Welcome

SHORT SALES

2010-02-24T10:37:00.000-08:00

Here's a quick primer on short sales:

What is a Short Sale? A sale that takes place where the indebtedness is greater than the value of the home. In a short sale, the lender agrees to accept less than what is owed them so that a sale may take place.
Why would a Lender consider a short sale? The alternative for the lender is to take the property back through the foreclosure process and sell it themselves later. The risk in doing this is that by the time the foreclosure has been completed: (a) the likelihood is that the property will be in poorer shape; (b) significant sums will have been spent to acquire it; and (c) chances are the lender will sell the property for less than what they can get in the short sale.
Whey would a home owner consider a short sale? While there is still damage done to a home owner's credit in a short sale, it is less than if the property is lost in foreclosure. Also, while not guaranteed, the home owner's liability (for any shortage) will likely be less than losing the home through foreclosure.
What are the downside considerations for a home owner in a short sale? (a) As stated above, there is still damage to credit--it isn't a "get-out-of-jail-free-card." (b) While a short sale may release the liens (mortgages) on the property to allow a sale, the indebtedness is not always forgiven. Sometimes it is, but every lender and every sale is different. (c) There are other potential tax consequences--you should consult a tax advisor before agreeing to a short sale.
What has to happen in order to create a short sale? The home owner must submit a hardship letter and full financial statement along with a sales agreement with a new buyer for the property to the lender(s) involved for approval.
How can I get more information? Give me a call at 269-488-0236 or email me at jared@jaredarnold.com.

IT'S OFFICIAL!! HOME BUYER HELP SIGNED INTO LAW!!

2009-11-09T06:46:00.000-08:00

The bill signed into law extends the tax credit of up to $8000 to first time buyers and also includes a tax credit of up to $6500 for homeowners who have been in their home for 5 years or more. CLICK ON THIS ARTICLE'S HEADING to link to a list of Frequently Asked Questions about the tax credit.

GREAT NEWS FOR FIRST HOME BUYERS

2009-11-05T07:37:00.000-08:00

The tax credit of up to $8,000 that was set to expire on November 30, 2009 is very likely to be extended by a vote of the US Congress by the end of this week. The deadline for signing a contract to purchase is now April 30, 2010 with a deadline for closing on the purchase of June 30, 2010.

The credit is for 10% of the purchase price (up to $8,000), which can be claimed on either the 2009 or 2010 tax return—or it can be claimed by filing an amended return on the 2009 tax filing. The definition of “first time buyer” is anyone who has not owned a home in the 3 years preceding the closing of the new purchase. There are income limits, but they are quite liberal.

This really represents a perfect storm for first time home buyers: historically low home prices, historically low interest rates and a substantial tax credit. THIS IS A TRUE TAX CREDIT—A BUYER DOES NOT HAVE TO HAVE PAID ANYTHING IN INCOME TAXES TO QUALIFY FOR THE CREDIT—POTENTIALLY RESULTING IN A TAX REFUND. Handy to have for furniture, appliances, repairs and home improvements!

What's to know about Kalamazoo?

2009-05-19T07:39:00.000-07:00

Looking for information about the history of Kalamazoo? Want to know all the places you can get ice cream this summer? Or places to commune with nature? The following link is a good place to start:

http://www.mlive.com/kzgazette/answerbook/index.ssf/2009/05/answer_book_2009_whos_who_in_k.html

Or click on the "Why Live Here" button of our website at

http://www.jaredarnold.com/

Have a great Summer!!!!!!!!!

$8,000 Tax Credit As Down Payment

2009-05-14T06:55:00.000-07:00

FIRST TIME HOME BUYERS CAN USE THE $8000 TAX CREDIT AS DOWNPAYMENT!!!!

More great news for first time home buyers: Now, not only can you get an $8000 tax credit for closing on a new home by November 30, 2009, you can get that tax credit front-loaded into your down payment!

