Thinking about buying some land, a home or a cottage near a Michigan farm? Then you need to be aware of the basics of Public act 93 of 1981, the Michigan Farm Act. Michigan farm operations are protected by the law. As with all law, it is lengthy.  Read it for yourself..

In short it states the owners/ operators of a Michigan farm are protected from complaints or lawsuits seeking the have their operations halted due to farm odors, dust or noises which are objectionable. This protection extends to future farm improvements or changes in operations and use of new technology that may become available in the future.

When you are looking at real estate, look around. Who are your neighbors? What are they doing?

You have decided you are going to buy that waterfront cabin, hunting land or a another property. Now the question will be asked of you, “How are you going to take title?”

Good question. Here is a real simple explanation of the options. In Michigan, there are four forms of fee simple ownership.

Estate in Severalty: This is ownership by one person only. Upon the death of this person, the property descends to his or her heirs.

Tenants in Common: This is ownership by two or more people. The interest owned by the tenants in common can be the same per cent or different. Upon the death of one of the tenants of common, their interest in the property would pass to their heirs.

Joint Tenancy: This is ownership by two or more people. Each of the owners must own the exact same percentage of ownership (if there are four joint tenants, each own 25%) and must acquire the ownership at the same time as the other joint tenants. Upon the death of one of the joint tenants, there is an automatic right of survivorship. That means the share of the deceased is divided equally among the surviving owners.

Tenants in Entirety: This is ownership by husband and wife only. Upon the death of either spouse, the ownership of the will belong to the surviving spouse. Each person is said to own 100%

Before making a decision, understand the options clearly and ask questions if you do not.

It is so easy to overlook the simple process of changing the filter in your furnace. Filters trap dust, dirt and other partials that can travel through the air. The dirtier the filter becomes, the harder the furnace and the fan have to work. The cleaner the filter, the more efficiently the furnace will operate. At the price of natural gas, propane, or fuel oil, every little thing we do to help the budget makes a difference.

There is a wide range of filters:  Electronic Filters, Metal Filters, Charcoal Air Filters, Electrostatic Filters, all at a wide range of prices.

I like the disposable filters that are relatively cheap. So, for a matter of just a couple of dollars, why not replace them often? 

It is recommended to change them every six weeks during the heating season.

Recently I was asked how to look up a lot in a subdivision on a plat map.  One way is to go to the county office building and pay a visit to the Register of Deeds office. There you could ask for assistance with the plat maps for that county.

The state of Michigan also maintains records of plat maps online that can be searched and viewed from your computer.

The State of Michigan has records of over 66,000 plats on file and the majority of them can be found online. These files go all the way back to 1873. While there is much information online regarding Michigan plats, there may be some information that is not found here.

The process is really pretty easy. You will first be asked to type in the subdivision name. You will then be asked to select the county name from a drop down menu. Then click “Submit”. The subdivision will appear on the screen shortly, depending on the speed of your computer and connection.

If you do not know the subdivision name, there is an advanced search option. You begin by selecting the county name from the drop down menu. A list of all the subdivisions in that particular county will appear. You may then scroll through the list until you come to the subdivision you are looking for. Click on the subdivision name and the subdivision will come up on your screen.

On the advance search option you are able to enter as much or as little information as you have and search for the subdivision. Having the section number, township and range can be very helpful. You can whittle the down the length of the list down considerably.

It is always recommended to also review plats at the County Register of Deeds. Looking for additions, corrections, surveyor’s affidavits, court orders, municipal resolutions and ordinances that may have changed the plat in some way.

When reviewing plats at the County Register of Deeds, don’t hesitate to ask questions if there is something you do not understand.

A question I am often asked is “ What is land selling for these days?

“Such was the case as I overheard a conversation the other day. As the two talked they were discussing parcels of land they knew of that had sold and the price it sold for. They came up with a value they thought was market value for land.

Interestingly enough, they really did not discuss the type land, it’s location or it’s charterisitics. Was it wooded or not? If wooded, what type of trees? Was it hardwoods, or pines, or brush?  Was it high ground or low? Was it flat or rolling?  Was there electric to the parcel? Was it on a paved road, gravel road, private road and was it accessible year round?

All these factors affect the desirability of the property and the value of what a willing buyer will pay, or what it will take for the seller to part with it.

It is like asking “What are used cars selling for these days?

Sometimes when purchasing unimproved waterfront property, a comparison is made between two parcels by comparing the price per foot of water frontage. I always hesitate to compare property that way. Here’s why.

I believe no two waterfront properties are the same. There are always differences.  Even if the lots appear to be similar, the views from the properties can be very different. Consider an obstructed view vs. an unobstructed view, or a partially obstructed view. How important is a sunset or sunrise view?  Are you a highlander or lowlander?

