Northern Michigan Real Estate

Michigan State Transfer Tax Exemption

In 1993, the State of Michigan implemented the state real estate transfer tax.  When a home is sold in Michigan, there is a transfer tax that must be paid by the seller.  This tax is based on the sale price of the home and is equivalent to $7.50 per $1,000 or the sales price on all home sales (unless the transaction is exempted under the statute). 

There is a portion of this statue that can potential help some sellers.  It has been on the books for years but is only coming to light due to our recent decline of values.  If the current owner sells their property and the current assessed value is less then when they purchased the property, they do not have to pay the State Transfer Tax.

This could affect owners that have purchased a property in the top of the market and are now forced to sell at a loss.  Since the tax is calculated on the "Sales Price", some due diligence must be done to find out if your seller qualifies for this exemption.  This is not the duty of the title company, it is your accountability duty to your client to research this information and find out if they are eligible for the exemption.  This could potentially save your client thousands of dollars depending on the price of the home. 

This exemption only applies to the STATE tansfer tax.  There are NO exceptions to the COUNTY transfer tax.

Christie Stalsonburg, Realtor

"A Tradition Of Sound Advice"

231-944-0854

www.stalsonburg.com

www.northernmichiganrealestatecs.com

Coldwell Banker Schmidt Realtors

402 E. Front St.  Traverse City, MI   49686

In a previous blog, I mentioned the box exchange service that I offer to my clients.  The one thing that I forgot to mention was the alternative to those expensive peanut packing products that are out there.  If you have not had the opportunity to stop by and price those little jewels, they are quite priceless.  They would be a great commercial ad for Mastercard because they are priceless.  I cannot even begin to try to rationalize why it costs so much to purchase a bag of Styrofoam peanuts.  I suppose it is simple supply and demand.  I have found an alternative to packing peanuts. 

Most of us have a shredder at home and we can put it to good use for our clients.  I recently was packing items in my Arizona home to send out to my home here in Traverse City and ran out of those "wonder peanuts".  I went to the local packaging store and just about choked on my words when the clerk told me how much they were going to cost.  I immediately went home and ranted to my husband about the incident.  His response was "we have a shredder and that ton of newspapers in the garage".  Why don't you just shred those and use it for packaging.  What wonderful idea.  That is just we what we did and it turned out just great.  I had all of the packing fill that I needed and it did not cost me dime. 

This is something that we can do for our clients.  If we have shredders at home, why not shred and package all of our paper into large trash bags to pass on to our clients when they are moving.  It makes great fill material and your clients will love you for not having to go to the store to purchase those high priced packing peanuts.

Christine Stalsonburg, Realtor

"A Tradition Of Sound Advice"

231-944-0854

www.stalsonburg.com

www.northernmichiganrealestatecs.com

Coldwell Banker Schmidt Realtors

402 E. Front St.  Traverse City, MI   49686

Sellers and Listing Agent's Beware

We finally get a contract on our listing and we are very excited to bring it to the seller.  After days of negotiation, we finally have a meeting of the minds.  Our sellers are ecstatic!!!  Then we hold our breath for the inspection period to end to make sure that they buyers do not find anything that they just cannot live with. 

The inspection is done and the buyer brings a list of repairs to be done, based on the inspection report that are longer than your arm.  The first thing that most agents do is ask to see the report to verify the repair requests.  I caution each and every one of you to re-think asking for these reports.  Once you and your seller see everything that the inspector just found wrong with your home, you are not obligated to update your seller disclosure documents to reflect this new information (if it was not already incorporated in your original documents). 

This is something that many do not think twice about.  Unless you are prepared to make this new report a part of your seller disclosure obligation, I would not ask to see the report.  Bottom line for the seller is that the buyer has asked for the repairs and it is up to the seller if they want to make them or counter back with a different list of repairs that they are willing to do. 

As the Buyer's Agent, you should also be aware that if you review the report personally and then pass it on to your buyer, you are then also obligated to disclosure to any other potential buyers for that property what you know about the property from the report.  If for some reason the original buyer backs out of the purchase based on the report and you happen to have another buyer who wants to put in a contract on this home, you must tell them what you know about the house based on the report that you reviewed.

The review of the inspection report should be handled just as the loan application process is handled.  The buyer should deal directly with the inspector and ask you, as their Realtor to ask for the repairs that they feel are necessary to move the contract forward.  Take yourself right out of the middle of this and don't review the inspection report unless you are willing to disclose everything that you learn from that report to any other prospective buyers for that home.    If another potential buyer finds out that you knew information about that home and did not disclose that to them, you could find yourself defending that action in the future. 

Some buyers are very confused when they get this huge report and have to decide what to be concerned about and what not to be concerned with.  This is why I always encourage my buyers to attend the inspection so that the inspector can show them the concerns that he/she finds and explain what the findings mean.

Christine Stalsonburg, Realtor

"A Tradition Of Sound Advice"

231-944-0854

www.stalsonburg.com

www.northernmichiganrealestatecs.com

Coldwell Banker Schmidt Realtors

402 E. Front St.  Traverse City, MI   49686

Let's Give The Buyer An Allowance

Sellers often seem to think that it is a good idea.  As a seller, it makes sense to let the buyers make the choice.  Your carpet needs to be replaced.  It is showing lots of wear.  Or perhaps, it is a pretty green.  You have always loved it.  It goes with your furniture.  You know it is not one of today's trendy colors.  So, why not give the buyers an allowance and let them pick what they want?

That "allowance you want to give them" is a deduction off the price of the house.  That means after the close buyers have to come up with the case to buy new carpet.  They may not have it.  Particularly in today's market where they need 20% down.  Lenders will not let buyers roll the price of the carpet into their mortgage.  Even if you have the money held with the escrow for the allowance, the buyer will still fear that it will not be enough to cover the replacement cost.

Then there is the buyer's fear of the unknown.  What will the price be to replace the carpet?  In the buyer's mind, the carpet costs more than the allowance you want to give them.

Sellers will increase the value of their homeand the a higher price if they prepare the house for sale and replace the carpet with a neutral colored carpet.

If you are curious about what to do to increase the value of your home, call me at 231-944-0854 or contact me at christine.stalsonburg@coldwellbanker.com or visit my web site at www.stalsonburg.com.

"A Tradition Of Sound Advice"

Christine Stalsonburg, Realtor

231-944-0854

www.stalsonburg.com

www.northernmichiganrealestatecs.com

Coldwell Banker Schmidt Realtors

402 E. Front St.  Traverse City, MI   49686

It appears that our local jurisdictions have not totally gotten on board with the real estate market price readjustments when assessing properties for tax purposes.  They were very quick to increases our valued assessments when the market was on an upward swing.  Since we have been on a steady decline, they are not very helpful in decreasing our values to bring them in line with the current market values.  I have offered to assist my clients with representation to their local jurisdictions by compiling the comps for their area in the recent year.  This has helped many of them get their values for tax purposes lowered and they are very grateful.  It seems that if the board making those appeal decisions are presented with hard sales facts from recent sales (arms length sales), they will reduce their values.  This is a service worth offering to your clients and a great way to keep in touch while providing a service that they can use. 

Christine, Traverse City, MI