Lee Morof's Real Estate Blog

One way lenders increase their profits on your Southeast Michigan real estate mortgage is by charging settlement fees. While many fees are standard and required, others may be negotiated.

Shop Around For Better Closing Fees

The Good Faith Estimate (GFE), as required by RESPA, is presented to you after you apply for a loan to purchase your Southeast Michigan real estate. It gives you a heads up as to what fees you should expect at closing.

If you don’t like the numbers you’re seeing on the GFE, shop around with other lenders. If you were approved for one loan, you can likely be approved for another.  Collect comparable GFEs and see how the interest rate, monthly payments, points, and closing fees stack up. Your best bet is to tell your lenders that you’re comparison shopping, so they give you the best numbers possible.

Common closing fees you can expect to see on your Good Faith Estimate include:

• Appraisal Fee – Fee for an independent appraisal of the value of the property. This fee often ranges from $350 to $500. Note that payment for this fee is sometimes required prior to closing.
• Credit Report Fee – This is the cost of acquiring a credit report.
• Title Insurance Fee – This is the fee paid to a title company for research and insurance related to the title of the property.
• Processing Fee – The processing fee covers the cost of the person who handles collecting the paperwork, such as credit reports and employment history, for underwriting. Sometimes, the processor is the loan officer.
• Loan Origination Fee – Also called underwriting fee, administrative fee or processing fee, the loan origination fee is charged by the lender for evaluating and preparing your mortgage loan. This fee can cover the lender’s attorney’s fees, document preparation costs, notary fees, and similar charges.
• Application Fee – This fee covers the processing of an application for mortgage insurance.

All loans have fees; there’s no escaping them.  If there aren’t any fees, the cost of making the loan has been wrapped up in other areas such as the interest rate or points.  So as you comparison shop, remember to look to the long-term cost of the loan, not just settlement fees.

That said, with some comparison shopping and negotiation, you may be able to decrease your fee amounts without the price being woven elsewhere into the loan for your Southeast Michigan real estate.

Whether you’re ready to buy or need more information before taking the plunge, I can help. Give me a call today at 248-514-2640 or email me at info@NorthWoodwardHomes.com.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

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Urban legends can be found within every industry, and Southeast Michigan real estate is no exception. Getting a big discount because a home needs minor repairs or being able to acquire 100 percent financing in a snap definitely isn’t as easy as it sounds and is probably just what you think — a big fat myth.

Whether you’re an experienced buyer or it’s your first time purchasing Southeast Michigan real estate, do your research and don’t get sidetracked by enticing fables that might cause you to miss out on your dream home. Below are three debunked mortgage urban legends that have been plaguing the industry for years.

1. You can get a foreclosed home for almost nothing. While foreclosed homes do tend to sell consistently lower than other homes on the market, they’re not always a great deal. Banks are required to sell a property as close to fair market value as possible, and only drop the price in small increments after 60 to 90 days. Foreclosed homes are also usually in worse repair and banks are less likely to negotiate on them.
2. As a first-time homebuyer, it’s easy to get 100 percent financing. While some homebuyers might be nostalgic for the subprime mortgage era when anyone could obtain full financing — that just isn’t the case any longer. While there is assistance out there, most first-time buyer programs require that you put down a certain amount.
3. A fixer-upper means a lowball offer. Gone are the days when just because a home needed a little cosmetic help you could make an incredibly low offer. Don’t do it because you’ll get rejected, and the buyer won’t take you seriously.

The market may be down, but that doesn’t mean you’re going to walk away with a steal. Save your money, keep your credit score in check and don’t fall prey to any of these common Southeast Michigan real estate urban legends.

If you’re in the market for a new home or you’d like to hear about more urban legends that buyers typically fall for, please call me at 248-514-2640 or email me at info@NorthWoodwardHomes.com for more information.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

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The data from the 2011 National Association of REALTORS® Profile of Home Buyers and Sellers is now available. Here are the significant changes you need to know that will help you market your Southeast Michigan real estate and get it sold:

