What is the MLS?

You may have heard people in real estate throwing around the term MLS, but what is it exactly?
MLS stands for Multiple Listing Service or Multiple Listing System. Although it may sound as if it is one, nationwide system, it is not. MLS is a collective term used to describe a network of private databases with listing information that real estate brokers share with each other. Brokers who represent sellers list properties so that brokers who represent buyers can search for homes that their clients might want to buy.

Multiple Listing Services are under the control of an association of realtors or a group of associations of realtors. If a broker does not belong to the association that governs the MLS in his/her area, then they cannot participate in this data exchange. Each group has their own criteria and stipulations for membership.

These databases are not open to the public, so a buyer cannot log onto an MLS and search on their own. They are also not open to people who put their own property on the market. Sometimes a real estate broker will allow someone selling their own property to include their listing on a local MLS for a fee.

When Buyers Walk

The negotiation to sell a home is like any other deal—it can fall apart at the last minute.
As a seller you may think you are on the verge of finally closing the deal, you may have already uncorked the wine, and the glasses are waiting to be filled, only to find that you have to start all over again.

There are any number of reasons a potential buyer may back out of a deal, including:

Not getting the financing: a buyer may really want to purchase your property, but a preapproval letter is not guarantee. If they don’t get the loan, they will have to renege on the deal.

Unexpected life change: A family with one child is set to buy your cozy little home and finds out the wife is pregnant with triplets. Again, they may have really wanted the property, but now find that it is too small.

Then there are times when the potential buyer does a little soul searching (or house hunting) and simply has a change of heart.

Cold feet: Although the buyer as gone through the entire process, he or she may still feel tentative, and back out at the last minute. It could be anything, the price, the area, the size of the yard…unfortunately for you the buyer’s nagging doubts don’t surface until you are far along in the process.

Commitment-phobe: Making an offer doesn’t mean a buyer stops looking. Sometimes in their continued search, they find a property that they want more than yours.

I am not telling you this to discourage you, but rather to say, that there are many factors you cannot control. If you have done your best to present your house in its most appealing condition, you have done well. You are not to blame if a buyer changes his or her mind.

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Foreclosure Prevention Companies are For Profit

If you read this blog regularly, or even if you just turn on the news or peruse the internet, you know that homeowners who are facing the threat of foreclosure are urged to get help as soon as possible.

Not only are you urged to seek help in such cases, you are also urged to be cautious about the help you seek. When things look grim, it is easy to get taken in or to go for the first thing that looks like it will bring relief.

There are companies out there that say they can prevent foreclosure, and some of them can, but you have to know that they are not doing this for free. They may charge you a fee that can be as much as 2-3 month’s mortgage payments for their services. For someone who is already in financial trouble, this is just adding insult to injury. These businesses are indeed working on your behalf and it is not wrong for them to expect payment. It is just that you don’t need the added expenses if you are trying to keep your house.

You can get the information you need by contacting your lender or a HUD-approved housing counselor. Lenders and HUD-approved counselors also want to see you keep your house, but they are not going to charge you for the assistance they provide.

Go to www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm or call 1-800-569-4287 to learn more about HUD-approved counselors.

Fire Prevention Tips

A friend recently told me that one morning she awoke to find a candle she’d lit the night before still burning. She went to bed without realizing that she had not extinguished the candle. Thankfully, there was not harm or damage done, but everyone is not so fortunate.

Some fires in residential areas are definitely preventable. Take the time to go around your house and make sure that you are not at risk for fire. Take care when cooking. And be certain that you do not leave burning candles unattended.

Another frequent cause of fires in the home is cigarettes. It is better if you can smoke outside, but if you cannot, take some precautions. Use deep ashtrays and place them on a stable surface. Don’t just toss cigarette butts into the trash; run them under water first to make sure that they are completely extinguished.

Here some other fire prevention tips:
-Do not leave the stove or grill unattended while you cook.
-Keep things like dish towels and other flammable materials away from the range top.
-Only use candles that are in a stable holder that won’t burn (glass, metal, etc.)
-Don’t bring gasoline into the house.
-Don’t plug in too many appliances at once.

Foreclosure Is Not the Only Option

If you are in a financial crunch, you may think that foreclosure is your only option. After all, everywhere you look, this is what people are saying—if you can’t afford your house and don’t pay, foreclosure is what happens.

