tongue as they prepare their home for sale, but its import is undeniable in formulating one of your listing’s most important ingredients: the asking price.

Before any Novi house can be put on the market, zeroing in on the dollar amount the ultimate buyer will be willing to pay is always a kind of high-stakes guessing game. This mysterious buyer could be anyone. He or she could appear at any time. Even so, picking an asking price that attracts the greatest number of possible ultimate buyers isn’t pure guesswork, nor is it some number that’s plucked out of the air. And it definitely isn’t a large number that’s chosen “just to see what happens.”

The most reliable way to arrive at an effective asking price is to do some serious investigation into the current Novi market by seeking what previous buyers have been willing to pay. That’s where PST! comes in.

This “PST” is an acronym for Proximity, Similarity, and Timeliness—the three main ingredients that measure the quality of Novi “comps”—the comparable sales figures that buyers, their agents, lenders, and sellers rely upon to develop asking and offering prices.

P—proximity: how physically close was the sale? Next door is best; in the neighborhood also good; 50 miles away, pretty worthless.

S—similarity: how do the layout and features compare with your house? With a slight adjustment, a 4 bedroom 3 ½ bath comp is useful for your own 4 bedroom 3 bath property. For a 1 bedroom condo, not useful. It’s important to account for level of finish, too. If a neighbor’s home sold for X dollars including its brand new $80,000 kitchen remodel, a similar house that’s straight out of the 80s shouldn’t expect the same.

T—timeliness: how recent was the sale? A March sale would be terrific right now; January 2015, not so terrific.

Researching and analyzing a good sampling of comps accomplishes more than just establishing the asking price. Being able to furnish a solid selection of comps convinces buyers that you are selling your house for a reasonable price. And lenders can use them to verify a property’s collateral value in today’s Novi marketplace.

When you are selling your Novi house, a good first move is to partner with an experienced local real estate agent. When you give me the nod, from the outset, you will be the beneficiary of the most comprehensive PST research available. That’s a solid place to start!

Three Reasons Why You Should Call Your Mortgage Lender In 2017




Instead Of Mostly Ignoring Your Mortgage This Year, Take An Active Role In Managing It. Give Your Mortgage Lender A Call!

We all fall into the same bad habit: Once we take

out our mortgage loan, we tend to forget about it—at least until it’s time to send in our payment each month.

But vow to take a different approach in 2017. Instead of mostly ignoring your mortgage this year, take an active role in managing it.

To do this, give your mortgage lender a call. You might be able to tweak your home loan so that you can save some serious dollars this year. Here are three big reasons to call your lender, and take control of your mortgage loan, this year:

It might be time to refinance: Mortgage interest rates have been low for a long time. And they continued to drop throughout the end of 2016. So maybe it’s time to talk with your mortgage lender about the possibility of refinancing your home loan.

Sure, a refinance isn’t free. But if you can drop your interest rate by a point or more, you’ll generally pay back your upfront investment quickly. If you plan on staying in your home for more than five years, the odds are good that refinancing your loan to one with a lower interest rate might make financial sense.

You’ll never know, though, unless you give your lender a call. Your lender will be able to run the numbers to determine if a refinance is the right move.

You might be able to eliminate a ton of interest by shortening your loan’s term: Maybe your interest rate is already low. You can still save money by refinancing your mortgage loan to one with a shorter term. Say you are paying off a 30-year fixed-rate mortgage today. By refinancing to a 15-year version of this loan, you can reduce the amount of interest you’ll pay over the life of your loan by tens of thousands of dollars.

Again, though, you should talk to your mortgage lender to determine whether the interest savings make the cost of refinancing worthwhile. A lot of this depends upon how long you plan to live in your home.

You might be able to pay off your mortgage early—but doing so might not make sense: Maybe you’re coming to the end of your mortgage loan’s lifespan. That’s good news. You might even be tempted to pay off your loan early just to get rid of the monthly payment.

But often, paying off a mortgage loan early isn’t the wisest of moves. Again, checking in with your mortgage lender might be in order.

Mortgage debt generally comes with lower interest rates than do other forms of debt, especially credit-card debt. If, then, you are paying off this kind of debt, it makes more sense to concentrate your money on reducing it than it does to pay off your mortgage loan early.



Existing-Home Sales Up in February; Inventory Rises from Prior Month


Existing-home sales rose 0.8 percent in February to a seasonally adjusted annual rate of 4.98 million, the National Association of Realtors reported (NAR) Thursday. Economists had expected the sales pace to climb to 5.01 million from Januarys originally reported 4.92 million. January sales were revised up to 4.94 million.

