The Home Buying Blog

How to Find a Real Estate Agent

2009-07-01T05:00:00.000-04:00

1. The Internet--Like everything else today, the information you are looking for when searching for a real estate agent is online.

2. Attend Open Houses--If you prefer a more personal approach to checking out real estate agents, go to open houses and note how agents interact with you and the other visitors. Also take a look at the marketing materials there and see if these materials seem professional.

3a. Ask for Referrals--Talk to people you know, both those close to you and acquaintances, if they can recommend a real estate agent to you. Spend a bit of time to talk with them about their experience so you can gauge whether or not their agent is someone you should consider.

3b. You can also ask professionals in the real estate industry for referrals. This may surprise you, since it seems counterintuitive, but it isn't. If you know someone in commercial real estate and you want to sell your home, ask them to suggest an agent who handles residential sales. People in an industry know "who is who" and may have more insight that someone outside of that industry.

If you have questions about buying or selling homes in Anne Arundel County, Calvert County, Charles County, and Prince George's County, call John Day at 410-507-2909

Less May Be More When Calculating the Mortgage You Can Afford

2009-06-29T05:00:00.000-04:00

When it comes to buying a home, it is up to you to keep your best interest in mind. Yes, we are going through a recession and the real estate market has been shaken up, but that still does not mean that everyone is being as cautious as they should be.

One thing to understand, especially if you are a first-time home buyer is that a lender may tell you the maximum amount of money you can borrow. This is not because they are out to get you--they are simply giving you an option.

It is up to you to figure out if you need to go for the maximum or go for less based on your situation and financial goals. A lender does not take into account things like your desire for frequent travel, funding your child's college education.

One recommended guideline is that you not spend more than 28% of your monthly gross income one your mortgage and related expenses (such as property taxes and insurance). Even this guideline does not have to be followed to the letter because you are certainly free to go for a percentage that is lower than 28%, depending on your other expenses.

Five Tips for Protecting Your Home While You are Away

2009-06-26T05:00:00.000-04:00

If you are able to get away on a vacation, you a probably very excited to leave familiar surroundings for something new, but you still want all to be in place when you return.

Here are five tips for vacationers to make sure that when you return home sweet home is all that it was when you left:

1. Request that the post office hold your mail while you are away. You don't want mail that has piled up to clue a burglar to your absence. You can also have packages delivered to your office or to the home of a friend or relative during this time.

2. If you have the newspaper delivered, have the delivery put on hold while you are gone so that newspapers don't pile up at your door.

3. Leave a car parked in your driveway.

4. Put your lights and television(s) on timers. If possible, get one that goes on a off at various times, so it seems as if someone is home.

5. Ask a friend, relative or neighbor to drive by and check on your home. They can make sure everything looks alright and pick up any packages that you may have forgotten.

Documentation Needed for a Short Sale

2009-06-24T05:00:00.000-04:00

A short sale is one way to sidestep going through the complete foreclosure process, but it is not a shortcut. Both foreclosures and short sales can take time to complete. Even when you are desperate to sell, you will want to make sure that you do not try to rush the short sale process because you do not want to be worse off than you were. Sometimes prospective buyers will make very low offers, thinking that the seller should take whatever is offered. The seller still has to pay their debt to the lender; they are not just trying to get rid of the house by any means.

One way to make sure the short sale process proceeds efficiently if you are a homeowner is to have your documentation ready for your lender. This includes—

Documents that show proof of your income and assets, including bank statements and income tax records for the last two years..

A letter explaining the difficulties that prevent you from continuing to pay for expenses related to your homes.

A listing of any liens on the property.

A comparative market analysis that demonstrates that the property will not sell for the amount owed on the loan because it has lost value.

Also see:
What is a short sale and how does it work?

The Making Home Affordable Plan includes Short Sales

2009-06-22T05:00:00.001-04:00

The government’s Making Home Affordable plan to help homeowners does not only apply to those who want to avoid foreclosure. A provision that was recently announced also wants to aid those who are ready to sell their homes and avoid having foreclosure appear on their credit records.