If you cannot afford your home loan, get advice from trustworthy people in the real estate industry. Don’t rely on what you hear on the news or act on advice from family and friends who are not subject matter experts. The news has a story to tell in a small amount of time and can’t speak to your particular situation. Your family and friends may mean well, but they probably cannot lay out all of your options.

Sadly, if you can no longer afford your house, you may not be able to keep it, but that doesn’t mean that foreclosure is the only option. There are ways to keep things from going that route, such as:

Short sale: This is when someone sells a property at a price that is less than what they own on the mortgage.

Deed-in-lieu of foreclosure: This is when a mortgage debt is completely cancelled after a borrower transfers their property’s title to the mortgage company.

Loan assumption: This is when someone else takes over payments on a property to make the loan current.

Think Outside of the Box

If you have a room in your home that seems boxy, boring, and just plain square, there are things you can do to liven it up.
Shed some light
Change mundane light fixtures for more interesting ones. If your house is in a development, then the builder probably put in plain light fixtures that they bought in bulk. There is no reason why you can’t change them.
Play musical chairs
Rearrange the furniture in a more intriguing pattern. If all of your furniture is hugging the walls, it is time for a change. Placing some pieces on a diagonal is one way to spice things up.
Paint the town
A fresh coat of paint is one of the quickest ways to liven up any room. If all of the walls are the same color, pick on wall to be an accent wall. Give the accent wall a different, but complimentary color.
Give it a trim
Who says that trim must be white? Don’t be afraid to try other colors as long as they have some harmony with the wall colors.
Don’t feel cornered
You are allowed to soften the effects of the corners in a boxy room. You can add plants or interesting antiques to a corner. There is no rule that whatever is near a corner must fit exactly into that space.

Steer Clear of Foreclosure

Did you ever have someone tell you that you can drive a car even when the gas gauge is on “E” because “E” doesn’t really mean that there is absolutely no gas in the car? Have you ever gotten a call from one of those people because they attempted to coast on “E” and found that their car manufacturer was unaware of this rule?

Well, many homeowners are acting as if they can coast on “E” and not lose their homes. Sadly this is not the case. Nevertheless, a Freddie Mac study showed that 20% of the people surveyed didn’t think they’d lose their homes if they missed three or more mortgage payments. Just as some people will tell you that a car doesn’t register that it is on “E” because there are hidden reserves, some homeowners think thought that it would take a while for a lender to notice and act upon missed payments.

While many lenders certainly want to avoid foreclosures, this does not mean that they can ignore non-payment. If you are in danger of missing payments, contact your lender as soon as possible. Don’t wait until it is too late. There are steps you can take to avoid foreclosure if you don’t ignore the problem. I'll get into some of the options in more detail next week.

When it comes to your home loan, you are in the driver’s seat so take control and steer the course to avoid foreclosure.

Seek Help, Don't Wait for It to Find You

A woman in Virginia was swindled out of her home by a man who claimed to have been sent by God. He showed up on her doorstep to pray with her and said that he’d save her home from foreclosure. He instructed the woman to sign some papers and not knowing any better, she signed. This scam artist cheated her out of her home and reaped the benefits of this deception.

Stories like this are very upsetting. There are always people who are willing to find a way to make a profit from a bad situation. In some cases like this, the swindler is telling a partial truth. There are people who have unknowingly signed papers that did actually prevent their homes from going into foreclosure…these papers have also made some renters in their own homes and they end up paying exorbitant rent to the scam artists who now own the house. Other people sign documents they don’t understand and end up losing their homes altogether.

If you are in trouble or threatened by foreclosure, please seek the help of someone reputable. If someone knocks on your door, it is likely that they are done some digging and scouted you out, believing you to be at risk. You are much better off if you go out and get help.

You can always contact me at 410-507-2909.

Get Pre-approved Before You Get in the Game

If you are house hunting without a pre-approved loan, go back to START. You are really rolling the dice and taking a chance if you go shopping for a house without one.

Getting pre-approved means that you know how much you house you can afford before you check out one listing. This makes a big difference when you shop. It means you can do a targeted search, instead of trying to imagine how much you will have to spend on a house. This will save you time because you won’t spend your days looking at properties that are out of your price range. If you qualify for more than you imagined you would, then you can confidently look at houses that you may have thought were too pricey.

Being pre-approved means that your credit rating and other qualifications have already been vetted by a lender. Even if you know that you are an excellent candidate for a loan, a seller does not know that. When you show up, already pre-approved, this tells a seller that you mean business and that you are not just cruising around, looking at open houses for fun.

