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Turning the Tide in Title

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10 | Th e M Rep o RT Take 5 M // This past winter was unusually harsh with record- breaking amounts of snow and freezing temperatures. How has this weather impacted the housing market throughout the first half of 2014? robinson // Traditionally, the winter months are slower for home sales. This year, we saw sig- nificant reductions from 2013 sales levels. Many assumed that our unusual winter weather was a major, if not the only, contributor to this drop in activity. In reality, the weather was just one of a variety of factors impacting sales. The colder temperatures, coupled with fewer homes for sale and new restrictions on loan qualifica- tions, have all resulted in a slower start for the market this year. In Michigan, sales for the entire state are down 12 percent from the same time last year, with the weather accounting for 2 to 5 percent of that decline. M // There are an abundance of buyers as a result of the pent-up demand from the winter. What are some challenges these buyers face in today's market? Similarly, what challenges are sellers facing? robinson // Lack of inventory of houses for sale is the primary challenge for buyers. Additionally, as previously noted, new rules regarding loan qualifications went into effect this year, requiring higher credit scores and better debt to income ratios, making it increasingly difficult to secure a mortgage. For sellers, their biggest chal- lenge is lower appraisals. Any time that home values increase rapidly but few transactions close, it is hard to get comparables on properties with characteristics similar to the subject land. That creates a spread between market value and appraised value. In addition, many people still owe more money on their houses than what they are worth. That nega- tive, equity problem contributes to the lack of inventory available for sale. M // What are the top three misconceptions about title insurance? robinson // The most common misconception is that title insur- ance companies don't pay claims. The truth is we do—we just don't pay claims the same way tradi- tional insurance companies do. Title insurance is designed to try and eliminate risks and avoid claims by researching and analyzing land Talking Title William Robinson, president of Attorneys Title Agency, knows a thing or two about Title, but his decades of experience in the business has given him insight on market dynamics. he took some time out to talk housing market recovery and the Title industry's role in the recovery. records. The goal is to assure an ac- curate sale and transfer of property rather than to pay for problems that could have been avoided. We are also often told that title insurance doesn't provide value. In reality, title companies handle much of the work that is required to acquire or sell a piece of property. For example, we look for issues such as who owns the property, whether there are existing mortgages against the property, or whether taxes need to be paid. We also prepare the closing documents and disburse the sale proceeds, so there is a lot going on behind the scenes. Lastly, people don't think they have a choice when it comes to selecting their title company. The fact of the matter is, you are abso- lutely free to enlist the help of the title company of your choosing. M // Traditionally, spring is when we see an uptick in the housing market. What are your predictions for the remaining balance of the year? robinson // We anticipate that inventory will remain low throughout the close of 2014, re- sulting in a year-over-year market decrease of about 10 percent in home sales. As a result of this low inventory, however, we should see solid appreciation in values. We also predict that interest rates for loans will continue to rise slightly, but will remain at attractive historical levels by stabilizing at fewer than 5 percent. M // For those who are house hunting, what advice do you have when it comes to selecting a qualified title insurance agency? robinson // Talk to trusted advisers, but make smart choices about the advice you accept. If you are working with a lender or real estate agent who has knowledge and expertise about the industry, listen to his or her recommenda- tions. They may already partner with a qualified expert upon whom you can rely. In other words, build the best team of pro- fessionals you can to assist you in marketing or purchasing a home.

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