Home Sales Continue to Climb

Metro Detroit Home Sales Continue to Climb over 2011 & Median Sale Prices Continue to Rise

* Average Days On-Market (DOM) for the entire MLS decreased from last year by 14 days, from 91 to 77.
* Overall, YTD sales are up by 9.0% compared to last year.
* Of the 7,041 sales closed in August of this year, 11.1% (784) were identified as short sales.
* 43.8% of all sales this month were identified as cash sales.
* The median sale price for all MLS sales increased to $89,500 - this is up 9.1% over last year.
* The on-market inventory declined by 16.1% from 31,457 in August 2011 to 26,404 in August 2012.
* Approximately 11.8% of the on-market inventory (3,106) is comprised of properties identified as foreclosures.
* Approximately 21.3% of the on-market inventory (5,629) is comprised of properties identified as short sale.

How closings work

On closing day of your home purchase, all parties will sign the papers officially sealing the deal, and ownership of the property will be transferred to you. It's your opportunity to make any last-minute changes to the transaction.


The day before closing, be sure to gather all the paperwork you have received throughout the homebuying process. This includes the good-faith estimate; contract; proof of title search and insurance, if necessary; flood certification; proof of homeowners insurance and mortgage insurance; home appraisal; and inspection reports. You might need to refer to these documents at closing.

Most home-sale contracts entitle you to a walkthrough inspection of the property 24 hours before closing. This is to ensure that the seller has vacated the property and left it in the condition specified in the sale contract.

If there are any major problems, you can ask to delay the closing or request that the seller deposit money into an escrow account to cover the necessary repairs.

At closing, your participation will involve a couple steps:

1. Sign legal documents. There are two agreements to sign: the one between you and your lender regarding the terms and conditions of the mortgage and the one between you and the seller transferring ownership of the property. Be sure to read all documents carefully before signing them and do not sign forms with blank lines or spaces.

2. Pay closing costs and escrow items. Borrowers handle the numerous fees associated with obtaining a mortgage and transferring property ownership in one of two ways. They either roll them into the principal balance of the new loan or agree to pay higher interest rates and have their lender foot the bill. Some buyers may have to pay these fees out-of-pocket.


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Common Questions from First-time Homebuyers - HUDCommon Questions from First-time Homebuyers ... First Time Homebuyer

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Closing procedures vary from state to state and even from county to county. But generally, these parties will be at the closing or settlement meeting:

Closing agent, who might work for the lender or the title company.

Attorney: The closing agent might be an attorney representing you or the lender. Both sides may have attorneys. It's always a good idea to have an attorney present who represents you only.

Title-company representative, to provide written evidence of the ownership of the property.

Home seller.

Seller's real-estate agent.

You, also known as the mortgagor.

Lender, also known as the mortgagee.

The closing agent conducts the settlement meeting and ensures that all documents are signed and recorded and that closing fees and escrow payments are paid and distributed properly.

Closing documents


You will receive the following important documents:

HUD-1 settlement statement: This Department of Housing and Urban Development document is a detailed list of all costs related to the home sale. It is similar to the good-faith estimate you received weeks earlier, but the HUD-1 is not an estimate; it is a precise record of the settlement costs. You and the seller sign it. Compare the HUD-1 statement to the good-faith estimate to see if the actual closing costs differ significantly. By law, you have the right to review the HUD-1 24 hours before closing. Do so. Clear up any mistakes and resolve problems.

Final Truth in Lending Act statement: You received the first version of this statement after applying for your mortgage. This final version outlines the cost of your loan and the annual percentage rate, and it accounts for any modifications to your rate and points between application and closing. Make sure that everything is in order.

Mortgage note: This document states your promise to repay the mortgage. It indicates the amount and terms of the loan and what the lender can do if you don't pay.

Mortgage or deed of trust: This document secures the note and gives your lender a claim against the home if you fail to live up to the terms of the mortgage note.

Certificate of occupancy: If you are buying a newly constructed house, you need this legal document to move in.

Once you've reviewed and signed all closing documents, the house keys are yours — and you will have successfully purchased your new home.

Housing Turns the Corner

* Housing Starts for June increased by 6.9 percent to a 760,000 unit annual rate.
* June Permits for new residential construction decreased by 3.7 percent to a 755,000 unit rate.
* Mortgage Applications for the week ending July 13 jumped by 16.9 percent on strong refi activity.
* Beige Book indicated modest-to-moderate expansion in June and early July for most of the U.S.

