Buyer’s Advantage in Maryland Real Estate

Everybody knows that the recession has caused the prices of homes to stagnate, resulting in a rather bleak real estate landscape for home sellers. On the other hand, the situation presents fantastic opportunities for home buyers. Since interest rates are lower, prices of homes are stable or lower, and income needed to qualify for home mortgages has fallen drastically, the advantage clearly swings to the side of home buyers.

According to the Washington Post study, homes have become more affordable across the State of Maryland. In 2011, there are only two Zips that require an income of over $200,000, down from 14 Zips in 2007. Four years ago, there’s only one Zip for home buyers with income of less than $50,000 but today, there  are 37 Zips with home affordability income of below $40,000. In the suburbs of Maryland and Virginia, there are some 36 Zips where the home affordability income has fallen by a whopping $55,000 in just four years! Home purchase interest rates have fallen from 6.58% in 2007 to 4.62% in 2011. For a single family home, the median price has fallen from $424,000 in 2007 to $329,990 in 2011. The income needed to purchase a home has fallen from $103,776 in 2007 to $65,088 in 2011.

As you can see, these are major drops, representing a significant advantage for home buyers. If you have an eye on your dream Dunkirk real estate, now’s the time to strike, fast!

How Lower Consumer Credit Scores Have Impacted Maryland Real Estate?

Potential home buyers who are applying for mortgages are finding out that it’s harder to qualify for loans now. According to a recent report by Kenneth R. Harney in the Washington Post, millions of people are left frustrated by the increasingly stringent criteria set by lenders, which is in turn fueled by decreasing consumer credit scores.

Assuming that you have found your dream home, it’s time to apply for a mortgage and this is where you credit score comes into play. To assess your credit worthiness, the lender will look at your FICO score, which is affected by credit utilization, types of credit used, length of credit history, recent searches for credit, and most importantly, payment history. FICO score can range from 300 to 850, and a higher score indicates that you have higher credit worthiness.

In 2006, the median FICO score was 723 but an estimated 50 million people suffered a drop of more than 20 points in their FICO scores from 2008 to 2009. For instance, the average FICO score at Freddie Mae and Fannie Mae is 760 and higher and the average credit score at the Federal Housing Administration is slightly higher than 700. Many potential home buyers who are looking for home loans are being turned away because they don’t meet the higher requirements. Without a good number of real buyers, sellers in Anne Arundel real estate will have to endure a less than optimistic market.

Maryland Real Estate: To Buy or To Rent?

One of the big questions about Annapolis real estate is whether it’s better to buy or rent. Well, there are no fixed answers because it really depends on your needs. Let’s look at some of the benefits for both options so you can make a more informed decision.

The Case for Renting
Usually, a young single adult may not want to be tied down to a singular place, much less a house for the rest of his or her life. Renting a house is a more attractive option because the person has greater mobility. It’s ideal for people who are still looking for that perfect job or place to stay. Also, a renter is not responsible for maintaining property so it’s more cost effective.

The Case for Buying
Married folks and people who are looking to settle down will find it more beneficial to buy a house. Mobility is not an incentive because these people are looking to stay at one place, possibly for the rest of their lives, and they already have a stable job. By owning a home, you will enjoy a sense of security and stability, and you will have the opportunity to establish yourself in the community. Unlike renters who have to wait upon the landlord for repairs or property maintenance, home buyers have complete control in this aspect. Furthermore, home owners have complete freedom to remodel or make changes to the property according to their whims and fancies. Another benefit for people to buy a property is that they can build equity. Once the real estate is fully paid, it becomes your asset.

If you are searching for the perfect home in Annapolis, you can talk to John Day, a highly respected Annapolis Realtor with a great track record.

Do I Need A Real Estate Agent to Sell My Home?

Do You need a Real Estate agent to sell your home?  No, how’s that for a plain and simple, honest answer.  You really don’t.  Go it alone, advertise it, show it, get an offer and go to closing.  Can it really be that simple?  Yes! is the plain and simple truth.

Although selling real estate is not a mystery the transaction can be rifled with issues that make the transaction messy, first let’s look at how easy it can be.

1. Get your home looking good inside and out.

2. Place an ad on Craigs List, For Sale By Owner.com, Use the newspaper, create a web page and post the listing anywhere you can.

3. Make yourself available to show the property.

4. If there is an interested prospect leave it up to them to find an attorney to write an offer.

5. Have an attorney review the contract, make a decision and move forward.

Go to settlement and collect your money, you don’t need us, you really don’t.  I would bet, that over 50% of the time this type of transaction could work out just fine.  The key is, both parties have to be reasonable people with the same goal in mind.  They want your house, you want to sell your house, everyone is happy.  But I’m sure you have a short list of people in your life that you consider “reasonable” right?

If selling your own home is so simple, why do over 90% of the people who want to sell their home contact a real estate agent?

