I love the fall. It's my favorite season. And we've been blessed in Southeast Michigan the past few years, with some glorious, warm, sunny autumns, well into November. So far as I type this, 2010 has not been an exception. We've had great weather leading up to halloween and more importantly, up to voting day, November 2. The recent "breezes" aside, it has been great and as for those breezes, well, something has to knock the leaves off the trees, right?
It's time for a voting pitch. No matter what party you're a member of, exercise your franchise on November 2 and get out and vote. If your candidate doesn't win and you didn't vote, you've only yourself to blame. The founding fathers gave us this priviledge and to me, it's the most important thing one can do for one's government, voting in the people you feel can run that government best. So, as an old radio jingle used to say, "be a good citizen, get out and vote."
Enjoy the fall and I look forward to future blogging about all things real estate. And if you have the opportunity and are inclined to either buy your first home or move up into a new one, you can't beat the mortgage rates we're seeing right now. All time, historical lows. Why, people are even taking advantage of 15 year fixed rate mortgages, to pay their homes off faster, at rates well under 4%. Nows the time to buy, as the economy finally appears as if it's starting to trend upward!
Thursday, October 28, 2010
Wednesday, September 22, 2010
Autumn Thoughts
Well, interest rates can't get any lower than this. They're already at all time lows of just around 4 1/4% for a 30 year fixed. Yet, I heard today on CBS Radio News, that demand for mortgages is down for the third straight month. I know it's tuff out there and that people are still worried about their jobs. But is it more that, or is it bankers and mortgage companies are being a little tighter with their money?
And also, this time, I'm the consumer giving you some advice from first hand experience. I just had my roof done and also new gutters and downspouts added. Now I had a second layer and shingles put on in 1996, along with new gutters and downspouts. This though, is more about the roof than gutters and downspouts. My home is 43 years old. Last week, I signed a contract for the work, which included 100 free square feet of plywood to replace the old plywood that had been on the roof since 1967.
Well, once the roofing company got up there, they discovered a ton of decaying, rotting plywood which had to be replaced, far more than the free, 100 square feet, far more. Also, several cracked trusses had to be shored up, at an added cost for 2 X 4's which were not in the contract. And the facia boards, on which the gutters hang, were rotting away and 75% of those had to be replaced at still more cost per board foot, not in the contract.
My point being, the cost of my roof job, has exceeded the original estimate on my signed contract by 16%! So be aware of these things. The roofing company, when they come out and give you an estimate of the costs, has no idea how much bad wood they'll find up there. My roof and my gutters look beautiful now and I've got a 30 year warranty on the shingles, PLUS a 30 year warranty on the company's workmanship. And yes, in case you ask, I was invited up on my roof, 4 or 5 times to see just how bad the wood was and what their plans were to fix it. I accepted each invitation, so I could see first hand, what was going on and I wholeheartedly agreed on the repairs.
I'm happy, but just be aware of these things if you're planning a roofing job in the near future!
And also, this time, I'm the consumer giving you some advice from first hand experience. I just had my roof done and also new gutters and downspouts added. Now I had a second layer and shingles put on in 1996, along with new gutters and downspouts. This though, is more about the roof than gutters and downspouts. My home is 43 years old. Last week, I signed a contract for the work, which included 100 free square feet of plywood to replace the old plywood that had been on the roof since 1967.
Well, once the roofing company got up there, they discovered a ton of decaying, rotting plywood which had to be replaced, far more than the free, 100 square feet, far more. Also, several cracked trusses had to be shored up, at an added cost for 2 X 4's which were not in the contract. And the facia boards, on which the gutters hang, were rotting away and 75% of those had to be replaced at still more cost per board foot, not in the contract.
My point being, the cost of my roof job, has exceeded the original estimate on my signed contract by 16%! So be aware of these things. The roofing company, when they come out and give you an estimate of the costs, has no idea how much bad wood they'll find up there. My roof and my gutters look beautiful now and I've got a 30 year warranty on the shingles, PLUS a 30 year warranty on the company's workmanship. And yes, in case you ask, I was invited up on my roof, 4 or 5 times to see just how bad the wood was and what their plans were to fix it. I accepted each invitation, so I could see first hand, what was going on and I wholeheartedly agreed on the repairs.
I'm happy, but just be aware of these things if you're planning a roofing job in the near future!
Sunday, August 1, 2010
Yes, Even Us Realtors Can Learn
It's funny, but it happened to me, having to list a house as just a client, not a Realtor and having to sit, wait and sift through the offers. Now I know how a lot of you feel, when you're put in the same position.
