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Renee Badall's Blog

By Renee Badall | Agent in Ann Arbor, MI
  • Repaying the First-Time Buyer Tax Credit

    Posted Under: Home Buying in Ann Arbor, Home Selling in Ann Arbor, Property Q&A in Ann Arbor  |  May 8, 2012 2:46 PM  |  1,578 views  |  No comments

    Weeks left meterAre you a home owner who purchased your home as a first-time buyer under the First-Time Homebuyer Program?

    Perhaps you are at the point of wanting to

    move up . . .

    move on  . . .

    move down . . .


    Wondering what your obligations are -- if any . . . ?

    If you purchased your home in 2008
    , you are already familiar with your repayment program, however  .  .  .

    • Selling calls all future installments due on your tax return for the year of sale. 
    • Your repayment is limited to the total the amount of gain on your sale providing you sell to an unrelated taxpayer (a non-relative).
    • If there is no gain or even a loss on the sale (which is entirely possible), your remaining installments may be reduced or even eliminated.
    • If you sell your home to a relative, the total amount of the credit must be repaid.
    • Please consult a tax professional to determine the tax consequences of a sale.
    If you purchased your home in 2009, 2010 or for military 2011, your obligation to repay the credit occurs only if you sell, rent or cause your home to otherwise stop being your primary residence within 3 years from your date of purchase. 
    • In this case, the full amount of the credit becomes due and is payable on the tax return of the year that your home ceased to be your principal residence.  
    Here are some examples under which your home stops being your main home:

    • You sell your home
    • You transfer your home to a spouse or former spouse in a divorce settlement.
    • You convert your home to a rental or business property
    • You convert your home to a vacation or second home
    • You no longer live in the home for the greater number of nights in a year.
    Your individual circumstances may be different.  To find your first-time homebuyer credit information, the IRS Website is helpful:

    First-Time Homebuyer Tax Credit Repayment Information

    Repayment of the Credit (form)

  • Who Owns Your Loan?

    Posted Under: Home Selling in Ann Arbor, Financing in Ann Arbor, Property Q&A in Ann Arbor  |  May 2, 2012 8:22 AM  |  1,573 views  |  No comments

    If you want to find out if Freddie Mac or Fannie Mae owns your loan, please check the following websites:

    Freddie Mac

    Fannie Mae


    You must be the homeowner.


  • Selling Your Home in Winter

    Posted Under: Home Selling in Ann Arbor, Curb Appeal in Ann Arbor, Property Q&A in Ann Arbor  |  December 8, 2011 5:19 AM  |  1,725 views  |  No comments

    Spring is the best time to sell your home, right?  Perhaps, but consider this -- buyers out looking at homes in December or January are generally more serious about buying.

     


    As a seller, you benefit for two reasons:

    1. A general lack of competition (inventory)
    2. Each showing is more productie leading to fewer showings necessary to sell your home. 

    To maximize your efforts . . .

    Let Your Lights Shine:  For a showing, every single light in the house must be on, even in the ones you may not think are important, such as closets, utility and laundry rooms.  Make sure all bulbs are working and replace them immediately when they burn out. 

    Keep your outside lights on as well.  This is an open-arms welcome for showings and even when you don’t have a showing scheduled, it helps people driving or walking by see that your house is for sale.

    During these shorter days with limited daylight and snow and clouds, keep your curtains and blinds open to capture every ounce of natural light.

    Set Up Timers:  You want your home to look warm and welcoming whenever prospective buyers drive past.  But you're not home all the time, so put indoor and outdoor lights on timers.  

    Wash the Windows:  As soon as the weather is too chilly to open the windows, remove (and store) your screens and get your windows washed.  This will bring the outside in by enhancing your homes natural light, and, in winter, that strong southern light can reveal grime and make it look like the home hasn't been well-maintained.

    Provide Convenient Parking:  It's vital that buyers have a convenient place to park.  Keep your driveway and front of your house free from snow and ice.  This, too, is part of the "welcome mat."  It takes a buyer 8 seconds to form an impression about your house.  Since you only get one chance at this, you want it to be a good one.  Making a buyer climb over a snow bank when they exit their vehicle or have to walk a long way in cold weather is not a good start!

    Make it Easy to Enter:  Make it easy for buyers to deal with their snow and salt covered shoes when they arrive.  Put an attractive area rug at the front door for wiping and placement of shoes.  Space allowing, place a chair or bench to sit on to make it easy for buyers to remove  their shoes or put disposable booties on.

