Jules Yates

As temperatures drop in the area it reminds me of shopping for foreclosures homes last winter with buyers. We would see these bright orange and green stickers in the kitchen and bathroom stating the home had been winterized. Often times it was done in late fall or occasionally in the middle of winter.

Either way keep one thing in mind... always assume the pipes are frozen. As I discussed with a buyer this evening, rarely is a home winterized immediately after the heat is turned off. Generally it is 30-60 days after a bank takes back a home in foreclosure before it is winterized.

I hate to say it but many times even if they are winterized early enough they are not done properly as was the case for one of my buyers last November. They were purchasing a home that had hot water heat. On our initial visit there was no evidence of frozen pipes but after the offer was signed and we had temps below 0 for a week all of a sudden several pipes in the basement burst.

In that case there was $8,500 worth of damage to the heating and water system Fortunately for my buyer the Seller (and in this case the buyers lender) reluctantly agreed to cover the repairs. The moral of the story always assume the pipes are frozen and get a competent inspection even if the home claims to be winterized.

JOIN EXIT REALTY!!

Jules Yates is an Associate Broker at Exit Realty Paramount in Traverse City, MI. To Learn More about Jules and to learn why he joined Exit Realty visit www.WhyIChoseExit.com. Have you considered a career change or considered making the switch to EXIT REALTY, if so let Jules sponsor you into an office (anywhere in the US or Canada) and he will personally help you build your business to new heights.

Finally...here is some great news for the Michigan Real Estate market. 3 cities in Michigan were ranked in the top 10 in the nation for House Hunting. You can get your best bang for the buck in these cities according to the Today Show. The criteria were cities where home prices have dropped the most but now are shooting up with record prices.

#1 Sarasota FL - $175,800 median home price
#2 San Francisco, CA - $472,900 median home price
#3 Lansing, MI - $81,300 median home price
#4 Marietta, GA - $121,400 median home price
#5 Grand Rapids, MI - $85,000 Median home price
#6 St. Petersburg, FL - $140,900 median home price
#7 Naperville, ILL #7 $204,300 median home price
#8 Trenton NJ #8 - $254,300 median home price
#9 St. Louis, MS - $133,400 median home price
#10 Saginaw, MI - $55,700 median home price

Watch the TODAY SHOW VIDEO (October 13, 2009) - Click the Link Below

http://today.msnbc.msn.com/id/26184891/vp/33191501#33191501JOIN

Join EXIT REALTY!!

Jules Yates is an Associate Broker at Exit Realty Paramount in Traverse City, MI. To Learn More about Jules and to learn why he joined Exit Realty visit www.WhyIChoseExit.com. Have you considered a career change or considered making the switch to EXIT REALTY, if so let Jules sponsor you into an office (anywhere in the US or Canada) and he will personally help you build your business to new heights.

This has been by far the strangest summer and fall I can recall since moving to Northern Michigan in 2001. This summer was cooler than normal but mainly dry which was a good thing in my mind. September was wonderfully summer and warm and here we are in October and it has been less than pleasant.

I took a drive this afternoon out to Bellaire, Michigan and as I was driving through the rolling hills of Antrim County I was surprised to see so many green leaves. Sure we had the occasional bright red or yellow maple tree along side the road but the majority of the trees are still green as they can be.

Just last week my brother came to visit from Lansing and he said he too was surprised that he did not see the color change. I have been told that lower Michigan has more color than we do here in Northern Michigan. Our proximity to and the warmth of Lake Michigan, Grand Traverse Bay, Lake Skeegemog, Elk Lake and Torch Lake creates a micro-climate which seems to delay the turning of the leaves.

If you live in lower Michigan and thought the color tour may be over... I assure you it is not. Please come up and visit us here in Northern Michigan this fall.

JOIN EXIT REALTY!!

Jules Yates is an Associate Broker at Exit Realty Paramount in Traverse City, MI. To Learn More about Jules and to learn why he joined Exit Realty visit www.WhyIChoseExit.com. Have you considered a career change or considered making the switch to EXIT REALTY, if so let Jules sponsor you into an office (anywhere in the US or Canada) and he will personally help you build your business to new heights.

