Lee Morof's Real Estate Blog

I’ve been getting a lot of questions about the estimated Southeast Michigan real estate values provided by online sources, so I thought I’d answer a few of the most frequently asked questions here today.

Why is the price you think my home can sell for different than the estimated home values provided by online real estate sources?

Because computer programs set those prices.  Here’s how it works in general.  A computer pulls the description of your Southeast Michigan real estate from public records.   Using that extremely basic information, such as square footage and number of bedrooms and bathrooms, the computer comes up with a price for your home.

Computer programs cannot personally visit your home and other homes in your neighborhood to see the differences and similarities.  They cannot see that your home has recently been painted and renovated.

Are there any circumstances in which those computer generated values are at least fairly accurate?

The estimated home values could be in the ballpark if all the following are true:

• Your home is in a subdivision in which the homes are very similar;
• Several homes just like yours have sold recently;
• Homes are not being sold as short sales or going into foreclosure;
• Your home is newer and has not had a major renovation or addition that is not in the public records.

While it’s fun to go online to see what your neighbor’s home sold for, don’t use that information as the final word for what your home could sell for in today’s market.

If you’d like a free, in-person, professional analysis of what your Southeast Michigan real estate could sell for in today’s market, give me a call today at 248-514-2640 or email me at info@NorthWoodwardHomes.com. No obligation, just 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

When you own a home, you have to pay your homeowner’s insurance and the tax on your Southeast Michigan real estate.  Depending on the state in which you live and your lender, you may be required to make monthly payments into an escrow account so your lender can pay your taxes and insurance, or you may have the choice to pay them yourself.

Escrowing homeowner’s insurance and Southeast Michigan real estate taxes has advantages and disadvantages.  If you have a choice, here are several things to consider when deciding whether to escrow or not to escrow your real estate tax and insurance.

Advantages to Escrowing

• No lump sum to pay.  The biggest advantage to escrowing your real estate tax and insurance is knowing that the money is there when it’s needed.  Your monthly mortgage payment includes 1/12 of your property taxes and homeowners insurance premium.  By paying this expense monthly, you don’t have a mountain of debt facing you at the end of the year, at a time when finances are tight for many people.
• Lenders like it.  If a lender is unsure if your home has sufficient homeowner’s insurance coverage, they can purchase insurance to cover their investment at your expense. A lender’s insurance policy is expensive and only protects their interest in your home. With the insurance in escrow, the policy is sent directly to your lender eliminating any confusion on the coverage provided.
• Lower closing costs.  You don’t have to pay your homeowner’s insurance and real estate taxes as part of your closing costs.  Unfortunately, you do still have to pay them, just not as part of your closing costs.

Disadvantages to Escrowing

• Closing costs are higher.  Lenders collect money at closing for your escrow account. That way, they have your money to pay the tax and insurance bills when they arrive.
• Errors can occur.  For example, if your insurance company cancels your homeowner’s policy, the insurance company sends the cancellation notice to the lender.  Unless the insurance company or the lender lets you know, you have no idea that your policy was cancelled.
• Mortgage payments may vary.  If you have an escrow account associated with your mortgage, your monthly mortgage payment will adjust periodically.  If your homeowner’s insurance or real estate taxes increase, your monthly escrow payment will need to increase to cover the added cost.

Both options have advantages and disadvantages, in the end you have to decide which is best for you and the protection of your Southeast Michigan real estate.

If you’re thinking of buying Oakland County MI real estate, I can guide you through all the complex details including whether to escrow or not to escrow.  Give me a call 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

Almost every home could use some remodeling here and there.  If your mother’s home could use some fixing up, here are a few remodeling projects that give a good return on investment – either in selling price or in the speed of the sale.  One of these might make a great Mother’s Day gift, even if your mother isn’t considering selling her Southeast Michigan real estate in Oakland County.

• Flooring – If your mother’s Southeast Michigan real estate has hardwood floors, it’ll be worth the investment to get the floors refinished. If she only has carpet or tile, make sure it’s in great shape. If not, replace the flooring with new carpeting or tile in a neutral color.  Buyers don’t want to worry about replacing flooring in the near future.
• Kitchens – Update countertops. Granite is great, but most markets still put a lot of value on nice, updated laminate counters. Also, consider freshening up the cabinets. If they’re old and tired looking, refinish them with new stain or paint. If nothing else, a few dollars worth of new hardware, such as drawer pulls, will go a long way.
• Paint and wallpaper – Remove wallpaper. Many people do not like wallpaper, and those who do like wallpaper have personal opinions on which wallpaper is attractive.  Also, make sure every room looks freshly painted.  Buyers want a finished house, not a bunch of to-do projects.
• Roof – Consider replacing the roof, if it needs it.  Buyers will likely move on from homes needing large repairs.
• Exterior – Patch cracks in the cement, plant some flowers and replace the door hardware, if it’s dated. These are all inexpensive fixes that will pay off.

