Vacation and Investment Home Sales on the Rise

For the most part, real estate has always been a sound investment - taking into account the less than stellar bubble bursting situation - which left all of us a bit flabbergasted. Fortunately markets are really about people and when people feel confidant in purchasing homes, they do it. Regardless of the idea of the market, many of us still want to enjoy a vacation home up north or purchase a rental property to have some added monthly cash flow. And in many instances, these are smart moves because instead of spending thousands of dollars on hotels and resorts, we get a great deal on a vacation home that we can visit all year. Likewise, rental properties, for most people, are a better return on their money than letting it sit in a bank account or risking it in the volatile stock market.

Coincidentally, a recent article published on RISMedia highlighted an increase in the number of investment and vacation property sales in 2011, the highest since 2005. A 2012 survey conducted by the National Realtors Association found that investment property and vacation homes sales rose a whopping 64.5 percent from 749,000 in 2010 to 1.23 million in 2011. This is great news for anyone interested in selling their income or vacation property. It's also good news for buyers who can trust that home purchases will continue to have future value.

Many of the sold homes have been picked up by investors cashing in on low home prices. Cash buyers were also very prominent with 42% of vacation home buyers paying cash and 49% of investment property buyers. Another positive is that home prices were also on the rise. The average investment-home price was $100,000 - a 6.4 increase over 2010.

As a realtor in East Lansing, I have noted an obvious increase in the sale of rental properties. I work with a range of investors always on the look-out for rental properties in the desirable MSU campus area of East Lansing. If you want to learn more about finding a great deal on East Lansing housing, contact me at MyRealtorRob.

Michigan's Positive Real Estate Trends

Anyone who has been living in Michigan during the market fluctuations of the previous several years, can take heart knowing that we appear to be coming out of a pretty hefty slump. Across the state, housing prices are on the rise, buyers are buying and sellers are beginning to recoup some their housing investments. As a realtor in East Lansing, Okemos and the Greater Lansing areas, I have celebrated this upswing as both a real estate professional and simply as a Michigan resident. It's rather frustrating to sell houses when the public opinion keeps veering towards doom and gloom, which is why it's so wonderful to offer news of the positive sort.

On a personal level, I recently received a request from a buyer to view a home for the second time, with the intention of making an offer. However, when I went to schedule the showing the home had already sold! This is the second time that this has happened to me in the last two weeks and few signs are more clear that a market is turning than houses disappearing off the market before an interested buyer can get an offer in.

According to a Michigan University finance and real estate professor, the risk of home loan defaults is at a seven year low (IQRealEstate). This he contributes to several factors, including stabilizing home prices, record low interest rates and an improving economy.

A recent Reuters.com article states that U.S. housing sales jumped in February, an 11 percent increase over the same month last year and prices rose. The article cites both Realtors and builders who are commenting on the notable change in home sales, but is careful to warn that the recovery will be slow and often spotted with minor setbacks such as increased home foreclosures.

If you're a buyer searching for a new home in the East Lansing or Lansing areas or are thinking about selling your home, please contact me at MyRealtorRob. As a seasoned East Lansing realtor, I can offer you a quick market analysis so that you can understand what your home is worth and provide you with detailed neighborhood information and other valuable home buying and selling tools.

Mortgage Relief: Cancellation of Mortgage Debt

Before the Mortgage Forgiveness Debt Relief Act of 2007, borrowers who had some portion of their mortgage forgiven by their lenders were required to pay taxes on the forgiven debt. This meant that individuals who had debt forgiven through a short sale, foreclosure or other arrangement with their lender, were responsible for paying tax, usually considered income, on the amount that was cancelled. The Mortgage Forgiveness Debt Relief Act gives homeowners the opportunity to avoid paying this tax so long as the mortgage is for their principal residence; it does not apply to second homes.

It is also important to note that the total outstanding debt may not exceed the original mortgage cost plus the price of any home improvements. This provision does not usually apply to home refinances or lines of credit; however, in the case of a home refinance, the provision may apply for the amount of the original loan plus improvements. The limit on the total amount of forgivable debt is $2 million or $1 million if you are married and filing separately.