The median price of an existing single-family home rose to $173,600 in February as the median price in January was revised down to $170,600.

The inventory of homes for sale rose for the first time since last July, up 9.6 percent to 1,940,000. At the reported sales pace, that represents a 4.7-month supply of homes for sale, up from the 4.3-month supply reported for January.

The month-over-month increase in sales was the eighth in the last 12 months. February sales were 10.2 percent ahead of the pace one year ago.

The report on existing-home sales tracked NARs Pending Home Sales Index (PHSI) which fell in December to its lowest level since June. The PHSI, however, bounced back in January to its highest level since April 2010.

Weak prices continue to contribute to the reluctance of homeowners to list their homes. The median price of an existing single-family home averaged $176,500 over the last six months, down from $180,000 in the previous six months (which included the summer months, typically a stronger sales period). Listed inventory, according to theNAR, is 19.2 percent below a year ago, when there was a 6.4-month supply.

Used Home Vs New Construction in Oakland County Mi


Can a used house compete effectively against new construction in Oakland County Michigan?

In some boom markets like Oakland County Michigan, the well-orchestrated efforts of new-home developments can make selling a "used" home seem impossible. But you can direct your own award-winning performance, and truly compete in the home-selling business.

Also see My Selling Strategies Page

A successful builder designs homes and decorates models with specific "profile families" in mind. Every detail of a model home from the name of the style to the decor of each room is calculated to emotionally grab families who resemble the profiled family. "This is us!" the prospective buyers should say to themselves as they tour the home.

Then the builder arms a professional sales staff with a variety of easy mortgage plans, making possible an on-the-spot home sale.

New Isn't Everything

  • To compete with this professional plan, "used" home sellers need a professional plan of their own. Work with your agent to:
    Target prospective buyers.
  • Decide who would be a likely buyer for your home and make sure your home is appealing to most any buyer but especially to the "profile family." Of course, you'll welcome an offer from any prospective buyer.
    Apply elbow grease.
  • Make your home shine like new, inside and out.
  • Put best foot forward.
  • Ensure prospective buyers learn about your home's upgrades and unique features as well as the neighborhood amenities.
  • Research competition.
  • Research the competing new homes and the builder's incentives, and offer to assist the buyer with points or other closing costs, as needed.
  • Provide a warranty.
  • Buy a one-year major systems warranty.
  • Price realistically.
  • Price the home to sell.
  • Remember, mature resale neighborhoods and properties have their own unique appeal. New isn't everything. stage, and Set the get ready to yell, "Action

Oakland County Moving Tips


Getting ready to pack up and make your move to Oakland County Michigan? Before you pack the first box, you may want to review these valuable moving tips from United Van Lines:

  • Specify the exact date of the move and when it will be convenient for an agent from the moving company to visually survey the household and prepare an estimate.

  • Tour your home before the agent arrives, checking everywhere, inside and out, to determine what will be moved and what will be discarded. Show the agent what will be moved.

  • If you're doing the packing, start collecting suitable containers and packing materials. Setting packing goals and deadlines will help ensure all packing is complete by moving day.

  • If moving because of a job change, learn exactly which moving expenses will be paid by your company.

  • Drain fuel from the power mower and other machinery. Discard partly used containers of any substance that may leak. Remember to empty water from steam irons.

  • Obtain a written appraisal of antique items to verify their value.

  • Don't wax or oil wood furniture before moving, because some products may soften the wood, making it vulnerable to imprinting from furniture pads.

  • Unplug all electronic equipment such as television sets, home computers, stereos, etc., 24 hours in advance of a move so they will be at room temperature on moving day. Moving a TV set and other electronic equipment in which heat is still retained could cause internal damage.

  • Identify items of extraordinary value such as jewelry, money, art, antiques and collections. (The moving industry identifies items worth more than $100 per pound as having extraordinary value.) Consider moving high-value and irreplaceable items (photos, memento) yourself. If you decide to ship, tell the agent about such items before packing or moving day.

  • Discard or make other arrangements for items that cannot be loaded on the van, including hazardous materials that are flammable, corrosive or explosive, as well as perishables such as food, plants or living things that may die or spoil in transit.

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Appraisals vs Comparative Market Analysis Oakland County Metro Detoit


While its standard practice for real estate professionals in Oakland County to conduct a Comparative Market Analysis (CMA) to help price your home correctly for sale, you may also want to discuss with your agent the possibility of investing in an appraisal before you put your home on the market. I thought these tips from my Website might be helpful in case you plan on selling in the near or distant future.