    Keep Odors Under Control:  Homes tend to be stuffy in winter and this allows odors to build up.  Pet odors and strong cooking odors are a challenge this time of year when the windows are shut and rarely, if ever opened.  Room deoderizers or burning candles are perfectly acceptable, but they should be subtle and in the background.  The best tact is to keep the house clean, change the cat litter daily, avoid strong cooking odors or even use an air purifier.  Consider setting your thermostat so that the furnace fan runs constantly during the day to keep air moving throughout the house to dissipate odors. 

    Cultivate a Festive Look:  Holiday decorations can help sell a home, but don't go overboard.  Remember, less is more.  You want potential buyers to focus on the features and attributes of your home.  Decorations should be an enhancement and not a distraction.  When a buyer starts mentally placing their furniture, you've had a good showing!

    Don't Ignore the Outdoors:  Make a good first impression on buyers with a neatly maintained yard.  Walks and steps should be kept clear, especially of snow and ice.  Take a look at the outside of your home and if there is not enough illumination to make it inviting, either change your fixtures or have new ones added. 

    Set a Comfortable Temperature:  We all tend to prefer a specific temperature for our homes during the winter, but don't blast buyers with hot air.  Remember, buyers will be wearing their coats, even as they walk around your house. 

    Keep Seasonal Clothing Under Control:  A major challenge of selling a home during the winter months is the overabundance of cold-weather gear that must be stored.  Buyers don't want to find the mudroom filled with boots or the hall closet overflowing with heavy coats.  Shift some winter coats to another closet andput anything not needed into storage.

     

  • HOW TO WRITE A HARDSHIP LETTER for a Short Sale

    Posted Under: Home Selling in Ann Arbor, Foreclosure in Ann Arbor, Property Q&A in Ann Arbor  |  November 4, 2011 8:50 AM  |  1,246 views  |  No comments

    You need to sell your home, but the market won’t support a price that is high enough to pay off your mortgage note.  You will need to do a short sale, but in order to do so, certain qualifications must be met.

    Most importantly, you must have a hardship. This can be anything from the home’s market value has dropped to bankruptcy. If you saw my Trulia blog – Short Sale Qualifications – you have seen the detailed information and some hardship examples.

    1. Brainstorm about your hardship. Sit and write down every idea that pops into your head about why you can’t afford your house/condo. Why are you having financial difficulties? Why is this property a strain on your financial situation? Write down every possible thought that has any affect on your financial situation or you wanting to get rid of the property. Don’t think too much, just write down whatever pops into your head. Sit and write until you have at least 5 ideas.

    ¨ Loss of job or job transfer

    ¨ Medical bills

    ¨ Increased property taxes

    ¨ Child’s college tuition

    ¨ Divorce

    ¨ Credit card debt

    ¨ . . .

    2. Look at your brainstorm list and pick the most obvious ones that have the most affect on your financial situation and ability to make payments on the home. Look at the list as if you were your Lender. Which hardships would you look at as the most crucial? Select 3 or 4 hardships, focus on them and explain exactly why they are affecting your ability to make payments on the loan.

    3. Write the letter. Make your hardship letter less than one page and in paragraph form. Short sale department reps look through many letters. They don’t want to be reading a novel to find out why you can’t afford your mortgage payments.

    · At the top of your hardship letter, type your bank's name, address, phone and fax numbers.

    · Be sure to date the letter.

    · Put a subject line: Request for Short Sale (your loan number and complete property address.

    · "Dear (bank's name) Representative

    · Paragraph 1: State a change. Mention what change took place and why you can no longer afford your mortgage payments. Keep is short and simple.

    · Paragraph 2: State why your geographic area is poor. "My property is located in ____________. The taxes have increased, property values have declined, there are 5 foreclosures in my neighborhood . . . “List all bad circumstances for your specific location.

    · Paragraphs 3 and 4: List any of the following and explain using details and specific numbers as best as you can:

       à Wrong doing by mortgage loan broker, bad adjustable mortgage

       à Hardships (income loss due to job loss, spouses job loss, increased bills, disability or health problem . . . Brainstorm from your list.


    · Final paragraphs: clearly state that you "cannot pay" and need to short sale the home. You don't have any other options available.

    · Sign and give to your Realtor who will review it with your Attorney and submit it to your Lender.