How to Take Advantage of the Debt Relief Act
When a debt is forgiven, the lender is required to provide both the homeowner and the IRS with a 1099 Form stating the total debt forgiven. The homeowner then completes a Form 982, which reflects the cancelled debt and why the debt was forgiven.

The Debt Relief Act is Set to Expire in 2012
The Mortgage Forgiveness Debt Relief Act expires on December 31st, 2012; however, it is possible that an extension will occur.

For more information regarding the the Cancellation of Mortgage Debt, visit IRS.gov.

If you are considering a debt forgiveness option in East Lansing or Lansing, please feel free to contact me with any questions that you may have. As a seasoned East Lansing realtor, I have years of experience assisting homeowners with mortgage debt related issues. If you are interested in buying or selling property in East Lansing, Okemos and the surrounding areas, visit MyRealtorRob.

Tools for Home Sellers

Today I'm going to diverge from my regular posts and offer instead a list of links for home sellers. These are links to articles and tools that can be helpful during the process of selling your home. You will find home selling tips for everyone and below that a section for home sellers in East Lansing, Okemos and Greater Lansing because I am a Realtor in those areas and thus know them well.

Home Selling Tips and Tools

Realtor.com: How to Choose a Realtor

HomeSellingBlues.com: Home Selling Spring Beautification Kit

FrontDoor.com: Home Selling Guide

Bankrate.com: 20 Tricks to Selling Your Home

HGTV.com: The Ten Best-Kept Secrets for Selling Your Home

IRS.gov: Tax Topics for Home Sellers

Realty101.com: Costs Involved in Selling Your Home

East Lansing and Lansing Home Selling Tips and Tools

IQRealEstate.com: Michigan Real Estate Market News

MyRealtorRob: Neighborhood Values Report

MSHDA.gov: Michigan State Housing Development Authority

"Risk comes from not knowing what you're doing." -Warren Buffet

The Home Warranty Wars

If you're buying or selling a home, you may be hearing the term home warranty getting tossed about. Home warranties are contracts through a third party company to cover unforeseen repairs after a home's sale. Home warranties are not confined to home sales. Many real estate investors and vacation property owners purchase home warranties for a range of home repairs so that they don't have to be concerned with hiring someone themselves.

If you're a home buyer, a home warranty gives you a bit of peace knowing that a faulty dishwasher or ailing furnace will be taken care of under your home warranty. However, home warranties may apply to an assortment of repairs, but coverage depends on the home warranty purchased. Generally speaking, less expensive home warranties will cover fewer repairs, but some easy online research can inform you of home warranty companies in your area and what services they offer.

If you're a home seller, a home warranty can sweeten the deal for your potential buyer and make them more confidant moving forward with a sale. Home warranties are often purchased by the seller as a small insurance policy on appliances and other mechanical systems in their home. However, buyers also have the option of purchasing a home warranties and in some cases, your Realtor will purchase the home warranty.

For instance, I recently split the cost of a home warranty with another broker to keep the closing process moving smoothly along. For a few hundred dollars, a home warranty can greatly alleviate a buyer's worries moving into a new home. Thus it's to the benefit of the seller, myself as the Realtor and any other parties involved to invest in a home warranty and insure that any unexpected replacements are paid for in advance. At times, the "who pays for the home warranty," dilemma can get a bit heated, but it's genuinely a minor issue that should can be resolved quickly and inexpensively.

If you would like to know more about home warranties, are thinking of buying or selling your home or have other real estate related questions, visit me at MyRealtorRob. As an East Lansing Realtor, I specialiaze in the sale and purchase of property in the East Lansing and Greater Lansing areas of Michigan.

Foreclosures Expected to Rise

Despite a decrease in the number of foreclosures in February, foreclosures are expected to rise nationwide in the coming months according to an article published by CNN Money. This is predominantly due to a $26 billion settlement between state attorneys general and 5 big banks concerning foreclosure practices. The agreement sets forth more specific guidelines detailing how foreclosures must be handled, which allows these banks to begin moving forward with foreclosures that have spent months and even years in limbo.