The body of water is important. Is it all sports? Fishing lake only? Do the water levels vary during the season? Is it a wooded site? How does the land lay? Does the land roll? Is it a walkout site? What is the beach like, sandy swimming beach or undeveloped with potential?  Does it have a marl bottom?

Access to the site is also important. Is it on a paved road, gravel, seasonal road, private road vs. public road? What utilities are available? Gas, electric, water, septic or sewer?

The water table in the land can vary greatly even in a short distance, as well as soil conditions, resulting in a different type of septic system required.

What are the building restrictions in the area? Are there lake association requirements? What are the neighboring properties like?

The list of questions can go on and on. When comparing two different waterfront properties, there are many factors to consider. No two properties are exactly alike!

What is Buy and Bail? It is a scheme where the owners of a home discover the value of their home has dropped. The outstanding mortgage balance is more than the value of their home. They continue to make the payments on their mortgage as agreed. They then in turn, find a second home at a lower purchase price, apply for a new mortgage with their credit intact and finalize the purchase of the new home.

They then stop making mortgage payments on the first home and allow that property to go into foreclosure. In the process they destroy their credit rating, but they are in a new home, sometimes purchasing a larger and better home or they purchase a home of the same range, but with less debt.

There has been a fair amount of this type of activity. It is being considered a form of mortgage fraud.

A few good articles on the subject: About.com Investor Centric Wall Street Journal

Buying a foreclosure property is not for the faint hearted or the inpatient!

Having previously posted on foreclosures, I thought I would revisit the subject. After thinking I have heard it all, I have been seeing more and more incompetence on the part of a lender. After searching several parcels of land, spotting what could be a sweet building site for a client, a foreclosure property was waiting for a new owner.

The offer was presented. A counter offer was made by the bank and then  later accepted by the purchaser. The next step for the buyer was to sign the buyer addendum, a several page document required by the lender, protecting themselves with all kinds of waivers from the buyer.

A few days later, the lender decided to resend the deal. It seems as if they discovered some liens they were responsible for, but were not aware of when the offer was signed. The next day, another communication arrived from the lender, this time stating they were now going to move forward with the deal.

A few days later, with the title work process started, it was determined that the property does not actually belong to the bank. While would like to say I have gotten to the bottom of all of this, I am afraid I still have more digging to do. I am sure there is more to this story, I will keep you informed. My point today is one should not have to put up with this type of ineptitude.

From the amount of posts out there, it is obvious that this type of frustration is shared by buyers and realtors from all areas. One post in particular expresses it very well.

I think when working with lenders as sellers, realtors more than earn their commission. I can’t believe I wrote that.

You have just discovered a sweet piece of land and the price seems right. You move forward and hire a surveyor only to discover the neighbor’s driveway cuts across the corner of your property. What do you do?

This type of problem occurs frequently. Over the years, we have found fences, driveways, sheds, garages and even houses that were over the property line. This happens when one is unsure of where the property line are actually located.

Recently, we discovered a small lakefront site. Being in an older plat with all small lots, it would be questionable if there were enough square feet of land to build a cabin and keep within the setbacks required by the township from the street, the water’s edge and the side yard setbacks. On top of that, add the requirements for the drain field and the reserve area and isolation distances from the neighbor’s well and drain field. We were not sure we could pull it off.

With closer inspection, it was discovered with careful planning, all of these requirements could be met. The only problem was that the neighbor’s driveway cut across the tip of the corner of the potential building site.

The neighbor had only owned his cabin for a few short years. When he purchased the cottage, his seller made it clear that the gravel drive was not actually on the property and understood that his gravel drive was across the corner of the neighbor’s property. It had been that way as far back as anyone could remember. He had enough room on his site to accommodate his drive and did not need the cut across.

The potential buyer of the site, wanting to make sure that there would be no problem, approached the user of the gravel drive and inquired of his willingness to relocate his drive. The gentleman was very gracious and acknowledged the encroachment. He informed the potential buyer, and future neighbor, that he would be willing to move it. After all, he had the room and there was very little cost, if any, to park on his own property.

Problem solved? No, the buyer being cautious approached his attorney for consul. The attorney advised having a document prepared and to be signed by all parties involved. A simple document was prepared. (I know it is hard to believe an attorney can do anything simple.) When the potential buyer presented the document to the neighbor, the neighbor refused to sign it and stated “My word is golden”. The buyer wisely did not move forward with the purchase.

Without the driveway being relocated on the rightful property, this lot cannot meet all the setbacks and requirements. Hence the lot is considered unbuildable and consequently of very little value. The property remains unbuilt. This is not an isolated case, we are aware of several similar situations.