That’s a loaded question and the answers are as varied as there are numbers of sellers who want to sell.  For many, it’s the financial aspect of  paying a percentage of the sale to a real estate company. Can’t blame you, who wants to end up with less than they could?  Then there are those that just plain don’t like the concept of a real estate sales person.  This may be due to a bad experience in the past, a bad experience a neighbor or friend had and shared with you or the belief that you just don’t need anyone else in the mix. Some just don’t want to be bothered, they don’t have time, don’t want to deal with showings of their home.  Some see it as overwhelming and a puzzling process, it’s actually simple, it’s the people involved that make it complex.  Whatever the reason others choose an agent, ask yourself, do I want an agent to represent me or not.  If your not sure talk with a few agents and find out from them what they can do for you that you cannot do for yourself.  Weigh the pros and cons on a sheet of paper and put a price on what’s it’s worth to you to have the assistance of an agent.

Can you have a “bad transation” with or without an agent involved?  Yes!

A bad transaction does not mean you had a “bad” agent. The fact is that most of the issues that come up during a real estate transaction are attitudes toward problems, not the problems. Lets start with the obvious first. You aren’t getting any showings on your home. Wow! that’s a real one these days, whose fault is that?  The market? The number of available buyers? The agent didn’t advertise your home properly? Maybe a combination and maybe none of the above.  Sometimes it’s expectations. Your expectations as a seller should be clearly identified and understood before you begin the journey.  Are they realistic?  If not, you are set for a disappointing process from the word go. There is a lot of anger in the marketplace, some justified, some ill directed but it’s there. The reality is, your home is worth less today than it was in 2006. In some cases, a lot less. That’s a tough pill to swallow. If you sell your home yourself or use an agent does it change this unpleasant fact?  No, I’m afraid it does not.

Let’s talk finances. You can save big bucks if you sell it yourself. That’s a loaded one as well. There are statistics out that indicate you will actually save money if you use a real estate agent. Now, statistics are everywhere, some wrong, some right and some down right fraudulent.  Some statistics say if you sell it yourself, buyers will assume that you will take less because you are not paying a real estate company. Bah Humbug!  They will try, but remember, your in the drives seat, just say no. You want the house, here is the price, take it or leave it.  I’m serious, by the time a buyer makes an offer, they have taken emotional ownership of your home.  Of course they are going to try and buy it for less than you want, that’s the age old game. You are told that we, the agents are great negotiators, guess what, we can’t negotiate for you, by law, we can convey your wishes to the buyer’s agent and they must convey those wishes to the buyer.  We don’t decide or make decisions on your behalf, we are the conduit not the source.  You control the outcome as the seller.  Remember what I said about expectations?  That’s where this comes into play.  Don’t posture, sell your home, that’s the object, keep emotions out of it.  Sometimes this is where an agent can really come in handy.

This is what I know for sure. I have settled over 150 homes in three years where I did represent the seller in the transaction.  Sometimes things go so smothly I feel I haven’t earned the fee that a seller is charged. Then there are many, many times when I feel as though I couldn’t have gotten paid enough.  Each of those 150 transactions have taught me valuable lessons about the process.  Experience is the value an agent brings to your transaction.  Plain and simple. It’s our experience with what works and doesn’t work regarding advertising. We have seen the pitfalls and can effectively communicate those to you so we can avoid them.  Some transactions can get so messy that we end up in a court room and you want experience there as well.

Whatever method you decide, alone or not alone it makes perfect  to consult with an agent first. Find out what they have to offer, how they are going to perform based on past history and most of all, are they a person you can work with for five or six months.

I am knowledgeable, I have seen a lot. If you want to have a discussion about selling your home, I am just a phone call away.

 

Anne Arundel County Real Estate Market Profile

The most recent Long and Foster generated market profile for Anne Arundel County can be found here.

There looks to be mixed messages in the report.  The good news is that there is less inventory now than a year ago.  That makes things a bit better for sellers trying to move their homes. Less inventory helps to support pricing and reduce days on market.  The days on market is still hovering at a fairly high level of 96 Days on the market, just slightly less than a year ago.

The absorption rate or time it will take to sell all inventory is also lower than a year ago but still the numbers are scary.  Looks like, if no other inventory came on the market the current active inventory would take almost 8 months to sell.

In the latter half of this year I hear many reports stating that prices had bottomed out.  I’m not sure that is true, the prices have still declined in Anne Arundel county real estate by 2 percent, year over year.

If you are going to sell your home, now might be the time.  I say that because I work for several lenders who liquidate their foreclosure inventory.  They have not placed much at all on the market for the past six months.  These properties are sitting, depreciating and will eventually hit the market, spiking inventory levels and again possibly causing some price devaluations.

If you have to sell, now may be the right time.  If you don’t have to sell, your wait for a strong market may be a long one, so sit tight.