In order to ensure that your transaction is completed in a timely fashion, consumers should do the following:

Make sure a qualified appraiser is hired (such as a designated SRA, SRPA or MAI member of the Appraisal Institute). The lowest priced appraiser does not necessarily equate with the most qualified.
Accompany the appraiser during the inspection of the property, if possible. The more active of a participant you are in the process, the more you will understand it and be able to catch any errors.
Request a copy of the appraisal report. Federal law requires that you receive a copy of the appraisal within 30 days.

Appeal the appraisal if appropriate. Market conditions do change, especially in these economic times. If you feel that new information may change the appraisal, be sure to contact them.
Have your agent ask the lender to order a second appraisal by a qualified and designated appraiser.
File legitimate complaints with appropriate state board or professional appraisal organizations.

Remember, one doesnt need to agree with the outcome of an appraisal. A home appraisal, no matter how scientific, still ends up being the opinion of the appraiser and, to some degree, a judgment call. However, the appraisal, when combined with your agents expertise on market conditions, will be a powerful way to determine the very best price for your home.

After years of decline, metro Detroit housing values making a comeback


Metro Detroits housing recovery gained steam last year, with rising home values reported in about two out of three communities, providing a boost to homeowners who have suffered years of declines.

The increases werent significant in most places and values across the region are still well below their peak in 2007 but the tax assessment data recently released signals a move in the right direction.

At the county level, housing values were nearly flat year-over-year, according to the 2013 assessing data, which is based on prices of homes sold between Oct. 1, 2011, and Sept. 30, 2012. Oakland County averaged an overall increase of less than 1%, while Wayne and Macomb fell by a little more than 1%.

That compares with steep drops in 2012 assessment data, when Oakland fell about 4%, and Wayne and Macomb fell by about 6% each.

In Woodhaven, values in this years assessments rose 8.2% the highest in the region. Among the other big winners: Washington Township, Northville and Bloomfield Hills.

Pontiac, Hazel Park, Center Line and Redford Township suffered the worst declines. Detroits values fell 11.5%, according to the new data.

Still, Wayne County officials are optimistic.

The rate of loss has slowed, said county assessor Philip Mastin. What we found in our studies going into 2013 was about half of the communities in Wayne County are flat or increasing. Last year, it was only four.

Its a supply and demand function, he said. Some of the biggest real estate owners, Fannie Mae and Freddie Mack, theyve held back their inventory so the prices will rise.

Paul and Emily Collins quickly sold their three-bedroom ranch in Woodhaven in September

We got full asking price, said Emily Collins, 27. It was five days before we accepted an offer. We were not prepared for that.

The couple is expecting a second child, and the sale happened so fast, they couldnt find a new place until January. They bought a house, almost twice as large, in neighboring Brownstown Township on a short sale.

The last six months is the best its been in the past five years, Ferrante said. We are definitely coming out of it, homes are definitely appreciating.

Still a challenge

Paul Tait, executive director of the Southeast Michigan Council of Governments, predicts it will still take years to get back to 2007 levels. And even then, the money will be worth less than it was at the peak, he said.

Regionally, were down just under a third, about 32%, Tait said, referring to the 2007 peak. While everyone is appropriately happy that values are rising again, for local governments, its still a challenge.

Tait said two amendments to the state constitution the Headlee Amendment and Proposal A limit the growth of revenue to local governments to the rate of inflation or 5%, whichever is less.

That means less money for things like police and fire protection and roads.

Pontiac suffered the regions greatest loss, falling 17.8%, which means less in property taxes to fund city operations.

Weve planned on it, but its difficult because Im cutting right and left, everything, said emergency financial manager Louis Schimmel. About five years ago, we used to spend in this city about $57 million a year. Today, Im spending $36 million.

The numbers are uneven across the region but still better in most communities than the year before.

In 2012, just 21 communities reported higher values, while 97 communities saw values drop. This year, 75 communities were up and 43 were down.

Woodhaven Mayor Pat Odette credits his citys 8.2% improvement in values to parks, the addition of sidewalks throughout the city to make it more pedestrian-friendly and a zero-tolerance approach toward blight of bank-owned homes.

Were booming, she said. We havent had to dip into our reserves.

Still a challenge

Paul Tait, executive director of the Southeast Michigan Council of Governments, predicts it will still take years to get back to 2007 levels. And even then, the money will be worth less than it was at the peak, he said.

Regionally, were down just under a third, about 32%, Tait said, referring to the 2007 peak. While everyone is appropriately happy that values are rising again, for local governments, its still a challenge.