The Kalamazoo Parade of Homes

2009-05-07T16:00:00.000-07:00

The Kalamazoo Parade of Homes is coming up soon! The dates are June 12 - June 20. It's a great way to stay current on:

new developments in construction
new colors
new appliances
new building materials
design and decorating ideas

All in all, it's a pretty cheap date. DeAnna and I will be helping staff Cornerstone Construction's Parade Entry at 9145 Richland Woods Drive in Richland. We hope to see you there. For a list of builder participants and sceduled dates and times, see the Home Builder's Parade site at http://sites.google.com/site/kalamazoohomepage/parade-of-homes

A First-Time-Buyer's Perfect Storm

2009-05-06T08:29:00.000-07:00

The conditions are just plain perfect for 1st time homebuyers right now:

Choices are many: Slow sales over the past few years have resulted in a large number of homes on the market.
Prices are low: Slow sales and the large volume of foreclosed properties and short sales have pushed prices down to 1999 levels!
Interest rates are terrific: 5% or better; the lowest rates in years!
An $8000 tax credit is there for the taking if you have not owned a home in the past 3 years: You only have until November 30, 2009 to take advantage, so don’t miss out! The following link lays out the whole program with a good section on frequently asked questions: http://www.federalhousingtaxcredit.com/2009/home.html You can even get a tax credit that exceeds your tax liability!!!!!!!!!

Call us at 488-0236 (Jared) or 488-0102 (DeAnna) or email us at Team@JaredArnold.com for further assistance.

SHAPE THINGS UP . . . OR LEAVE IT TO THE NEXT OWNER?

2009-05-04T09:19:00.000-07:00

Fixing things up prior to going on the market is ALMOST ALWAYS what you want to do. Not always, but nearly. Here’s why:

1. In today’s crowded real estate market, you need to compete well. There are lots of tired, cluttered,
houses in need of TLC out there already. Don’t join them!
2. Too many buyers have a difficult time visualizing what a home would look like fixed up, cleaned up,
uncluttered. Make your place easy on the eyes.
3. Many buyers do not have remodeling or redecorating skills—or the time, if they do have the skills. We
have seen home buyers breathe a big sigh of relief when they walk into something fresh and easy to move
into. Make yours that kind of experience!
4. Your hesitation to pre-judge what someone else would like (in paint and carpet colors, for instance) is a
misplaced concern. Just keep the colors neutral and you will save your buyer a hassle they didn’t want.
Think about it: You don’t want to hassle with it. Neither do they!
5. The cost of shaping things up doesn’t have to be huge. Check out the following link for good examples of
shaping up, cost estimates and “before” and “after” photos:

http://www.realtor.org/rmohome_and_design/articles/2009/0905_home_bestroommakeovers

As always, gives us a call (269-488-0236) for advice on your particular home. We’d be happy to come out and suggest low cost ways to make your home show its best.

Pending Home Sales Rebound

2009-02-19T12:38:00.000-08:00

The Pending Home Sales Index, a forward-looking indicator based on contracts signed, rose 6.3 percent in December and was 2.1 percent higher than December 2007, according to new data released by NAR (the National Association of Realtors). The association’s Housing Affordability Index, which shows the relationship between home prices, mortgage interest rates and family income, rose 10.9 percent to the highest level on records dating to 1970.

The largest gains in pending sales occurred in the South and Midwest, which also experienced the biggest improvements in affordability. The index in the Midwest jumped 12.8 percent in December, but is 1.2 percent below the level recorded a year ago. In the South, the index climbed 13.0 percent and is 1.6 percent above a year ago. The index in the Northeast slipped 1.7 percent in December and is 14.5 percent below December 2007. In the West, it fell 3.7 percent but is 17.5 percent higher than a year ago.

Lawrence Yun, NAR’s chief economist, said the modest rebound was spurred by buyers taking advantage of lower home prices and low mortgage interest rates. “Significant uncertainty clouds the housing market despite improved affordability conditions. For a sustainable housing market recovery and, hence, sustainable economic recovery, we need a significant housing stimulus and mortgage availability for qualified borrowers,” Yun says.

In a related report, the U.S. Census Bureau finds that the U.S. homeownership rate was 67.5 percent in the fourth quarter of 2008, down slightly from 67.9 percent the previous quarter.

This report is a re-print of an article published February 3, 2009 in the MemberConnect email newsletter published by the Council of Residential Specialists.

