Jeff Duneske's Blog

One of the questions that I am asked by most of my home sellers is "Do open houses work?"

Many housing reports state that less then 2% of homes sales are a result of open houses. Open houses typically have nosey neighbors or unqualified buyers come through the homes. In my career of selling over 250 homes, I have never sold a home from holding it open.

Open houses typically benefit the Realtor holding it open, rather then the seller. Open houses have always been a tool to meet new home buyers and prospects. More often then not, home buyers that come through will have some reason or excuse on why the home is not what they are looking for or simply the home is priced out of there range.

Another reason why I do not hold open houses is the chance of theft. Anyone coming through could potentially steal not only personal items, but the latest trend has been visitors requesting to use the bathroom only to rummage through the medicine cabinet for prescription drugs.

In the age of technology that over 75% of home buyers ar using the net to search for homes, many buyers would prefer to see virtual tours from the comfort of their home. If there is further interest, then the buyer can call their agent or the listing agent.

Do to the high liability that is now put on the real estate agents, I no longer hold open houses. I encourage my clients that if they would like to want an open house, hold it open by themselves. Then if there are no interested buyers that come through that day, at least they were not kicked out of their home for three hours for no reason.

On March 22nd, Michigan Senate Republicans, under the leadership of Majority Leader Mike Bishop (R- Rochester) voted down Governor Granholm’s 2% tax on services, sending a clear message that tax increases to balance the 2007 budget are off the table. The vote went down along party lines with all Republican Senators voting against the Governor’s tax proposal joined by one Democrat, Senator Glenn Anderson (D- Westland), a REALTOR® member. In speaking with reporters following the vote Sen. Bishop declared Governor Granholm’s 2% tax on services “killed for good.”

Following the vote to defeat the tax, the Senate worked into the night to pass the remaining budget cuts totaling almost $600 million. The remaining votes went down party lines as the budget was passed.

This legislative victory was made possible by those that contribute to RPAC and the members who responded to the MAR Call to Action. During the floor debates regarding Governor Granholm’s 2% tax on services, many Senators remarked about the volumes of emails and phone calls they received regarding the negative consequences of this tax on Michigan families and businesses. Our membership’s over 4,900 emails to their State Senators aided in forming their decision on this vote.

While this is a tremendous victory for the real estate community, there is still a long way to go. While he recognized the tax proposal would be defeated, Senator Michael Switalski (D-Roseville) stated that, “The issue of revenue will not go away. I’m confident we will return to revenue before this is over.”

Local State Reps have proposed a relief to home purchasers from the 1994 Proposal "A" Property Tax. Under 1994's Proposal A, a property's taxable value can't rise above the rate of inflation or a maximum of 5 percent annually. That cap on taxable value increases is lifted at the point a property is sold, when the property's taxable value is reassessed at 50 percent of market value.

With many Seniors wanting to downsize their homes that they have lived in for 20+ years, many are unable do so because once they sell their home, even if they downsize, they will be taxed out of their payment range.

The proposal has been that Seniors, Veterans, First Time Home Buyers and Disabled home buyers would have a phased in taxable value increase over three years following the transfer of property, while another which has yet to be introduced includes implementing an 18-month moratorium on the pop up tax.

One-third of any increase in the property taxes on a principal residence would be collected from the new property owner in each of the immediately succeeding three years following a transfer.

In a depressed housing market flooded with an abundance of homes, any proposals that can help spark some home purchases, I am in full support of. I think proposal A really needs to be looked and see if there cannot be a completely new proposal that every buyer can benefit from.

A few days ago, Governor Granholm's 2% tax increase plan was introduced in the State Senate. Senate Bill 307, introduced by Senator Liz Brater (D-Ann Arbor) includes taxing real estate commissions and other industry-related services.

Please click on this link to acces more information as well as a letter to your Senator urging them to oppose this legislation.

By the Governors own estimates, only 6 states currently have a real estate service tax. However, none of those states have an income tax, service tax, and transfer tax. If the 2% tax on services were to pass, Michigan would be the only state to tax all three. This would only further depress Michigans real estate market by increasing the costs of purchasing a home or commercial property, and would price many potential buyers completely out of the market. The Michigan Association of REALTORS. and its over 32,000 members oppose this 2% tax on services, a move that would prove devastating to the real estate industry. Please contact your State Senator and urge them not to co-sponsor or vote for Senate Bill 307!