1. Most buyers are married: 64 percent of all buyers are married couples (up five percent from 2010), 18 percent are single women, 10 percent single men and 7 percent unmarried couples.
2. Your property is competing against 12 other homes: Buyers searched a median of 12 weeks and visited 12 homes, both unchanged from 2010.
3. Multiple bedrooms and bathrooms are preferred: The typical home had 3 bedrooms and 2 bathrooms.
   4. Most buyers want single-family homes: 77 percent of respondents purchased a detached single-family home, 9 percent a condo and 8 percent a townhouse or rowhouse.
4. You need to promote your home to buyer’s agents: 60 percent of buyers working with real estate professionals were represented by a buyer’s agent.
5. Hire a Southeast Michigan real estate agent to sell your home: 87 percent of home buyers use real estate agents to find their home. 91 percent of buyers who used the Internet to search for a home purchased through a real estate agent.
6. Market your home online, with yard signs and at open houses: When buyers were asked where they first learned about the home they purchased, 40 percent said the Internet; 11 percent said a yard sign or open house.

Want to work with a Southeast Michigan real estate agent who knows how to market your home to get it sold? Let me show you my proven marketing plan. Schedule an appointment with me today by calling me at 248-514-2640 or emailing me at info@NorthWoodwardHomes.com.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney  
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

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If you get a mortgage for more than 80% of your Southeast Michigan real estate’s fair market value, your lender will require that you pay Private Mortgage Insurance (PMI). PMI payments are expensive at about 0.5% to 1% of the entire loan amount on an annual basis.

Obviously, it would be a good thing if you didn’t have to pay PMI. To help you achieve that goal, here are several tips to avoid paying PMI on your Southeast Michigan real estate:

• Save for a big down payment: The easiest way to avoid PMI is to have a down payment of at least 20% of the value of the home you want to purchase.
• Borrow to get 20% down: Check with friends and family for down payment assistance. You can offer repayment with interest and still never pay what you would have to for PMI.
• Get a Second Mortgage: Getting a second mortgage to cover the difference between your down payment on your first mortgage and the 20% threshold for your PMI can make a substantial difference in your monthly payments. Talk to a qualified mortgage professional to discuss your options.
• Pay More Interest: Some lenders will waive PMI if you agree to a higher interest rate. Again, discuss your options with a mortgage professional.
• Consider a Less Expensive Home: This goes back to being able to hit that 20% threshold. As we’ve all seen in this tough economy, stretching beyond your means can have dire consequences if your circumstances change. Consider if you really need that extra bedroom and extra expense. If you haven’t saved enough to afford an expensive home, downsize your expectations and buy within your means.

If you’d like a referral to an outstanding mortgage professional or need help finding a home that fits your budget, give me a call today at 248-514-2640 or email me at info@NorthWoodwardHomes.com.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney  
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

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If you are on the verge of buying Southeast Michigan real estate, you’ve probably heard the term Private Mortgage Insurance (PMI). Mortgage professionals talk about it a great deal, but you may be asking, “What is it exactly? And why should I care?”

Private Mortgage Insurance Defined
PMI is required by lenders if the down payment of a purchase is less than 20 percent of the home’s value. It protects the lender if the borrower defaults on the loan. It also makes the lender more apt to loan, even if the down payment is as low as 3%, because in the long run, the lender’s investment is protected.

You Pay For It
Unlike other types of insurance which you pay to protect your interest in an asset, you pay Private Mortgage Insurance to the mortgage company to protect its interest in your new Southeast Michigan real estate. (Note that PMI is not usually tax deductible. Check with a tax professional for details. )

Make It Go Away: PMI Can Be Terminated Once You’ve Paid Down Your Loan
Once you pay down your mortgage to the point where it hits the magical 80% of the original purchase price or appraised value, whichever is less, you can request cancellation of PMI. The Homeowners Protection Act requires that loans made after 1999 include notifications to the borrower when you arrive at this point in your payments.

Your PMI payments must be automatically canceled once you pay down your loan to 78%. At closing, and on a yearly basis, you should receive information from your lender about when you can request cancellation.

Whether you’re ready to buy Southeast Michigan real estate or need more information before taking the plunge, I can help. Give me a call today at 248-514-2640 or email me at info@NorthWoodwardHomes.com.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney  
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
 www.NorthWoodwardHomes.com

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In this computer age where everyone relies on the Internet for accurate information, it’s unfortunate that some online Southeast Michigan real estate information can be misleading. With the vast amount of time you have to spend house hunting to find a home you love, you don’t want to waste any of it on properties that aren’t what they seem.

