How do you pick an agent to represent you?
Posted: February 25, 2011 Filed under: Home Buying, home selling, real estate style Leave a comment »
There has to be a better way !
All the experts say that you should have a real estate agent represent you when buying or selling a home. That sure sounds like a good idea, but how do you pick an agent to represent you? There seems to be a lot of agents to choose from. You can go on line and just type in the name of any town and real estate agent and in a flash your google machine will spit out a gazillion choices. You can call the agent that is listed as selling the home you like ( this opens a can of worms because in Maryland and DC they can’t really represent you). There is always the option of asking a family friend whom they would recommend.
Maybe there is another option that will do the trick.
It might be wise to slow down and realize that whomever you choose is going to assist you in one of the largest purchases you will ever make. It is more than just a purchase. The agent chosen will have a big role in helping you find your home. Money will come and go, home is every day.
Why not create a little checklist and then use the checklist when researching potential agents. Try to avoid anyone that focuses on what they’ve done and hone in on those that are quiet and listen to what your dreams include. Some agents will have more designations ( i.e. that long string of initials behind their name) than others. Designations are like diplomas, they only indicate the agent passed the classes. Those letters do not guarantee that the agent has a clue about the actual practice of real estate in your market. A solid checklist should include :
- Has the agent done successful transactions in your market.
- Has the agent had clients that are similar in age and professional level as you.
- Does the agent listen to you before making suggestions about how to proceed.
- Does the agent communicate with clients in manner that you communicate (phone, email, text, etc).
- Are you comfortable with the agent
Everyone has their own idiosyncrasies. Some agents still really do use what appears to be a high school photo on their card and website. There are some agents that want to put you in their car and drive you around. You have to find an agent that works well within your comfort level. The process may take a little more time, but you will find the rest of the journey to your new home a much smoother ride.
I am always open to hearing from you. If you have found a method that works, let me know.
Don’t throw away your Maryland Homestead Exemption
Posted: February 18, 2011 Filed under: home ownership tips, Real Estate Taxes | Tags: maryland homestead tax exemption Leave a comment »
Just as they do every year, the Maryland State Government has sent out their yearly tax bills to homeowners. Most residents have opened the bill, groaned at the current evaluation and filed the bill away. You see, if your lender is escrowing your real estate taxes, you don’t have to do anything else.
This year, the State of Maryland has decided to require every homeowner to reapply for the Homestead Deduction. In the envelope, there is the standard assessment notice and two additional pages.
Now these additional pages look just like the usual junk mail that the State stuffs in everything they send out. All is not as it appears. The inserted pages must be looked at and reviewed and used.
One of these pages informs the property owner that everyone must apply to “continue” receiving their Homestead Deduction. If you are not now receiving the Homestead Deduction, you may use the form to apply.
The other piece of paper is the actual form needed to apply. You can apply on line at:
http://www.dat.state.md.us/ the form is available under the “homestead eligibility application” heading.
Don’t toss your current deduction in the circular file.
Snake Oil…makes more sense that sizzle and steak
Posted: February 13, 2011 Filed under: Financing, personal insight | Tags: arms, mortgage plans Leave a comment »
Trust me…one bottle will cure you in 7 days
There was a time when Snake Oil salesmen travelled from town to town selling their product. They would set up shop on a street corner or in a vacant lot and begin extolling the curative powers of thier elixer.
“Friends, I can see many of you suffering from ill health. I can hear the coughs, the sneezes and the wheezing. You are suffering. Today, you will suffer no more. Buy one bottle of my Mozillo Snake Oil, take a table spoon every morning and I guarantee that within 7 days you will be symptom from. You will be cured! Some of you may remember I was here 6 short months ago. I see Jack Queen over there. Jack, you bought a bottle… tell the folks what happened.”
The older fellow, Jack Queen responded, “Why I was on death’s very door. I took the medicine and 7 days later I was cured. Used it in on Ezra Tucker a month or more back, he is fit as a fiddle today.”
The crowd begins to line up and within a short time, the Snake Oil salesman has sold out of every last bottle he had brought with him. Men, women and children headed back home to begin the cure. Tissues in hand they made there way to the comfort of warm living rooms and comforter covered beds.
Seven days later, the sun rose on the town and every one of those that had taken the medicine was symptom free. They met one another in the market or at the coffee shop or in the library and shared how wonderful it was to be well again. They were convinced that the Snake Oil was miraculous.