Lenders are being offered an incentive of up to $1000 if they let owners who do not qualify for loan modification sell their home through a short sale. Buyers benefit because they can get a home for less than what they might normally have paid. And as we have already mentioned, home owners avoid going through foreclosure. A short sale does affect a person’s credit report, but its impact can be softened if the lender is willing to tell the credit bureaus that the former homeowner paid their debt in full.

If you remember, by definition, a short sale is when a home is sold for less than the amount currently owed on the loan that was used to purchase the property. So how can it be considered paid in full? Well, if the bank agrees to take a lower price as the full price and that debt is paid, then the debt is completely paid.

Setting a List Price, pt. 2

2009-06-19T05:00:00.001-04:00

Earlier in the week, we noted that if you are selling the house, you do not want to be hasty about deciding on a listing price.

Dangers of underpricing--
Listing a house at a very low price, one that is likely a lot less than it is worth, may very well bring about a quick sale...but it may also bring a lot of remorse. You will not profit from the sale as you might have with a fair price, even if you sell it fast. You run the risk of not being able to pay back your lender if you still owe on the home.

Dangers of overpricing--
Often overpriced house just sit and sit. And the longer they sit, the more frustrated you become as a seller. People who are looking to buy a home will note just how long your home has been on the market and may pass it by.

You may also find that you need to reduce the price, possible multiple times. This also sends an unpleasant signal to prospective buyers. If the price keeps getting lowered, buyers may think that the property was overpriced and they may question if it even worth the reduced price.

Setting a List Price, pt. 1

2009-06-17T05:00:00.000-04:00

Make sure that you take your time when deciding on the original listing price for your home. This is a step in the home selling process that you do not want to rush. You cannot pick an arbitrary number, but must work with your real estate agent to come up with a price that reflects the value of your property and is in line with the current real estate market.

Things that factor into a home's listing price:

CMA (Comparable Market Analysis)-This is a comparison of the selling prices tha properties that are similar in the same area. Notice this is a comparison of nearby house prices after they have been sold. This is not to say that you cannot look at current list prices, but the list prices do not reflect the actual selling prices.

Location-As you know, more desirable locations can command higher prices.

Condition-A home that is barely lived in will see at a higher price point that a fixer upper or even a house that is in decent condition, but has seen dome wear and tear.

Amenities- A house's amenities, those that are original to the house and those that have been added by owners over the years, can make a big difference when it comes to setting price. A jacuzzi tub or mudroom can put your house into a different price bracket.

Tips for Cleaning Up after Water Damage

2009-06-15T05:00:00.000-04:00

With all of the rain that our area has received recently, some of you may have found that too much rain has caused some damage to your home and belongings. It is advisable to go over your property and document any water damage in a list and with photos so that you have written and visual records. You will need to document both structural damage to the home itself (wall, roof, HVAC, windows, doors, septic system) and damage to other items in your home (electronics, furniture, appliances, clothing).

Here are a few tips to recover from water damage:

-Don't wait to clean. You want to keep mold from growing.

-Water can be removed with fans and dehumidifiers. Also, keep windows and doors open for as long as you can.

-Be careful about cleaning items that use electricity and have been exposed to water.

-You can disinfect using a solution that of a gallon of water mixed with 1/4 cup of bleach.

-It may be possible to hold onto carpets if you clean it, then wet vacuum it and let it try completely.

-Items that need to be discarded if they are damaged by flooding include: mattresses, pillows and building materials (such as ceiling tiles, drywall, and paneling).

Can a House's "Reputation" Affect Its Sale?

2009-06-12T05:00:00.000-04:00

Do you think that a house's history can affect its sale?

It is true that people are sometimes reluctant to purchase homes that have a verifiable history of violence. On the other hand there are others who are eager to purchase such homes because of their notoriety.

But what about homes that have had, not a history of violence, but a history of discord? Right now, the former home of Jon and Kate Gosselin (the parents of twins and sextuplets who are the subjects of the television show Jon and Kate Plus 8) remains on the market. There is some speculation that it is not the so-so real estate market that has stood in the way of the sale. Instead, some think that the couple's unfortunately very public marital woes, combined with the fact that it a lot of the house of has been filmed that is a deterrent.