Residential real estate indicators continue to show improvement, with gains visible in sales, prices and construction.  Housing starts for June increased by 6.9 percent to a 760,000 unit rate.  This is still weak by historical standards, but it is the strongest building rate since October 2008.  June permits for new construction fell by 3.7 percent to a 755,000 unit rate, giving back some of the large gain in May; however, the trend still looks good.  A key question about housing is....are recent gains durable?  The self-sustaining housing cycle starts with easing credit, which allows wealth-generating buyers to purchase cheap existing homes that are appreciating in value at very low interest rates.  Real estate and financial services workers are employed and home owners circulate cash back into the economy with fix-up and move-in purchases.  Growing confidence in the existing home market increases confidence in new home sales.  New home sales spur construction, which demands materials and employs workers, adding two more positive feedback mechanisms.  What could derail the train?  Given the fundamental tightening in housing markets that is occurring because the rate of new home construction is far below the rate of household formation, only a significant decrease in household wealth, coming as a result of a moderate-to-strong recession would shift demand.  Housing demand at this point is likely durable through a weakly growing economy, or through a mild recession.  Lack of credit availability could also derail the train.  A global financial market crisis could dry up credit availability, but that is looking less likely as Europe muddles through its financial, political and economic restructuring.  barring a hard recession in the U.S., a possibility increased by the approaching Fiscal Cliff and a melt-down in Europe, the positive trends in residential real estate look durable for now.

Top 10 Red Flags for Homebuyers

Sellers don't always disclose the whole truth to potential homebuyers, especially if they're eager to sell (or "motivated" in real estate lingo). But you can't afford to get a professional inspection of every house you tour. So before you spring for the pro, narrow down your choices by doing your own pre-inspection to spot potential problems.


1.Mass Exodus From the Neighborhood

Don't let a home's curb appeal keep you from glancing down the street. Are there several other homes for sale? Are nearby businesses boarded up or vandalized? Get the scoop from the neighbors. If everyone else wants to leave the street, maybe you should, too. Just do it before you're stuck with a bad investment.

How to choose a neighborhood

2.Mediocre Maintenance

Three layers of roofing and gutters with plants growing in them are signs the owners aren't big on maintaining their home. What else did they neglect?

Signs of poor home maintenance

3.Foundation Failures

Check out the yard grading. If the yard slopes toward the house, it could cause water to run down the foundation walls or into the basement, which will be costly to repair. Scour the foundation for damage. Bulges or cracks bigger than one-third inch can mean the house has serious structural issues.

Get your home inspected

4.Bad Smells (Inside or Outside)

Take a big whiff of the air inside and outside the house. Do you smell anything funky? If you can't smell anything but the huge baskets of potpourri all over the house, this could be a red flag.

Smells to be aware of when house hunting

5.Faulty or Old Wiring

While you're probably not an electrician, make sure all the switches and outlets in the house function properly. Flickering lights, circuits that don't work and warm or hot outlets or faceplates are all symptoms of wiring problems.

Look out for old home wiring

6.Fresh Paint on One Wall

New paint can really spruce up drab walls, but it can also hide bigger problems, like water damage, mildew or mold. If the room smells strange or if you see stains or saggy walls or ceilings, have an inspector look for mold and leaks.

Finding a good home inspector

7.Locked Doors and Blockades


Ask about any rooms that are "off limits" during your home tour, and arrange to see them later if you're interested in the house.

Be sure to tour the entire house

8.Foggy or Nonfunctioning Windows

Check for water in between double-paned windows and make sure all the windows are functional.

What to look for in windows

9.Structural Walls or Floors Have Been Removed

Sure you love the open floor plan, but was the house always open or did the homeowners renovate? If they removed a load-bearing wall without adjusting the framing, it can shift weight to other parts of the house. Hire a structural engineer if you think any renovations are questionable.

Explore backout contingencies

10.Bugs!

No one wants a house with a pest problem, be it roaches, mice or, worst of all, termites. Be on the lookout for unwelcome creatures as you tour the house. Even if no foes pop out while you're there, consider a separate termite inspection if you're thinking of purchasing the property.

BOTTOM LINE: Always get a professional inspection

Yeah, it's a little expensive, but it's worth every penny. Skipping a home inspection is not a good way to cut homebuying costs. You'll end up paying more in the long run when problems inevitably arise.

Listing your home?

Say the right thing: 6 things your home listing should include

Particular phrases and specific information can help your home sell more quickly — and for a better price.

A picture may be worth a thousand words, but the right turn of phrase in a home listing can make a big difference in how fast a home sells and how much a seller can get for it. (Bing: What has sold recently in your area?)

The right description can get your home a second look; the wrong one can sour buyers on the property in a matter of seconds. So choose those words wisely, agents say.

"It's all about capturing an audience," says Cheryl Bare of Century 21 Comstock Earnest in Waldorf, Md. "I try to create something that will just get [buyers or agents] to take a look at it."

MSN Real Estate asked Bare and other top agents to pinpoint the six elements of a good listing, as well as the things that are better left unsaid. Here, in no particular order, are their tips:

What's your home worth?

1. Highlight unseen amenities. The data fields on a listing can tell you how many bedrooms and bathrooms a house has, but they won't tell you the whole story. Neither will the photos, agents say.

"The description is the place for things that aren't obviously seen in the property details," says Jessica Edwards of Sea Coast Realty in Wilmington, N.C.
Important amenities such as an oversized garage or great views should be played up in the write-up. If you can see a picturesque vista from almost every room in the house, say so. Likewise, if a house is private because it backs up to an open space rather than a neighbor's property, that belongs in the description too, agents say.

Read: Is it ethical to alter listing photos?

