Happy 2011

Well, the New Year is here and yes, if you've followed my blog, the helical piers are in! The job took about a week and a half because of the cold weather, the frozen clay earth and the dryness of that earth, but yes, the piering was finished and my family room was raised a little over half an inch on Wednesday, January 26, 2011 and then stabalized so that it will never sink again! It's almost level in my family room now, after having been way off level and the exterior cracks have closed somewhat. They also sealed a major crack in my basement in the opposite corner from the family room, which had been there for years and years, probably since my home was built in 1967.

Please also note, if you've been following the newspaper reports, home prices in our area have now sunk to 1994 levels. In other words, if your home was worth $200,000
in 2006, but was worth 120,000 in 1994, well then, you should put it on the market for the 1994 price, or somewhere close to it. You'll never get even close to that 2006 figure. Some people try, but then find out the house will never appraise for a mortgage and right now, the buying and selling of real estate is being run by appraisals. It just shows you how badly the economy affected Michigan and like I've been telling people all along, the country may have been in a recession, but Michigan was in it's worst depression since the 1930's.

I do believe sincerely that we have hit bottom and the economy in our state is turning around. But it's going to take a while for a noticable increase in home prices. The big thing is to get current inventory down and also purge the available
homes list of foreclosures and short sales. That is slowly but surely happening, but frankly, most of the home sales today are still foreclosures and short sales. And with interest rates rising to around 5% from historical lows closer to 4%, home buying and selling, just got a little tougher!

Got A New Problem At My House!

Well, the last time I was on board here, I blogged about my roof replacement and how much the extra wood needed, cost me out of pocket. Well, a week or so after the roofers left, I had my satellite company come out to "refocus" my dish, because the roofing people had to move it. Well, during that process, I'm watching the satellite guy staple some wiring to the side of my house and I note that some cracks, which had long been there between bricks, had really widened. Of course, I had not been watching them closely, but it was far worse than needing some tuckpointing. At one spot near a windowsill under a picture window, the crack was nearly an inch wide! In the main part as the crack zig zagged down to ground level, it was half an inch wide!

So, I approached a local home inspector with some pictures and he told me I needed piers put under my house and he recommended I get 3 estimates. So, I checked the Yellow Pages and found 3 companies that did helical piering and over the period of a week, got all 3 estimates, ranging from $9500 to $15,500. The $15,500 guy wanted to pier the entire back of my house with 12 helical piers, while the other two companies said that was not necessary. Just the family room had sunk an inch and a quarter to an inch and a half over it's 43 year life, while the other back corner of the house, had barely sunk a quarter of an inch at most. Something to watch the other 2 compnies said, but it doesn't need fixing right now.

So my choice was the mid price guy, about $9900. They'll put in 7 helical piers around the sides and back of my family room and raise it back up to level. After that, I can't have any repairs to the interior for about 6 months, because the house, the beams, the interior, all need to get used to the new "settings" as it were. And oh yes, the interior cracking is horrible, right in the same spot where the exterior brick cracking was going on with big splits in my drywall inside.
So I suggest you be observant of the exterior of your home, especially if you have cracking where mortar used to be between the bricks, if you have a brick exterior. And if your family room is on a slab, like mine. I have a nice basement, but a slab under that family room. Be aware, that the slab under the family room can sink, creating this cracking problem!

'Tis the season again. Seems just like yesterday that it was Christmas, 2009 and now, it's 12 months later. So from my "cracked" house to your "healthy" home, my wishes for a Happy Holiday! Seasons Greetings to all!

The Leaves Are Falling, The Vote Is Coming

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!

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!

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!

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!

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.