What’s all this talk about Short Sales

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Short Sales, Bank Owned, Foreclosure, Bankruptcy…all start with one problem; Finances or the lack of funds to overcome the current and future expenses. Who hasn’t had some type of financial issues in your life? Unfortunately, these are some of the more extreme financial solutions. With foreclosures on the rise, short sales have become an option to relieve some of that burden.

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.

Foreclosure is the final action that a bank takes to recover assets to cover the mortgage at which a homeowner promised to pay. There are other alternatives to foreclosure. One of the biggest problems with deterring foreclosure; Homeowner denial.

How many empty promises were made to the collection agency?

How many times has the phone rang and you didn’t answer it?

How many notices from the bank went unopened into the garbage?

For some reason it is our human psyche to ignore it and it will go away. THIS IS THE WORSE THING YOU CAN DO. Let me tell you a secret; Banks don’t want to own real estate. Now the catch-22, they don’t realize that either. You would think that they would want to help you before you start to have problems in today’s economy and housing situation. I have heard many stories that the bank wouldn’t even talk to the homeowner until they were at least one month behind on their payments. So, I guess you have to hurt your credit to fix your credit. (that is not my advice, that is just my reasoning.)

What is happening quite too often now is that homes have depreciated anywhere from 5-15% since 2006. (prices are actually that same now as they were in 2005 according to the January 2008 Housing report for Frederick County) What you have now is a mortgage that is worth more than the property is actually valued. This is creating problems with refis too. Some are looking to refinance their mortgage to help lower the payments which is great. The interest rates haven’t been this low for a long time. But now the problem, the appraisals are not matching up with what is owed on the property. In some cases you have homeowners that bought their home with no money down which means after all the charges, the loan was more than the purchase price. Simple banking math; you don’t pay much on the principal to lower your debt for the first few years only interest (even on 30 yr fix loans.) Now, if the homeowner tries to sell the property, the amount they owe is more than the market will pay. Hence the birth of the short sale. What happens now, the bank has to approve the sell of your property, because now they are looking to take a loss on your mortgage. This can be a tedious and nerve racking process for all involved. In the end the bank still might to decide on foreclosing on the property. They might feel this will yield them more money.

Now a shortsale doesn’t always relieve you of your financial burden. Banks might request that you pay back the difference between the sale price and the mortgage price or they may not. If you are relieved of the difference, it is still considered as income by the government and could be subject to taxation. Either way, it is much less than having the whole mortgage hanging over your head. This might not be the right choice for you or the only solution that is out there for you, but there are solutions. You need stop avoiding the banks…that is the worse thing you can do. A REALTOR educated on short sales can help show you options.

I will be back next week to talk about what to expect in a short sell as the seller and as the buyer.

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February 7, 2008 · Filed Under Frederick Foreclosure, Frederick MD Real Estate, frederick real estate

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The Squirrels are telling us to Get ready for Winter

My grandfather always told me to pay attention to the squirrels. They are telling us what the winter will be like. Sure they are scurrying for nuts all the time. Look at the tails, are they bushy? Thick and bushy, don’t you think they want to be warm this winter? How about their nest? Higher in the tree, worse the winter. (he said that about the paper hornets nest too!) Thicker the nest, worse the winter. I don’t know about Channel 7 News, but I like to believe my grandfather…not that it came true all the time…I just liked to listen to his wisdom.

And with that I must say, vacant home owners need to be ready…How many times has a Buyer’s agent taken their client to show a houses and couldn’t get in? That’s frustrating for the buyers. This buyer might need to find something real soon and your house wasn’t ready for show. Worse off, your house was perfect for them.

Here are a couple tips to remember with your vacant house.

Shovel the sidewalks - This is just asking for problems. And not only that, you can be fined by the city (with in the city limits)
Winterize the house - If you think you home will be vacant for a long time, call a plumber to removed the water from your pipes. This way if the furnace breaks down while it is freezing outside, you don’t have problems.
Visit a couple times - Either send someone or do it yourself. Pick up the free publications and pizza notices from the driveway and the door.
Vacuum - While at the house at least once or twice a month, vacuum up leaves or dust bunnies that might have been tracked into the house.
Remove Toilet Paper - WHAT? Believe me, if you don’t turn off the water, you are going to want to remove the toilet paper. If available sometimes, people will use the bathrooms. What no plunger? You get my drift or the next visitor will.
Call your Insurance Company - this is for your protection. Not all insurance companies offer the same coverage when the home is vacant. You will need to clear this up before an accident happens.
Hire a Home Stager - Yes it cost some money, but a stager will be able to make the empty home look homey and that’s all it might take to sell your home.