GREAT ECONOMIC NEWS!

2008-03-13T07:30:00.000-07:00

In case you missed it, there’s been encouraging southwest Michigan employment news in the Kalamazoo Gazette lately. It even showed up on page one!

The first news article reported a speech delivered to the Kalamazoo Rotary Club by George Erickcek, economist at the W.E. Upjohn Institute for Employment Research. According to Mr. Erickcek, the Kalamazoo area is headed in the right direction: job growth is bucking national and state trends with 600 jobs gained in 2007; we rank third in the state (behind Ann Arbor and Lansing) in the percentage of residents aged 25 to 34 who are college graduates; Western Michigan University, Kalamazoo college and the Kalamazoo Promise all contribute to our potential for creating a “knowledge-based economy”, a key element to economic growth.

This assessment was followed two weeks later by twin employment announcements, one by long-time local employer Fabri-Kal and one by new player Kaiser Aluminum. Fabri-Kal stated it will add 160 to 200 new jobs to its current local work force of 115. It will move into a facility previously occupied by Mead Paper which has been vacant since 2001. Kaiser announced it will create 300 new jobs in aluminum extrusion, using 435,000 s.f. at the Mid-Link Business Park.

Next came an announcement by AT&T that it will expand its customer service center in downtown Kalamazoo and add 110 workers. Then one by K&M Machine-Fabricating Inc. in Cassopolis that it hopes to fill 120 positions in the next 18-24 months. K&M will manufacture housings for wind turbines as demand for wind generated electricity continues to grow.

What’s more, new jobs have a “ripple effect.” Mr Erickcek states that each manufacturing job usually creates one additional local job. All of this supports the argument that the Kalamazoo area will manage well and prosper into the future. As the economic contribution of Upjohn-Pharmacia-Pfizer continues to diminish from its historic levels, diversification in employment is very welcome news indeed!

www.jaredarnold.com

IGNORE THE HEADLINES!

2008-03-01T09:59:00.000-08:00

REAL ESTATE NEWS: IGNORE THE HEADLINES!

The news is full of ominous statements about the world of residential real estate: FORECLOSURES DOUBLE! HOME SALES AT WORST LEVELS IN LAST TEN YEARS! NEW REQUIREMENTS CLAMP DOWN ON MORTGAGE MARKET!

You see and hear them every day. Over and over again. Why? Because negative headlines sell. They grab your attention. If the news media has learned nothing else, it is that bad news sells better than good news. Disaster is more interesting than harmony. Consequentially, headlines that make it sound as if the world is coming to an end.

My advice: Ignore the headlines. Headlines almost always ignore context and rarely hint at local differences. If you are interested in the topic, read the whole article, listen to the entire program, do comparative research . . . but DO NOT ASSUME THAT A HEADLINE ACCURATELY DESCRIBES THE TRUTH! It might from time to time, but it is a better bet that it does not. Particularly, as it applies to you and your market.

EXAMPLE: Buried inside an internet article I read yesterday with the headline “HOME SALES, PRICES DECLINE” (from the Wall Street Journal) was the tidbit in the last paragraph that residential sales in the mid-west in January were 3.4% higher. If you failed to read every paragraph and every sentence, you missed it.

EXAMPLE: The headline “WORST SALES FIGURES IN TEN YEARS!” has shown up many times in recent months. And for our area, this is accurate. What is also true, however, is that the last ten years have produced record sales levels. Residential sales for 2007 clobbered those of the early 80’s—including 85% more homes sold than in 1982! Further, more homes sold in the Greater Kalamazoo area in 2007 than in any year prior to 1997!

In short: all real estate is local, take the headlines with a large grain of salt and, in the words of Paul Harvey, get “the rest of the story.” Not all headlines apply to Michigan. Not all Michigan news refers to our area. Not all local information matters in your neighborhood. For an in-depth picture of the local market and, more particularly, your corner of it, give us a call. 269-488-0236

www.jaredarnold.com

TIMING THE MARKET FOR A REAL ESTATE MOVE

2008-02-11T08:18:00.000-08:00

Just as in the stock market, one is tempted to try to make a real estate move at “just the right time”. That would mean selling high, buying low, getting the lowest interest rate on the mortgage loan you need and, of course, having all this happen when the time is right for you!

