Some people have the misconception that ”average home prices” is the same as “median home prices” when they are actually quite different. Let’s take a closer look at these terms.

Average Home Prices

Average home price is exactly what the term means… the average price of a number of houses. In a simple example, we have 5 houses with sales prices of $100,000, $200,000, $300,000, $400,000, and $2,000,000. To calculate the average home price of the houses, we add up the individual home prices to get a total of $3,000,000, and we divide it by the number of houses (5) to come up with the figure of $600,000. Is it a good indicator of the value of the houses?

Median Home Prices

Basically, the median home price is the price of the home in the middle of the group. In this sense, it does not involve any calculation at all. Using the previous example, there are 5 houses so the median home price is simply the price of the 3rd house which is $300,000. For all sample sizes, the median home price provides an indication of the middle-range home prices.

Now, you should know the difference between average home prices and median home prices. If you have some questions about buying or selling real estate, you may contact top Maryland REALTOR John Day for a discussion.

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According to NAR Research, 85 percent of home sellers and 79 of home buyers use real estate agents when they are selling or buying their home. Yet, it’s important to note that not all real estate agents are REALTORS. Generally, REALTORS are acknowledged to be higher level real estate agents because they adhere to the NAR’s strict Code of Ethics, and they have all the tools to help home buyers and sellers through NAR membership.

Expertise

Possibly the biggest reason to use REALTORs is the fact that they are experts. For most home owners, the home is their biggest investment so it’s always wise to trust the experts when it comes to pricing, marketing, staging, negotiation, and all other aspects of the sales process. REALTORs know almost everything about the local real estate market so they can offer the best guidance for both home sellers and buyers.

Protection

REALTORs have a duty to protect your interests as a home buyer or seller as outlined by the Code of Ethics. In this sense, you can rest assured that you will be getting a fair and reasonable deal in accordance to market forces.

Get in touch with top Maryland REALTOR John Day to find out how he can help you!

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Perhaps, you are looking at some interesting Maryland real estate, and you have just found a home which can be perfect… with some repairs. It’s quite a tricky situation because you can only perform the repairs after you have purchased the house but… you will not receive the money from the lender unless the repairs are done. Fortunately, the HUD’s 203(k) Program allows you to overcome this problem.

With the HUD’s 203(k) Program, you can apply for a loan to purchase or refinance a property, including the cost of improvements or repairs. This way, you can purchase and repair the home, in one swat! It should be noted that this loan is available to owner-occupants, government agencies, and nonprofit organizations. The downpayment is roughly 3.5 percent of the sales price plus the repair or improvement costs. After you have found your fixer-upper, the next step is to work with your real estate agent to perform a feasibility analysis of the home. Then, it’s time to draw up the sales contract, and look for a 203(k) lender that is approved by the FHA. For more information on the HUD 203(k) Rehabilitation Program and a list of 203(k) lenders, kindly go to the full article on the official HUD website.

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The last time, we discussed why it’s such a good idea to short sell your home in 2012 and in this post, we will take a look at the IRS Mortgage Debt Forgiveness Relief Act in more detail. The tax exclusion is applicable to mortgage debt forgiven in a foreclosure and debt reduced via mortgage restructuring on principal residence from 2007 up to 2012.

If you are filing a joint tax return, the maximum amount of forgiven debt for this tax exclusion is $2 million and for married filing separately, it’s $1 million. In a short sale, you are selling your home at a price which is below the amount of mortgage owed. Say, you owe $800,000 on your mortgage and you short sell your property for $700,000, the remaining $100,000 of the debt is written off by the lender. Before the Mortgage Debt Relief Act of 2007, you may have to pay a tax on the canceled amount, and it can be quite a sum, especially for higher priced properties.  If you are facing foreclosure, the short sale is definitely worth some serious consideration, and the Mortgage Debt Relief Act provides extra incentive… at least until the end of 2012. To have a fuller discussion of the short sale option, talk to top Maryland REALTOR John Day, today!

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