Q: We received an offer for our house that stated the buyer would pay $1,000 over any bona fide offer. What does that mean?
A: That is what we call an Escalation Clause. The buyer is saying that if there is another offer that is higher than theirs, that they will pay $1,000 more than the other offer. Bona fide by definition means in good faith, without fraud. Often the Escalation Clause will also include language that the seller has to show the buyer a copy of the other offer as proof that it exists.
Q: Because there are not many condos on the market, I want to buy a condo first and then sell my house. I don’t want to pay higher property taxes on the condo because I have the Homestead on my house. Do I have to tell the new city about the house or can I claim the condo too?
A: Yes, you need to tell them. The good news is that you can claim both legally. Homestead is now called Principal Residence Exemption or PRE for short. In 2008, the State of Michigan amended the General Property Tax Act, Public Act 206 of 1893. The amendment enables a person who has established a new principal residence to retain a PRE on property previously exempt as the owner’s principal residence. The conditional rescission allows an owner to receive a PRE on his or her current Michigan property and on previously exempted property simultaneously if certain criteria are met. An owner may receive the PRE on the previous principal residence for up to three years if that property is not occupied, is for sale, is not leased and is not used for any business or commercial purpose.
To initially qualify for a conditional rescission, the owner must submit a Conditional Rescission of Principal Residence Exemption, Form 4640 to the assessor for the city or township on or before June 1 (beginning with the summer tax levy) or Nov. 1 (beginning with the winter tax levy) of the first year of the claim. The owner must annually resubmit this form on or before Dec. 31 to verify to the assessor that the property for which the PRE is retained is not occupied, is for sale, is not leased and is not used for any business or commercial purpose. Consult a real estate attorney or an assessor’s office for more information.
Market Update: June’s market update for Macomb County and Oakland County’s housing market (house and condo sales) is as follows. In Macomb County average sales prices were up by less than 1% and Oakland County average sales prices were up by more than 4% for the month. Macomb County’s on market inventory was down by almost 37% and Oakland County’s on market inventory was down by more than 33%. Macomb County average days on market was 21 days and Oakland County average days on market was 20 days. Closed sales in Macomb County were down by almost 17% and closed sales in Oakland County were down by more than 17%. The closed sales continue to be down as a direct result of the continued low inventory. Demand still remains high. (All comparisons are month-to-month, year-to-year.)
By the long-standing historical definition from the National Association of Realtors (NAR) which has been in existence since 1908; a buyer’s market is when there is a seven-month supply or more of inventory on the market. A balanced market between buyers and sellers is when there is a six-month supply of inventory. A seller’s market is when there is a five-month or less supply of inventory. Inventory has continued to be low. In June the State inventory of houses and condos for sale increased slightly to 1.8 months of supply. Macomb County’s inventory was at 1.3 months of supply and Oakland County’s inventory was at 1.6 months of supply; little to no change. As you can see, by definition it is not a buyer’s market.
Steve Meyers is a Real Estate Agent/Realtor at RE/MAX Metropolitan located in Shelby Twp., Michigan and is a member of the RE/MAX Hall of Fame. He can be contacted with questions at 586-997-5480 (voicemail) or email him at [email protected] You can also visit his website: AnswersToRealEstateQuestions.com
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