As the executor of my parents estate after they both passed away in 2009, I had to put their house on the market in their native New Hampshire. I carefully sorted thru Realtors and decided the way to go was through the only real estate office in their little town of Kingston, New Hampshire. So I selected an agent from that office and she knew her stuff and was very helpful. The house went on the market in mid October, 2009. Now this house needed some work and as it turned out, cost me about $15,000 to bring it up to snuff to pass an FHA inspection. We had innumerable offers along the way, many "lowballs" which were rejected and finally, in mid April, came an acceptable offer of full price on an FHA deal, $185,000, but I also had to pay about 5% in closing costs for the young buyers.
At first, closing was scheduled for "on or before May 21, 2010." As it turned out, some of the necessary work to get the house up to snuff, had to wait until the weather turned warmer, like exterior painting. So around May 1, I started getting all kinds of phone calls here in Michigan, from New Hampshire. My Realtor, my New Hampshire attorney, contractors wanting to talk about their work and also wanting to get paid. It got to be so bad, 8 or 9 calls a day from New Hampshire, I finally threw my hands up in disgust because it was interfering with my work here in Michigan. So I decided on May 12, I'd had enough and it was time to get out of Michigan and head to New Hampshire.
I arrived there a week before the anticipated closing was scheduled and there was still work to be done, like chimney and fireplace crack repairs ($2300), septic tank draining ($150) and yes, I even had to rent a dumpster for the driveway ($500). In the case of these 3 jobs, I had to be there because the contractors involved, would not take a credit card number over the phone. They needed me there, in person, to hand them a check, another good reason why I "got out of Dodge" so to speak and headed to the Granite State.
Finally, came the big day, Friday May 21. Well, in came the call from my Realtor. The mortgage for the buyer wasn't ready yet, we'll have to close Monday the 24th. Then came Monday the 24th and again, "the mortgage isn't ready yet, we'll now close no later than Wednesday the 26th." I actually was allowed to get involved with the buyers mortgage person. I told him, "we'd better close, because I don't want this to spill past Memorial Day weekend into June, as I've got to get back to Michigan." Well, it didn't close the 26th either, but, with some arm twisting by my Realtor, we got a closing scheduled for the 27th at 1230pm at the county registrar of deeds office.
Finally, a closing! Yeah!! It took less than an hour and I had my check. A quick trip to the cemetary to say goodbye to Mom and Dad (I'll be joining them there, but I hope not in the near future) and I had had enough of New Hampshire!! I took the check and deposited it in my Bank of America account (they are all over the place, even in New Hampshire) and then, I hit the freeway and headed back to Michigan, arriving back in Troy the night of May 28, after an overnight stay in Syracuse, New York. My own, personal real estate story, successfully completed, even if delayed by almost a week due to unforseen forces!
And now, I can sympathise with some of the issues my clients have to go through!
As the executor of my parents estate after they both passed away in 2009, I had to put their house on the market in their native New Hampshire. I carefully sorted thru Realtors and decided the way to go was through the only real estate office in their little town of Kingston, New Hampshire. So I selected an agent from that office and she knew her stuff and was very helpful. The house went on the market in mid October, 2009. Now this house needed some work and as it turned out, cost me about $15,000 to bring it up to snuff to pass an FHA inspection. We had innumerable offers along the way, many "lowballs" which were rejected and finally, in mid April, came an acceptable offer of full price on an FHA deal, $185,000, but I also had to pay about 5% in closing costs for the young buyers.
At first, closing was scheduled for "on or before May 21, 2010." As it turned out, some of the necessary work to get the house up to snuff, had to wait until the weather turned warmer, like exterior painting. So around May 1, I started getting all kinds of phone calls here in Michigan, from New Hampshire. My Realtor, my New Hampshire attorney, contractors wanting to talk about their work and also wanting to get paid. It got to be so bad, 8 or 9 calls a day from New Hampshire, I finally threw my hands up in disgust because it was interfering with my work here in Michigan. So I decided on May 12, I'd had enough and it was time to get out of Michigan and head to New Hampshire.
I arrived there a week before the anticipated closing was scheduled and there was still work to be done, like chimney and fireplace crack repairs ($2300), septic tank draining ($150) and yes, I even had to rent a dumpster for the driveway ($500). In the case of these 3 jobs, I had to be there because the contractors involved, would not take a credit card number over the phone. They needed me there, in person, to hand them a check, another good reason why I "got out of Dodge" so to speak and headed to the Granite State.