Buyers who show up pre-approved are on their way to the winning the game.

What is a HUD-1?

If you are in the process of buying or selling a home and hear someone mention a HUD-1, you may wonder what they are talking about.

If you don’t know, HUD is the Department of Housing and Urban Development, and the HUD-1 is a standardized form that HUD created.
It is an itemized sheet that lists what the buyer and seller are paying to complete the sale of a residential property. This includes: commissions, loan fees, escrow, insurance, property taxes, points, transfer taxes, plus appraisals and other expenses that are not a part of the closing.

The closing agent fills out the form and it is signed by both parties in a real estate transaction (buyer and seller).
A buyer should see the HUD-1 at least one business day before closing. Ideally, buyers would see the form sooner than that, but since it contains information that must be gathered from several places, that may not be possible.

Sellers must also check the HUD-1 to make sure that the charges such as commissions, transfer taxes and their share of property taxes have been assigned correctly.

Signing the form is an indication that you agree with all of the information states there. If you see an error, don’t sign and then mention it later because it is not easy to have a mistake addressed once you’ve signed a HUD-1. If it is necessary, you may have to postpone the closing to have the issue addressed.

Tips for Buying a Foreclosed Property

In all the conversations about the looming wave of foreclosures, there is one group of people who are not as much worried as they are hopeful: potential buyers.

Some of you out there are not profiteers or scam artists, just hardworking people who are sorry for others’ misfortune, but optimistic that you now may be able to afford the home you want.

If you are careful and do your homework, you may be able to get that home. But don’t just swoop in and grab a foreclosed property because the price is lowered.

Some foreclosed homes have been vacant for a while, so you need to know that you may have to spend some money to get the house into the condition you want.

Some disgruntled homeowners have stripped houses of appliances or damaged them because of their anger and frustration.
It may be tempting to just take your chances, but it is safer to get a professional inspection. You need to know what kind of problems or damage a home may have before you agree to make an offer.

And please don’t buy a foreclosed property without a title search. You should also get a title insurance policy. If there are liens on the property, you don’t want to be stuck with them later.

You can visit the Foreclosure section of my website to see properties that are for sale.

A Word to the Wise, part 2

Last week, I wrote about a Canadian study about what kinds of words in an ad would help a home sell faster. It is important to be positive, but not misleading.

It is also important to consider what buyers want and not push your own motivations as a reason why someone should buy. In fact, some people think the phrase “motivated seller” is a turn-off.

One realtor likes to include something about how a property could be the best deal in town. If the listing price is reasonable, this appeals to a buyer on several levels. Everyone likes to think they are getting a deal. People also like to think of themselves as smart. So acknowledging that they are getting a deal will make the buyer feel special.

The study found that certain words not only attract buyers, they also attract a higher selling price. Researchers were puzzled by this. Yes, it seems like a house described as “gorgeous” would sell for more, but that doesn’t mean it will actually happen. But that is exactly what happens. Houses with positive, even glowing as descriptions sell for more than others.

No university offers a degree in real estate psychology, so we can only guess why this happens. Perhaps buyers are willing to pay more if they think that they will truly get their money’s worth. Or maybe they don’t feel a need to bargain down the price because they are pre-disposed to accept a house that fits an ad’s complimentary description.

Whatever the case, it pays to take full advantage of a property’s strengths when describing it in an ad.

A Word to the Wise, part 1

Researchers at the University of Windsor studied real estate listings in Canada to see which words and phrases went over well and which ones sent potential customers running in the other direction.

As is often the case, you can catch more flies with honey than with vinegar. The word “beautiful” did a lot to convince property seekers to buy a property. The word “landscaping” meant a house sold 20% faster. Ads with words like this sold faster, but there is a caveat: it must actually be true. Saying that a dilapidated house is beautiful will not fool anyone and makes a seller look dishonest.

Words and phrases that pleaded with people to buy, such as “must sell”, actually made it more difficult to sell these houses. So, according to this study, even when it is true that you must sell, you’d do better not to mention this in an ad.

Instead you probably would be better off discussing your home’s assets and best features. These are what will see the home faster than anything else. Buyers are not really interested in your personal motivation for selling. They become motivated when you demonstrate that your property is a good fit for them and their needs.

Check back on Monday for more on this topic.