Tait said two amendments to the state constitution the Headlee Amendment and Proposal A limit the growth of revenue to local governments to the rate of inflation or 5%, whichever is less.

That means less money for things like police and fire protection and roads.

Pontiac suffered the regions greatest loss, falling 17.8%, which means less in property taxes to fund city operations.

Weve planned on it, but its difficult because Im cutting right and left, everything, said emergency financial manager Louis Schimmel. About five years ago, we used to spend in this city about $57 million a year. Today, Im spending $36 million.



Foreclosures Down to 69,000 in March, Inventory Also Down


Year-over-year, the number of completed foreclosures decreased about 19 percent to 69,000 in March 2012 compared to 85,000 in March 2011, according to CoreLogics National Foreclosure Report for March. Month-over-month, with the number of completed foreclosures in February 2012 at 66,000, foreclosures increased about 4.5 percent.

On a quarterly basis, foreclosures decreased to 198,000 in the first quarter of 2012 compared to 232,000 through the same quarter a year ago.

Overall, since the start of the financial crisis in September 2008, there have been approximately 3.5 million completed foreclosures.

In addition to the yearly and quarterly decreases in completed foreclosures, the number of loans in the foreclosure inventory decreased by nearly 6 percent, or 100,000, in March 2012 compared to the year before.

Since the foreclosure inventory is also coming down, this suggests that loan modifications, short sales, deeds-in-lieu are increasingly being used as an alternative to foreclosures to clear distressed assets in our communities. This is what was envisioned with the recent National Foreclosure Settlement, and can often be a better outcome for both borrowers and investors, said Anand Nallathambi, CEO of CoreLogic.

Out of all homes with a mortgage, approximately 1.4 million homes, or 3.4 percent were in the national foreclosure inventory as of March 2012 compared to 1.5 million, or 3.5 percent, the same month a year ago, and 1.4 million, or 3.4 percent, in the prior month of February.

Delinquencies are also down, with the share of borrowers nationally that were more than 90 days late on their mortgage payment, including homes in foreclosure and real estate owned (REO) assets, dropping to 7 percent in March 2012 from 7.5 percent a year ago, and remained unchanged compared to the prior month.

The overall delinquency level was unchanged in March, remaining at its lowest point since July 2009, said Mark Fleming, CoreLogics chief economist.

The distressed clearing ratio for March was up at 0.81 compared to 0.76 in February 2012. A higher ratio indicates a faster pace of REO sales relative to the pace of completed foreclosures.

As for individual states, strides were more notably made with non-judicial states.

Non-judicial foreclosure markets like Nevada, Arizona, and California are experiencing significant improvements in their shares of delinquent borrowers. Some judicial foreclosure states are also improving, like Florida, but not to the extent of non-judicial markets, said Fleming.

Year-over-year, the percentage of 90-plus delinquencies in Nevada decreased 3.7, while in Arizona the drop was 3.2 percent and in California 2.2 percent. Judicial state Florida saw a 1 percent decrease in its percentage of delinquent borrowers.

Highest % of Foreclosure Inventory

  1. Florida (12.1 percent)
  2. New Jersey (6.6 percent)
  3. Illinois (5.4 percent)
  4. Nevada (4.9 percent)
  5. New York (4.9 percent)

Lowest % of Foreclosure Inventory

  1. Wyoming (0.7 percent)
  2. Alaska (0.8 percent)
  3. North Dakota (0.8 percent)
  4. Nebraska (1.1 percent)
  5. South Dakota (1.4 percent)

Five States with the Most Foreclosures
(Over 12 months ending in March 2012)

  1. California (150,000)
  2. Florida (92,000)
  3. Michigan (62,000)
  4. Arizona (58,000)
  5. Texas (57,000)

The five states account for 49.1 percent of all completed foreclosures nationally.

CoreLogic is a provider of consumer, financial and property information, analytics and services to business and government.

Spring Outlook: Reports From the Field Suggest Better Days Ahead


Despite the fact that key market indicators released in recent weeks have shown declines in home sales, anecdotal reports from real estate agents in the field suggest better days are ahead for the industry, according to commentary released Monday by the economic team at Wells Fargo Securities, LLC.

Even builders whove endured possibly the steepest drop-off in business over this downturn are optimistic heading into the spring, the economists note.

As a result, Wells economic team has nudged its forecast for home sales slightly higher, as the spring selling season appears to have gotten off to a strong start. They are now expecting sales of existing homes to top out at 4.50 million in 2012 and rise to 4.65 million in 2013. These annual projections compare to 4.26 million existing homes sold in 2011.