If you live in an area all your life, there is a good chance that you will know something about the owners of a home you are considering for purchase. Did you buy a house in your area that had a less than stellar reputation? Were you hesitant or did you dismiss speculation and focus on the house's location and desirable features?

The Expanded Definition of First Time Home Buyer

2009-06-10T05:00:00.001-04:00

We have mentioned a few times that this is a good time for first-time home buyers to get in on a real estate market that seems to be working in their favor. Some of you may be thinking that this is great for the newbies, but that it won’t do much to help you because you have owned a home in the past.

We just want to make certain that you know how "first time home buyer" is being defined. Of course first time homebuyer refers to people who have never owned a home. However, it also encompasses people who haven't owned a home for three years. This widens the field to include some of you who were home owners previously, but have not been homeowners continuously and have not owned a home in the past years.

These stipulations are not a part of the guidelines for every first time homeowner program, but people who fall in that latter category are eligible for the federal tax credit for first time home buyers.

SO think about it...if you got out of homeownership a few years ago and now want to get back in, this is your chance. Remember, the federal tax credit is only in effect for home purchased before December 1 of this year.

What is a Quitclaim Deed?

2009-06-08T05:00:00.000-04:00

A quitclaim deed can be used to transfer the share of interest one person (the grantor) holds in a property to another person (the grantee). The property in question can be a residential property or a parcel of land.

Since the term has the word "quit" in it, there is an assumption that a quitclaim deed is only used when someone wants to relinquish their rights to a property, but this is not necessarily the case. (For one thing, if you still own a property outright, a quitclaim deed will not change that. Mortgages do not transfer with a quitclaim deed.) You can use a quitclaim deed to add someone to the title for property that you still own. With a quitclaim deed you can transfer all of a property or just part of it.

Some people think that they can just write up a quitclaim deed on their own, but if you want to be sure that it is valid, you need to make sure that it is notarized. The laws regarding quitclaim deeds vary by state, so be certain to check to see what the law says for your state. Although quitclaim deed forms are available online, it is best to seek legal counsel before enacting one.

Three Options for Buying a Foreclosed Property

2009-06-05T05:00:00.000-04:00

Just as there are different ways to buy a house that an owner has put on the market willingly and not because of financial hardship, there is more than one way to buy a house this is slated for/already in foreclosure.

Public Auction
This option often requires a buyer to pay in cash. Busing a house at auction means there is usually little time for the buyer to research the title or investigate the property's condition. When you buy a house at a public auction, you may get a really great deal, but there are some risks.

Pre-Foreclosure
This involves working with a financially-strapped owner to buy a property outright. Buyers who do this usually have time to looking into the title and the state of the property. The advantage to the owner is that they can avoid having their credit history being scarred by foreclosure. The buyer can get the property for less than its market value.

Bank-Owned
When you buy a bank-owned home, the banks has usually cleared the title and hopefully kept up with maintaining the property. The buyer may not get the same discount they would get if they bought a home through public auction or in pre-foreclosure.

The Advantages of Homeownership

2009-06-03T06:50:00.001-04:00

With the economic downturn, a lot of people who have always rented are enjoying saying (or perhaps just thinking) "I told you so" to those who ventured into the housing market. They want to crow about how they have played it safe. If they were not ready to own a home then they really did play it safe. However, if they were financially stable and want to own a home, but have not bought out of fear, then perhaps they sold themselves short.

It is true that the shaky job market means that some are concerned about foreclosure and others have seen their property values fall. But it is not all doom and gloom. If you think you would like to own your own home, there is nothing wrong with that. In fact, this is great time to buy a home because you have so many options and many eager sellers.

One of the financial advantages of owning your own home is the ability to deduct your mortgage loan interest when it is time to pay income taxes to the federal government.

But of course the advantages of homeownership go beyond the bottom line. There is the great feeling you get from owning a place that is all yours--a place that you can decorate and alter as you choose because it is yours. You can't put a price on that and for some people this makes an invaluable impact on their quality of life.

