That Haunting Feeling … Could be the Real McCoy

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.

Economic Downturn Keeping Divorcing Couples Together

The foreclosure crisis has altered the real estate landscape and is changing relationships to the extent that some people who wanted to separate have either decided to remain together as a couple or to remain together in the house, as exes.

When a property will not sell and neither spouse can afford to buy out the other, couples who had intended to go their separate ways find they must stick it out until they are able to sell their house.

One divorcing couple that was profiled by the Boston Globe went against the advice of their real estate agent and priced their home at a price that was not amenable to the real estate market. They ending up lowering the price but the house still did not sell.

If you are going through this situation, consider contacting a mediator or lawyer to help you work through it. We are here to give advice about real estate and not personal matters, but if need be, you may want to contact a counselor as well. This is a very stressful situation that you may need to talk it over with someone.

Other couples who were preparing to divorce found that the economic downturn gave them the impetus they needed to try to work things out.

City Culture Affects Resale Value, pt. 2

Last Friday, I mentioned that real estate is a temporary investment and that area culture can affect your ability to sell your home. Even if you plan to spend many years in a home, perhaps to raise a family, you are still buying with the goal of eventually selling. And if you are able to do so, it pays to try to think years ahead to that time when you will want to sell.

No one knows exactly what will happen, but sometimes there are indications that you can factor in when deciding which home to purchase.

One real estate agent in New Jersey has found that homes that are near synagogues sell well because Jews who are observant do not want to drive or work on the Sabbath. For them it is important to live close enough to walk to the synagogue. The prices for homes in the vicinity of orthodox and conservative synagogues remain steady.

This is the kind of insider knowledge that you can get when you do a little bit of research. It also helps to see your real estate agent as a source for information. Ask your real estate agent what they know about the upcoming plans for change and growth in the area where you are considering buying a home.

City Culture Affects Resale Value, pt. 1

They say that parenting is a job you work yourself out of. In a similar fashion, real estate is an investment that you take on to get rid of.

Certainly you have no way to predict what will happen as you get ready to sell, especially if you buy a home that you plan to live in for many years. Still, it is certainly possible to bear in mind what makes a house easier to sell when you buy.

For example, if you live in an area with many retirees now, or one that economists/experts say will become a destination for retirees, buy a house that you think a retiree would also want to buy. One home owner is a retiree-friendly city observed that low-maintenance homes sell a lot better there than stately homes with large grounds.

It is important to buy a house that you like and want to live in for the time being, no doubt. But if you can also get a home that you will be able to sell eventually, you will be a lot happier when that time comes.

Come back on Monday for more on how the cultural background of area residents can affect resale value.

Will Down Payments Become Standard Again?

In recent years, prior to the current economic strain that we are experiencing, it became very popular to make large purchases with "no money down." There was a time when this would have been unheard of, but over time restrictions eased. People were able to get cars and even homes without having a down payment.

It is hard to wait and wait until you have amassed enough for a down payment when you want to become a home owner, so it is easy to understand that once down payments became more and more optional, people jumped at the chance to buy homes.

Of course it is likely that it will become more difficult to buy a home without a down payment. Some of you will cringe at that thought, but it may not be a bad thing. Here's why:

-Putting down that 10-20% means that you will have more equity in your home sooner, This will be helpful if you need to move sooner than you'd planned.

-If you need to get a home equity loan, you can do that sooner if you have made a down payment and built up equity.

-Sometimes you can avoid having to pay private mortgage insurance when you make a substantial down payment.

Banks Are Closing in on HELOCs

Even if you feel secure that you will not lose your home to foreclosure, you may find yourself affected by the glut of foreclosed homes on the market. Those of you who have a home equity line of credit (HELOC) have reason to be concerned because the overall credit crunch can affect your loan.

A HELOC is a loan that is available on a continual basis, so people who took out these kinds of loans were counting on being able to access that money when they felt it was necessary. Losing that pool of money put a serious crimp in plans, since people often use HELOCs to start a business or cover ongoing medical expenses. But what happens if that expected resource in not available?