Then fact seperated fiction and reality replaced illusion … and the Snake Oil salesman had to find a new product. Modern medicine stepped up and revealed that the common cold usually last anywhere from 3 to 7 days. The discomfort is most easily dealt with by staying warm, inside and getting plenty of rest. If you just completely ignore the cold, chances are it will disappear within 7 days. The Snake Oil did have a correlative relationship to the cure…but it was not causational.
This Snake Oil was just as easy to take, but it cured no ills
The most recent products have been the multiple servings from the mortgage industry. They have created all sorts of variable priced loans. A borrower can choose from an “adjustable rate”, a “teaser rate”, “interest only” or one of the other fancy terms used to describe the pandora’s box of options presented them. They are all “legal”. They all do exactly what they claim to do. They all remain available. And, if judged with a careful eye, they are as valid as the Snake Oil of days gone by. If you take out a mortgage, with one of these instruments, you home will be paid for in full at the end of the term of the loan.
The difference between Snake Oil taken to cure the common cold and this new version is quite apparent. The common cold was going to run its course over 7 days. Regardless of whether or not you took the medicine, you would be cured. The new version requires that you actually follow the terms of your loan.
BIG DIFFERENCE
The salesman may extoll the wonders of a loan that begins at a much lower interest rate (say 3.5%) and he may show the borrower a chart that indicates the monthly payment for a $200,000 loan will only be around $1,360 per month. He will point out that the borrower only need an income of around $57,000 -$58,000 to qualify for this wonderful program.
If asked about the a(djustable) r(ate) part of the loan, the salesman will most likely point out that the borrower is young and will be making more money by the time the loan resets (increases in monthly payment) and the home will probably be more valuable then as well. He will imply…Why wait, you can have more home now? The fine print that caps the loan at 8% is mentioned in passing.
Let’s be very clear. This is all legal. This is all true. This is all based on IF. We have an entire industry in taters because no parent, no boss, no legislature, no official demanded that WHAT IF should be part of the conversation. Literally millions upon millions of people drank the new Snake Oil and IF never happened.
WHAT IF regulations were in place that stated the person with an income of $57,000-$58,000 could only borrow enough for a $135,000 home if the interest rate could cap at 8%? All the other IFS would have little impact on the borrower. Their earlier home payments would be lower, but they would cap out at an amount that the borrower could still afford. (less than $1,400 per month)
A sign of the times
It is time that we stop blaming the Snake Oil and start restricting the salesman. History has proven, when it comes to financial planning and budgeting, we need to be protected from ourselves. Despite the rare headlines pointing out isolated cases of mortgage fraud, most people took the emotional route when borrowing money to buy a home. They believed that their income would rise. They believed the value of the home would rise. They believed that the mortgage would never reset to the highest limit. They did not believe lies…they believed in maybes. They grasped the IF with both hands and WHAT IF was left to linger in the corner with the reat of the never completed thought processes.
None of the usual reasons offered caused the housing crisis and melt down. The correlation between everything offered is certainly reasonable. Snake Oil will always be around. It really will never harm anyone as long as it is taken with a healthy dose of reality. And in reality, lending money based on hopes and prayers is something that needs to be terminated.
One of the wisest steps the administration could take would be to refuse to guarantee or insure any mortgage loan amount in excess of what the borrower could afford to repay based on the amount borrowed at the maximum interest rate the loan will allow.
Just a thought, of course, I may have sipped some Snake Oil before breakfast this morning.
Goodman Homes in Wheaton Maryland
Posted: February 10, 2011 Filed under: goodman homes, Uncategorized Leave a comment »
These homes are wonderful. Working in this area, Lourdes and I are very familiar with them. His use of glass, allowing the outside in, is masterful. When available, we include them as key viewing homes for buyers. We are fortunate to have so many small pockets of these homes in our area.
Charles M. Goodman (1906-1992) was an American architect who made a name with his mid-century modern/contemporary designs in suburban Washington, D.C. after World War II including homes in Wheaton.
Goodman designed the original National Airport outside of Washington, D.C. After attending the Illinois Institute of Technology, Goodman came to D.C. in 1934 to work as the designing architect in the Public Buildings Administration. He later served as head architect at the Treasury Department and the Air Transport Command. After World War II he worked closely with Robert C. Davenport designing and site planning most of the Hollin Hills neighborhood in Alexandria, VA where his firm, Charles M. Goodman Associates designed over 14 models of houses.
