Lola Audu~Real Estate Broker/Owner Grand Rapids, Michigan Real Estate

This morning, my inbox has received several notifications about the formal extension of the Homebuyer Tax Credit which will provide financial assistance to many New Home Buyers and Existing Homeowners who are considering the purchase of their next home. Later in the day, a conversation with a client underscored our need to make sure that as real estate professionals, we provide accurate information from the Federal Government about this tax credit. Here's the question:

Question: If an existing homeowner sells a home and qualifies to utilize the extended Tax Credit, is the date on the contract OR the settlement closing date the one which is used to determine qualifying eligibility?

I spoke with 2 mortgage officers, both of whom were not certain about the answer. Than I visited the Federal Tax Credit information site (which had not yet been updated to reflect the news of the morning 11/06/09) and also read the FAQ from our State Association & the National Association of Realtors. Why was this necessary? Well, the answer in part may be the result of rapid changes which sometimes create a lack of clarity. However, here's the response from the National Association of Realtors (NAR) which was obtained from my local and state Board.

Question: I am an existing homeowner. On October 25, 2009, I signed a contract to purchase a new home. I have lived in my current home for more than 5 consecutive years and am within the new income limits. I will go to settlement on November 20. If President Obama has signed the bill by the time I go to settlement, will I qualify for the new $6500 tax credit?

Answer: Yes. The existing homeowner credit goes into effect for purchases after the date of enactment (when the bill is signed). There is no reference to the date of contract for the new credit. The provision looks solely to the date of purchase, which is generally the date of settlement.

This is just on example of the types of questions which consumers will be asking. Do you know where to send them to get accurate information? The Michigan Association of Realtors has been proactive in getting information out about this program. Other detailed questions about the change in the provisions for the Tax Credit can be found here.

Kris Wales recently wrote an excellent blog (Members Only) about the dangers of rushing to provide information which may not be fully accurate and the harm this can do to a consumer. In a rapidly shifting environment, even loan officers are not necessarily getting information prior to the general public or real estate agents. It becomes even more critical for real estate agents to direct clients to reliable sources and to ask their clients to contact the appropriate professionals for additional guidance when appropriate.

Good News on the housing front & just in time for the Holidays in Grand Rapids, MI. In a market which has seen the worst of times in recent years, a recent article in the Grand Rapids Press heralding an increase of 35 PERCENT in home sales over 2008 was more than welcome...local professionals are ecstatic!

It's been great to touch base with so many agents who tell me they are busy again. We sold most of our inventory within the last couple of months and are "re-stocking the shelves." The 'HOT PRICE' range is $100,000 ~ $140,000.

This has helped to increase the average Home Sale Price to $109, 826 which was 3.2 percent higher than the same period in 2008. But...year to date, home prices are still down by 15.1% over 2008, a number which can be attributed to the on-going issues with foreclosures and short sales in the local market.

Other noteworthy improvements in the Grand Rapids, MI market include the decreased number of Short Sales and Foreclosures in September and the possibility of the extension of the Home Buyer tax credit which served to enable over 200,000 new jobs last year according to a quote by Jerry Howard, President of the National Home Builders Association in this article.

Now, all this good news does not necessarily indicate we are totally OK. There are still huge inventory of foreclosed properties which have not yet been placed on the market and joblessness continues to be a scourge on the Michigan economy. As we near the end of the year, what happens in these two areas as well as the credit markets will send strong signals about the on-going journey of recovery.

If You're a Homeowner...

These past several months have created some glimmers of hope. Inventory levels have declined and housing prices have inched up. More importantly, Sales have increased substantially. One of the critical assessments that homeowners who need to sell a home can make is the OPPORTUNITY COSTS CALCULATION. It's a fairly simple calculation which aids in determining how long you should hold on to your home, if this is a time to sell your home and what your carrying costs without a Sale actually are.

An Example...Calculating the OPPORTUNITY COST

For example, let's say your home is valued at $140,000. You've been in the home for less than a decade and you currently owe approximately $120,000. The OPPORTUNITY COST is determined by taking approximately 10% of your current expected Sales Price and dividing it by 12. In this case:

140,000 X .10 = 14,000

14,000 / 12 = $1,167 = OPPORTUNITY COST per month

That number $1, 167 is approximately what it will cost you EACH MONTH if home prices DECLINE another 10% over the next 12 months. This year, home prices declined approximately 15% overall from last year, and since 2006, there has been a 30% DECLINE nationwide. So an improvement to a decline of only 10% is not unreasonable. You can manipulate the numbers to see a range of options, but most experts seem to think that we can expect declines within the neighborhood of 6% - 10% in home prices over the next year.

An Example...Calculating Your Specific OVER-PRICING PENALTY

OPPORTUNITY COST + CURRENT MORTGAGE PAYMENT = OVER-PRICING PENALTY

For example: $1,167 + $1,100( est. Mortgage Payment) = $2, 267 (OVER-PRICING PENALTY PER MONTH)

OR...$27,204 PER YEAR

Adding the OPPORTUNITY COST to your current mortgage payment gives you a unique perspective of what it will actually be costing you to OVER-PRICE your house in today's market. If you'd like a detailed report about housing & pricing in your specific Grand Rapids, MI neighborhood, please give us a call at 616-791-0511 or e-mail us at info@auduhomes.com.