Unlike foreclosure, these loans have not gone into default and may be paid up, but even homeowners with good credit are finding that the banks are tightening the purse strings on HELOCs—either lowering limits or suspending these lines of credit altogether.

What is a homeowner to do? Some people have applied for additional lines of credit. Others, who have already trimmed their budgets are just accepting that they will not have as much credit as they thought and making necessary adjustments.

Has your HELOC been altered due to factors beyond your control? If not, what would you do if this were to happen?

It's A Great Time to Buy That First Home

While some people are watching and waiting for the "bottom," those of you who want to buy a home and feel secure doing so, might want to go ahead and take the plunge.

Earlier this month, the New York Times declared that now is a great time for first-time home buyers to buy a home. The paper noted that in a decade's time when the financial crisis is not what it was, many of us will be looking over our shoulders, mourning that we did not invest in property when prices were low.

If you do want to buy a home, it pays to make sure that your credit portfolio is in good order. Even with lowered prices, you want to make sure that you can get a good interest rate.

Now this is not exactly great news for those of you looking to sell, it is not necessarily bad news either. If a publication like the New York Times is encouraging people to buy homes, then that type of influence will spread and you will be able to get a buyer sooner rather than later.

Keep Your Home on the Market Through the Winter Holidays

Every year home selling experts debate whether or not to advise home sellers keep (or put) your home on the market during the holidays.

One well-known real estate expert lists some compelling reason not to try to sell a home at this time. But I say, if everyone else is taking their homes off the market, then it is a great time to stay in the game. With fewer homes on display, there is a better chance that yours will be one of the chosen ones.

One agent said that she found that families like to look at homes during winter break because their kids are off from school.

Peoples reasons for buying homes vary. Everyone is not looking to move across town; some people buy homes because they need to relocate, for example. Yes, even in a down economy, someone has to move somewhere, even during the winter. And if they must move, you want your home to be the one they buy. But they cannot buy it if you take it off the market. So give some thought to keeping your "For Sale" sign up through the holidays.

Come back on Monday for some tips on selling your home during the holidays.

Elderly Cannot Sell Homes, Postpone Assisted Living

Not long ago, I wrote about how the foreclosure crisis is affecting seniors as much affects young people and the middle-aged. There is also another, at times overlooked fallout from the foreclosure crisis and the unrest in the housing market—growing numbers of elderly cannot sell their homes and move into assisted living facilities.

First and foremost this affects the elderly who need a certain level of care that they cannot get while they live at home on their own. And it also affects the fortunes of assisted living facilities. And these facilities are getting creative so that they can

These facilities have noticed that waiting lists are shrinking and that they have fewer residents. Some assisted living facilities have started to work with real estate agents so that the agents can assisted the elderly in selling their homes. Assisted living facilities are also working in partnership with banks so that homeowners can get bridge loans to help them make it through the transition until their homes sell.

If you are a senior citizen living in Maryland who wants to move on to assisted living and you are having difficulty selling your home, give John Day a call at 410-507-2909.

The Role of the Home Appraiser

In case you were unaware, a home appraisal is supposed help the lender decide whether or not to make a loan. It is not really a tool to give buyers the correct price.

Recently, The Washington Post had a brief article where they interviewed a real estate expert about the recent unrest surrounding home appraisals. The expert noted that although the foreclosure crisis has brought the home appraisal process to the forefront, that this is not the first time that this part of the real estate industry has come under scrutiny.

One big component to a home appraisal is looking at properties that are considered to be truly comparable to the property in question. Like all of us, home appraisers face pressure to do their job a certain away. Sadly, some appraisers have succumbed to the pressure to name a price that relied to heavily on what a buyer was willing to pay, and did not factor in the market and similar properties.

Just as there was talk of how there was hope that bankers and other people in finance would self-regulate, the same has been said of home appraisers. As the expert in the Post noted, we cannot rely on self-regulation alone.

