Ignore the Headlines - finally the media gets it

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I came across an article recently that I would like to share with you. For so long the media has been pounding that the market is bad, horrible, stay away… Yes, things haven’t been as productive as they used to (for sellers). I have written many times about this market too. The media likes to to generalize the numbers for the most part. They quote the national averages and then point toward ground zero of the worse areas in the United States.

Let’s talk quickly about averages… You total the data and divide it by the number of data points and you have one number that represents the average. Example: 1, 7, 10, 2, 3, 9, and 10. The average is 6. So if each number represents a housing market, you have seven areas. Each area has a number to represent the condition (10 being the worse) The news media tends to focus on the areas with the numbers above the average (or the most affected areas.) You still have markets that are out performing the rest of the nation. So, when someone shows you averages, remember there’s always high numbers and low numbers. Which do you want to focus on?

Back to the article “Ignore the Headlines”...It talks about the economy, stock market, oil prices and the housing market. The part that really drew me in and something I can’t stress enough. Was the example that Jim Svinth, chief economist of Lending Tree, made about “waiting it out”

Consider a typical home that sells for $218,900. You put down 20% and get a 30-year fixed-rate mortgage at today’s rate of 5.5%. Monthly principal and interest come to $994.31. Let’s say that 12 months from now the same house goes for 10% less, or $197,010. But by then the recession is history and the Fed is jacking up rates to stem inflation. If mortgage costs rise a point, to 6.5%, your monthly payment would be $994.94 and you’d have saved nothing. Meanwhile, home prices might steady and sellers might become less willing to negotiate. And you have spent a year living someplace you’d rather not be.

This market is a moving target. Everything is pointing in the right direction for eager buyers. High inventory to choose from and low interest rates. The creative loans have gone to the wayside. If you qualify for a loan, you should feel secure in making the payments. Lenders have tightened their requirements (they had to.) Sellers are up against foreclosures and short sales that are impacting the values of their properties. Hold your ground…selling your home might not be the best thing to do right now.

We will climb out of this market…we always have. Real estate is a cyclic market…

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February 20, 2008 · Filed Under Buyer, Frederick MD Real Estate, Frederick Market Conditions, seller

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Urbana MD Real Estate Market Conditions

Urbana Maryland has been a sought after area through the early parts of 2000s and continues to have appeal to home buyers. It is one of the established newer communities in Frederick County and it’s conveniently located for access to Montgomery County and Washington DC. In its final phases, the businesses have started to settle down. There is still plenty of room for growth. The housing market in zip code 21704 makes up about 5% of total market in Frederick County. With that said here is a snap shot of homes in the Urbana Area.

Total Homes on market - 106
Total Townhouse - 33
Total Single Family Homes - 72
Total Condos - 1
Under Contract - 1
Sold in the last 90 days - 29
Absorption Rate - 9 months (check here for a comparison)

Have a great day and remember if you need a personalized look at your neighborhood, please feel free to contact me.

Bob

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February 18, 2008 · Filed Under Frederick MD Real Estate, Frederick Market Conditions, Market Condition

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Friday Foto in Frederick

We had some serious ice this week that caused school cancellations. The ice coated the branches. Mother nature always has a way to amaze us. The first foto is right after the freezing rain started. The bottom pictures were from Thursday after the rain. All the ice melted except for the tops of the mountains. When I came home on Thursday the sun was shining through the trees and it look like crystals.

Have a great weekend.

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February 15, 2008 · Filed Under Frederick Misc, Friday, Fun

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What should a seller expect in a Short sale

We started talking about Short Sales last week and I said we would break it down for the seller and the buyer. The Short Sale transaction can be frustrating for everyone involved. I think most of the frustration comes from expectations not being met. The short sale is not your every day real estate transaction. This is relatively new territory for most real estate agents and definitely a new venture for the seller. This should be one of your last resorts. Talk to your bank. You might be able to renegotiate your mortgage. Again, back to my point banks don’t want to own real estate, they just don’t realize it yet. They are going to fight you tooth and nail to keep the current condition and hope you find a way to pay. A well trained real estate agent in foreclosures and short sales will be able to assist you in this process. Again I want to repost my disclaimer.

Disclaimer; I am not a tax expert, CPA, financial planning expert, nor a lawyer. I suggest before you decide if a short sale is right for you, that you seek professional advice from your CPA, tax expert and lawyer. What I am giving you here is a peek into what could happen if this is the right choice for you.

There are a few things that you should be prepared to do before venturing into a short sale transaction. The bank has to deem your situation worthy of a short sale. Remember, they are going to ultimately take a loss on this. If they approve, they will pass this short fall onto you as a 1099 at closing. The government sees this as income to you and expect you to pay taxes on it. (Tax laws are changing on this regularly, check with your Tax preparer) You might not have to anymore.

Your agent will be needing a copy of a few things from you to help streamline the whole process.

Authorization to talk to you lender(s)
Most recent mortgage statement.
Most recent tax return.
Two most recent pay stubs.
Bank Account Statement(s)
A Hardship letter written in your own words.

The banks will want to see these items in order to consider your request. If there’s a second mortgage, most likely both will have to approve the short sale. Remember you agent will do their best to get the approval, but there’s no guarantees that they will accept it. It is not uncommon for one or the other lender to force it to foreclosure. The loss mitigation department sometimes have a mind of their own. They have secret formulas that they use to determine which route is more beneficial to the bank.

Your sellers agent will submit this again with another pile of documents when an offer comes through. It makes it easier on the Loss Mitigation Officer to see everything at one time (again or maybe for the first time) They have hundreds of these request coming across their desk monthly. The more your agent is organized, the quicker the response time to the sale approval. I say quicker with a little tongue and cheek. The approval process could take anywhere from 30-60 days. You don’t need any more delays than that. Especially if the foreclosure process is closing in on you. Buyers and Buyer’s agent need to be aware of this. We’ll talk about their expectations next week.

This is an emotional process, your agent should be able to help keep things in perspective and work through the hiccups of the transaction. Ultimately, you want to get this property off your books. So you can regain control of your life.

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