Earnest Money Deposit: Show them you mean business

2009-06-01T05:00:00.001-04:00

Some things in real estate aren’t quite what they seem, but an earnest money deposit really is just that—earnest money you deposit to let a seller know that you are serious about buying a property. This deposit is not the same as a down payment; your purchase contract should outline the two amounts (earnest money deposit and down payment) separately.

The amount of an earnest money deposit can vary depending on your situation. It could be a mere formality—as little as a dollar—or it could be a substantial amount.

As a buyer you want to assure the seller that you mean business. If your real estate agent advises you on a minimum amount, you may want to put down more as a show of good faith. (By the way, earnest money deposits are also known as good faith deposits.) In a seller’s market, a buyer must compete with other eager would-be homeowners, so it would be wise to put down more money, not less.

Be advised: although this money is included to the seller your commitment, it should not be given directly to the seller. Instead, give this deposit to a reliable third party (a real estate brokerage, legal firm, or title company) and make sure you get a receipt.

What to Do When You Need a New Roof

2009-05-29T07:08:00.004-04:00

Sometimes keeping a roof over your head can literally mean getting a new roof installed. It may seem like a huge or scary undertaking, but if you do your research it need not be an ordeal. You have to investigate a roof replacement the same way you would investigate before doing any other repair. You don't have to run out and get the first person available. A good amount of this research can be done on the internet.

Here are some basic tips for getting your roof replaced:

-Make sure that your work with a licensed contractor.

-Check to see that your contractor has an established place of business.

-Read up on roofing so that you will know what the contractor is talking about.

-Get more than one estimate and get them in writing.

-Get a lien release. This will outline the specific work that you are paying for and will prevent you from being obligated to any third party that the contractor hires or works with.

-While you can look up licenses and other information online, you will want to see the shingles for your new roof in person. The actual color can appear quite different online or in a sample book.

-Get two warranties for your contractor: one of the labor and one for the shingles.

Are You Ready to Buy a Home?

2009-05-27T05:00:00.000-04:00

While we certainly love to see for sale signs taken down because a home has been sold, we know that homeownership is not something people should rush into just because. If the turbulence in the housing market has taught us anything, it is that homeownership is not for everyone.

You fit the profile of a homeowner if you:

1. Plan to stay in the area. Things do change unexpectedly, but if you feel like you might move in the next year or so, think twice about buying. If you can avoid being a long distance landlord, you probably should.

2. Embrace the idea of maintenance. Home requires upkeep and if you are not willing to put in the time and effort, you might want to keep renting. Your home is an investment and you have to do the work to make sure it lasts.

3. Have saved some money. It is difficult to get a home loan if you do not have any savings because lenders want to see that you have a cushion in case your financial situation changes. Even if your financial situation does not change for the worse, you will need to have money for homeowning expenses—both expected (property taxes) and unexpected.

Safe Grill Set-up

2009-05-25T05:00:00.000-04:00

People like to say that Memorial Day Weekend is the official beginning of the grilling season. Some of you may have already done some grilling, but if you just dragged the grill out without really going over your setup or making sure that you have adequate space for grilling, it is not too late.

Keep in mind that charcoal grills should not be use indoors or inside tents or vehicles. These grills should also not be stored indoors with coals that have just been used.

Here are some safety tips for gas grills:

-It is important to keep spare gas containers upright.

-Do not store propane or any flammable liquids near the grill or indoors or in the trunk of a car.

-Get new connectors is yours are nicked or scratched because they could leak gas.

-Check to be certain that the tubes that lead into the burner are not blocked by grease or insects.

-Make sure that the gas hoses are far from hot surfaces. You can install a heat shield for protection.

-Place the grill a minimum of 10 feet from your house or garage. You should not grill in a garage or carport or under a flammable surface.

First-time Buyers: Tips to Avoid Househunting Fatigue

2009-05-22T07:02:00.003-04:00

Not too long ago, I mentioned the recent drop in foreclosure rates in the DC area. One expert attributed our area's drop in foreclosures to the fact that although things are not booming, our economy is stronger in comparison to other areas. We also have a large number of first-time home buyers who are starting to get less shy thanks to lowered prices and government incentives.