Of all these variables, the loan is the easy part. Since about 1984, mortgage loan financing has been pretty reasonable—that’s when the rates dropped under 10% for good. If that doesn’t sound very appealing, consider that, at the time, it felt fantastic after 3 years of mortgage rates that ranged from 12 to 18%! In 1982, the majority of homes in the Greater Kalamazoo market sold on land contract (with the seller acting as the bank) at 11% interest—the highest rate allowed by Michigan law—and every buyer felt lucky to get that affordable a rate!

You can now get a 30 year fixed rate under 6%, with 15 year rates approaching 5%. This is affordable by any measure of the past 25 years. And don’t fret over the media headlines from the past couple months. Money is available. The only thing that has really changed in the home financing arena recently is that banks are again acting as prudent banks should: checking credit, verifying income and deposits.

The challenging part is selling high and buying low. While there are things you can do to nudge things in that direction (more on this later), logic tells you that if it is a seller’s market when you are selling, it will be a seller’s market when you turn around to purchase as well. In a way, that is good news. Especially when you are making a local move, it can be a relief to know that after selling your home at what feels to be a rock bottom price, you will be able to go out and find a bargain yourself. Conversely, when you sell at a premium price, chances are that you will pay a premium on the other end. When you stop and think about it, the difference between the old home and the new one is less in a buyer’s market. That makes NOW a very good time, financially, to make a move. It may take more time to sell, but there will be lots of choices and great prices when it is time to buy.

All of this hinges, of course, on the timing that works best for you. If you’re really not ready to make the move (it is a lot of work!), then none of this matters. If you ARE ready, we encourage you to get on the market in late winter before inventories swell (June—August) in order to face less competition and still have a good number of buyers. For tips on how to compete well in today’s very crowded market, read our previous blog entries (October 17 & December 3) or give us a call.

www.jaredarnold.com

TAKING A BREAK FOR THE HOLIDAYS

2007-12-18T13:16:00.000-08:00

The holidays can be an exciting time of year. Parties, family visits, fresh snow, shopping and bright lights all contribute to this being a time of high energy.

It can also be the perfect time to slow down. A time to reflect on the past and dream about the future. A time to take stock of your life and make adjustments.

If you are a home seller, it can also be a good time to take a break from the market. I often recommend this to seller clients, especially if any of the following are true:

1) You’ve been on the market 6 months or more.
2) You’ve been on the market a short time “testing the waters” to see if you can get an optimistic price.
3) You’ve not received any written offers.
4) The holidays are a busy time for you—parties, family get-togethers, shopping, travel, etc.
5) It’s difficult to keep the house clean and uncluttered for showings because of #4 above.
6) You were planning to complete some of those fix-ups to make the home show better.
7) There is not a compelling urgency to sell now versus 2 months from now.
8) You’re just tired of living in home for sale and a break would be refreshing.

The days between Thanksgiving and the end of January are the traditional dog days of the residential real estate market. While it is true that homes can sell at any time of the year, it is also true that this time of year is the slowest. Especially if you’ve already spent considerable time on the market, taking a break at this time of year is a low-risk undertaking—if buyers haven’t been breaking down the doors during the more active times, chances are you won’t be missing them over the next 6-8 weeks!

Another reason to take a break is to reduce the perception of being “shop-worn”. Buyers usually know how long you’ve been for sale—they ask their Realtor—so taking a break and starting over gives your property a bit of fresh look. It actually does look better to have been on 6 months and off 2 months then back on 2 months than it does to have been on continuously for 8-10 months. The reality is that once you are “on the market”, market time is your enemy—the longer you have been out there without selling, the more likely a buyer is to shy away. Right or wrong, the perception of buyers is often “No one else has bought it—so there must be something wrong.”

True, there is the risk that a buyer may come along that would have been suitable for your home had you still been active on the market. It’s a strategy call. Do you risk missing that buyer or do you risk showing up to all prospective buyers as a home with lots of market time without a sale? If you can stand the wait, I recommend the latter. It gives your home a fresh start. It gives you a fresh perspective. It’s worth considering, at least.

