Detroit Real Estate

Many people go back and for whether they should do a short sale or not.  You have to decide when it makes sense for you to do a short sale.  Is it worth the trouble if the bank isn't cooperating?  Is the bank being stubborn on the price?  Is the second mortgage company being hard nosed?  Is the bank requiring you to sign a deficiency?

Let me explain this a little bit.  When you sell your Metro Detroit home via a short sale there is two ways for the bank to go.  They can forgive the deficiency, and give you a letter releasing you from any liability from the deficiency.  Or they can refuse to give you a letter.

If the bank refuses to release you from the liability, then you are possibly responsible for the deficiency.  Then it may be smart NOT TO DO A SHORT SALE.  Now this is just my opinion.  Why would you go through the whole hassle of doing a short sale if the bank can come back after you for the deficiency?  The only reason I can see is if you can keep your credit in tack and the bank won't report the short sale on your credit report.

From what I have been told is if you can get through a short sale without getting behind on your mortgage payments it is a good thing.  It is better for you and your credit report than if you had 90 day lates or a foreclosure on your credit report.  But nobody knows for sure how badly a short sale will affect your credit report.  It depends on whether you have late mortgage payments or not.

But my opinion is that if you are going to be responsible for the deficiency it is better off to let the home go into foreclosure.  Then you are through with the home.... very seldom do banks go after people that have lost their home in foreclosure.

Now let me say this.  You need to seek legal advice from a real estate attorney before you make these choices.  You should also talk to your CPA or the person that does your taxes.  You need to know all three of these aspects:

1. Your possible legal liability
2. Your future financial liability / ability to get back on the right financial path
3. What this will do to credit / can you survive with bad credit for three to seven years? 

Don't rely on my opinion.  Get professional advice from those who specialize in those fields.  They are better to guide you on what to do.  But it is your decision alone.  Choose carefully.

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Feel free to contact me if you make a decision to sell your home as a short sale.  I will be glad to help you get it sold.

                       Russ Ravary

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My quote of the day is:

Whenever you make a mistake or get knocked down by life, don't look back at it too long. Mistakes are life's way of teaching you. Your capacity for occasional blunders is inseparable from your capacity to reach your goals. No one wins them all, and your failures, when they happen, are just part of your growth. Shake off your blunders. How will you know your limits without an occasional failure? Never quit. Your turn will come. 

                                                                     Og Mandino 

Home negotiation - How to bid and win a home here in Metro Detroit suburbs.  My first piece of advice I tell most Metro Detroit home buyer that is looking at homes don't do extreme low ball bids, and expect to win the home.  Doing low ball bids is just going to create frustration, and then you are going to blame somebody for not winning the home.

I had one guy that was bidding $50,000 - $70,000 below homes that were listed at $150,000 - $170,000.  He never won one and no matter what I said he would do it again.  I finally let he go and find another agent.  He still has not one a home after 2 other agents and a year and a half of bidding.  He still doesn't get it.  He is just wasting his time.  He will never get a home doing low ball bids unless the market goes back to being a slow market.  Bidding on a home in this Southeastern Michigan real estate market is not easy.   

It is no longer a buyers market in the better cities in the suburbs. By that I mean Plymouth, Royal Oak, West Bloomfield, Birmingham, Northville homes aren't being given away.  If the house is a decent house there will most likely be multiple buyers looking at it and very possibly multiple offers.  About 40 -50% of the "good" foreclosures are going over list price. 

Yes there are a lot of low price mediocre homes in the less desirable cities.    So you and your real estate agent should know what is happening in the city you are looking in.  One way to find that out is look at the last 90 days of sold homes.  If you are buying a foreclosure then look at how the foreclosures have sold.  But also look at the regular home sales.  Especially if the foreclosed home is in great shape. 

What you should do is:

• look is at the recent sold homes in the area.
• take into account what you can afford to pay and stay within your budget (remember the taxes)
• bid according to how bad you want it
• if you love it and have to have it.... bid high....put your best foot forward
• if the home is just one of the many you like and you want a deal then put in a lower bid (not outrageously low) 
• if the house is the best you have seen then bid for it that way....don't be cheap (other people know how nice it is too.)

Making a good bid based on market conditions, the home's condition, and how much you like the home is the key to your success.  If you put your best foot forward.  By putting your best foot forward I mean what you can financially afford and at the same time what you won't feel bad if you lost the home.    So if you can afford to pay $200,000 and you bid $190,000 and you love the house and lose it.  Then regret it I don't think you put your best foot forward.  No regrets is what you want.  If it's the best house you have seen, then bid to win.

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Feel Free to call or email me with any questions.

 What problem, we have no problem, just a situation that needs to be resolved.  Yes We have no problems............... no reason to get upset, no reason to yet to get worried or upset.  We only have to search for a solution to find for the situation we are in.  In Metro Detroit real estate there are always situations, and issues that come up that need some sort of solution.

There are issues caused by bank guidelines, by asset managers attitudes, and time lines imposed by the bank.  Sometimes things get delayed.  Sometimes items that are supposed to get done, don't.  Then we have to scramble to get them done.