To learn more about home appraisers, visit The Appraisal Foundation.

Older Americans Hit Hard by Foreclosure Crisis

Who do you picture when you think of the foreclosure crisis? Perhaps you envision someone who is young, someone who took a subprime loan because they figured they had the earning potential to cover the loan. But young people are not the only ones who have suffered as the result of predatory lending and subprime mortgages. And the older you are, the less time you have to recover from such a setback.

According to AARP this is not the case at all. The AARP Public Policy Institute has released a report entitled "A First Look at Older Americans and the Mortgage Crisis. The mortgages of people 50 and over represent about 28 percent of all delinquencies and foreclosures connected to the foreclosure crisis.

Many homeowners who are 50 and above have been really hit hard by the mortgage crisis. Sometimes they are buying another home, thinking that they'd finally get the home they really wanted. Others may have spent all their adult lives dreaming of homeownership, and bought their first homes using the less than favorable loans that were becoming easier to get.

Whatever the case, consider checking in on your relatives and friends that are 50 and above. If it is not too delicate a subject, ask them how they are managing their mortgage payments. If you or someone you know in Maryland is facing foreclosure, call me at 410-507-2909, if you need assistance.

A Bit of Good News About Home Sales

Although experts do not expect to see the pace of home sales somewhat recover until next year, the good news is that there has been a rise in pending home sales as of late. Now, when they say a rise, they do not mean that things have returned to the days of the housing boom. But more homes were slated to be sold.

For example, according to the National Association of Realtors pending home sales increased from July to August. Yes, the word "pending" is modifying sales. So what does that mean? When a home sale is pending that means that the seller has accepted an offer from a buyer, so both parties are intending to move forward, but the deal has not been made final.

At this point no one can say for sure how faltering global markets will affect the housing market. There have been reports that areas that were hit very hard by economic uncertainty are seeing an increase in sales.

There is no doubt that the current economic woes and shaky global markets can affect the sale of homes in your area. But you cannot control all of these factors. What you can do is make sure that you have done what you can to make your home attractive to potential buyers.

Home Selling Sleepovers?

When buyers have more leverage, they can make more requests, and this is just something that sellers have to deal with when they want to sell a property? But just how far are you willing to go?

One trend that we've seen increasing over the past year and a half or so, is the 'sleepover.' This is when a seller allows a prospective buyer to stay the night in their home so the buyer can 'get to know the house better.' This has even been incorporated into television reality shows that depict would-be buyers sleeping over and spending a great deal more time in a house than they would normally do.

Both sides are hoping for a perfect match, but it seems like the seller has more to lose in this deal. What if a prospective buyer somehow damages the property?

Experts say that clearly, this is not a selling tactic if you are still living in the home when you put it on the market. You may consider allowing a sleepover if you are an absentee owner.

For the buyer, there is the hope that spending the night in a strange house will help it become more familiar. Some sellers who tried this technique have found that is is price and not familiarity that makes a difference after hopefuls who slept over still did not make an offer.

The Government's Takeover of Fannie Mae and Freddie Mac

The government's takeover of Fannie Mae and Freddie Mac has been all over the news lately. Some have applauded it; others have been against it. You are probably interested in how all of this will affect you.

Here are a few facts:

Fannie Mae and Freddie Mac did not make subprime loans.
These two companies did not get involved in making loans directly to consumers. What they did was buy securities connected to some rather shaky home loans.

The government bailout of Fannie Mae and Freddie Mac is about stabilizing the housing market.
While the government has stepped in to help out these two organizations, this does not mean that you will receive personal assistance with your mortgage. Some homeowners mistakenly think that they will be able to get a check from the government or from one of these companies. This is simply not the case.

The takeover could be good news for some sellers.
Right now, mortgage interest rates are getting lower. This may persuade some reluctant would-be buyers to go ahead and take the plunge.