Now these are only a few suggestions, but they will help you with the successful sale of your home.

Good Luck, be patient, price right and make it best of show.

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January 17, 2008 · Filed Under Frederick MD Real Estate, Staging, frederick real estate, seller

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November Market Condition Reports

The totals are in for November. Not a surprise as we get ready to close in on another year on the Frederick MD real estate market. Looks like we will finish up with around a 30% decrease in sales over last year. (which was down 20% from 2005) You can see the total number of listings are starting to decline as well. This is due to the Holidays. It is truly unfortunate for the sellers, because the winter months have some of the more serious buyers out and about. Corporate Relocations always happen throughout the year but are more likely to occur at the end of the year and in the beginning of the year. It seems like most REALTORS® are closing down shop around this time. Some of my busiest months have been in December…just sayin’.

The prices are still coming down over last year as the average days on market increase to 153 days. The prices are going to continue to decline as we see the impact of the foreclosures and bank owned properties increase. The economist don’t have a true idea of the impact as most of their models can’t predict this market yet. It’s purely speculation.

November 2007 Market Totals

	2007	2006	% Change
Total Sold Dollar Volume:	$51,875,314	$86,846,551	-40.27%
Average Sold Price:	$341,285	$347,386	-1.76%
Median Sold Price:	$299,700	$311,950	-3.93%
Total Units Sold:	152	250	-39.20%
Average Days on Market:	153	96	59.38%
Average List Price for Solds:	$374,652	$367,970	1.82%
Avg Sale Price as a	91.09%	94.41%
percentage of Avg List Price:

You can see we are approaching 2004 prices in the housing market.

Click to enlarge.

If you are selling in today’s market, it is imperative to price your home correctly. This is not a time to test the market at a higher price. If you would like a personalize Competitive Market Analysis (aka CMA) of your home, just contact me and I will have it for you in a few days.

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December 10, 2007 · Filed Under Frederick Market Conditions, frederick real estate

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Market Conditions for Condos in Frederick County

Condos seem to have been the litmus test of the real estate industry. As the sales increase so do the rest of the market. I guess it’s a matter of where either one starts or one finishes their home buying process. First Time home buyers find the price of condos to be an attractive place to start their real estate portfolio. Condos are usually the right size, more luxurious than their previous apartment, definitely better looking than their room at Mom and Dad’s and most cases maintenance free. So condos are usually an excellent choice for getting a start on your homeownership.

On the other end of the spectrum, you have the “empty nesters” down sizing. Couples that have raised their family, had the big house with the picket fence and are now tired of cutting the grass, raking leaves, cleaning all those empty rooms and end up heading over to the condominium purchase. The Active Adult communities are made up of condominium association with features and amenities conducive to the lifestyles of the 55 and older crowd. You find this demographic prefers something more on the luxurious side. They want the finer things in life as they spend (and prepare for) their retirement. Condos allow them security, community, and maintenance free living.

Condo Market 12/03/07

Condo Assoc.	Active	Contract	Sold in last 90 Days	Price Range
Ambertowne	12	1	1	115,000-162,500
8th St Mews	9	O	1	189,900-219,900
Creekside Plaza	9	O	O	397,900-1,180,000
Jefferson Chase	10	O	O	159,900-234,500
Mill Crossing	12	1	O	209,900-249,900
Maxwell Place	4	O	1	345,000-673,750
Monacacy Overlook	4	O	O	190,000-205,000
Old Farm Station	11	2	3	155,000-239,000
Ridgeview II	6	3	4	215,000-260,000
Springridge	4	1	2	229,900-245,000
Wormans Mill	6	1	1	264,900-369,900
All Frederick County	158	16	42	115,000-1,180,000

If you are interest in more information about any of the condos in Frederick, feel free to contact me. I will gladly find you the information that you need.