Finally, came the big day, Friday May 21. Well, in came the call from my Realtor. The mortgage for the buyer wasn't ready yet, we'll have to close Monday the 24th. Then came Monday the 24th and again, "the mortgage isn't ready yet, we'll now close no later than Wednesday the 26th." I actually was allowed to get involved with the buyers mortgage person. I told him, "we'd better close, because I don't want this to spill past Memorial Day weekend into June, as I've got to get back to Michigan." Well, it didn't close the 26th either, but, with some arm twisting by my Realtor, we got a closing scheduled for the 27th at 1230pm at the county registrar of deeds office.
Finally, a closing! Yeah!! It took less than an hour and I had my check. A quick trip to the cemetary to say goodbye to Mom and Dad (I'll be joining them there, but I hope not in the near future) and I had had enough of New Hampshire!! I took the check and deposited it in my Bank of America account (they are all over the place, even in New Hampshire) and then, I hit the freeway and headed back to Michigan, arriving back in Troy the night of May 28, after an overnight stay in Syracuse, New York. My own, personal real estate story, successfully completed, even if delayed by almost a week due to unforseen forces!
And now, I can sympathise with some of the issues my clients have to go through!
Tuesday, June 22, 2010
Commissions!
Today, what amounts to a sore subject for some people, paying a Realtor a commission to sell their house.
I was driving thru Royal Oak the other day and I noticed a "For Sale By Owner" sign. We Realtors call such properties FSBO's, pronounced fizz-bo. At the bottom of this Royal Oak "fizz-bo" sign was something else "Realtors 4%." Now what this means is, the "fizz-bo" homeowner is willing to pay a 4% commission to any Realtor who brings him a buyer. The industry standard is 6%, so either this "fizz-bo" thinks he's getting a big savings, or they don't realize how a commission is split! Of course, if he does pay 4%, he is saving money, but the industry standard for an agent who brings a buyer for the property, is 3%.
The standard 6% commission is split 2 ways, 3% to the listing office and 3% to the selling office. So your listing agent doesn't walk away with a 6% commission. Your listing agent doesn't even walk away with the 3% that goes to the LISTING OFFICE! That 3% is divided up between the listing agent, his or her company broker/owner and, if there is a franchise involved, like CENTURY 21 National, there's a franchise fee that both the company broker/owner and the listing agent pays.
A general rule of thumb, on a 6% commission, the listing agent is going to walk away with 1.32% of the sales price of the house, not 6%. So on a sale of $100,000, the 6% commission is divided like this, $3000 for the selling office, $3000 for the listing office. That $3000 for the listing office is then split into $1500 for the listing agent and $1500 for the broker/owner. The broker/owner then has to pay a 12% franchise fee, $180, as does the listing agent. So the listing agents actual take from that 6% commission is $1320 on that sale of $100,000!
And that dear friends, explains how real estate commissions are paid!
I was driving thru Royal Oak the other day and I noticed a "For Sale By Owner" sign. We Realtors call such properties FSBO's, pronounced fizz-bo. At the bottom of this Royal Oak "fizz-bo" sign was something else "Realtors 4%." Now what this means is, the "fizz-bo" homeowner is willing to pay a 4% commission to any Realtor who brings him a buyer. The industry standard is 6%, so either this "fizz-bo" thinks he's getting a big savings, or they don't realize how a commission is split! Of course, if he does pay 4%, he is saving money, but the industry standard for an agent who brings a buyer for the property, is 3%.
The standard 6% commission is split 2 ways, 3% to the listing office and 3% to the selling office. So your listing agent doesn't walk away with a 6% commission. Your listing agent doesn't even walk away with the 3% that goes to the LISTING OFFICE! That 3% is divided up between the listing agent, his or her company broker/owner and, if there is a franchise involved, like CENTURY 21 National, there's a franchise fee that both the company broker/owner and the listing agent pays.
A general rule of thumb, on a 6% commission, the listing agent is going to walk away with 1.32% of the sales price of the house, not 6%. So on a sale of $100,000, the 6% commission is divided like this, $3000 for the selling office, $3000 for the listing office. That $3000 for the listing office is then split into $1500 for the listing agent and $1500 for the broker/owner. The broker/owner then has to pay a 12% franchise fee, $180, as does the listing agent. So the listing agents actual take from that 6% commission is $1320 on that sale of $100,000!
And that dear friends, explains how real estate commissions are paid!
