Title Issue that Comes up When Buying a Foreclosure

"Covenant deeds are not illegal. With a warranty deed, the grantor is warranting title against all prior claims - even claims that arose prior to the grantor acquiring title to the property. With a covenant deed (or "deed C") the grantor's warranty is limited to claims arising from the actions of the grantor. You get a little more from a covenant deed that you would get through a quit claim deed. Bank/sellers` are never going to give someone a warranty deed, the battle is typically over whether the bank will give a covenant deed or only a quit claim deed.

If I was a buyer, I would push for the covenant deed and in all events make sure that I had good title insurance in place to protect me. Good title insurance from a reputable company is always important but particularly so if you are getting something less than a warranty deed. Purchasers need to keep in mind that there is title insurance out there these days that really doesn't protect the them because the exceptions to coverage are way too broad.

I usually review the title company's pre-committment policy and often with recommend that buyers taking covenant deeds (or quit claim deeds) should strongly consider having their real esate attorney look at the title commitment/policy before they close. This is even more important if the policy is coming from an affiliate of the seller/bank --or other title company that we may not be as familiar with."

Check out the "All MLS Listings" above or our other Blog postings including "Things to Do in Ann Arbor"

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City Living

Ann Arbor has a diverse selection of homes for sale all over the city, but downtown Ann Arbor is where many want to be and there’s no better way to get close to all the city’s biggest and best events than purchasing a condominium, high rise or loft in the heart of downtown. These modern homes tend to be sleek and sophisticated, and are literally footsteps away from some of the most in-demand downtown areas and restaurants. There are many styles to choose from, most of which have terraces and balconies that offer amazing views of the cityscape.

What You Get

City dwellers not only get the perk of being walking distance from everything they need, but loft and condo owners often enjoy the added amenities that the spaces provide themselves. Stainless steel appliances, cork or bamboo floors and granite countertops are often standard in these urban homes. It’s also common to find state of the art security systems, fitness centers and other amenities in lofts and condo buildings.

Luxury Meets Affordability

Luxury usually comes with a hefty price tag but that is not necessarily the case in downtown Ann Arbor.  Prices start at about $150,000 and often include plenty of amenities to accompany all the other standard perks that come with living downtown. Lofts and condos in downtown Ann Arbor are the perfect blend of comfort and convenience. Check one out today!

If you are thinking about buying or selling a Home or condo, give us a call at (734) 996-0000 or send us an email to explore your options and to find out when is the best time for you to make a move.

Welcome to the Best Realty Search System Available

Take 2 minutes to view this short video about how to use our new FREE web application.

After you have had a chance to check out the basic's, you might want to view the other more advanced video's below by clicking on their Links. Click the viewer to the right to get started on clip #1.

REMEMBER TO TURN ON YOUR COMPUTER'S SPEAKER TO HEAR SO YOU CAN FOLLOW ALONG WITH THE TIPS AND RECOMMENDATIONS.  

Tip Video #2

Tip Video #3

We can provide you with more updates in the future.  Please let us know what you think.  If you haven't signed up already with your own search profile account, you can get started by clicking here  

Know someone looking for real estate?  Please forward this email to them. 

Forgot how to return to your account? Click here for your login page to retrieve any favorite properties or customized searches that fit your criteria.  We recommend that you bookmark the login page too for easy navigation in the future.  However, a login is not necessary to view your update emails that will follow in the future. Unless you are on someone else's computer, we would recommend that you do not hit the log-out button so your your personal computer will remember your password etc on future visits. IMPORTANT: CLICK & SAVE LISTING FAVORITES!

This system will give you a large advantage over other competing buyers and in many cases you will see these new listings even before many realty brokers & agents do.

Look for your first new listing email update report soon

 Please let us know if you see something you would like to view so we can setup a showing appointment for you.  That's what I specialize in..... Representing Buyers.  My ABR designation stands for Accredited Buyer Representative.

Remember, you can always change your search criteria.  Just ask us or use the TAB key to move quickly through the search criteria fields then hit the "Search" button for the result's.  Only saved searches will get automatic new listing updates sent to you.