While employment conditions have clearly improved and consumer confidence and spending have risen, we remain concerned about the lack of real after-tax income growth.

That said, the anecdotal evidence is hard to dismiss, the economists write.

Most real estate agents are reporting significant gains in buyer interest and sales, and these gains are organic rather than incentive induced, according to the Wells Fargo economic team.

Unfortunately, they note that conservative appraisals and tight mortgage underwriting continue to undermine a large number of deals, however, they suspect that the undertow from these two hindrances will subside over the course of this year, as the fog surrounding shadow inventories lightens up a bit and more lenders come back to the market.

Unseasonably warm weather led to upticks in existing-home sales in December and January. Those gains were paid back with a 0.9 percent decline in February, but the economic group at Wells says the underlying trend remains positive and they expect to see further improvements as the spring homebuying season kicks off.

Distressed transactions still make up a considerable portion of overall sales activity and will continue to pressure prices through at least the first half of 2012, they note in the report. Real home prices are now back down to 1999 levels, as are price-to-rent ratios, according to the economists.

We expect home prices to definitively bottom by the middle of this year, as the backlog of foreclosures finally begins [to] clear, writes Wells Fargos economic team. For properties not in foreclosure, prices have probably already bottomed, but should remain relatively low given the competition from foreclosures.

Foreclosure Activity for Judicial vs. Non-Judicial States Flip-Flopped


Depending on whether the data was based on a judicial or non-judicial state, foreclosure activity told different stories in RealtyTracs Foreclosure Market Report released today for February 2012.

When clumping states together based on foreclosure processes, February foreclosure activity in the 26 judicial states increased 24 percent from February 2011 and 2 percent from the previous month of January. For the 24 non-judicial states, the numbers moved in near opposite directions, with foreclosure activity decreased to 23 percent from February 2011 and down 5 percent from January, according to a RealtyTrac release.

Overall, foreclosure filings default notices, scheduled auctions, and bank repossessions were reported on 206,900 properties in February, down 2 percent from the previous month and 8 percent a year ago from February 2012, which is the lowest decrease since October 2010, according to RealtyTrac.

The foreclosure and mortgage settlement filed in court earlier this week will help pave the way to a properly functioning foreclosure process by providing a clear roadmap for necessary foreclosures, said Brandon Moore, CEO of RealtyTrac. That should result in more states posting annual increases in the coming months. Not surprisingly, many of the biggest annual increases in February were in states with the more bureaucratic judicial foreclosure process, which resulted in a larger backlog of foreclosures built up over the last 18 months in those states.

For metro areas, 10 of the nations largest 20 reported year-over-year increases in foreclosure activity in February, with Florida cities Tampa (+64 percent) and Miami (+53 percent) posting the highest increases.

Most of the metro areas with decreases were in the West, led by Seattle (-59 percent) and Phoenix (-43 percent), which

corresponds to a recent ForeclosureRadar report showing decreases in foreclosure filings in February for most West coast states.

The metro areas with the highest foreclosure rates were Riverside-San Bernardino in California (one in 166 housing units), Atlanta (one in 244), Phoenix (one in 259), Miami (one in 264) and Chicago (one in 302).

The metro areas with the highest number of foreclosure filings in February 2012 were Los Angeles (12,731), Chicago (12,587), Miami (9,333), Riverside-San Bernardino (9,057), and Atlanta (8,859).

While Nevada and California reached new lows in foreclosure activity and saw decreases in February, the two states still had the highest foreclosure rates despite signs of improvement. One in every 278 Nevada housing units had a foreclosure filing during the month, which is twice the national average, and one in every 283 housing units had a foreclosure filing in California.

With one in every 312 Arizona housing units with a foreclosure filing during the month, the state stood at number three.

Default notices were filed on 58,886 U.S. properties in February, up 1 percent from the previous month but still down 7 percent a year ago. Foreclosure auctions were scheduled on 84,180 homes down 2 percent from January and down 13 percent. REO properties totaled 63,834, a 4 percent decrease from January and down 1 percent from February 2011.

States with the greatest increase on a year-over-year basis for default notices were Hawaii (321 percent increase), Maryland (+157 percent), Connecticut (+64 percent), South Carolina (+58 percent), and Indiana (+37 percent).

Default notices were down on a year-over-year basis in several states including Nevada (-89 percent), Michigan (-72 percent), New York (-44 percent), Iowa (-28 percent), and Kentucky (-25 percent).

For Nevada, the major decrease in default notices has been credited to recent state legislation requiring lenders to file an extra affidavit before initiating the foreclosure process.
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