Detroit Real Estate

I have seen homes that are absolutely beautiful upstairs and have mold downstairs.  Homes that need no work but have a moldy basement.  Those are the homes you might want to consider if you have the money and the people to clean it up. Most Michigan home buyers run at the sight of mold.  And I agree in many cases you should run.  If you can't afford to fix the cause of the mold or afford to re-mediate the mold correctly you should run.  Many times it can become a major project because the mold has come down the walls and is behind the walls.  Those types of projects can become nightmares because you don't know how bad the mold is behind the walls.

But mold in the basement is one area, I think most cash Michigan home buyers should think about the home more.  If you and your family member don't have allergies or asthma this might be a problem that can be corrected.   If you have allergies or asthma you should stay away from Michigan homes with mold.

I think there is opportunity to buy a home at a great price is when the sump pump backs up and floods the basement.  When Michigan home owners walk away from their foreclosed house they shut off the electricity.  Sometimes the bank doesn't even know the homeowners have left.  So when it rains the sump fills up, the basement floods, then the mold starts to grow.  This is what you seeing in these pictures. 

A basement flooding happens quite often in Michigan foreclosed homes because of the electricity being off.  The flooding stops as soon as the electricity is on and sump pump starts working. But by then it is too late.  The drywall is wet and the conditions for mold grow are there.  So the mold grows on the drywall.

 This foreclosed home was in Southfield Michigan.

But when the basement floods the drywall will draw up the water like a sponge.  Then the mold will grow as high up the drywall as the water got absorbed.  The water could have been one or two inches deep and cause all this mold.

What is great is that the mold can be cleaned up.  Of course whoever does the work should be qualified to do the clean up.  Masks and protective clothing should be worn.  But basically gutting the basement down to the cement walls most likely can be the solution.  Then cleaning up the cement walls and repainting can get the home back in livable shape. 

On the other hand when a Michigan home floods because of broken pipes and there is on mold on the ceiling, walls, floor trusses in the basement and on the walls of the main floor.  Then I would run the other way.  That home is a major project.  You may not be able to get all the mold out in a home like that.

So don't cross off the house with the moldy basement if you are a cash buyer.  But if you are a buyer that needs a mortgage then forget about the home and move on.  The only time I ever saw a home get bought with mold was a USDA rural housing loan.  I don't know how it slipped through.    

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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.

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 

Here is quick story about recent Novi home inspection with a Metro Detroit first time home buyer.  They called me up to meet.  Not cry, no overly upset but with a few worries.

The Novi home was built in 2002.  But as the Metro Detroit home inspector was going through the home he made these comments:

1. The furnaces were in good shape but they were just mediocre quality or average quality
2. The hot water tank was just fifty gallons and that they wouldn't be able to shower and wash clothes at the same time
3. The outside of the house needed painting and caulking
4. There is only 9 inches of insulation in the attic.  Since 2002 the Department of energy recommends more insulation than that.

We sat down to talk about all of these things. When you buy a Novi home, the quality of furnaces, appliances, water heater, and other items may be of lesser or greater quality that you would buy.  The seller is not going to up-grade a furnace to a better quality furnace if it is not broken. The best thing to do is use the furnace and then replace it when it breaks.  Or if it is really bothering you, buy a new one.  That is unless you want to reduce your energy costs and replace it with a high energy efficient furnace.

The average water hot water tank is 40 - 80 gallons.  Yes the builder didn't splurge on the hot water heater and the home owners didn't know better to ask for a bigger one.  An new one should cost about $500 - $700 depending on the contractor.  But in my house we never run the washer and take a shower unless we are in a rush or are going to take a short shower.  Again the seller most likely won't put in a new one because the old one isn't broken.

Outside painting - The paint isn't peeling and yes it does need to be painted.  Because this is a Novi foreclosure the bank is not going to get involved in maintenance issues.  They are going to tell you no.  They are going to say "take it or leave it".

All of the homes in the Churchill Crossing subdivision are about the same age.  So they all have the 9 inches of insulation in them which was required at the time.   Yes the Department of Energy now recommends much more but you have to look at the cost to install, the savings you will get, and how long it will take to get your return on your money.   Again the seller is not going to do this.

So when you do your Novi home inspection or any inspection in the Metro Detroit real estate market don't expect the seller to upgrade working items.  Don't expect them to do maintenance items.

Most sellers will not replace or add to items that are working or sufficient.  It will be up to you to upgrade a working part of the house.  And most sellers will not do common maintenance items unless you push the issue.  If it is a foreclosure the bank many times it will come down to.... do you want the house as is or not?

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Do city inspections work or not is the subject of this blog Metro Detroit home inspections. Do required city home inspections bring up home values?  No I don't think so.   One of my bosses argued that it didn't improve the cities that had them.

But I disagree.  I think it helps the cities that have them.  Many of the cities that have instituted them are cities that aren't the "desirable" cities or the "hot" cities.  They are just average cities that may have fallen a little.

What I think is that is has helped the cities.  By requiring driveways to be fixed, by requiring the homes be brought up to code has helped the cities.  By the cities doing required home inspections when the home gets sold keeps homes in better shape.  For example Detroit has a required city inspection but they fail in the follow up.  They just want the money for the home inspections. 

Where other cities like Taylor, Dearborn, Inkster, Westland require you to do the repairs before you move in.  Some title companies require the Certificate Of Occupancy before you close.  I myself don't like government getting involved in our personal affairs or our homes, but if it is a choice of becoming like Detroit or keeping a local city up.

I think it has helped Taylor, Inkster, Dearborn, and Westland keep the neighborhoods up.  Sure it may not have improved the neighborhoods, or improved the city.  But the cities have not fallen further.  I think it is a good thing in some ways.  So if you buy a home in Taylor, Inkster, Dearborn, Dearborn Heights, and Westland be prepared to have a city inspection done.  Be prepared to do some repairs.

If you have any questions feel free to call or email me about any of the local areas.

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