Leading foreclosure cities including Tampa and Miami, Florida have already begun to show an increase in the number of homes entering foreclosure since the new guidelines were established. The state with the highest rate of foreclosure filings is Nevada with 1 in every 278 households filing for foreclosure. California is in second with 1 in every 283 households and Arizona is third with 1 in every 312 households filing for foreclosure.

A 2011 post on Michigan Forward cited Michigan as in the top five states with the highest foreclosure filings. Although this may be appealing to investors in the market for inexpensive homes, foreclosures ultimately hurt those who are foreclosed upon and tend to bring down the values of other homes in the area. The future of the market is still uncertain in most areas, but for first time buyers, foreclosures represent an opportunity to purchase a desirable home at an affordable price.

If you are looking for a home in East Lansing or the Greater Lansing areas of Michigan or would simply like more information about foreclosures, financing and other real estate related issues, please contact me at MyRealtorRob.

Metro Detroit Home Prices Rise while National Prices Fall

Home prices in Detroit saw a 13 percent increase in February over the same month last year, which marks the 8th consecutive month of rising Detroit home prices relative to last year. While home prices around the country fell for the fourth straight month in December 2011, housing prices in Detroit actually increased. Detroit has often been known to set itself apart from other major U.S. cities; however, it is a rare event to see the city coming in on the positive end of the financial spectrum. According to the Standard & Poor's Case-Shiller index, as prices around the country fell, Detroit saw an increase of .5 percent during December and has now seen a considerable jump of 13 percent for February 2012.

Robert Dye, a Chief Economist at Dallas-based Comerica Inc., reported the data to be encouraging; however, he warned that "it is still too early to say that residential real estate markets in the Detroit area have definitely turned the corner," (Detroit News). Dye believes that housing affordability combined with low mortgage rates is attracting a lot of buyers to the market. The most notable increases took place in Livingston and Macomb Counties, both of which saw jumps of more than 23 percent over last year's figures (Detroit News).

Ultimately this is good news for Michigan. Perhaps the housing market is beginning to turn around. If you're in the market for a home, buying now before prices rise further makes sound financial sense. As a realtor in East Lansing and the Greater Lansing areas of Michigan, I can attest to an improvement in the market as buyers find more appealing finance options and sellers continue to be flexible with prices. If you would like more information about real estate in the Lansing area please visit MyRealtorRob.

Detroit, Michigan

Will the Housing Crisis End in 2012?

According to a recent article on DSnews.com, there are several reasons to believe that 2012 may signal the end of the housing crisis. This conjecture mainly stems from a report released by Capital Economics citing that loosening bank standards will allow more people to borrow money for housing purchases.

A variety of other market indicators are also contributing to this conclusion. For instance, lenders are now offering loans to borrowers that are 3.5 times their earnings, which is an increase from the low of 3.2 times borrower earnings during the crisis. Additionally, many banks are becoming more flexible with their LTVs or Loan to Value ratios, up to 82% from the low of 74% reached in 2010.

While the loosening bank standards are a huge benefit for anyone searching for a home, other factors may also contribute to an improved housing market. Many housing prices have moved into more acceptable (i.e. affordable) ranges compared to home prices during the height of the housing bubble. Homes simply cost less now, which is a great incentive for anyone looking to buy. Furthermore, a lot of homeowners have begun to offer creative financing alternatives like land contracts and rent-to-own options to reach buyers who can't qualify for conventional mortgages.

As an East Lansing, MI realtor, I can offer first hand experience of the housing market and from where I'm standing, the outlook is good. People who have been renting during the crisis are beginning to purchase homes because the prices are often less than the cost of rent. The growing rental population has also motivated a lot of real estate investors to purchase rental properties, especially in East Lansing where Michigan State University always provides a thriving rental community. If you would like more information about buying or selling a home in East Lansing or the Greater Lansing area, please contact me at MyRealtorRob.

If you think hiring a professional is expensive, wait till you hire an amateur - Red Adair

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