Some of you are ready to purchase your first home, but a little intimidated by all of the options out there. Don't worry, if you take it one step at a time, it won't seem so daunting. There are a lot of choices, but only so many that will really be a good fit for you. You will not find a perfect home, but you can find the home that is perfect for you without running yourself ragged. If you know what you want and are ready to view possibilities, you have to do more than just walk through. Here are a few tips--

1. Take advantage of technology--Use a digital camera to capture the houses on yout list.

2. Take Note--Write down your thoughts as well.

3. Don't Wait to Rate--Evaluate each home right after you leave.

DC Area Foreclosure Rates Drop

2009-05-20T05:00:00.002-04:00

Some of us felt a little better after reading in the news last week that the foreclosure rate in the Washington DC area fell more than 30 percent from April of last year. Sadly, the foreclosure rates for the nation as a whole went in the opposite direction and have increased.

This is hopeful news, but it does not mean that we are out of the danger zone yet when it comes to foreclosures. If you are concerned that you may not be able to hold onto your home, be sure that you are getting help from a reputable organization. They may not be at the forefront of the news as they were in recent months, but dishonest people are still trying to take advantage of vulnerable people who seek assistance in avoiding foreclosure.

One way to steer clear of foreclosure is by selling your home through a short sale. If you are thinking about this option and have property in Anne Arundel County, Calvert County, Charles County, and Prince George's County and are thinking about give John Day a call at 410-507-2909. He can analyze your situation to determine if a short sale will work for you.

Fix Up Your Property Before Selling

2009-05-18T05:00:00.002-04:00

I was in a store the other day and overhaeard a conversation between the proprietor and another customer. The store's proprietor was selling her home. Now having been in the store for a while I could see what the store owner was doing right: she was chatting up all of her regular customers and telling them that she was selling her home.

So here is where she may have erred...when a woman came in and said, we hope to see you soon, she explained that she had her husband we planning to buy in this woman's neighborhood. She and the woman went on to discuss how they couldn't believe that the store owner's prime property was not being snatched up. They discussed how they could not believe just how picky people were being. The store owner said that she had updated the kitchen, but left the bathrooms as they were--and this was what people who realtor's brought by mentioned.

In today's market you cannot underestimate the importance of fixing up your house before putting it on the market. And once you get some feedback from would-be buyers, consider finding ways to make some improvements even if you cannot do a complete makeover.

Here are some ideas:

Home Improvements That Will Help Sell Your Home

Inexpensive Ways to Update Your Kitchen

Take Advantage of 2009 First-Time Homebuyer Tax Credit

2009-05-15T05:00:00.000-04:00

You are probably aware that Congress passed laws that would give first-time home buyers an $8000 tax credit. Perhaps you have thought about it, but have procrastinated about looking into whether or not you are eligible. To inspire you to make that move if you fit the bill, we have outlined some of the basic provisions below.

***

You must purchase a home before December 1, 2009. (Eligibility began on January 1, 2009.)

Under this legislation, a first-time homebuyer is anyone who has not owned a home in the past three years. If you are married, your spouse also needs to fits these criteria for the two of you to buy a home.

You must buy a primary residence--this includes condos, townhouses, co-ops and single-family homes.

The $8000 that has been mentioned is the maximum; some people will qualify for less. The tax credit you get when you buy a home under this legislation will depend on the price of the home and your income.

You will not have to pay back the tax credit if you stay in the home for at least three years.

***

If you are eligible, give some thought to buying a home this year. There is no guarantee that the government will offer a similar incentive the following year.

Get Design Ideas at the Washington Design Center Spring Design House

2009-05-13T05:00:00.000-04:00

How many times have you left an especially creative friend or acquaintance’s home fired up with ideas for how you could change your own house?

If you are looking for some design inspiration, look no further than the Washington Design Center's Spring Design House. Twice a year, the Washington Design Center puts on a Design House filled with ideas and top of the line home furnishings. This time around the theme is "Urban Elegance." A team of designers took on the task of employing this theme in the design of several rooms.