This Past week I had the privilege of attending the Michigan the Michigan Association of Realtors convention at the Grand Traverse Resort here in Traverse City. Having the convention here in my hometown was simply a blessing. If you can believe it this is the first MAR convention I have attended in the 21 years I have been in business and all I can say is... wow.

One of the most important things I learn (or became more familiar with) was a financing program through RD (Rural Development) and specifically what is called RD Direct. I am confident that the majority of the population (and many REALTORS) are not aware of how powerful this program can be to first time home buyers or those with a low or very low income.

Did you know that a single person (living in Grand Traverse County) with "decent" credit and an income LOWER than (yes... lower then) $22,150 per year (or equivalent of less then $11 per hour) more than likely can qualify for a RD Direct subsidized loan. The rates are different for each county and are higher if you have additional family member living with you.

This is a $0 DOWN loan which basically gets you a 33 year fixed mortgage at 1% interest (if you qualify). You can buy an existing home or custom build A NEW HOME. You may not realize this but right now I work with a builder who can build you a new 2 bedroom 1 bath home "STICK-BUILT" Home. This includes a basement, garage, appliance, air conditioning on a 1 acre lot for $130,000 with NO MONEY DOWN. Both land costs and building costs are way down so why not take advantage of this opportunity.

Now that may not quite sink in just yet but for example on a $150,000 purchase (a quite respectable home these days in Traverse City) the payment with taxes and interest would be around $700-$750 per month ($445 plus $275 for taxes and insurance). In a traditional transaction the monthly payment would be $774 plus $275 or $1,049. That is a $275 monthly savings.

Again to put that in perspective that is the equivalent to buying a $85,000 home under a conventional mortgage at 5% interest versus a $150,000 home at 1%. We are talking about the same payment, more house and a lower interest rate. That 1% rate is like free money to you and it gives someone who qualifies additional BUYING POWER.

EXAMPLE ($0 down programs): With a Conventional mortgage in the amount of $85,000 at 5% interest the monthly mortgage payment would be $774 PLUS $275 for taxes and insurance for a total of $1,049 per month.

With an RD Direct loan you could buy a $150,000 home at 1% interest with a payment of $445 PLUS $275 for taxes and Insurance and get a $275 per month subsidy for a total of just $750 per month.

If you are unfamiliar with mortgages and finance this all can seem like a lot of mumbo jumbo but trust me when I tell you this... there has never been a better time to buy a home then now. I'll be happy to explain it to you in person so that you get a better understanding but all I want to do now is make EVERYONE aware that buying a home is possible for many people but they just don't realize it.

I am sure some of you say...what is the catch. Well as far as I am concerned, there is no catch. If you are looking for some thing than the worst case would be what is called the recapture. What that means is the government is subsidizing your loan and making about $275 per month of your payment for the time you have the loan.

Since they are in essence helping you, when you go to sell your home (and lets say it does not go up in value) you will not owe any of that money back. If on the other hand it appreciate in value, then in that case you will be required to pay back a portion of the profit. It sure seems fair to me so don't let someone tell you not to check into it.

Visit http://www.rurdev.usda.gov/RHS/sfh/brief_rhdirect.htm for more information or call me anytime at 231-218-5199. You may be asking what I get out of this and the answer is simple. I get to help people buy a home and the seller pays me when I sell a one. Everyone wins and you get yourself a new home.

JOIN EXIT REALTY!!

Jules Yates is an Associate Broker at Exit Realty Paramount in Traverse City, MI. To Learn More about Jules and to learn why he joined Exit Realty visit www.WhyIChoseExit.com. Have you considered a career change or considered making the switch to EXIT REALTY, if so let Jules sponsor you into an office (anywhere in the US or Canada) and he will personally help you build your business to new heights.

It seems that at least once a week or more I get a call on one of our listings and at some point the discussion about foreclosure comes up. That is not surprising, The part that surprises me is the amount of misinformation that is out there in regard to foreclosures, how to buy them, where to buy them and the foreclosure process in general.

Just this afternoon I got a call from a potential buyer who heard from a neighbor that one of my listings was in foreclosure. He said, "I heard it was in foreclosure and so the bank must own it right?" I told him, "No... it is in foreclosure but still within the 1 year redemption period." and asked if he was interested I owning the property.