  • SHORT SALE QUALIFICATIONS

    Posted Under: Home Selling in Ypsilanti, Foreclosure in Ypsilanti, Property Q&A in Ypsilanti  |  November 4, 2011 7:57 AM  |  1,171 views  |  No comments

    When lenders agree to do a short sale in real estate, it means the lender is accepting less than the total amount due. A short sale occurs when a property is sold, and the lender agrees to accept a discounted payoff. The lender will release the lien that is secured to the property upon receipt of less money than is actually owed.

    In order to be a candidate for a short sale, you must meet certain qualifications.


    First
    of all, you must have a hardship.
    This can be anything from the home’s market value has dropped to bankruptcy. Here are a few examples:

    • Your home's market value has dropped. This must be substianted by your Realtor with comparable sales.
    • The mortgage is in or near default status. You DO NOT have to stop making your mortgage payments in order to be considered for a short sale.
    • Financial hardship. You must submit a letter of hardship that explains why you cannot pay the difference due upon sale. Some examples of hardship might be unemployment, job transfer, divorce, medical emergency sudden illness, bankruptcy, death . . .

    You have no assets. The Short Sale Package (which you have requested from your lender -- more on this later) will include a copy of your tax returns as well as a financial statement. If your lender discovers assets, they may require you to pay back the short fall. They may, however, discount the pay back.

    Steps in a Short Sale (simplified):

    1. Request a Short Sale Package from your Lender.
    2. Lenders require that your property must be listed by a Realtor and in the MLS (Multiple-Listing Service).
    3. You hire a local Realtor, preferably one that is experienced in short sales. When doing your research, look for the SFR (Short Sale and Foreclosure Certified) designation.
    4. Your Realtor will do a comparative market analysis to determine the price range that your home should be listed in.
    5. You and your Realtor agree on a price and sign a Listing Agreement subject to selling as a short sale with third-party approval.
    6. You will sign an Authorization to Release Information granting your lender permission to discuss all aspects of the Short Sale with your Realtor.
    7. Your Realtor is busy marketing the property for sale and finding a buyer.
    8. A buyer is found and offer is made for market value, which is obviously less than the balance owed on your mortgage note.
    9. You accept the buyer's offer.
    10. Your offer is submitted to your lender along with all required documentation.
    11. Your lender accepts the offer. This takes some time -- anywhere from 2 to 8 months, sometimes shorter, sometimes longer.
    12. You must now accept the lenders terms regarding the short sale.
    13. The transaction closes when the buyer delivers the funds, the lender releases the lien.

    Here are my recommendations:

    • Hire an good Realtor.  Make sure they are full-time. This shows that they are professional and dedicated to their career. Ask questions, interview, make sure that the Realtor you hire to represent you is experienced with Short Sales. They don't have to do them exclusively, but they should be experienced. One of the best ways to ascertain this is to look for the SFR designation. This stands for Short Sale and Foreclosure certified. It means that the Realtor has taken the extra step to learn as much as they can about Short Sales.
    • Hire an Attorney. This is not in place of a Realtor, it is in addition to. Lenders talk and work differently with Attorneys. There are Attorneys who specialize in in Short Sales. Having an Attorney represent you will give you a considerable step up. You are asking your lender to dismiss you of a considerable amount of debt. You can afford an Attorney!
    • Call your Lender to inform them of your impending Short Sale. Ask for their Short Sale Package. Complete it and give it to your Realtor. He/she will make sure that both your Lender and Attorney receive it. Your Lender may tell you that they don't want any paperwork from you until you receive an offer. Don't believe it. Failure to have these documents ready and in place will slow the entire Short Sale process down once you receive an offer. Buyers walk when the wait is too long.
    • Be organized, punctual and courteous.
    • Periodically, your Lender may ask for additional documentation from you. They may even ask you for the same documentation over and over again. Do it. Do it immediately upon being asked.
    • Work closely with your Realtor and Attorney.
    • Your Realtor should communicate regularly with the buyer's Realtor. Information is power and will help keep the buyer in the deal. 

      For help with writing your short-sale letter, check my blog to see "How To Write A Hardship Letter."


