Real Estate Information Archive

DeHanas Real Estate Services recently participated in the 2015 Great Big Home Show which was held at the Capital Clubhouse in Waldorf on March 14 &15. The show was designed to bring service providers and homeowners together for an opportunity to pick up new ideas on home projects, and potentially save thousands of dollars.  DeHanas Real Estate was on hand to offer home sellers, tips on getting their homes ready for the sales market, and talk to prospective home buyers about the most common home projects for new home owners.

During the event, DeHanas Real Estate held a drawing for a Big Screen TV.  The winning entry was submitted by Dorothy Ellerbe of Clinton, who was awarded the prize on Monday following the event.

DeHanas Real Estate Services offers pre-buying counseling sessions for home buyers looking to prepare themselves the buy a home in a very competitive housing market. This service is free. Call 301-870-1717 for an appointment.

Search for Homes

The title sounds like the start of a riddle, and yet the answer is simple and can be complex.

Those of us (agents) that have been in the real estate industry for a long time all know each other.  We grew up together, attended high school and college together, our kids play together, we are friends, family, roommates, and in some cases spouses that work for different real estate brokerages.  Our local agent network is really not that large.  And we work and learn with each other, daily!

Often we all hear the same question from prospective clients; "What is the difference between real estate brokerages?" or "Why should I go with your company over XYZ National Brokerage?" When it comes down to it, what benefits do consumers have using one brokerage over another? What's the difference?  The difference is "nothing and everything".  Sorry to be so paradoxical about the answer, because it is so simple.  The difference is not in the brokerage. The difference is in the individual agent.

As agents, we choose the place where we are most comfortable hanging our hat, where the work place is inviting, nurturing and productive. I have also known real estate agents who have been affiliated with almost every local real estate brokerage at one time or another.  And the service they provided at one brokerage was no different than the service they provided at another.

It used to be that an agent would choose a brokerage over the tools it offered to make their jobs easier and more manageable, or the quality of in-house training programs. Quite frankly, now, the training is the same, and in some cases, the EXACT same. Just today I attended a class sponsored by Exit Realty, and have attended classes put on by Keller Williams, Remax, Century 21 and Coldwell Banker. The Webinar has also changed the playing field, creating an even opportunity for every agent regardless of if they are with a national franchise or an independently owned real estate brokerage.

Sometimes agents choose one company over the other because of the technological support. Again, another area where the Internet has created the same opportunities for all agents to take advantage of.  The same tools are available to every real estate brokerage regardless of if you are with Remax in Maryland or Century 21 in California. They are the same tools with a different label. 

The truth is most real estate brokerages are set up to support the agents, not the consumer.  It is the agent that makes the difference.  If a brokerage offers all kinds of marketing tools and the agent chooses or fails to utilize them, is that the brokerages fault?  Real Estate Agents are independent contractors.  They are a self contained businesses within a franchise name.Ten agents in the same brokerage are going to conduct business in ten different ways.  The important factor here is work ethic, know-how and results.

If you hire an agent with a strong work ethic, who is knowledgeable about their field, and has a track record of success, it does not matter if they are with Keller Williams Realty, Remax, Century 21 or any of the thousands of franchises, or if they have their own brand. 

Word of mouth used to be a popular method for finding a good quality agent. In Today's technology-driven world, it is fairly easy to identify who the hard-working, successful agents are.  And savvy home buyers and sellers will tell you, they "take to the net" and find out what other home buyers and sellers experiences are like by looking through feedback sites like Trulia, Zillow, Google, Yelp, Facebook,RateABIZ and dozens of others. Check out the testimonials.   No longer can an agent hide from a dissatisfied client, and likewise, when a real estate transaction has gone especially well, consumers will let you know.

The difference is as unique as the individual agent. 

Search for Homes 

The Debt Forgiveness Act, scheduled to expire on December 31, 2012 could impact many homeowners of distressed properties. Those are homes in a state of pre-Foreclosure where homeowners are attempting to avoid foreclosure by selling them as a short sale.

Federal tax law generally requires that a taxpayer who has indebtedness that is forgiven by a lender is required to claim and pay taxes on the amount of the forgiven indebtedness, which is classified as "income." As a result, prior to 2007 homeowners whose homes were foreclosed upon or who completed short sale transactions (or received principal reductions in loan modifications) were potentially required to pay taxes on the amount of indebtedness which was forgiven in those transactions. The Mortgage Forgiveness Debt Relief Act of 2007 was passed by Congress in order to modify the law by providing taxpayers who met certain requirements an exemption from taxation on the forgiven indebtedness. That law, however, is scheduled to expire at the end of 2012 and, unless extended by Congress, will result in the loss of this exemption and the imposition of additional and potentially significant taxes on thousands of distressed homeowners.

More than 50,000 homeowners go through Foreclosure each month and the number of short sales has increased significantly over the last few years to approximately 500,000 per year. In addition, as a result of the $25 billion foreclosure irregularity settlement which the nation's largest mortgage lenders recently entered into with the federal government, thousands of homeowners may receive principal debt reductions over the next few years. Although an extension of the exemption would seem to be a "no brainer," the fact that Congress is entering a "lame-duck" session creates the possibility that little legislation will move ahead through the end of the year.         

Even if the law does expire, some homeowners will still be eligible to exclude the income from forgiven indebtedness. For example, if the debt is discharged in bankruptcy or the homeowner is "insolvent" (meaning they have more debt than assets) at the time of the debt forgiveness, no tax is due. But homeowners who are considering a short sale and their agents should take this pending expiration into account and seek competent legal or tax advice so they will be prepared for the ramifications to them, if any, that will result if the law is not extended by Congress prior to the end of the year.

