Kris Wales - Macomb County MI real estate blog & homes for sale search site

One of the common misconceptions for home buyers (and some real estate professionals) is that the first time home buyers tax credit is $8000 for all buyers.

When reading the fine print of the IRS form 5405 there is an entry line to fill out asking for the smaller of 2 items: $8000 or 10% of the purchase price.

Reiterating: The tax credit is for 10% of the purchase price of the home up to $8000. It is not a full $8000 for every home buyer.

Let's all help to stop the confusion to home buyers by using the words "Up to" in our articles.

Edit: The chart that NAR put out for their members to use states "$8000" but it doesn't say "Up to $8000". You may want to add the language to your own charts for accuracy.

Unless you live in Michigan, or one of the other hard hit by unemployment states, the signing of H.R. 3548 by President Obama yesterday probably was good news to you because of the extension to the first time home buyers tax credit. Here, in my local area, I'm cheering because there will be thousands and thousands of out of work people who will continue to receive an unemployment check, for at least 20 more weeks.

How hard hit is my area by unemployment? (Look at these numbers and try to remember that the numbers reflect real people and their lives, and isn't just data.)

Michigans overall unemployment rate at the end of September was reported to be 15.3 percent. In Wayne County alone it was 18.3 percent. The city of Detroit? A staggering 28%.

Many of those people who were laid off at the beginning of this year, or late last year, have not found replacement jobs. It has been reported that approximately 44,000 people in Michigan cashed their last unemployment checks in October.

Coming in to the winter months and having their unemployment benefits cease would be cruel. Thank you to all of our government officials for taking care of this and giving an extended lifeline to those who so desperately need it.

When I read the news yesterday about the President signing this bill I was excited, and relieved, more so for those who cashed their last unemployment checks then I was for future home buyers. Needs first - wants later.

A bit of a twist to my home sales market report for October '09 in Macomb County MI:

I thought it would be informative for home owners to see how home buyers in our area are purchasing
their homes - is FHA still "king", or are cash buyers taking the lead?

Macomb County had 917 residential homes sold during the month of October 2009, which is an
increase from this time last year (730 homes sold.)

Sales prices county wide are still falling, with the average sales price being $91,890 compared to $101,574
in October of 2008. It is a sharp decrease county wide, but some cities / townships showed increases.
(Please feel free to call or email me for a detailed report for your area. I would be happy to provide the information for you - no fees for this service.)

How were buyers paying for their homes? The chart below will show a breakdown of how these 917
homes that sold in Macomb County MI were purchased last month.

With the large number of cash purchases we can still see that investors are buying the lower priced homes, taking advantage of this buyers market to increase their portfolios of rental properties. The large number of FHA and VA buyers also tells me that the first time home buyer tax credit had home buyers out in full force to take advantage of the money being offered to help them.

All of the data above was collected by Mirealsource™ and it's participating brokers and agents, and is deemed to be reliable but not guaranteed. As always, if you want specific information regarding your neighborhood or home, please feel free to contact me for a no pressure analysis.

One of the cities in my area has a wonderful online service in which you can find out the current taxes,
utility bills (water and sewer) and also check to see if there are any permits that have been pulled for
repairs or renovations.

In the case of vacant homes (foreclosures, REO's, etc.) there is also one more check that you as a purchaser
need to do:  Pick up the phone and call the city and find out if a certificate of occupancy is needed prior
to moving in to the home and if an inspection is needed by the building department.

A buyer client and I are in the middle of a "counter offer" purchase on a bank owned home, and one of the
things that I asked her to do was to call the city building department and find out if this home needed to
have an inspection prior to her being able to move in to it.   As it turns out, this home was red-tagged (although the tag was not readily visible when we viewed the home) and does need to be inspected by the building department.

It will cost the buyer $200 for the city building inspector to come out and look at the home, as well as additional fees if permits need to be pulled for any city mandated repairs.   Most small repairs can be done by the potential home owner, but those needing more expensive work (electrical, plumbing, heating & cooling, etc) will require additional inspections and permits.

Please don't assume that just because there isn't a notation on a city / township online service about an inspection being required that this is truthful.  Data does "fall through the cracks" and entries are sometimes not made in a timely fashion.

                                                Pick up the phone and call.  

For those wondering why I don't make the call myself for my buyer clients:  Third party translations can sometimes fall short of accuracy.  I want my buyer clients to hear for themselves what the city / township building department has to say.  They can also ask specific questions while they are talking to the representative while those questions are fresh in their minds.

It's taken too many years but the city of Detroit finally said to landlords: "If you own a home or an apartment building in the city and you rent out the home or apartment it is your responsibility to make it lead free."

Is it going to be expensive for landlords? Yes. Is this new ordinance going to cause rent to rise to compensate for the testing and removal of lead? Probably.

I have a feeling though that parents of children who live in these homes and apartments within the city would gladly pay higher rent in order to protect their children. I also have a feeling that many other cities will now follow suit and be drafting their own ordinances. It's going to be an interesting year ahead watching all of this unfold within the city of Detroit and hopefully within other cities in Michigan.

It's about damned time.

The text of the Detroit News article regarding the passing of this ordinance can be found here.