      • Renee Badall   
  • Why You Need Buyer Agency

    Posted Under: Home Buying in Ypsilanti, Foreclosure in Ypsilanti, Property Q&A in Ypsilanti  |  August 20, 2011 9:47 AM  |  913 views  |  1 comment

    Renee Badall, Buyer AGentBefore you disclose confidential information to a real estate agent regarding a real estate transaction, you should understand the type of relationship that you have with them.  Unless you have a signed Buyer Agency Agreement with a Realtor by law, that Realtor represents the Seller.  Prior to 1993, all Realtors represented the Seller. 

    Now — to your benefit — we have Buyer Agency.  Signing a Buyer’s Agency Agreement benefits you    because it insures that the Realtor you are revealing your desires to is working solely on your behalf  and not just gleaning information from you to take back to the Seller.  Please understand that when you call the    listing agent (Seller’s Realtor) to see a property, she or he is working in the best interest of their client — the Seller.  It is their duty to get the best deal for their client — the seller — not you.

    As a Buyer Agent, I step into a fiduciary (TRUST) relationship with you and it is my duty to:

    Ò Promote your best interest

    Ò Make you aware of all facts that might affect or influence your decision to tender an offer to purchase

    Ò Keep confidential all your motivations for buying while at the same time, disclose to you all information gleaned about the willingness of the seller to complete the sale, accept a lower price, motivation . . .

    Ò Never advance any interests adverse to yours, or conduct your business in such a way as to benefit another party to the detriment of your interest. 

    Ò Act according to the law subject to your continuous  control, but not exceeding the scope of authority conferred by you.  In other words, “I don’t make decisions for you.”

    Ò Protect you from foreseeable risks of harm and recommend that the you obtain expert advice or assistance when your needs are outside the scope of my expertise.

    Ò Never communicate personal information about you that was given to me within the scope of employment as your Buyer Agent.  This personal information must be kept confidential unless you tell me otherwise.

    Ò Disclose material facts (something that will affect your decision to buy the house or pay a different price) concerning the transaction and property which might affect the decisions that you will make. 

    Ò Promptly report to you all money and property received and paid out, and upon request, to tender an account of these actions.  I must safeguard all money held on your behalf.

    Renee Badall

     

  • Earth Day IDEAS

    Posted Under: Quality of Life in Ann Arbor, In My Neighborhood in Ann Arbor, Property Q&A in Ann Arbor  |  April 21, 2011 7:59 AM  |  801 views  |  No comments

    As we celebrate our 41st Earth Day environmental awareness is a common theme.  Originating in the USA,it is now celebrated around the world.  The word “green” has become a buzz word.  Let’s make sure it’s sincere. . .

    As an EcoBroker, my goal is to educate my clients on affordable home features that will provide comfort as well as a healthier environment.  What a great feeling to know that you are not sending your hard-earned cash and carbon footprint up the chimney!

    Even a tiny effort on your part contributes to the environment’s bottom line.  Here are some ideas:

    H    Spring cleaning – clean under and behind your refrigerator to provide more energy efficiency; clean and check window seals; look for obvious sources of draft and leakage.

    H    Check your air conditioner – outdoors, trim back plants and vines that grow around the a/c unit; inside, adjust your thermostat settings and have your system inspected by a qualified professional.

    H    Two degrees – adjust your programmable thermostat up 2 degrees in the summer and down 2 degrees in the winter. 

    H    Twist the knobs – on the hot water heater, the refrigerator and your programmable thermostat.  Adjusting them a little out of your “comfort zone” can have a big impact on the environment and your pocket book!

    H    Change direction – warm weather means changing the direction of your ceiling fans.  In summer they should be set to draw air upward to cool the area and ensure constant airflow.

    H    Let it slide – make sure the track is clean on your sliding door wall and windows.  A build up of dirt can damage the seal create gaps where air can escape.

    H    Ventilation – attic ventilations systems draw cool air up through the house and have a much lower carbon footprint than an air conditioner does, often at a considerable savings.

    H    Window treatments – consider installing insulated, thermal backed window treatments. 

    H    Plant some shade – trees are good for the environment while at the same time shield your home from summer sun.

    H    Let the wind blow through – Install a clothes line and enjoy sun-soaked clothing.   Air drying your laundry saves on energy and is gentler on your clothes helping them last longer.

    H    Go green – start a compost bin, install a rain barrel, reduce, reuse and recycle whenever you can.

    Every little bit helps.  If you think for one moment that your contribution is insignificant, multiply it.  Put your hands together!  Feel the momentum as millions of tiny acts band together.  Can you feel it?


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