A few lessons can be learned from this situation. When purchasing a piece of property, order a survey if there is not an existing one available. Secondly, all agreements regarding real estate should be in writing.

It’s that time of year again. Every year notices of tax assessments are sent out by the local real estate tax assessors. And, it usually goes up.

You have the opportunity to appeal this assessment. If you believe it is unreasonably high, you ought to do this.

In most townships and cities, the first thing to do is to call and schedule an appointment with the Assessor’s Review. This appointment will be at the township hall. Generally, appointments are scheduled in ten minute intervals. (If you do not live in the area of the property, you can file an appeal by mail.)

Upon arrival, you will usually be asked to review their assessment information on your property. Look this sheet over very carefully. We have found incorrect information many times over. I once appealed taxes on a particular piece of property and found the property was assessed as having a pool in the back yard. That particular property never had a pool, and the previous owners had paid taxes on the property for years based on an incorrect assessment including a pool. Sorry, no refunds!

You will be given the opportunity to present why you believe your assessment is too high. The reviewers may ask you questions regarding your property. The reviewers will often have their best poker faces on and you have little clue as to what they are thinking. You will be notified later by mail with the results.

It is very important that you have documentation as to why you believe your assessment is high. That should include a list of comparable properties in the same area that have sold for less. The best comparables are ones that have sold in the last twelve months. (Most local assessors do not accept sales that are foreclosures.) This information can be retrieved through the local county assessor’s office. Or, quicker yet, by placing a call to a local real estate agent for some assistance. Your success or failure will often be directly proportionally to the preparation you put into your research.

If upon receiving the reviewer’s decision it is not where you think it should be, your next option will be to appeal to the Michigan State Tax Tribunal. If you are confident of your homework, we encourage you to take this next step. You begin by asking for an appointment, but be prepared for a wait. The state moves very slowly.

The State Tribunal works a little differently than the township. You will again have the opportunity to present your documentation. The local assessors will also have to give their reasons why they have assessed your property the way they did. They do not have to do this at the local level. Another difference, the State Tax Tribunal will consider sale information of foreclosure sales.

This process is not difficult or costly. It is a case of nothing ventured, and nothing gained. You may be glad you did.

I am sure if you have purchased a new car from a car dealer you have had this experience. You are quoted a price, plus tax, title, dealer preparation charges, transport fees and a host of other fees. The list can go on and on. I am not talking about fees paid to the lender, but to the auto dealership directly. It is rather irritating to be charged so openly with fees I have always found questionable in nature. Perhaps you have felt the same way.

That same process has arrived in the real estate world. Today several larger real estate firms have begun charging the same type of fees. These additional costs are generally called “Document Preparation Fees” or “Transaction Fees”.

I am not talking about real estate commissions that are charged to the seller of the property, generally ranging in the 5% to 10%. Nor am I talking about fees charged by a lender to process the mortgage loan. I am referring to a fee charged by the real estate company, generally to a buyer, in an amount ranging from $100 to $300. It is explained as “Fees to oversee the paperwork process”, hence the document preparation fees or a transaction fee.

In some cases behind the scenes it works like this: the sales agent works on a 100% commission, receiving all of the commission charged to the seller, or a percentage of the total commission if there are two agents involved, one selling and one listing. The real estate company involved receives no portion of the sales commission, only the transaction fee.

Recently as a seller, I was carefully examining the fees on a closing statement and I noticed “Transaction Fees”. This was something I had not come across before when selling a property. I questioned the fee and promptly objected to the charge. After a weak explanation of why the amount was required, they hesitantly agreed to remove the charge from the closing statement.

As a seller you are obligated only to pay any and all fees described in the listing agreement upon the sale of the property.

Likewise, as a buyer you are only obligated to pay any fees that you have agreed to pay as disclosed in the buyer agency agreement.

Again, not all real estate firms are charging these type of fees, some are, and the concept is growing.

As in any transaction, please ask questions if you do not fully understand any of the terms, conditions or charges.

Previously I wrote about Land Contracts and later I wrote Don’t be confused by Interest. In those articles I should have mentioned a term called “usury”. Usury means excessive interest, charging more than the law allows. When it comes to land, the laws that are followed are those of the state in which the land is located.

In Michigan, the criminal usury rate is 25%. The maximum interest rate allowed on seller financing (such as a land contract) is 11%. There are some exceptions. For example, if the buyer is a business, the rate can be up to 24.99%.

Remember that interest rates on seller financing are negotiated between buyer and seller. Interest rates charged by lenders vary from lender to lender. Shop for the best rate possible.