1. Have you provided the min. square footage acceptable to you?
2. Revise the min. number of bedrooms?
   
3. Limit the areas to 1-3 of your most desireable school districts.
4. Correct min-max price range?
5. Search by School district, NOT by name of cities & townships.

Thank you for your consideration. 

This is our new MLS listings service packed FULL OF FEATURES!  

If this Page doesn't display full width, then just click on the link above titled "All MLS Listings" for a clean full page demonstration.  One you have a full page, then Add or delete areas by typing in the section bottom left and then hit search at the bottom for your results.  Thanks for your consideration 

Anyone can be a real estate investor in todays market.  I have many clients who are investing in homes prices between 15-80K who are Buying to earn income.  Current investors should note the recent underwriting change dropping the 90 day wait for flip type sales to buyers using FHA loans. (see below) 

For newcomers, generally the plan is to flip the property.  In other words you buy asset, make the necessary repairs and/or upgrades and then place it back on the market for sale.  Most of the time in order to replenish capital an investors first choice is usually to sell it for cash or buyer financing ie:the buyer gets a mortgage and pays the owner in full.  Second option.... the seller enters into a land contract with terms above market interest rate after receiving a downpayment from the buyer. The terms often will call for a balloon payment after three years at which time the buyer will then seek a mortgage to cash out the seller.  Often the buyer is not in a position to get a mortgage right now and the seller can chose this type of transaction because perhaps the property location or market conditions in the subdivision didn't yield a cash buyer right away.  The other option for the seller is to Rent the property out until which time as they may decide to sell it.   All three choices yield a nice return on investment.

New and current investors should note  ... short sale and REO flipping 
are becoming more and more accepted by the government and major 
lending institutions.  This is evidenced, among other things, 
by Freddie Mac's recent bulletins, updated credit policies by 
major lenders allowing for C buyer financing, and revised title bulletins 
stating that the C purchase price does not need to be revealed 
to the A lender as long as certain disclosures are made. 

Last Friday the FHA has rescinded its 90 anti-flipping rule and will, 
for a period of 1 year, allow FHA buyers to obtain loans 
on properties that have been recently purchased by investors 
who intend to flip them for a profit.

This "green light" by FHA means that if you've been on the 
sidelines of property flipping, you need to educate yourself 
as soon as possible, because investors will be coming on 
strong for 2010 given this latest news. 

contact me to discuss this further.  You can also stop by this web site to get easy to use investment tools etc.  www.A2Realty.info or stop by our MLS access and custom report web site at www.shelterquest1.com for easy and current review of the latest listings.   

Tom can be reached on his cell phone at 734-516-2000 to answer any additional questions that you may have.  

Principal Residence Exemption

Sellers who have taken advantage of the opportunity to retain two principal residence exemptions must file Form 4640 by December 31.

Legislation (signed in 2008) enables that the seller can retain an additional exemption for up to three years on property previously exempt as the owner's principal residence if the following criteria are met:

• the property is not occupied
• the property is for sale
• the property is not leased or available for Lease
• the property is not used for any business or commercial purpose.

For your convenience, a copy of Form 4640 is available at link to the form on the Michigan Government website.

With lower property values due to our struggling economy, many homeowners have been able to take advantage of an exemption contained in the Michigan Transfer Tax Act.  If a seller meets the criteria, they would be exempt from paying the state transfer tax.  Following are the criteria:

1. The property must have been occupied as a principle residence – classified as homestead property.
2. The property’s SEV for the calendar year in which the transfer is made must be less than or equal to the property’s SEV for the calendar year in which the seller acquired the property.
3. The property cannot be transferred for consideration exceeding its “true cash value” for the year of the transfer.

For example:
If the SEV of the homestead principle residence when acquired in 2005 is $100,000 and the current SEV on the property is $90,000, then the first two criteria have been met.  To establish the “true cash value” of the property, you must double the current SEV at the time of transfer.  In this scenario, the true cash value would be $180,000.  If the property sold for $170,000, then the 3rd criteria has been met of Exemption “u” as designated by the Michigan Transfer Tax Act.