He continued to probe into the details of the foreclosure which is when I asked him if he truly understood the foreclosure process. I soon discovered that he had been given a lot of bad advice from other people. The first thing one needs to know is just how the foreclosure process works. The process goes something like this:

1. AFTER 30 DAYS LATE - Most lenders will call you within 15 days after missing a mortgage payment. Any time you're late on your mortgage payment it's technically a default, but generally a lender would not foreclose until you are at least 90 days late.
2. AFTER 60 DAYS - After missing a payment for 60 days you will generally continue to receive calls and you may receive a letter offering to assist you. CALL YOU LENDER because they want to help you. Often times they will discuss options available to you.
3. AFTER 90 DAYS - Generally after 90 has passed without payment (especially if thee is no contact with the lender) the lender will begin the foreclosure process. You will be notified in advance and generally be given the opportunity to bring your payments current or make other arrangements.
4. NOTICE OF FORECLOSURE - Approximately 14 days after foreclosure is started a notice of foreclosure is published. The notice must be published once a week for 4 weeks in a newspaper that circulates in the county where the property is located. The notice must also be conspicuously posted at the property and the lender has a right to enter the mortgaged premises for this purpose. As a homeowner you have rights at this Point. The borrower can cure the default and keep the existing financing prior to the sale if they pay all of the payments that are past due prior to the sale date. They could also sell the house and pay the loan off in full (or ask for a "Short Sale" which is discussed later).
5. SHERIFF'S SALE - In Grand Traverse County the Sheriff's sale is held on the second floor of the Court House twice a month. Currently approximately 15-30 homes go up for sale every other week. It's an auction and the house is sold to the highest bidder over the minimum bid (which is established by the lender prior to the sale). In Grand Traverse County approximately 97% of all mortgages are purchased by the lender. The lender will buy the property and Sheriff's Deed is recorded. At this time the lender (or highest bidder) owns the home but YOU DO NOT HAVE TO MOVE OUT OR ALLOW ANYONE ACCESS until the redemption period expires. The amount of the sale is typically the principal balance of the loan plus interest, late charges and legal and court costs.
6. REDEMPTION PERIOD - The rules can vary, but in Michigan the redemption period is 6 months for single family homes on less than 3 acres. If the property is over 3 acres the statutory redemption period is 12 months. During this time the homeowner may continue to occupy the home (no payments are made) and has a right to redeem the property by paying the full amount of the sheriff's sale (this could be less then the original balance of the loan) plus interest at the rate of the original mortgage. This could be done by getting a new mortgage or selling the home.

Take note: The redemption period can be reduced by the court to as little as 30 days if the property is abandoned). Generally after a sale, the lender will hire an asset protection company to keep an eye on their property. Often times someone will drive by and determine if there appears to be anyone living in the property.

If at any point the property appears to be abandoned, the lender may attempt to shorten the redemption process by court order. In that case a notice will be sent to the last know address as well as posted on the property. The homeowner will be give 15 days to respond or the court may deem the property abandoned and the blender will take possession. Any remaining personal property may be removed.

Foreclosure is a long and arduous process and circumstances will vary with each and every lender. The above example is just that an example. If you are having trouble making your house payments the best thing to do is to be honest about it with your lender. Call them and be prepared to explain your situation in detail. The bank does not want to foreclose so they are generally willing to try to create a workout plan. If you're having trouble making your house payment the best thing to do is to face up to it early and you can probably work things out.

Other options/alternatives to save your home.

If you have come to the conclusion that you just can make your current mortgage payments, you have several options to consider. There are several options that your lender may offer you if you miss a payment and want to avoid foreclosure:

A revised repayment plan. If you suffer a short-term financial setback (expensive car repairs, a medical emergency), your lender may provide some flexibility by agreeing to let you pay off your deficiency in several installments over the next several months.

Loan modification. Many mortgage servicers can adjust the terms of your loan -- most often by lengthening out the amortization schedule of your loan, lowering the interest rate or rolling the deficiency into your loan and reamortizing the new balance, all in an effort to bring your loan current. No lender wants a mortgage in default.

Short sale. The subject of this site, the lender may allow you to sell your home for less than the outstanding loan amount, takes the proceeds and forgive you of any remaining debt.

