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…

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

6 Comments

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.

February 13, 2008 · Filed Under Frederick Foreclosure, Frederick MD Real Estate, seller

8 Comments

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.

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

11 Comments

This is how we roll - helping sellers and keeping buyers informed

In an incredibly tough market like this, you have to be on your toes. Use your time wisely and productively. As a real estate agent, one of the key things you need to know is the inventory in your area. What are the average days on the market? What is the average list to sale ratio for the neighborhood? And you have to know the inventory… What do the houses in the neighborhood look like compared to mine? What condition is the house in right now? The Mt Airy Long & Foster Office real estate agents cover four counties; Frederick, Howard, Carroll and Montgomery.

We are getting back to basics at the Mt Airy Long & Foster Office. Once, sometimes twice a month, we schedule a LARGE caravan of our real estate agents to preview our listings. This has a twofold affect… One; the agents get to see new homes and get first hand knowledge of the condition, location and layout of the them. They are able to talk more intelligently about the neighborhood and provide their buyers valuable time saving information. Two; there are multiple agents previewing the home to provide feedback to the seller. They know what their buyers expect out of the homes in today’s market. The seller might not have noticed that wrinkled carpet, but the buyer will. Maybe the paint job is not that complimentary and needs to be neutralized. When you live in a house there are a lot things that kind of disappear into the background. A discerning buyer will pick up the littlest item and might cause them to reject the rest of the beauty the home has to offer. The inventory is too high not to be best in show. When you are selling a home you have have to have an open mind to the suggestions made with feedback. Granted, you are not going to be able to address all the items, nor will you really want to. But it is best to know what other think about your house, because it will help you position yourself as competitive as possible. In this market you should consider staging your home to increase your appeal.

Some agents believe the caravans or home tours are a waste of time…my question? What information are they providing to their clients? It sure isn’t anything about your house! And besides, what else are they doing with their time? I can think of two instances that an agent on tour immediately called their buyers to inform them of the house they were previewing. This lead to scheduling a showing for that seller. Both agents said they would have never known the beauty of the house if it were not for the tour. Sometimes, pictures and words on the internet don’t do the property justice.

Speaking of pictures… I still don’t understand why agents only put ONE picture of the home on the internet… That’s another day’s ~~rant~~ blog.

December 12, 2007 · Filed Under Buyer, Frederick MD Real Estate, seller

9 Comments

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