By: Lori T. Williams, Esq., Wayne/Oakland County Legal News Examiner for hornface.com and Owner/Managing Attorney of Your Legal Resource, PLLC
I interviewed several local professionals in the real estate industry to learn their perspectives on our local real estate market. I thought I’d share their perspectives with you in this real estate blog series.
Janet Pasco is a market manager for Micoley & Company, and works with Michigan, Ohio, and Indiana banks handling their foreclosed properties. Micoley & Company prides itself on generating sales in less than 90 days using a non traditional auction process. The company headquarters are in Wisconsin, and Pasco is located in Beverly Hills, MI. “We are predicting a double dip recession in real estate at the low end and continuing stagnation at the high end”, says Pasco. Nationally speaking, both homes sales and foreclosures are on the rise, but real estate values still decline. See The Secondary Market Overview; Home Prices Falling in Most Major Cities; and Core Logic’s Report on ‘Shadow Inventory‘ for more information on the national real estate picture. Locally speaking, home sales were up in April. See Home Sales Spike in Metro Detroit.
Concerning short sales, Ellen Mahoney noted that “it’s getting tougher on several fronts:
1) The FTC prohibits anyone, other than attorneys, from collecting fees in advance of providing services such as changing mortgage terms, attempting to avoid foreclosure through short sale or deeds in lieu of foreclosure. See MARS legislation.
2) Additionally, increased disclosure rules make the process more burdensome for all concerned. (Namely, the 2300 page Dodd Frank Bill).
3) Some Banks are taking a tougher stance and not agreeing to forgive the additional sums owed by the homeowner in a short sale transaction. Additionally, junior lien holders (second mortgages) are also fighting harder to get more money from the transactions.”
Mahoney is the President of the Loss Mitigation Consulting Services division of Complete title Services of Southeast MI, LLC, located in Birmingham, MI. She has learned to think outside the box and come up with creative, non- traditional solutions for buyers and sellers to work with banks. Mahoney works closely with realtors and real estate attorneys when helping her clients through short sales or loan modifications.
Scott Ferguson, a realtor with Remerica Preferred Realty in Livonia, focuses only on short sales and echoes Mahoney’s sentiments. Ferguson believes “it is critical to work with an experienced real estate attorney who is on top of the new laws and procedures and who can find the legal loopholes which allow our clients to move forward with their lives.” Ferguson says, “it’s a waiting game and realtors can waste valuable hours sitting on the phone for hours on end listening to bank account executives tell them the same thing they told you last week.” To bypass the ineffective waiting game, Ferguson contracts out this part of the process to experienced real estate attorneys who negotiate the short sale deals directly with the lender. He shares these and other tips for realtors in his blog.
For perspectives of real estate attorney Ken Gross, read my previous blog: Will Santa Bring a Resolution to the Housing Crisis for Christmas? Ken is a 2011 recipient of the Michigan Lawyer’s Weekly Leaders in the Law Award. Ken is also the managing partner of Thav Gross, in Bingham Farms, MI. Ken noted that “on April 21, 2011, the Michigan Court of Appeals delivered a block buster decision in favor of homeowners. In Residential Funding Co. v Saurman, the Court held that foreclosures conducted by advertisement (the typical manner) in the name of Mortgage Electronic Registration System (MERS) as the mortgagee rather than the true lender, are invalid. This situation applies to many of the foreclosures that have occurred in Michigan. This decision means if someone has already had their home foreclosed and is in their 6 month redemption period, they now have a defense that can be used to challenge the foreclosure and make the lender start over. Better yet, in this situation, if the borrower missed the opportunity to seek a modification, they may again have another chance. While the case may be appealed or the legislature could act to limit the decision – for now, for once, something good has come to help the Michigan homeowner in the war to save their home.”
Darla Rowley is a home stager in Royal Oak who works on traditional home sales, and recently started marketing her services to banks to help with their foreclosures. “Home staging can be helpful in all sales, but it is especially important in foreclosures because it helps improve the look and condition of a property in order to boost its interior and exterior visual appeal. Staging can sell a home faster and for more money.” According to StagedHomes.com, homes that are staged remain on the market for 83% less time than homes that are not staged; 94% sell within 30 days. According to HUD reports, staged properties can sell in half the time as compared to non staged properties. Rowly reports her clients are selling their homes in 30-45 days, on average, in traditional sales. Rowley also offers a project management side of her business, which includes affordable remodeling projects designed to generate a sale. Rowley notes that “strategic updates will minimize the factors that inhibit a sale and maximize the emotional appeal that generates a sale.” Strategic updates can sell a home in less time, while keeping in line with the home owner’s budget. Rowley encourages homeowners and banks both to work with a professional experienced in merchandising homes for re-sale, as this allows them to take the buyer’s point of view into consideration. “Otherwise, the money can be spent on updates that don’t enhance the warmth, charm, and personality of the home, and which won’t create the emotional response in a buyer that leads to a sale.” For more information, visit Rowley’s website or her blog.
Points to Ponder and Share:
How will this real estate outlook impact your decision to buy or sell a home?
What strategies have you implemented to try and manage your own home’s value in a declining market?