Lender started foreclosure … What should I do?

Q. My lender has started foreclosure proceedings. What should I do?

A. Immediately contact an attorney and/or a MSHDA approved foreclosure prevention counselor in your county. Click on the following link for information on foreclosure prevention counselors. http://www.mshda.info/counseling_search/. Many Michigan counties also have lawyer referral services that can assist you in finding an attorney. The Save the Dream toll-free number is 866-946-7432. Operated by the Michigan State Housing Development Authority (MSHDA), the hotline directs homeowners to a homeownership counselor in their county who specializes in foreclosure prevention.

For more specifics and some general counsel on “short sales”, auctions, time tables, tax consequences (there’s a big one), etc, give me a call asap.

Two Simultaneous Principal Residence Exemptions

Homeowners who are selling their homes, but moved into another home elsewhere in the State, get to have two Imageprincipal resident exemptions. …the St of MI Act provides that an owner may retain an exemption for up to 3 tax years on property previously exempt as principal residence if that property:

• is not occupied;
• is for sale;
• is not leased; and
• is not used for any business or commercial purpose

Big penalty for not rescinding when the old home is sold.

We complete this form free for clients that have retained us under buy/sell brokerage, minimal fee for others.

DIY’s for profit ( but not necessarily fun )

Four piles ! – that’s the bottom line.

  1. Toss it.
  2. Donate it.
  3. Sell it.
  4. Keep, organize and store it.

If a seller wants to get the same prince the neighbors got for their property, then I have expectations for them too !

Read the entire list with a caveat, e.g., I’d put kitchen bath rehab higher on the list, but if yours in no more than 5 years old and clean clean clean, then its off the list. You get the idea.

Above is the jest of today’s suggested reading.

Moving up: Whats that big dream house cost in time and money ?

There are some good articles and checklists on why owning a home, moving, or large home vs a smaller one is more expensive. Based on many factors I typically discuss w/ a buyer/seller up front, I agree on most points – based on planned usage, time you plan to stay there and many other factors.

Up front I give a buyer/seller a questionnaire to help them sort thru variables as well as help me understand how to better service them as a brokerage customer/client &/or how to screen other professionals if retained for a referral situation.

For as many costs of more time and money, with some pre-planning you might come out ahead with a larger home or a larger yard. Whats the time savings of a soccer space in the back yard over a regular trip to the park. How about a vegetable garden, in-law apartment, in-home office/studio for your business, renting storage space in the pole barn, Christmas tree stock, pumpkins the kids will sell, hardwoods for the woodstove,  closing off outer/ northern rooms in winter to buffer the main rooms for easier heating ? There are tax savings & income possibilities if done right.

But I do prefer one start with the downside of reality in case one never uses the beneficial aspects.

Better than “house hunters”

Before I rehabbed my first investment property back in my college days, I read and reread 2 books by the investing couple Sam and Mary Weir, e.g.: How We Made A Million Dollars Recycling Great Old Houses.    I remember taking a trip east to look up these addresses and see if it was all real – it was !

The books are a bit dated, but the ideas in them are not – still one of the best quick easy but realistic reads for the just starting out investor I can think of. Clients that retain me I actually give them a free copy of this upon request via Facebook.

Fast forward to the HGTV days. I’m not a TV watcher, but these guys seem to be the modern rough equivalent primer for the wannabe/current investor.  Here’s the quip and link:

Property Brothers.” features people who buy a fixer-upper and renovate it into their dream home with the help of twins Jonathan (the contractor) and Drew (the real estate agent) Scott. 

decent article

Adaptive reuse / flexible use

I tend to look at properties from a “multi-use” perspective.

I might say to a prospective buyer client “will you ever work from home ?…have customers stop by ?…. want rent out part for future/retirement income stream ?… have retired parent(s) live with you ?… have a business & residence at the same location ?

In our up/down economy that has become more of the norm in recent years these are valid considerations. I prefer to start with “when will you move” or “what might cause you to have to move”, to help a buyer consider liquidity – and the “what if you can’t sell” perspective.

I’ve linked to an article on an adaptive reuse option that has always intrigued me. Converted factories turned dazzling homes

Hidden Problems in Older Properties

When I first started investing in home This Old House was popular, oil was going to run out, and Mother Earth News was all the rage. How I Made a Million Dollar Recycling Great Old Homes was my favorite book, so much so I actually took a trip the east coast to drive by most of the homes in the book ! I was going to find an old house “with charm”, rehab it, and make my fortune.

Since that time I’ve owned quite a few properties, built some, rehabbed some. I typically urge buyers to favor homes built after WWII – similarly I greatly urge couples NOT to build new…. this is another blog post.

In my “historic properties” I found 6 layers of roof on one, mice and skunks in the crawl space in another, flooding basements you wouldn’t believe – but lots of “charm”.

These older ( pre 1940 ish ) homes take an extra layer of investigating – if you want to call out an inspector, these are prime targets.

DIY’s ? Take a flashlight, foldup ladder, level, tape measure, outlet tester, binoculars, power screwdriver, camera ( for memory jog ), photograph the electical panel(s)/ furnace/ waterheater/ and any other mechanicals to forward to a specialist should you want a second opinion. I have checklists AND a few insights to offer.