Although the Washington Design Center was founded primarily to serve design and building professionals who buy wholesale, they want to reach out to individual consumers too. The center now has a designer on staff there who is dedicated to helping individuals purchase items. When you finish checking out the Design House, you can wander over to vendor showrooms. And if you see anything you want to buy, even just one small item, you can seek the staff designer's help in purchasing the item.

There is no fee to tour the Washington Design Center Design House. It is open now until June 27, 2009. Visit the Washington Design Center on the web for more details.

Home Staging...with Live Actors

2009-05-11T09:10:00.002-04:00

When it comes to home selling trends, we are always amazed at some people's creativity. A while back we told you about homeselling sleepovers--where potential buyers asking to sleepover in homes that are for sale so that they could get a feel for what it would be like to live in them.

Well, now some builders and owners are hiring people to stay in unsold properties and taking home staging to a whole new level. The Wall Street Journal has reported that instead of just getting new furniture as a prop, people are hiring temps to stay in houses to give them that "lived-in" look. People hired for these jobs must be able to give it the ambiance of someone who can afford to live there, even if they can't. They add their own touches--magazines and photos and such--to make it seem less vacant.

One such temp hired by a builder said that she fields calls from real estate agents and tell them that she lives there because she does, at least temporarily. She auditioned for this job with includes making sure the house is pristine for 12 hours a day. She also has to light candles and turn on music and then leave prior to showings. When she has some warning, she will bake cookies before a real estate agents shows up with a prospective buyer.

And perhaps it works. If the One buyer who toured the property occupied by the temp mentioned above guessed that the house was being put up for sale by a wealthy world traveler.

Neutral Colors Net Sales

2009-05-08T05:00:00.001-04:00

According to a recent article in The Washington Post, real estate experts (home stagers, realtors and interior designers) agree that when it comes to clinching that home sale, neutral paint colors work best.

And this is not just the case when it comes to open houses. These colors are also more appealing to buyers who view pictures of your home on the internet (You are using an internet-savvy real estate agent, we hope.)

A lime green room just screams "Work!" to a buyer who feels faced with the prospect of having to re-paint. Even if you love bold colors, it is likely that many prospective buyers will not share your tastes. It may still be off-putting to buyers who like bold colors because they will feel as if they have not been given the opportunity to put their own mark on the space. Yes, it isn't theirs yet, but with a neutral palette they will either feel at ease or be able to start imagining what they would like to do after they purchase the property.

The experts did allow for the fact that repainting a child’s room while you are still in residence might be upsetting for a child who is already facing a move. And they added that it is okay if you leave the bathroom as-is since people are not as likely to be deterred by the prospect of re-painting a bathroom.

That Haunting Feeling … Could be the Real McCoy

2009-05-06T05:00:00.001-04:00

On of my friend's father died alone at age 84 in his condo in Florida. They guess that he probably had a heart attack. She and her sisters decided to sell as soon as possible so they could liquidate the estate and not have to worry about the property. She wondered whether prospective buyers might be uncomfortable knowing that he had died there. No one ever asked, so they did not volunteer the information.

Some jurisdictions require that sellers disclose whether the seller or a family member died in the home. The reason why the buyer should ask for disclosure on particulars about death in a home is that it could portend to potential hazards. Perhaps the stairs are steep or unsafe. Perhaps there is a ventilation or filtration problem that you are not otherwise aware of. Perhaps there was a violent act in the home, and restless spirits remaining.

Unlike Europeans, Americans are often queasy about death happening in a home, its uncomfortable feeling or as a possible omen or a curse. Some buyers are so uncomfortable with the thought of death or spirits in the home that they actually retract their bid. History aside, homeowners with century-old homes are more accustomed to the feeling and the potentiality of spirits co-habiting their homes.

Now that I think of it, my friends reported that items mysteriously moved or disappeared during their first month in their 50-year old house. But everything soon settled down to normal. Peaceful co-existence, you might say.

Bottom-line, weigh all angles when evaluating your home purchase, and look for hints and hooks that can reveal the home’s hidden truths.