Just about 3 years ago, I decided to write a blog post. Within a month, I stumbled upon Active Rain and signed up. I had absolutely NO idea how much that simple decision would change my life and career.

Yesterday, 2 extraordinary events intersected together in 1 day aka 1,440 Minutes. During the Annual Broker Meeting of the Grand Rapids Association of Realtors®, I was nominated by Pat Vredevoodg, 2007 NAR President for the position of President-Elect (2009) & elected by the board of Brokers of the Grand Rapids Association of Realtors®.

It was a moment ripe with symbolism on a variety of levels. Pat captured a unique essence during her brief nomination speech which she termed as a 'tweet' about why the Brokers present should cast their vote in favor of the nomination.

Here's Pat's insightful Twitter nomination: Vote for Lola Audu because she is "Smart, Caring, Cutting Edge, Daring, Forward & Clear Thinking, Humble, Funny, RE Pro, Motivator, Responsible, Experienced, Mom, Inspiration"

Later that afternoon, I picked up a direct message on Twitter from Todd Carpenter, NAR's Social Media Manager who asked me to check my in-box for a message from President-Elect of NAR, Vickie Cox Golder. Here are excerpts from the e-mail which showed up this morning,

Dear Lola,

Congratulations! You have been identified as an influencer in progressive ideas about real estate and, as a result, we invite you to participate in a new pilot program for the National Association of Realtors ®. NAR's leadership would like to include your voice in our governance system in 2010 and have selected a national NAR committee for you to join. .....

By serving on a national NAR committee, you will have the opportunity to bring your ideas about today's competitive and evolving marketplace to the industry's leaders and you will be in a position to spark change within the business......

NAR has made a commitment to elevating the voice of young professionals and early adopter of social media in the real estate business, and we want to hear from you.....you were recommended to serve on the Housing Opportunity Committee.

What an opportunity! I'm so grateful to God that the tapestry which He weaves in our lives through our experiences is never conventional nor is He ever limited by pre-conceived limitations about who we are or can become.

I'd like to also congratulate another fresh young perspective and voice from Michigan...Christa Caulk who has also been selected to a NAR committee , the Political Action Involvement Committee. Congratulations to you Christa, I know that your contributions will enrich the dialog of leaders in our industry! And...Kudos to NAR for embracing a fresh perspective for the future of our profession!

*Christa Caulk is the daughter of Missy Caulk, a leader and innovative thinker in the real estate industry and in social media.

I'm one of those people who checks things out online BEFORE I go. Why not? I figure there is more to be gained from taking advantage of the benefit of other people's experiences before spending the gas, time and money to discover the truth myself. Apparently, there are a lot of folks like me.

Did you know that the according to Wikepedia, the first ratings site was created by Michael Hussey and called 'RateMyFace.com. I was intrigued to discover that ratings sites started out as dating sites for the most part and evolved over time to include all sorts of other services, including sites rating professionals such as lawyers, doctors and teachers.

It was also interesting to learn from this book about the founding of Facebook that this popular site also had a ratings component behind it's inspiration. It's founders envisioned it as tool to enhance their social/dating scene during the college experience at an Ivy league school.

Today, the concept of consumers determining the Value of a product or service through ratings is quickly developing a huge cache in terms of credibility. People trust what other people have to say about something, even more than the owner or creator of the product.

The viral nature of social media has accelerated the trend. In Grand Rapids, the concept of ratings by a community took a giant leap forward through the launching of Art Prize this fall. Artists from all over the world will be displaying their work from September 23 through October 10, 2009 in venues throughout the city. The winner of the Art Prize ($250,000) will be decided on by...you guessed it, members of the public who register to vote!

This is why I find it especially intriguing that a Google search for the term 'Rating Services for Realtors' with a hit total of approximately 2 Million, does not highlight a single comprehensive ratings database for real estate professionals or their services on the first 2 pages! A perplexed consumer asks the question on Ask.com... wondering WHY one can find information on a number of other professions, but not a comprehensive database for Realtors?

There are a few associations which are exploring the utilization of a Ratings Service such as the Houston Association of Realtors®, but these are few and far between. It might also interest you to know that the Google search results for Rate your Realtor number 13,000,000! Some of the sites on the first page are powered by consumer generated content and data exchanges. This is something consumers want, are searching for...and may ultimately successfully create for themselves.

And it won't just be about Realtors®. Can you foresee a time in the near future in which community ratings will play a bigger part of defining the value of any particular area? Today, Walkability scores for neighborhoods are increasingly a part of the data supplied to prospective new home owners on some aggregate databases.

The list of options which consumers might be interested in about a community is potentially endless...think school ratings, environmental awareness, diversity, employment opportunities, medical services. From a consumer perspective, it would be helpful to be able to download a comprehensive profile of a community, then select the issues that were most important and see what others are saying or not saying in one place. What do you think? Are Realtors® missing the boat by their lack of proactivity in this area?

Picture courtesy of Wolfgang Staudts' photostream on flickr

This has been one of the oddest summers I've ever experienced in West Michigan. July has been mild and temperate. Sometimes, it's actually felt more like spring sweater weather. I haven't minded too much because fall is my all time favorite season of the year. The flowers seem to love the weather too. The rainfall and moderate sunshine has allowed to them to bloom beautifully. Mother Nature seems to enjoy challenging our expectations from time to time.

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