Down Payment Assistance Loophole Closes Oct. 1

Many hopeful homeowners have been helped a loophole in a federal law that allowed them to get down payment assistance from the seller through a non-profit organization. The ability to get down payment assistance this way will no longer be possible after October 1, 2008.

Since the news hit that this loophole would soon be closed, some sellers and non-profits that have helped homeowners have done a lot to get the word out. If you thought to use this type of program to purchase a home you have on more month to do so before a ban is enacted. Builders are aggressively marketing homes with down-payment assistance because they really want sell homes.

If you know that you don't have money for a down payment, but feel you are in financial shape to buy a home and keep up with payments, consider trying to take advantage of this before October rolls around.

The closing of this loophole does not mean that prospective home buyers have no alternatives for down payment help. What you cannot do is get the down payment as a gift from the seller through a non-profit. There are still, many programs that offer down payment assistance. Some programs ask that the buyer repay all or some of that money. Others require that the potential homebuyer attend classes on home finance.

You can learn more about approved down payment assistance programs at the HUD website.

When should I Buy my first house?

If you are one of those people who have been sitting on the sidelines waiting to purchase your first home, its time to move. What could a first time Maryland homebuyer be waiting for?

It is clear that we are experiencing some of the best interest rates that we have seen in many, many years. It is also true that there is an abundance of homes for sale with inventories at a 27 year high. There are also loan programs available that make purchasing your first home easier than ever. Real estate is a fantastic long term investment.

To put things in perspective, I often think of my parent’s purchase of their first home, a 100 acre farm in southern AA county. In 1954 they purchased the farm with a rather tired 18th century home on if for $12,000.00. Today, those 100 acres (if still in tack) would be worth somewhere around 1.7 million bucks. You do the math, the return is excellent. If you had invested that $12,000.00 in the stock market at a decent rate of return, you may have earned just about the same using this property and scenario. If you had done that, where would you have lived, with your friendly neighborhood stock broker? You would miss out on the joys of building equity while experiencing the pride of owning a piece of the American dream. Don’t you think that this kind of long term appreciation will continue? There are more and more people born every day. There is no rebirth of land mass in this county that I am aware of. So, get moving. Maybe your parents and possibly your negative friends have said, wait to buy. Wait for what? Do you think prices are going to decline for the next 5 years? You are wrong! Do yourself a huge favor and buy a house.

The first step is to find out what you can afford and what that translates into a monthly INVESTMENT. Yes, interest and your house payment is an investment in your future, plain and simple. I suggest you contact a bank or a direct lending mortgage company that you and most people you know have heard of. Names like SunTrust, Bank of America, Wachovia and your credit union if you have one are good starting places. It’s free and educational to meet with a lender to explore your options. Regardless of what you here there is plenty of mortgage money available. The FHA insured loan limits have just been increased, there are great first time buyer programs available. It’s possible to purchase your first home with very little out of pocket expenditure. Don’t be a cynic, the opportunities are endless with 3,861 homes for sale in AA county according to the Metropolitan Regional Information System (MRIS) our local multiple listing service, don’t your think you can find something appropriate?


Take a moment to review a Current Market Snapshot of your desired buying zip code.

Relocating? Maybe Your Employer Can Help

In the past, employers have offered to assist relocating employees with moving expenses and covered the costs of those who needed to travel to look for homes in a new city. But now with the recent issues in the housing market, there are employers who are taking things a step further.

If you are relocating for your current job or moving because you've accepted a new job in a different city, ask about what the company can do to help you as you transfer to a new area.
If you put your house on the market and it doesn't sell right away, you will have the added burden of trying to cover expenses for your old home and your new life. Companies know that you will be less than productive in that situation. You will have so many adjustments to make already so here is how they may try to ease your load.

Temporary Housing
Some companies supply temporary housing for a certain period time. In light of the fact that houses aren't selling as quickly as before, some employers are becoming less restrictive about the deadlines for employees to leave temporary housing.