Other projects included the 1964 Unitarian Church in Arlington, VA, his own residence, Goodman House, in 1954 on Quaker Lane in Alexandria. In Reston, he designed a cluster of townhouses in the woods above Lake Anne known as Hickory Cluster. He also did designs in Washington, D.C. at the Southwest Waterfront and just north of Fort McNair.
Goodman was famous for his contemporary designs, orienting homes at angles to the street instead of head-on, generous use of glass and limited removal of trees to maintain the wooded affect.
In Maryland, Goodman designed homes in Takoma Park and the Wheaton area of Silver Spring.
His 1951 development in Takoma Park was listed on the National Register of Historic Places in 2004, as the Takoma Avenue Historic District.
Goodman developed two neighborhoods in Wheaton.
His 1949-51 development off of Viers Mill Road known as Hammond Woods was listed on the National Register of Historic Places in 2004, as the Hammond Wood Historic District.
His 1958-61 development off Connecticut Avenue known as Rock Creek Woods was listed on the National Register of Historic places and is known as the Rock Creek Woods Historic District.
These homes don’t resell often, but there has been a resurgence of interest since the late 90′s that has made them rather sought after homes. Most real estate agents that know about them will always state in their remarks about the home that it is a “Goodman Contemporary”.
Paul says there are wolves out there
Posted: February 10, 2011 Filed under: market conditions, real estate style Leave a comment »What is it about the rain that brings the mischievous out to play?
Real Estate sales is the type of racket that leads one to bump bellies with all manner of folk. Over my years in the industry to date, you might say I’ve been sheltered. For all of the horror stories that float about a brokerage regarding the customer from hell, or the underhanded agent that shafts a fellow colleague out of a deserved paycheck, the instances in which I have encountered such REALTOR kryptonite have been few and far enough between to defy instant recollection. Challenges and difficulties, to be sure, but no readily recounted tale of woe regarding a true American consumer psycho. Either the good people of Scottsdale, AZ are simply of good stock, or my conscious decision not to hand out business cards at the dog track every Saturday afternoon as a central component of new client acquisition was prescient.
When the downturn in the market that first became evident in 2007 became a full-fledge nosedive, however, a bunch of loose cargo in the back of our plane and overhead storage bins unloosed itself. Ending up in the aisles and on the laps of well-behaved passengers, we find ourselves wading through the cretinous stowaways in attempt to pull the decent home buyers and sellers from the acrid wreckage. Wouldn’t you know those oily ne’er do wells always seem to reach the emergency exits first; whooping it up as they slide to safety wearing a stolen oxygen mask. Don’t worry about granny in seat 46C. She can hold her breath for up to 18 seconds at a stretch.
To answer a few of the more “creative” questions I have fielded recently, I figured I’d simply draft a response to which all such future inquiries may be pointed.
No, I will not help you tie up a property with a straw buyer until such time that you can amass your down payment and/or financing. It’s a fraudulent offer, and one made in bad faith.
No, I will not write offers on 15 short sale properties at once for the same buyer. Short sales are frustrating, but it’s not just a numbers game. I will not grease the wheels to a seller’s foreclosure by tying their property up with an offer you have no real intention of seeing to fruition.
No, I will not give you a guestimate on how long you can live in your house rent-free before your mortgagor initiates foreclosure proceedings. There are more than enough homeowners in need of loan modification or short sale assistance. I cannot in good conscience help you game the system and further bog the process down for those in true need of help.
No, I will not help you buy a property as a primary residence if I know that you have no intention of ever occupying it. There will be many dubious, and potentially fraudulent purchases made in the rush for the tax credit, but I won’t be a part of any of them.
No, I won’t secure a tenant for the property upon which you have stopped paying your mortgage. That “free money” that goes in your pocket until the bank forecloses and boots the unsuspecting tenant out carries a steep price.
No, I will not be party to any side agreement pay-out in a Real Estate transaction that does not appear on the settlement statement.
Rationalize such schemes all you like, but a treacherous climate does not excuse treachery. Not only does potential harm fall on specific parties, but on the greater good as well. Don’t look to me to make my own biological contribution to the cesspool we’ve been forced to bathe in for many moons now. Moral and ethical constraints aside, for no deal is it worth ruining a hard-earned reputation and future livelihood. This is how I feed my family.
Your shenanigans are not worth my license.
