Robert Smith

For homes in the Howell zip code 48843 (basically the Howell area south of M-59), there are some interesting contrasts between 2007 and 2008.

The total number of homes sold are pretty close, 370 in 2007 (through 12/31/07) vs. 378 in 2008 (through 12/4/2008). The fact that the total number of sales has remained pretty constant is a good sign by itself. With lenders getting tougher on loan requirements, required down payments and more underwriting scrutiny it shows that there are still buyers out there looking for homes - and they're able to buy!

If we look at just the foreclosed (also known as bank-owned or REO) homes, the picture is more grim. In 2007, there were 47 bank-owned home sales of the 370 total, or about 13%. For 2008, we've seen 115 bank-owned home sales out of the 378 total, or 30%. That's more than double last year's rate and this year's data is not complete at this point.

The median price dropped from $209,750 to $170,000 (a 19% reduction) for those same time periods. That's a huge drop in value, undoubtedly influenced by the higher number of foreclosures. But there's also the fact that owner-occupied homes are dropping in price, too, as the entire housing market loses value.

The time to sell a home went down- from 145 days in 2007 to 134 in 2008 So, homes that sold did so about 8% faster in 2008 - a small bright spot, anyway.

If you absolutely have to sell, expect to take a hit from what your home was worth 2 years ago. At least 20%-25% is not uncommon, and it may be even more.

On Thursday, December 4^th, I'll be joining my colleagues from the Brighton Optimist Club to ring bells for the Salvation Army. We'll be in front of Taorello's Market Place, 1007 E. Grand River, Brighton 48116, from 10 AM - 8PM.

If you're in the area, stop by and say "Hello!" to an Optimist - especially if it's a cold day. We'll be working in one hour shifts, and I can tell you that standing for an hour on a cold day is a challenge. My time slot is from 3-4pm, and I'd especially love to see you and exchange greetings of the season!

This year's campaign kicked off on November 14^th, and the goal is $145,000. The Salvation Army also runs an Adopt-A-Family program to make sure that nobody is forgotten during the Holidays.

This is just one of the many community service projects that the Brighton Optimist Club undertakes each year. Sometimes your time and energy is as important as a monetary donation (or more so!)

Contact me to find out more about the Brighton Optimist Club and the programs it conducts for the youth of the area.

I've been doing a lot of REO (Real Estate Owned) properties for about two years and I encounter many misconceptions by consumers - at least from my personal experiences in dealing with bank-owned (foreclosure) properties.

First, the bank will take anything to dump a home. This is absolutely not true in most cases. (Of course, the borderline tear-down is an exception.) If you're offer is at 80% or less of the list price it will likely be rejected outright. If you're asking for seller contributions towards closing costs, you'd better bump that price up a bit, too.

While banks don't want to hang onto these properties, they're just like you and I - they want the best price that the market will bear, based on condition, amenities and the like. Banks price homes in different ways, but they usually get at least two Realtor® evaluations (called Broker Price Opinions, or BPOs), and sometimes a full appraisal, too. When they list a property at a certain price, they're fairly confident in that value.

Second, if you're putting in an offer on a house that hasn't been on the market before, you'd better go in close to full price for the first few weeks. Some Asset Managers will not take less than close to that amount for the first 2-4 weeks. Prices typically get reduced monthly, based on the listing agent's Monthly Status Report. Asset Managers pay careful attention to local market trends (housing values, unemployment rates, etc.) when deciding upon a pricing strategy and the amount of the reductions.

Third, most banks have already priced the home for its condition. Sure, all of the appliances are gone, and maybe some light fixtures, too. It could have a few holes in the wallboard or carpet that is badly stained. That's been rolled into the original pricing. If you're on the edge with what you can afford, don't expect the bank to bend over backwards for you to get that extra few thousand dollars to meet your pre-approval price point.

Remember, that may have been what happened to the prior owners who just lost the house - they became over-extended. As one Asset manager told me in an email that recently accompanied an offer rejection, "I can't help if they do love the house, they absolutely need to purchase something they can afford and this one they cannot, sorry." Ouch!

More discussion in later posts, but remember that you buy these homes ‘as-is', so be sure to get inspections done and carefully consider what you are trying to buy. Expect to pay a licensed plumber to de-winterize the home to check out the plumbing (around $100) and then to re-winterize it (another $200). This is over and above the cost of the inspection itself.

If you have questions about both the benefits and pitfalls of buying a foreclosure property, feel free to contact me.

This Saturday, June 7th, the Brighton Optimist Club will be holding its 22nd annual Free Fishing Derby For Kids at the Brighton Millpond.

Free to kids under 16, there will be awards in various categories across three age groups, free bait, a Lil' Anglers event for children 4 years of age and younger, and a casting contest. A large display tank will show some of the better catches that day.

Bring your rod and reel and a bucket for the fish. There will be three weighing/counting stations available, and all fish are to be released after being recorded. There are some loaner rigs available and free bait, while supplies lasts. The first 400 kids registered will also get a tee shirt.

Registration starts at 7:30 am and the Derby runs 8-11 am. Souvenier picture fishing licenses are also available, but pictures must be taken prior to 10:30 am. Pizza will be served to the kids at 11. While results are being tallied, a local Jump Rope Team, the Jumpin' Allstars, will entertain the crowd. This event it totally FREE!

The Brighton Optimist Club is celebrating its 30th anniversary of "Bringing Out The Best In Kids" this year. This is the longest continually running fishing derby in the State of Michigan. Feel free to contact me with any questions about either the Fishing Derby or the Brighton Optimist Club.

Single Family Home sales in Livingston County for the period of January 1st through May 31st have increased by 6% over the same period last year. The average sales price is down 12.9%, but at the end of April that figure was at 13.7%, so it appears that we're moving in the right direction.

Almost half of the sales (46%) are being attributed to first-time buyers. First-time buyers are defined by the U.S. Department of Housing and Urban Development (HUD) as:

• an individual (or spouse) with no ownership in a principal residence for the 3 years prior to the purchase of this home
• a single parent who has only owned a home with a former spouse while married
• a displaced homemaker who has only owned a home with a spouse
• an individual who has only owned a prinicipal residence not permanently affixed to a permanent foundation
• an individual who has only owned a property that was not in compliance with State, local or model building codes, and if that home cannot be brought into compliance with building codes for less than the cost of constructing a permanent structure

Condominiums continue to be a very good buy, too, although many first time buyers decline this type of home ownership because many lack basements for storage, they're intimidated by community regulations, and they don't want to pay the maintenance fees.

A future article will discuss the benefits and shortcomings of condominium ownership. If you have questions in the meantime, you're welcome to contact me directly. My blogging time has suffered due to a high increase in listing and selling activity, my community service commitments, and trying to keep a semblance of family time. You are always welcome to contact me via phone or email (available at my primary web site, http://www.RealEstateMich.com).