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Tuesday, July 28, 2009

Another Win at the Michigan Tax Tribunal

Just saved another client about $1700/yr in taxes while getting 2 back years of reduction for another and saving about $900.

On another protest, about $4400/yr for a 2 year judgement, was won at 3rd and final appeal/hearing.

Thursday, July 23, 2009

FHA borrowers mortgage insurance premiums overview

excerpts from

It says the following:

“In the past, some FHA borrowers have paid annual mortgage insurance premiums throughout the life of their mortgages. Effective for all loans closed on or after January 1, 2001, FHA’s annual mortgage insurance premiums will be automatically canceled under the following conditions:

*For mortgages with terms more than 15 years, the annual mortgage insurance premiums will be canceled when the loan to value ratio reaches 78 percent, provided the mortgagor has paid the annual mortgage insurance premiums for at least five years.

*For mortgages with terms 15 years and less and with loan to value ratios 90 percent and greater, the annual mortgage insurance premiums will be canceled when the loan to value ratio reaches 78 percent, irrespective of the length of time the mortgagor has paid the annual mortgage premiums.

*Mortgages with terms 15 years and less and with loan to value ratios of 89.99 percent and less will not be charged annual mortgage insurance premiums.”

The FHA also says:

“FHA will determine when a borrower has reached the 78% loan to value ratio based on the lower of the sales price or appraised value at origination. New appraised values will not be considered. For example, if the lower of the sales price or the appraised value at origination was $100,000, when the loan amount reaches $78,000, FHA will no longer collect annual mortgage insurance premiums on the loan. Cancellation of the annual mortgage insurance premiums will normally be based on the scheduled amortization of the loan. However, in cases where the loan payments have been accelerated or modified, cancellation can be based on the actual amortization of the loan as provided to HUD by the servicing mortgagee.”

list them and forget them

Dana Schultz - a past client of ours (one who sold 2 homes using Homeowners Concept and saving thousands in each case) - called the other day. Her daughter had been trying to sell her home in Illinois in an area where Homeowners Concept does not have an office, using an MLS only broker (also known as Limited Service) and having paid $500 upfront just to go in MLS. The property had been on the market for 9 months her daughter had moved to California and she was doing the showings because the service they used did not have the option to show. After a few trips over the IL border to show the home, her daughter decided to cut the price of the home drastically so it can sell ($30K to be exact).

This price cut had spurred some activity but she was wondering whether other Realtors were
avoiding the home or talking buyers out of it because it was limited service. This issue has been raised many times by sellers, ever since the MLS only companies came into the market a few years ago. Yet, you will not find an agent admitting such but as our study of the local market showed (see the blog post dated 2/20/09 titled: MLS only companies - an eye opener) many sellers who pay all this money upfront have little success. The companies (known in the industry as "list them and forget them") collect their money upfront (around $500) and have no incentive to sell the home. There is definitely more work for an agent that decides to show and write on a limited service home because the seller is still For Sale By Owner and there is no other agent to assist the seller with the contracts, counters, inspection, closing, etc. As a result this work falls on the shoulders of the selling agent. So putting yourself in an agent's shoes having to choose from a vast selection of homes and looking at the dismal success rates Dana's observation is right on the money.



From article #2:

There is more to negotiating than just the price.

There is no substitute for experience when it comes to negotiations. As I said before, there is more to negotiations that just price, there are repairs, time-frames and many other small details that become part of the negotiation. A Realtor has the ability to step back emotionally and really look at the deal in an unbiased way. They should be able to analyze proposed price & use their data to support the selling price. Through experience, they recognize which repairs make sense to accept, which ones can be settled with money & which repairs should be thrown out with supporting arguments as to why. Further, a buyer looking at the FSBO is holding onto his/her money now expecting to get the better end of a deal who gets the "savings" ?

Seller - For Sale By Owner
It's hard to compete with experience when you are negotiating a contract. It's like playing cards. You get better the more you play. You learn when to hold fast, when to bluff and when to fold. A buyer face to face with a seller will have more of an incentive to "win", since the meeting IS face to face. This doesn't mean that you can't do it. Here is where you have to weigh your options carefully. If you sell on your own and get the raw end of the deal on repairs or even lose a few thousand dollars on price because you didn't have the data to support your argument, how much did you save by not using a Realtor?

How many accidental legal representations did you make in face to face showings, emails, contracts, and advertisements ? How often did you violate state and federal disclosure laws, fair housing HUD laws ? How much future liability will you have ?