Now, if you would kindly hurry up and slide into the waiting arms of the authorities below, there are good people on this plane who need my help
Good news in Flower Valley, Rockville, Maryland
Posted: February 10, 2011 Filed under: personal insight | Tags: flower valley, honor roll, saint patricks Leave a comment »
Honor Roll Katerina
It was a warm September night in 2009. I sat at the kitchen table and waited while dear Katerina sat on the floor and wailed…”I can’t do it….I won’t do it………..”. I left her there that night. I went upstairs after telling her that homework would be done every night and there would be no note to the teacher excusing her.
Katerina had just finished a rough year in school the year before. She had moved from public to private school and discovered she was a bit behind. She had passed, but by the skin of her teeth. It had been a struggle. Her mom had moved her to Saint Patricks. She wanted to be sure that Katerina had every chance to succeed. It was a struggle for a single mom to pay the tuition. She made that struggle because…well, she is a mom and mom’s do that kind of thing.
I was new to the scene and had memories of my school years in a parochial school. I got by but it was very hard. I knew Kat was still trying to adjust and wasn’t sure she could get it done.
It was a new year and I told her……….this year…the honor roll. She allowed that she was not smart and she had never done that and she could not do that and on and on and on.
Then her mom stepped in and laid down the law.
The same laws that were in place for her sister and brother.
Welcome to no t.v. Welcome to no IPod Welcome to the world of doing homework every night.
Mom’s know best.
Opps…hey John…welcome to the 6th grade again!
The rules were in place. Homework would be done when she came home each day. If she needed help, we would help her after dinner.
Fall turned to winter, the blizzards came and went and winter discovered Spring. We passed Labor Day, Thanksgiving, Christmas, New Years, Sadie Hawkins (?) and Easter. Kat learned to study every day.
We did homework together every night.
Grades came in each quarter. Some up and some down. Projects were assigned and done. She built the Great Wall of China. She read books. Math problems were conquered. Kat began to believe. She saw the results of working hard. She worked harder.
Today, the school year came to a close. Report cards were sent home. Oh, and there was one other item she brought through the door. Yep, a certificate that indicated that for the first time in her life…she made the Honor Roll. She beamed. She smiled. She believed. She refused to give in to the fear that she could not do it. She grew into a hard working young lady. She conquered her fears and her doubts.
Congratulations Katerina…we are very proud of you!
The school is located in Flower Valley in Rockville, Maryland. It is a great neighborhood. If you would like to move to the area…and have an Honor Roll student nearby…give me a call at 301-509-5111.
now is the time
Posted: February 9, 2011 Filed under: Home Buying Leave a comment »
It seems that a lot of the folks I talk to say that they wish they had bought a home two years ago. The market has changed and even the wisest of experts can not predict which direction it will take. We have experienced a few years of price increases that have far exceeded any past predictions. Homes have literally doubled in price in some areas. Oh to have had a crystal ball in January of 2003.
I thought about it. I have to agree. If you are sitting there today, considering purchasing a new home, it is easy to say “we should have done that two years ago.” Looking at today’s prices, it seems logical that a purchase in 2003 would have been a great investment. I suppose you should remember that you are looking at 2003 prices with a 2006 income. Maybe you were not really in a position to buy two years ago.
I have one hope in talking with these folks. I don’t want to be sitting with them in 2008 and hearing them say “we should have bought two years ago.” Prices may level off or they may actually go down a bit, but as sure as the sun comes up every morning, those prices will rise again. There is no better time to buy than right now.
The current market stagnation has created an environment that supports buying now. There is more inventory and there are fewer buyers. Everyone seems to be waiting for someone else to make a move. Today’s buyer is operating from a position of strength. Prices and terms can be negotiated to create the best deal for a buyer. Home owners are conceding points they held firm just six months ago. This current status will not remain.
People continue to receive jobs that include relocation. Babies are still being born. The need to find a new home remains. Those that act will reap the benefits.
If I hear from you, that will be fine. Just don’t say “I should have bought two years ago.” Now is the time to say “I’m ready.”
Should Renters Get a Home Inspection?
Posted: February 9, 2011 Filed under: real estate style, Renting Leave a comment »
Margaret Woda shared this recently. I read the blog. I read through the comments. Then I shared the following.
Margaret – I handle clients that are seeking rental property. Sometimes, I feel like one of the last men standing. The majority of my referrals come from other agents that do not want to expend the time or effort in helping rental clients.
They do present some challenges -
- Often, they do not have a great deal of cash reserves beyond the required security deposit and first month’s rent.
- Many times, their credit is a bit impaired.