Wednesday, May 5, 2010
Goodbye Ernie
I published this in the Detroit News Tiger Forum on the New's website on Wednesday afternoon, May 5. It is my Ernie Harwell story:
Back in 1997, I was working as a sportscaster at WJR Radio in Detroit. I had just been nominated in January, 1997, by my peers in the State of Michigan, for the 1996 Michigan Sportscaster of the Year Award, as presented in each state every year, by the National Association of Sportscasters and Sportswriters. There was only one other nominee, Ernie Harwell. So, I figured this was the end of that honor. Ernie had won the award something like 12 times previously. I had been nominated 7 or 8 times total during my career at both WAAM in Ann Arbor and WJR, but had never won and never expected to.
Guess what? In March of 1997, it was announced I had won the voting, much to my total and complete shock. The morning I was notified I'd won, I'm sitting at home and my phone rings.....it's Ernie. He must have called the station and gotten my home phone number. "Mister Chapman, this is Mister Harwell." Those familiar Georgia tones and inflections. I replied "Hi Ernie." He then came back with "Congratulations on winning the Sportscaster of the Year Award. It's well deserved." Ernie did not have to do that, very few if any would have made that congratulatory call. I will never forget it. I'd known the man, not intimately, for my 13 years at WJR. What made it more special, was him not saying "Paul, it's Ernie. Congratulations." It was him using his wonderful salutation of "Mister Chapman." If he called you "Mister" you knew you were in Ernie's good graces.
It was a very special moment in my life and it shows the gentleman that he was thoughout his career and his life. God bless you Ernie. My consolences to Miss Lulu and your family.
Back in 1997, I was working as a sportscaster at WJR Radio in Detroit. I had just been nominated in January, 1997, by my peers in the State of Michigan, for the 1996 Michigan Sportscaster of the Year Award, as presented in each state every year, by the National Association of Sportscasters and Sportswriters. There was only one other nominee, Ernie Harwell. So, I figured this was the end of that honor. Ernie had won the award something like 12 times previously. I had been nominated 7 or 8 times total during my career at both WAAM in Ann Arbor and WJR, but had never won and never expected to.
Guess what? In March of 1997, it was announced I had won the voting, much to my total and complete shock. The morning I was notified I'd won, I'm sitting at home and my phone rings.....it's Ernie. He must have called the station and gotten my home phone number. "Mister Chapman, this is Mister Harwell." Those familiar Georgia tones and inflections. I replied "Hi Ernie." He then came back with "Congratulations on winning the Sportscaster of the Year Award. It's well deserved." Ernie did not have to do that, very few if any would have made that congratulatory call. I will never forget it. I'd known the man, not intimately, for my 13 years at WJR. What made it more special, was him not saying "Paul, it's Ernie. Congratulations." It was him using his wonderful salutation of "Mister Chapman." If he called you "Mister" you knew you were in Ernie's good graces.
It was a very special moment in my life and it shows the gentleman that he was thoughout his career and his life. God bless you Ernie. My consolences to Miss Lulu and your family.
Thursday, April 8, 2010
Questions Answered On The Homebuyers Credit
The April 30 deadline is fast approaching to get a deal signed and confirmed, in order to qualify for the credits being offer by Uncle Sam on home purchases. Here are some of the more commonly asked questions and their answers, courtesy of the National Association of Homebuilders!
1. How does a home buyer claim the tax credit?
Answer: The credit is claimed when the home buyer files or amends their federal income taxes. For qualifying homes, purchased in 2009 or 2010, the taxpayer must complete form 5405 and attach a copy of the settlement statement. In most cases, the settlement statement is a properly executed Form HUD-1.
In circumstances where a HUD-1 is not provided, such as purchasing a mobile home or a newly constructed home, the IRS will accept an executed retail sales contract(mobile homes) or a copy of the certificate of occupancy (new homes).
2. Does the homebuyer have to sell their current home in order to qualify for the $6,500 repeat buyer tax credit?
Answer: A home buyer does not need to sell their current home in order to be eligable for the repeat buyer credit. They can continue to own both homes, and rent or use their former home for something else, as long as it no longer serves as their principal residence. The taxpayer is required to use the new home as their principal residence, and live in it for at least 36 months, or they will have to repay their credit.
3. Do married couples both have to meet the eligability requirements in order to claim the credit, even if they file taxes separately?
Answer: Both spouses must fully meet all of the eligability requirements for either the $8,000 first time home buyer tax credit or the $6,500 repeat buyer tax credit, regardless of if they file joint or separate tax returns. However, if an unmarried couple purchases a home and only one person qualifies, the eligable person may claim the full credit.