Beware of the following online inaccuracies when house hunting online:

• Misleading descriptions – When you visit a property, double-check that what attracted you to it online is portrayed accurately. Ensure that a “fully finished basement” isn’t just concrete floors and drywall or that the “spacious backyard” isn’t as narrow as a dog run.
• Errors – It’s impossible for nation-wide real estate websites to manage and fact check all of the information posted to their pages, so inaccuracies often happen — such as wrong price points or incorrect home descriptions. Follow up with a Southeast Michigan real estate agent, if you’re seriously interested.
• History hiccups – Check with an agent to find out how long a house has truly been on the market. If a seller has switched agencies or removed the property from the market for a period of time, the house could appear to be newly listed based on its official number of days on market.
• Out-of-date information – Agents market many homes at once, and while they might reprint fliers for an open house or relay current information to inquiring buyers, they could completely forget to update the online information.
• Old listings – Be careful about spending time on a wild goose chase. Properties are often listed online, but have already sold. While this may be an intentional ploy to get you to call an agency, most agents are just too busy and forget.

The Internet has made searching for homes and gathering house hunting information much. Just be skeptical, see a home in person, and thoroughly research the history and neighborhood before making an offer on Southeast Michigan real estate. 

If you’re interested in purchasing a home, let me do the time-consuming house hunting for you. Call me today at 248-514-2640 or email me at info@NorthWoodwardHomes.com for more information.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney  
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

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With Daylight Saving Time turning back the clock this month, sellers having trouble going the for-sale-by-owner route should take a hint from Father Time: Set aside the time to “fall back” on helpful connections and get your Southeast Michigan real estate sold.

Your for-sale-by-owner home is probably clear of clutter and staged to perfection, so why aren’t buyers lining up to take a peek? If it’s not the price, then it probably means you need to take a look at your marketing. The tips below will guide you on how to take some time to fall back on local connections and reach out to more people.

• Connect through all your communities. Networking online through real estate sites and social media  platforms are a good place to start, but don’t stop there. Utilize all of your connections by emailing friends, close coworkers, social groups and any other contacts from activities in which you participate. Also, talk to neighbors because they’ll be the best advocates for getting someone they know and like to move in down the street.
• Ask a friend to do a walk-through. It is always valuable to have a fresh set of eyes to notice the things that you’ve gotten used to, such as old hardware, a yard in need of attention or a wall that could use a fresh coat of paint. Also, if you have pets, make sure you ask a friend without any pets to give your home a quick sniff. Lingering pet smells are always a turnoff for potential buyers.
• Reach out to Southeast Michigan real estate agents. While this may seem counter-intuitive for a for-sale-by-owner seller, this is actually a great avenue for reaching potential property purchasers. Real estate agents have buyers, and if you offer a commission, they might send them your way.

Selling Southeast Michigan real estate is harder than it seems, so make sure you’re utilizing all of your resources. And if nothing seems to be working, then you might want to seriously consider hiring an agent.

Please call me at 248-514-2640 or email me at info@NorthWoodwardHomes.com if you’re finding it hard to unload your home for sale.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney  
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

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In today’s precarious job market, many luxury homeowners are finding they can’t afford their massive, custom-designed properties any longer. As the once rich are having to quickly sell or abandon their Southeast Michigan real estate, you might be able to snag a good deal on a distressed luxury home.

There are many horror stories associated with national and Southeast Michigan short sales and foreclosures, but if you do your research, are patient and can act quickly, you might be able to purchase the home of your dreams. If you want to take advantage of this sour market, then consider the following guidelines — and happy house hunting!

• Find an agent who has experience with distressed real estate. Interview Southeast Michigan real estate agents to find out their history of dealing with foreclosures and Southeast Michigan short sales.
• Research comparables. Investigate to make sure it’s actually a good deal by looking at other luxury homes that have sold in the area. Your agent can give you invaluable information on comparables.
• Be patient. It’s easy to get anxious when it comes to making such a large purchase, but remember that these properties are in turmoil — which can take some time to resolve.
• Hire a home inspector. If you’re going to be investing big bucks, pay a home inspector up front to check out the home. Just because it’s a luxury property doesn’t mean that it hasn’t been neglected for the past couple years. You’ll want to know what kind of damage and repairs you’ll be dealing with.
• Make an offer quickly. Other potential buyers and real estate investors will be keeping an eye out for enticing properties, so be ready for competition.
• Have your finances together. Pay as much as possible in cash. It will be more enticing to the lender, who actually makes the final decision on a short sale or foreclosure.