- Several of them are working in positions that allow them limited time to view properties.
- Lots of the property offered is owner managed by owners that do not know local law.
One would think that listing agents would be up to date on local laws and that they would counsel their clients. That view is challenged when you review properties listed for rent. The vast majority of them do not indicate a cooperative fee of 50%. The appearance of minimal compensation for bringing a tenant has left me to conclude that most rental listing agents, get a listing agreement signed, put a lock box on the door, a sign out front and enter it in the MLS. The shoddy and incorrect information in the MLS is yet another indication that minimal effort or knowledge has gone into the process.
My efforts have been to educate the rental public that they do need representation. Listings are not accurate and leases are being signed that do not conform to local laws. People are paying more for repairs than necessary, etc.
Sorry, the preamble to my comment was a bit long. Passion for representation creates a prologue. The State of Maryland requires that property that is rented remain in safe condition. It is the law. If something is discovered to be unsafe or unhealthy, there are remedies.
The cost of a home inspection is often out of reach for those renting a home. I have considered this and talked about with many clients. It is something that sounds like a good idea on paper, but in practice it may not be so beneficial.
There are issues and all of them would have to be addressed in the application. The application would then become a binding contract with contingencies.
- The scope of the inspection would have to be standardized.
- How long the prospective tenant had to accomplish the inspection would have to be in the application.
- The nuances of whether or not a security deposit could be collected and how it’s return would have to be codified.
Then you have the hypothetical situations that must be addressed in consultation with the prospective tenant. If the home fails to pass inspection, the prospective tenant will have paid for the inspection, but in the way you present it, they would just move on. How many homes can the average prospect pay for an inspection? The timing involved is another issue for the landlord and tenant. If the law says 5 or 10 days to complete the inspection, the landlord is on hold for one third of a month, the tenant is out of the rental market for the same period of time.
Like I said, it sounds like a good idea but I fear it is not practical and if we start down that road, we will be increasing the paperwork needed exponentially. Our contract of sale is already a legend across the nation.
A better solution would be to make a law that homes for rent be State or County certified. Let the inspections for safety issues and health issues be done by the inspectors that are already working for the various jurisdictions. If they discover a problem, the home can not be rented until the situation is corrected.
Today, the best risk management practice is to become rental certified and make it your business to know the landlord and tenant codes in the places you practice. Rather than develop one more disclosure to put on file proving that “I warned them”, educate yourself and sub-sequentially your clients. And while I realize that co-op fees are set without collusion, it is time listing agents acknowledged that keeping more than 50%-60% of your fee is an indication you are more interested in lining your pocket for doing pretty much nothing.
Of course, this is all just my opinion, but as I mentioned…I work with renters every day.
Q. Should I get a home inspection before moving into a Crofton rental property? I’m concerned about safety issues and hidden defects.
A. Frankly, a home inspection for rentals isn’t customary in this area… but it’s probably a good idea. Here’s why I say that…
The typical rental move-in checklist deals primarily with cosmetic issues: The carpet, walls, windows… But what about the things you can’t see? These are the things a home inspection would disclose.
Wouldn’t you like to know before moving into the property if some of the electrical outlets aren’t grounded? What if there’s an open electrical junction box in the attic? If the roof leaks or basement floods? Does the furnace have a cracked heat exchanger? Is there aluminum wiring and, if so, are there any safety precautions the tenant should take? Would you recognize a wood-destroying insect if you saw it? Was the deck built well enough to hold the 30 people expected to attend your son’s graduation party?
A home inspection usually costs about $250-$300 in the Crofton area, but that could be a small investment in your family’s safety.
If a home inspection indicates any compelling safety issues, you should ask the landlord to correct them before you move in. You can (and should) still make a record of cosmetic discrepancies, which you can identify on your own, but there’s more to property condition than cosmetics.
If you’d like me to provide contact info for 2 or 3 local home inspection companies, let me know as soon as possible because it may be a few days before they can fit you into their schedule. Then, if they find anything you want to report to the landlord, you may need a few days to negotiate requested repairs.
____________________________________________
Maybe a home inspection SHOULD be customary for rentals… Perhaps a landlord should get one before listing his property for rent. That wouldn’t be a bad risk-management strategy for landlords.
There’s no simple answer to the question about whether a renter should get a home inspection. Or… perhaps there is.
Many thanks to the renter who asked this question and inspired me to consider this issue. I am going to start offering a home inspection to my rental clients and landlords.