If you believe you may be eligible, you have up to 4 years from the transfer date to file for the exemption.  It is also important to note that there are no similar exemptions in the County Real Estate Transfer Tax Act.

To see if you as a seller are eligible, please contact our office for a copy of the “Transfer Tax Exemption Worksheet.”   

As always, thank you for your consideration and referrals.

Tax Credit Update  

The United States Senate is expected to vote, later today, on a bill to extend Unemployment Insurance benefits.  This bill will contain the Dodd - Lieberman - Isakson Amendment to extend and expand the $8,000 First Time Homebuyer Tax Credit.

The Extended and Expanded Tax Credit will contain the following provisions:

Amount:                        $8,000
Eligibility:                     ALL Home BUYERS (Step-up buyers will have to have lived in their current home for SEVEN* years to be eligible)
Income Limits:              $125,000 for single filers/$225,000 for joint filers        
Time Frame:                 December 1, 2009 to April 30, 2010 plus 60 Day extension if binding   contract is in place by April 30, 2010
               
*The 7 year ownership requirement is designed to lower the "score" or cost of the tax credit.  This is still open to change.  The Congressional Budget Office is going to "score" the cost of 3 year and 5 year requirements.  The National Association of Realtors is continuing to push for step-up buyers to be required to be in their current home for three year period.        

I wanted to give everyone an update on Condo's, both for Conventional loans and FHA loans.  For Conventional loans, nothing has changed much since spring time.  Below is a refresher of what lenders look for to determine if the condo is considered Warrantable or Non Warrantable.  A Warrantable condo allows lenders to go through our "normal channels" of financing.  A Non-Warrantable condo means that certain items are lacking with the complex.  When a condo is Non Warrantable, they do have an outlet for financing, as long as the borrower qualifies.  These are called "portfolio loans" and require higher mean credit scores, greater down payment and higher interest rate.  Basically the lender is holding the paper and not spinning it off to an investor.  I have forms or questionsaires available to help us determine what the condo community qualifies for.  Just ask me if you would like a copy. 

Warrantable Condo ALL MUST BE MET - An established project is one in which (a) at least 90 percent of the total units have been conveyed to purchasers; (b) the project is 100% complete (including ALL units and common elements); (c) the project is not subject to additional phasing or annexation AND (d) control of the homeowners association (HOA) has been turned over to the unit owners.

IN ADDITION:
1. Less than 15% of the total units are delinquent in paying HOA fees
2. No litigation pending
3. Project does not permit rental - either short term or long term - of the individual units -- i.e. nightly, weekly, monthly or time shares.    There can be non owner occupied units - not to exceed 30% of the total units  
4. No commercial use
5. No hotel/condo-tel reference in the name, legal, etc.
Condo Questionnaire is required on all attached condos regardless of the LTV.
This is directly from FNMA frequently asked questions 12/08 and is in conjunction with the FNMA 08-34 Announcement.

FHA Condo's:

There has been a lot of discussion about FHA changing their guidelines on condo's.  They have now pushed back there decision until December 7th.  They have yet to decide on their guidelines and I wouldn't be surprised if it were pushed back even longer.  As a reminder, however, Site Condo's are treated as single family residences (SFR) and lenders still allow for Spot Approval's.  Ask me for an FHA Spot Approval Checklist.  All answers must be "yes" for it to qualify for an FHA loan.  Also, other conditions may apply after getting this filled out.

Basically a completed community has a much better chance of meeting the quidelines.

In our current Buyer’s market, the type of Home that is selling has shifted from the traditional profile of the past 20 years. It is therefore important to understand where your home fits into the overall market activity. Although traditional owner occupied homes make up a majority of the current homes available for sale, the majority of the homes being sold are bank owned or financial hardship related sales. This puts downward pressure on values and causes pricing to take a more significant roll in marketing. As a traditional seller, in order to stand out in a crowded field, (made even smaller by the Buyer’s focus on bank owned) flexibility on pricing, terms, Lease vs. sale, or lease to own becomes imperative.

Click here for an interesting graphic showing these changes.