If you want to purchase luxury Southeast Michigan real estate at a great price, consider distressed properties going to a short sale or foreclosure. As a Certified Distressed Property Expert and Attorney, I can help you navigate any type of real estate transaction.  Call me at 248-514-2640 or email me at info@NorthWoodwardHomes.com, if you’re ready to start looking or would like more information.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

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With appealingly-low home prices and historically-low mortgage rates, you know this is an ideal time to buy Southeast Michigan real estate. What about your adult child who doesn’t have the down payment needed to buy his or her first home? Should you help him or her take advantage of this opportunity?

Many parents are asking themselves this question. According to a survey done by the National Association of REALTORS®, 36% of first-time buyers received help with their down payment from family or friends – typically parents – in 2010.  That was up 28% from 2009.

Can you afford it?

The first thing to ask yourself is whether you can afford it. Are you on track to reach your financial goals for retirement? If you are not, you cannot afford to help your child buy Southeast Michigan real estate.  Additionally, some financial experts suggest that you should not tie up more than 3% to 5% of your assets in family loans.

Are you prepared to lose the money?

Your offspring may fully intend to repay you, but his or her ability to do so could change quickly in today’s financial environment.

To reduce the possibility of your child falling behind on payments or defaulting, create a contingency plan.  If the amount you’ve lent is small enough, you might decide to give it to them as a gift. If not, work out a schedule of repayment. For instance, you could reduce the monthly payment. Just make sure you get some type of payment on a regular basis, even if it’s only symbolic.

Will your other children be accepting?

Your other children should know that you are providing this aid, if you intend to also help them financially, and if not, why you made that decision. If helping one of your kids finance a home will cause a major rift in your family, you may not want to move forward with it.
Can you do the deal and then back off?

Helping your son or daughter buy Southeast Michigan real estate in Oakland County, Michigan can be a positive for all of you. But you don’t want to be the type of parent who helps and then spends the next decade dictating how to decorate the home and dropping in to visit any time you please.

If you’d like to find a home to purchase for your child, I can help.  Give me a call today at 248-514-2640 or email me at info@NorthWoodwardHomes.com for additional information.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

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More than likely, you’ve cooked dinners, you’ve played games and you’ve made thousands of memories within the personally decorated walls of your home — and now you think you’re ready to move on. No matter the reason for selling your Southeast Michigan real estate, getting emotional is normal. However, you need to keep those emotions in check, because they could be detrimental to closing the deal.

Emotional calls constantly get sellers in troubling situations that make them regret their split decisions. A snide remark, too-low offer or fixer-up request can strike a personal cord, but you need to set your feelings aside in order to do what’s best for your financial future. Below are emotional mistakes that can stop negotiations and put you in housing hot water!

• Overpricing faux pas – Just because your sweat is worth a lot to you doesn’t mean that your property’s value will reflect the years of hard work, cleaning, upgrades and love you’ve put into it. Do your research. If there are comparable houses in your neighborhood at lower price points, reduce your listing price so that you’ll be a contender for buyers.
• Negative negotiating – Even though you may not want to entertain low offers, listen to your Southeast Michigan real estate agent. He or she has been through hundreds of negotiations and is your best bet for closing the deal at a fair price.
• Personal injuries – Don’t let buyer biases get to your personal ego and cause you to reject a potential purchaser all together. Remember, you are selling this house and moving on; they’ll be able to do whatever they want once they own it anyway.
• Mourning the sale – The memories go with you, so don’t have any second thoughts. Concentrate on making new happy moments in your future home.

Don’t let sentimental seller’s syndrome cause you to blow a fuse, have seller’s remorse, or worst of all, lose a sale. Eliminate emotions from the sale process in order to draw in buyers, get your money’s worth and sell quickly.

If you need help selling your Southeast Michigan real estate in Oakland County, call me at 248-514-2640 or email me at info@NorthWoodwardHomes.com for more information.

Lee Morof
Associate Broker/Certified Distressed Property Expert/Attorney
RE/MAX Showcase Homes, Birmingham, Michigan
Call:  248-514-2640
info@NorthWoodwardHomes.com
www.NorthWoodwardHomes.com

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