Short refinance. The lender may release you of your existing debt and refinance the outstanding balance into a new loan.

Refinance with a "private money mortgage" loan. You may not like the high rates and fees for this type of loan, one from a private lender, but it may allow you to buy time to sell your home in an orderly fashion and avoid default or foreclosure.

For More information on short sales please visit my website http://www.ExitShortSales.com or email me at jules@julesYates.com

As for buying a foreclosure

There is a lot of information out there about buying foreclosed homes and some of it is true and a lot of it is just plain false. I will try to clear up some of the basic misconceptions about foreclosure properties:

First let's get familiar with the basics. Foreclosure property or bank owned property (now owned due to foreclosure) is referred to in the business as "Real Estate Owned" (a REO property). At this point the home is no longer in foreclosure as the bank (or lender) is the title holder.

Properties that are still in possession of a homeowner facing foreclosure is known as a "Pre-foreclosure property" or possibly a "Short-Sale". Many investors look for these distressed properties as many times they can be purchased for less than the current market value. Are there deals out there? Yes there are, but you need to be aware of what to expect when looking at REO properties:

1. WARRANTY - You will be buying a home "as-is" with no warranty.

2. COINDITION - Rarely is there any information available about the previous owner or the condition of the home.

3. UTILITIES - When looking at these homes the utilities will usually be disconnected as lenders do not want to pay high utility bills

4. FREEZE DAMAGE - If you purchase a home that went into foreclosure during the winter months, you need to have the home inspected as often times there can be freeze damage, even if the property was supposedly winterized.

5. FINANCING - In many cases your financing options will be limited as many of the properties will not qualify for many government programs (FHA, RD, VA, etc.) as there may be guidelines that the property must meet.

6. INSPECTION - When a property is appraised it may require you to put the utilities in your name (prior to ownership) so that a proper inspection may be done. Also the appraisal may require you to have the utilities on as well. If it is in the winter you may be required to pay to have the home de-winterized and then re-winterized for the inspection. Rarely will these costs be covered by the seller.

7. CASH BUYERS - If you are a cash buyer or you qualify for conventional financing, the inspections, etc may be optional. Consult your real estate professional for advice.

COMMON MYTHS

1. Homes can be purchased for pennies on the dollar

While there are often some very good deals, rarely will a lender sell a property at a significantly reduced price. Generally you can expect to save around 10-20% on average. An experienced REALTOR can help you find the best deals out there.

2. All REO properties are in poor condition

Although many REO properties are in need of repair, others are in like new condition. Again an experienced REALTOR can help you find the best properties out there.

3. You should contact the banks directly and ask about their REO inventory

Most larger lenders hire a licensed professional to market their property. Your best source for bank owned (REO) properties is a local REALTORÒ who specializes in REO properties

4. You can not get 100% financing on bank owned properties

If you (and the home) qualify for certain government programs you may be able to purchase a REO property with no money down. In fact there are several programs which are available for those who make less than $71,750 (for a family of 4 in Grand Traverse County) or $50,250 if you are single. Ask your REALTOR to recommend a lender who specializes in these programs.

5. I can't but a home with little or nothing down if the property needs repairs

There are certain government programs available for homes in need of repair (or that won't qualify for other programs). These special loan programs will require the property to be repaired after closing by a licensed professional. The amount of the repairs will be added to the loan amount so you will need to qualify for the purchase price PLUS the cost of the repairs. Consult your REALTOR for more information.

6. I have to pay to sign up on special websites to get list of foreclosure properties

No you do not. Your REALTOR can easily provide you with a list of bank owned properties. Ask to be set up on an automated email so you find out about the properties as they are entered in the MLS.

7. The market is still falling so I should wait to buy a home

Absolutely not. While the market may not have bottomed out, timing the market is a challenging task as each market is different and the statistics for each type of property (single family, vacant land, waterfront, etc.) is also different. Also interest rates are at record lows and as long as you are going to hold your property for several years you should be in a great equity position once the market does correct itself and it eventually will.

If you wait, interest rates may go up, financing option may change and prices may increase. Remember if you know we hit bottom and so will the rest of the world. When that happens sellers will be less flexible and the deals will evaporate fast.