2. Be specific. You don't just want to just say "beautiful remodeled kitchen" in a property description. Instead, point out features and brands that prospective buyers covet, says Don Moore of Better Homes & Gardens Tech Valley in Albany, N.Y.

Slide show: 10 home remodels that turn off buyers

Drop brand names such as Viking, Sub-Zero and Bosch. Identify granite countertops and stainless-steel appliances. Mention appealing features such as those pullout shelves in the kitchen cabinets or the walk-in pantry.

On our blog, 'Listed': Don't call it a comeback: Will white appliances surpass steel?

"I try to hit [buyers'] hot buttons," says Julie Johnson of BHG David Winans & Associates in Dallas. "I give as many details or facts about a property as I can."

That could include updates such as a new roof, separate his-and-hers closets, a finished basement or a master bedroom downstairs.

A saltwater pool, or a pool that has been recently resurfaced or updated, is also worth distinguishing from its traditional counterparts.

3. Use the right adjectives. Too much fluff can be off-putting, Johnson says, so use descriptors sparingly. And choose the words that pack the most punch.

A Canadian study conducted more than a decade ago – but to which agents still refer — found that homes described as "beautiful" sold for 5% more than those in "move-in condition." Likewise, homes that were described as "beautiful" or "gorgeous" sold 15% faster.

Images that doesn't mean that every house or room deserves that descriptor, but if it fits the bill, by all means use it, agents say. "Beautiful landscaping" is a good combination.
But don't exaggerate. The worst thing, agents say, is building buyers' expectations with a grand description of something only to have it fall far short in real life. Remember, "spacious" is a relative term. "Open floor plan" on the other hand, works for everyone.

Here's Johnson's makeover on a listing that went overboard with the adjectives:
Before: "Splendid, Sweet, and no other Equal! This one hits the sweet spot! Tons of hardwoods, gorgeous granite countertops, plantation shutters, 2 covered patios, crown molding, stone fireplace and fantastic fixtures. You will love the updated style Highland Home floor plan with the California kitchen. Both master and secondary bedroom downstairs. Massive master suite! Don't forget an awesome gameroom and fully wired media room. Exemplary Frisco ISD!"

After: "Highland home with ideal open floor plan including master and extra bedroom down, game & media room wired for surround sound, hand-scraped wood extended thru 1st floor including study, kitchen open to family room with granite, stainless appliances, double ovens, 5-burner gas cooktop, oversized master, larger than average secondary bedrooms, plantation shutters, sink in 3 car garage, pool-sized yard with covered patio, established neighborhood feeds to Exemplary Frisco ISD with quick access to major highways."

MSN Living: Affordable ways to refresh a dated kitchen

Johnson asks of the before, "What is a California kitchen anyway?" It's a good bet those reading it won't know either.

4. Good grammar is mandatory. Bad spelling and grammar can be as big a deterrent as hokey copy. It sends the message that a seller doesn't have good agent representation. If an agent can't take the time to spell-check the listing, what other corners is that agent going to cut?

Here's a good example of how bad spelling and ill-conceived content can put buyers off, followed by Moore's fix for it.

Before: "Seeing is beleiving! Foundation has new concrete/foam insluation skirting and all joints have foam insulation and are caulked. Owner will be painting exterior in the spring.'

After: "This distinctive ranch is located on a picturesque 1.4-acre lot in the heart of Slingerlands. There's a massive stone fireplace and wall of windows in the LR overlooking the private wooded lot. You'll feel like you are in the Adirondacks! The open floor plan is perfect for entertaining. It's sure to be a treasure once updated with your personal touch."

Sounds more compelling than the "before" right? (Side note: While good insulation is important, it might not be the thing that gets buyers out in droves.)

Moreover, be careful with abbreviations that people might not understand. While agents might use "WBF" as an abbreviation for wood-burning fireplace, many home shoppers would have no idea what that meant and therefore can't be swayed by it, Johnson says.

5. Provide motivation. A psychology major in college, Johnson says that sometimes stating something is enough to make a large number of people believe it's true. And that goes for pronouncements on pricing.

MSN Money: The psychology of pricing your home

The phrase "priced to sell" or "Great Deal!" can be more of a call to action for buyers, even if the home in question is priced on par with others in the area.

Home affordability calculator

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Bare has used "Better Run!" and "Best Buy," but only if the home is priced relatively low.


6. Tout lifestyle. Buyers are also motivated by emotion. A home is a place where they will create memories. So give them a hint about what those memories might be. How will they enjoy the home and its features? Edwards suggests: "Relax with a glass of wine on the custom deck overlooking the well landscaped backyard" or "entertain friends in the gourmet kitchen." Does it have a front porch? How about "relax with a glass of lemonade on the front porch," Bare suggests.

If a community has great amenities such as a neighborhood pool or nearby walking or biking trails, mention them. If the elementary school is a short walk away, that should be featured prominently as well. Ditto for perks such as short commutes or proximity to highly desirable restaurants and shops.

Just remember to deliver the biggest selling points of a house in the first couple of lines, whether it's "tons of storage space" or "beautifully landscaped front yard."