CHANGE THE DECOR? OR LEAVE IT TO THE NEXT OWNER?

2007-12-03T07:15:00.000-08:00

Selling “as is” vs. redecorating

The following are phrases heard from home sellers over the years when the subject of pre-sale fix-up comes up:
“I don’t want to guess what the new owner might prefer. I’m sure they would rather make those choices.”
“I know the carpets are dated and not in the best of condition, but wouldn’t most buyers prefer carpet to the hardwood floors underneath?”
“Yes, the drapes are dated and restrict light in the rooms, but isn’t it better to provide a buyer with some privacy for moving in?”
“It’s really not a big problem. We’ve lived with it that way for years”
I almost always disagree. Here’s why.

Competing well: Fact is, most home buyers prefer homes that are “turn-key”, ones they can move into without making a lot of changes. The home buying and moving process is complicated enough as it is—without throwing a remodeling project on top. To compete well with other homes “for sale” on the market, make moving into yours look like the easy choice.

Cash flow to make changes: Most home buyers are using all (or nearly all) of their available cash resources for their down payment and loan closing costs. Once they move in, they simply do not have a lot in reserve. When you require that buyers remodel after moving in, you have eliminated the majority of buyers that would otherwise consider your property. This is particularly true in the first-home-buyer market. Chances are they are borrowing, or receiving as a gift, some or all of the money they need to close on a home purchase.

Exaggerating the cost: You may know that a project will cost $1000. If that is the case, chances are good prospective buyers will guess twice that. The buyer for your house likely has less experience with home repairs and remodeling than you and, therefore, has less ability to accurately estimate costs. So spend the money and get it done. It removes objections in the buyer’s mind.

Having choices isn’t necessarily a marketing plus: Choice can be perceived as either good or bad. It can be wonderful to have choices and it can be terrible to have choices. The new home market provides a good example. Most new homes are bought as built and marketed by the builder—with all the choices made ahead of time by the builder. Far fewer are bought as custom homes with most or all of the choices made by the buyer. The reasons are many. For starters, most people are not that good at visualizing what a home will look like once it is finished—they need to see it and touch it to feel confident that it will satisfy them. Also, with choice comes responsibility. Most new home buyers would rather walk into a fresh-feeling, newly-completed home than bear the burden of hundreds of decisions. The same goes for the existing home market. Make it easy.

The “hassle” factor: Think about it: You don’t really want to paint, remove carpets and refinish hardwood floors. Most people don’t—especially when they already have enough on their plate. Forcing a buyer to take on projects only hamstrings your marketing efforts. You’re better off with the hassle of remodeling than the hassle of not selling..

Buyers who want you to sell “as is”: Those who are looking for a project are also looking for a bargain. In a market where prices are flat or falling—even when the buyer is an owner-occupant—restricting your potential buyer pool to re-modeler/speculators only enhances your prospects for a lower price.

In summary, make the choices and complete the work before going on the market—or take a break from the market and do the work before resuming your marketing efforts. It will pay you back in price and time on the market. Your property will compete better. Call us for advice in what to do and what colors to use.

Ready, Set, Sell !!!!

2007-10-17T08:05:00.000-07:00

GETTING READY TO SELL

I get quite a few calls from homeowners asking me to look at their home and tell them what they should do prior to placing it on the market. I am always glad to get those calls. For one, it’s an opportunity to go to work and earn a living. More important, it’s an opportunity to go to work on marketing a home that is putting its best foot forward. Homeowners that set aside their own perspective have a distinctive leg up on the competition!

SUCCESSFUL SELLERS LEARN TO THINK LIKE BUYERS

A difficult notion for many homeowners to understand is that how their home looks when they are living comfortably in it is probably not how it should look to sell quickly and for the most money. Put another way, once that “for sale” sign goes up, your home—with all of its history and emotional meaning to you—is no longer your home. It’s a product for sale. When it is at its best, it shows up not as your personal domicile, but as a new set of living possibilities for prospective Buyers.