There are appraisal issues where the house does not appraise.  There are only a few solutions to this problem.  Either the seller lowers the sale price, or the buyer brings more money to closing, or we have to find a buyer that can pay cash, or the house doesn't get sold.

There are inspection issues.  We as real estate agents have to reduce the costs of repairs to help the sellers bottom line.  We have to make the buyer happy, we need get the repairs done to make the buyer happy.  Many times it is a give or take between the buyer and seller.

There are money issues that sometimes pop up when the mortgage person doesn't communicate the costs completely to the buyer.

There sometimes are title issues caused by probate, trusts.

We as real estate agents have to think outside of the box to get the issues resolved.  You see there aren't problems.  Only a solution that we have to find to fix the issues.  So don't get worried....we have the resources, the help from agents to find the solution to get the deal closed.  That's what we get paid for....to smooth out the bumps for you!!! 

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I got an email about buying a Redford home, bankruptcy, and bad credit.  Here is what the email said. 

I don't know what to do, I'm at my wit's end.  I have to have one of the lowest credit scores possible that it is under 500.  I can afford most of the Redford homes that I have looked at.  Most will cost me $300.00 less than the rent that I am currently paying ($800.00 a month) including property taxes.  But my credit is so bad is that I can't get out of the hole, what can I do other than file bankruptcy?  And how will filing bankruptcy affect my chances of getting into one of the homes I like.

 My answer is to this poor guy is:

If you are looking to buy  a Redford home this year you are out of luck, there is no quick fix so you can buy a house.  Sure a credit repair company "MAY" be able get you into a Redford home in six months, but you will be doomed to fail.  Simply because you haven't gotten into the habit of making your payments on time.  I would bet a hundred dollars that you would lose the house in the future.

My suggestion is to take it slow and do it right.  Get into a routine of making your payments on time.  The key in your situation is to file bankruptcy and start over.  But be sure to consult with a bankruptcy lawyer, don't rely on my advice.  You should seek legal advice and make your decision based on their advice.  You have to make a clean start otherwise you will always be in this predicament.  After you file bankruptcy you need to start establishing new credit slowly.  Get one secured credit card and use it to buy gas or groceries.  Pay it off in full each month.

I hate to say it but having a good credit score boils down to making your payments on time.  A good credit score is good credit history.

Now this will take time, but it is the only way.  There is no quick fix to bad credit.  You have to earn it.  You can get a FHA loan 2 years after a bankruptcy.  But you need at least 3 credit lines open for a year with most lenders in this current market.

So don't get upset and feel bad that you can't get credit now.  That you can't buy a home now isn't a bad thing because if you did I would bet you would be in foreclosure within two years.  So start putting your financial building blocks back together.  Bankruptcy first, open a secured credit line, pay your payments in full on time, open a second line after 6 months, don't let anything go over 30 days late.

It's not hard once you put your mind to making your payments on time.  No excuses if you want a home.  So I ask you how bad do you want that Redford home?

My quote of the day is:

For time and the world do not stand still. Change is the law of life. And those who look only to the past or the present are certain to miss the future.

                                                                                            John F Kennedy 

Marianne is still fighting cancer.  It has taken over so many of her functions.  As I sit by my wife's bedside I wish to share something I watched her do over and over.  It's something all of us try to learn but my wife had a God given talent.  She was able to engage people like none other.  She had the special talent of anybody that met her, loved her.  She had the special way of engaging people.  A special way of friending people.

She was like Santa Claus in a woman's body.  Her sparkling blue eyes, infectious smile, and body language that made people feel comfortable.  She was a sight to see with young kids.  She would squat, kneel, or sit and talk to those kids like she was their best friend.  I myself have a voice that scares young kids so I could never do what she did.

She was the sounding board for people's problems.  She would spend hours on the phone, or sitting with somebody "LISTENING" to their problems.  Even if it was the same problem over and over.  That's the way it always was.  Many people get bossy, or irritated in those situations but she would just listen.

Here is what she would do:

• 1. Get down to their level, sit if they are sitting, stand if they are standing.
• 2. Ask questions about the person that she is talking to. She wouldn't talk about herself, other to identify with the person relating a story of hers that made the person she was talking to realize she was like them.
• 3. Look into their eyes and nod while talking
• 4. Re-affirm what the person was saying
• 5. She would lightly touch the person.... On the hand, on the arm making the "connection"
• 6. But most of all she listened far more than she talked
• 7. Listen, Listen, Listen

It is something we all try to do as real estate people, something we try to learn and improve upon each year.  But my wife had the talent.  I was always afraid she would be abducted by some wacko, because her smile and eyes invited people.  You know us guys we fall for women that give us the time of day, talk, and smile at us.  We take it as this lady likes us.  Marianne could stand anywhere, strike up a conversation, and become a friend before she walked away.

No ulterior motive, but she could "Win friends, and influence people".  That's the way she was.     So I give you her tips to share.  To become a better person, because listening to your kids, your friends, your loved ones will build communication and make you a better friend.