If you need help deciding the priority of quick fixes for your mother’s Southeast Michigan real estate, call me at 248-514-2640 or email me at info@NorthWoodwardHomes.com. I’m happy to help.

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

When you buy southeast Michigan real estate in a subdivision, co-op or planned unit development, you may be subject to a host of rules and regulations as established by the Homeowners’ Association (HOA) governing that development. 

You’ve most likely heard of HOAs, but you may not know exactly how they operate and how they can impact you and your southeast Michigan real estate.  In this article, you’ll get information on some of the broader issues that you should be aware of when moving into a community governed by an HOA.

What is a Homeowners’ Association?  

It is a corporation formed by real estate developers to market, manage and sell homes and lots within a development.

Does the southeast Michigan real estate developer retain control of the HOA forever?  No.  After a predetermined number of homes or lots are sold, the control is turned over, first, to a handpicked group of homeowners.  Later in the process, elections are held once a year within the development to choose board members.

Can anyone be a board member?

As long as you’re a property owner in the development governed by the HOA, you can campaign for the position.  Elections are held once a year.  It is not a paid position; board members volunteer their time.

What is the primary function of the HOA?

The primary function of an HOA is to maintain the rules and restrictions that were put in place by the developers and to maintain the community’s common areas.

Common areas include streets, parking lots, parks or green areas, pools and buildings used by the owners like a clubhouse or fitness center.  If your southeast Michigan real estate is an attached condo unit, this would include the exterior of your unit as well.

Can I elect not to join the HOA?

No, HOA membership is written into the pros and cons of buying a home when the development is formed.  No matter how many times the property changes ownership, the HOA requirements remain with it. 

You’re also required to pay HOA fees, which are used to maintain the common areas.  If you do not stay current on the fees, the HOA can put an assessment lien on your southeast Michigan real estate.

Before buying into a development with an HOA, read and understand the CC&Rs.  Also, take the time to talk with some of the other homeowners in the development to find out how they feel about their HOA.

If you’re interested in buying southeast Michigan real estate, with or without an HOA, I can help.  Please give me a call at 248-514-2640 or email me at info@NorthWoodwardHomes.com.

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

Do you know how closing costs actually work? Or, how you’d use CMAs (comparative market analysis) to evaluate Southeast Michigan real estate in Oakland County? And, can you decipher all of the abbreviations and acronyms, such as FDR, lo dues and MLS.

Purchasing a home is frustrating enough without having to go through the frustration of decoding all the complicated speak and legalese. If you brush up with a real estate dictionary  before your home-buying search, you’ll gain valuable knowledge and save yourself a lot of time and headaches in the long run.

• Basic lingo every Southeast Michigan real estate buyer or seller should know …
  ARM – This stands for Adjustable-Rate Mortgage, which is a type of mortgage where the interest rate periodically adjusts.
• Closing costs – These are miscellaneous expenses buyers and sellers pay upon closing; they usually include brokerage commission, escrow taxes, recording fees, etc.
• CMA – This stands for Comparable Market Analysis, which is a report of recently sold, comparable homes in the same market as the home you’re selling.
• ERV – Estimated Rental Value 
• FDR – Formal Dining Room
• Fixture – Anything that is permanently attached to the home, such as door knobs, carpeting, light fixtures and landscaping
• FP – Fireplace
• HDW – Hard Wood Floors
• Lo dues – Dues paid to the homeowners association
• MLS – Multiple Listing Service, which is an organization that compiles multiple listings into one report and distributes it to all of their realty members.
• PSF – Per Square Foot
• Sale price – The actual price at which the property sells.

Don’t let the hectic housing market overwhelm you.  If you understand Southeast Michigan real estate lingo, you’ll be more knowledgeable and able to easily achieve your real estate goals.

If you have questions about any of these terms or want help achieving your real estate goals, call me at 248-514-2640 or email me at info@NorthWoodwardHomes.com for more information.

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