OPEN UP SPACE

The starting point is almost always the removal of your “stuff”. It’s time to de-clutter: less furniture is better; fewer things hanging on the wall is better; less stuff in the garage, basement, yard . . . everywhere. If you’re moving, you need to get rid of stuff anyway. The three year/three month rule is a good starting place: anything you haven’t used in the past 3 years—and cannot imagine a use for in the next 3 months—should go. Give it away, donate it, recycle it or trash it. The main reason, though, is to make your property more of a “blank slate”. You want prospective Buyers to be able to imagine how they will use your space—you don’t want them to be distracted by your possessions. Less stuff makes a home feel larger, also. Very important!

PAINT

There is no single better investment than pre-sale painting. Patch the drywall cracks and nail holes and give your home a fresh coat of paint—certainly inside—and outside if needed. Paint has a way of making a home feel fresh and clean. It cleans up the visual landscape, making the home feel larger, more comfortable. You’ll always get more out of painting than you spend.

CLEAN IT UP

Now is the time for deep cleaning. Carpets, kitchens, bathrooms, plumbing fixtures, windows. Again, a clean home just feels more comfortable, more inviting, larger.

JUST WHAT YOU ALWAYS WANTED

A sad truism in the world of residential real estate is that you get your home just the way you always wanted—just to hand it off to someone else. When I sold our first home, I installed the last couple replacement windows, put on a new roof, put in a new well, moved the water softening equipment out of the crowed utility closet it had occupied, replaced all the carpet, painted throughout and put on a new front deck. It looked great! It hurt to not be able to appreciate it ourselves, but it made for a quick sale and a good return on our investment.

BE SMART

The focus should be on making changes that cost less than what you will gain in sale price. A new kitchen or bath makes sense if yours is clearly obsolete or dysfunctional, but usually major expenses are not necessary or advisable. That’s where we can help. Give us a call before you spend too much.

HOW'S THE MARKET???

2007-08-27T12:50:00.000-07:00

It’s a question posed daily to nearly every real estate agent, especially in the last few months with headlines rich in real estate “news”.

The answers are many and varied: It’s awful! It’s not that bad. It’s OK. It’s great! It’s been lots worse! All can be true—all at the same time. It depends and what part of the market you’re asking about . . . and whether you’re a buyer or a seller!

The fact is that—while there are forces nationally that influence all parts of the real estate market: the “sub-prime” market troubles . . . foreclosure increases . . . mortgage banking failures . . . Federal Reserve discount rates—how real estate is doing where you are depends on specifically where you are and what you are doing. Your community. Your neighborhood. Your school system. Your price range.

In the Greater Kalamazoo market, generally, if you are a buyer, it’s a pretty darned good market—there are lots of choices, financing is available and affordable and bargains are there to be had. If you are a seller, the competition is fierce—there are more homes on the market now than at any time in the last 25 years.

Still, there are exceptions and a wide range of variability. For instance, in Portage in the $100,000 - $125,000 price range, the current inventory of homes for sale is only at a 6.7 month supply—meaning that if the current rate of sales continued and no more homes entered the market, how long it would take to run out of homes? To put this in perspective . . . a balanced market carries about a 6 month supply of homes . . . in 1993 we carried a 4 month supply (very much a seller’s market) . . . and in 1981-1982 (with interest rates in the 14-17% range) the inventory hovered around 15 months!

Here’s snapshot of the current inventory levels in a smattering of other market segments in our area: Vicksburg area: $100,000 – $150,000 (7 months), $200,000 - $300,000 (12 months); Richland & Ross Townships $200,000 -300,000 (21 months); Plainwell area $175,000 - $225,000 (16 months); Gull Lake homes over $500,000 (25 months).

The bottom line: Each geographical and price segment of the market is its own mini-market. The experts and the media can say what they will about the national real estate picture—and it is always interesting—but what matters is what’s happening in the micro-market surrounding the home you own or the area you want to buy in.

All The Best,
Jared

P.S.
(I use the quotes around news because my perception has long been that what shows up in newspaper or TV or magazine or internet headlines as “news” is not really new—it’s been going on for quite some time. All media outlets, rightly or wrongly, think that they cannot get your attention and sell you something without sensationalizing the everyday.)