Making up the difference
An employer may compensate you for the loss you take on selling your home if the price you get is less than the home's appraised value.

Buyout
Really motivated employers are actually buying employees' houses themselves.

Autumn is the Time to Fall in Love with a Beach House

If you’ve been to the store at the end of a season, you know that is when everything goes on sale. Swimsuits cost less at the end of summer and sweaters are available at bargain prices come springtime.

While purchasing property cannot exactly be compared to buying clothes, the notion that you can get a bargain when buying things at the end of a season does apply in some cases. If you’re looking for a vacation or beach home, fall is a great time to look. The rest of the world will wait until spring as their thoughts turn to sand and surf. Competition for these properties is more intense at that time.

Fall is when beach house owners have closed things up for the season. They’ve enjoyed the house themselves and have left or they have received final payment from a renter. Either way, if they decide to sell, they will feel less pressured at this time of year.

Buying a beachfront property in the fall means that you are faced with preparing the house for winter right away. You also must wait a while before using it yourself or renting it out to someone else. But if you are willing to wait, you may be able to get a great deal that will have you sitting pretty next spring.

Mini Boom Areas Defy Real Estate Slump

The general consensus is that the housing market is in a slump. But there are many specific areas -- little oases in the real estate market -- that defy that slump. In these micro markets real estate prices are not only holding firm but increasing, and there's no shortage of buyers willing to pay the price.

Especially near large metropolitan areas, there are always particularly desirable neighborhoods or zip codes that continue to attract buyers no matter what the larger housing market is doing. As long as the local economy is strong, generating jobs and rising incomes, the housing market in these small pockets will continue to thrive.

Dubbed oasis micromarkets by Washington Post columnist Kenneth Harney, these mini boom areas share some important characteristics: (Click here to read the entire article.)

• Close to the action. Neighborhoods are well established and a very short commute from urban centers offering employment, entertainment, shopping and services.
• Top of the line. Homeowners have above-average incomes, above-average education levels and are veteran homeowners. Schools systems will rate exceptionally high, crime will be extremely low and city services (library, parks, refuse collection, etc.) will be exemplary.
• Prime mortgage territory. Owners and properties qualify for prime mortgages. You won't find evidence of the subprime mortgage fiasco and its attendant foreclosures in these areas.

There are several oasis micromarkets in and surrounding Washington DC where demand and housing prices remain high and rising. The Bethesda-Chevy Chase, Maryland area (zip code 20815) fits the profile as do portions of northwestern Washington DC (zip code 20015). Both zip code areas have defied the current housing slump with median sales prices rising an average 6%. Some micromarkets may not be easily identified because the number of houses on the market has risen (up 9.7% from last year) and houses are taking a bit longer to sell (an average 47 days compared to last year's 33). But if you compare sales records to that of the regional averages, business is definitely booming in these micromarkets.

Housing Market Decline Good News for Buyers

Doom and gloom are back in the headlines. The National Association of Realtors expects existing home sales to decline this year and median sale prices to drop.

• Existing home sales, which were 6.48 million in 2006, are expected to dip to 6.29 million this year before bouncing back to 6.49 million in 2008.
• The median price for existing homes is forecast to drop 1% to $219,800 this year, but should rebound 1.4% in 2008.

Compared to 2006, home prices dropped 1.4% in the first quarter of this year. It's the first year-over-year decline in national home prices since 1991, according to the S&P Case-Shiller index. Prices have been falling for the past three quarters.

This is good news for home buyers. High inventory, low prices and low mortgages make this a great time to invest in a new home, particularly if you plan to live in it for a few years. The real estate market is expected to stabilize in the next year, though at a lower level than the artificially inflated boom years of a couple seasons ago. If you plan to stay in your home for several years, you'll come out ahead.

For the latest information on the housing market in your neighborhood, call veteran realtor John Day. John can help you find your dream home or sell your house in Maryland or the metro Washington DC area; just click the post title to view homes selling in your area. Whether you're buying or selling a home, John Day is your key to success.