4. Do all home purchases need to be completed by April 30, 2010, in order to be eligable for the credit?
Answer: There are 2 exceptions to the April 30 deadline. If the buyer enters into a binding contact by the deadline, they have until June 30, 2010, to complete the purchase. The deadline has been extended a year, to April 30, 2011, for members of the uniformed services, Foreign Service or employees of the intelligence community who have been on qualified extended duty outside the United States for at least 90 days, between January 1, 2009, and April 30, 2010.
I hope these questions and answers help and I hope you have the opportunity to take advantage of Uncle Sam's gift to homebuyers!
1. How does a home buyer claim the tax credit?
Answer: The credit is claimed when the home buyer files or amends their federal income taxes. For qualifying homes, purchased in 2009 or 2010, the taxpayer must complete form 5405 and attach a copy of the settlement statement. In most cases, the settlement statement is a properly executed Form HUD-1.
In circumstances where a HUD-1 is not provided, such as purchasing a mobile home or a newly constructed home, the IRS will accept an executed retail sales contract(mobile homes) or a copy of the certificate of occupancy (new homes).
2. Does the homebuyer have to sell their current home in order to qualify for the $6,500 repeat buyer tax credit?
Answer: A home buyer does not need to sell their current home in order to be eligable for the repeat buyer credit. They can continue to own both homes, and rent or use their former home for something else, as long as it no longer serves as their principal residence. The taxpayer is required to use the new home as their principal residence, and live in it for at least 36 months, or they will have to repay their credit.
3. Do married couples both have to meet the eligability requirements in order to claim the credit, even if they file taxes separately?
Answer: Both spouses must fully meet all of the eligability requirements for either the $8,000 first time home buyer tax credit or the $6,500 repeat buyer tax credit, regardless of if they file joint or separate tax returns. However, if an unmarried couple purchases a home and only one person qualifies, the eligable person may claim the full credit.
4. Do all home purchases need to be completed by April 30, 2010, in order to be eligable for the credit?
Answer: There are 2 exceptions to the April 30 deadline. If the buyer enters into a binding contact by the deadline, they have until June 30, 2010, to complete the purchase. The deadline has been extended a year, to April 30, 2011, for members of the uniformed services, Foreign Service or employees of the intelligence community who have been on qualified extended duty outside the United States for at least 90 days, between January 1, 2009, and April 30, 2010.
I hope these questions and answers help and I hope you have the opportunity to take advantage of Uncle Sam's gift to homebuyers!
Tuesday, March 23, 2010
Don't Forget Your Tax Break!
We're hearing a lot today about the up to $8000.00 tax break for first time home buyers, if their deals are written and accepted by April 30, 2010 and close by June 30, 2010. It's a terrific deal for first time home buyers, but there's also another part of the story I don't want you to forget and that's the existing home buyer!
Have your deals written and accepted by April 30 and close by June 30 and even if you're a current homeowner, you'll get a nice tax break of up to $6500.00.
Yes, these are incentives to help spur the sagging housing industry. I think a lot of us found out, Realtors included, how much this nation's economy was dependant on new and existing home sales. It turns out that new and used home sales were actually driving the economy for the past decade and when people stopped buying homes, well, in came the worst recession we've had since the Great Depression ended in the early 1940's. Personally, I don't think these government deals will be extended. They were extended once, but like "Cash for Clunkers" which was extended once, then ended, I'm expecting the same thing to happen with these housing incentives!!
So with these government incentives and with mortgage interest rates still close to historic lows, what's stopping you from stepping up to the plate and buying your first home OR, putting your current home on the market while looking for a new place in which to dwell?
Have your deals written and accepted by April 30 and close by June 30 and even if you're a current homeowner, you'll get a nice tax break of up to $6500.00.
Yes, these are incentives to help spur the sagging housing industry. I think a lot of us found out, Realtors included, how much this nation's economy was dependant on new and existing home sales. It turns out that new and used home sales were actually driving the economy for the past decade and when people stopped buying homes, well, in came the worst recession we've had since the Great Depression ended in the early 1940's. Personally, I don't think these government deals will be extended. They were extended once, but like "Cash for Clunkers" which was extended once, then ended, I'm expecting the same thing to happen with these housing incentives!!
So with these government incentives and with mortgage interest rates still close to historic lows, what's stopping you from stepping up to the plate and buying your first home OR, putting your current home on the market while looking for a new place in which to dwell?
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