As reported to me by the Southern Maryland Association of Realtors, the Charles County Commissioners, during a recent budget meeting have preposed to increase the environmental impact fee, which will show up in your property tax bill.

What is an environmental service fee?  Its a fee for the County's recycling and stormwater management maintenance programs and is included on the homeowners' property tax bill.  It is shown on the bill with the designation ESF.  The fee is currently $62.00 per year.

After many questions of staff and a great deal of healthy discussion at the Commissioners' FY08 budget worksession held on Tuesday, the Commissioners agreed to take forward to the public hearing on the FY08 Budget a proposed increase of this fee to $65.00 per year.

Homeowners can find their property tax bills on-line by visiting the Charles County website at:

http://www.charlescounty.org/treas/taxes/index.html#realproperty

Click on property tax inquiry, and follow the instructions given to search for the tax bill.  A detailed breakdown of a property tax bill in a given year may be found by clicking on the year.

SEARCH FOR HOMES

As a real estate professional, I have found that educating the public is a large part of my business. You may remember the catch-phrase used by The Men’s Warehouse clothing company; “Our best customer is an educated customer.” No truer words have been spoken when it comes to selling residential real estate. When I work with a buyer or seller who is aware of the market conditions, and understands the value of ‘doing things right from the beginning’, there tends to be a much smoother, and gratifying experience for all involved.

So why is it that some homes sit on the market and never sell (and current statistics indicate that 41% of the homes on the market in Southern Maryland will not sell), while others sell in a relatively short period of time? Two reasons; “sellability” and “Pricing”. When you make improvements to a home, like replacing the carpeting, freshening up the paint and sprucing up the landscaping, you are adding to the sellability, not to be confused with “Value”. The afore mentioned improvements do not create value. The second reason is “price”, and the biggest reason homes do not sell.

There is a common misconception about the difference between a Comparative Market Analysis, commonly known as a CMA, usually prepared by a licensed real estate agent, and an appraisal, which must be compiled by a licensed appraiser. Unfortunately, sellers will often times confuse market value with market price, which prompts unrealistic expectations of what their home will sell for.

Keeping in mind that ‘a home is worth only what a buyer is willing to pay for it’, it stands to reason that when supply outweighs demand there is more to chose from, putting pressure on pricing, and thus creating a buyers market. Maryland real estate cannot be lumped, as a whole, into one category.  There are parts of it that are experiencing significant price pressure, while other areas, like Southern Maryland are seeing flat to only slightly negative appreciation.

The secret to pricing a home that will sell (here is the real tell-all) is to price it 2%-5% in front of the market comparisons in the direction of the trend.  In an up trending market, you would price a home higher than the last home sold for, while in a down trending market, a home should be priced slightly lower that the last group of comparisons sold for.  In Charles County, for example, recent home-sale statistics show the average ‘sold’ price was –1.44% over homes sold a year ago. If you want to sell your home under the current conditions, you would price it about 2% below the CMA recommended price for your property.

Often I will hear a seller say that “it appraised for more”…….And here is the reason for confusion; there are a number of reasons a seller will get an appraisal. It could be for a home equity line, a refi, a bridge loan, or an appraisal of resale. Each of these appraisals is compiled for different reasons, and is merely supporting documentation that is required by the bank to justify the loan they have made to the homeowner. It is not uncommon at all for three different appraisals to have three different values. Also, the typical comparison appraisal only uses 3 comparables, while a CMA generated by a real estate agent uses all of the comparables within the neighborhood, providing a larger picture of the market trend. Also, the information in a CMA and an appraisal is only good for 30 days. Don’t rely on the pricing opinion you received 3 months earlier, as it will have changed.

SEARCH FOR HOMES

With more listings coming on the market than there are buyers, it is time to get serious about competing in a buyers market.  Over the last several years, anyone who wanted to sell a house just needed to put a “For Sale” sign in their front yard, and buyers would come in droves.  What a change of events during 2006. So, what can a home seller do to get their home sold for the most money in the least amount of time?  Here are a few tips:

1. Get your home in tip-top shape.  Some of the small tasks can go a long way to getting your home noticed. Start on the outside of your home.  Take a look at the curb appeal from a different perspective. Do you need a fresh coat of paint, do windows need rescreening, could you use new shrubs or mulch? All of these items are low cost fixes that will dramatically improve the look of your home.

1. Clean & declutter.  You will be amazed at how many home sellers don’t do the basic household chores.  This is one step that, if you do it, will give you a major leg up on the competition. Remember to clean ceiling fans and vents, and get rid of piles of paper and old magazines. The fewer knick-knacks you have around the better your home will show.  If you need a fresh coat of paint, do it. If you know you need new carpeting, do it.  Offering a decorating allowance does not cut it. Most buyers cannot look past the work that needs to be done. Also remember to organize cupboards and closets.  Buyers will look inside all of them.  Your going to have to get organized before you move, you may as well do it before you have showings. Click here for a list of 25 Easy Fix-Ups.

1. Hire a great real estate agent.  The market has been flooded with new agents over the past several years, most of them looking to make a quick buck, and offering very little service.  Before you hire a real estate agent there are a number of essential question you should ask. Make sure you are in the best possible position from the beginning.  A good agent is going to know how to price your home right the first time.

1. Be open to offering buyer incentives. In a buyers market, a seller will most likely be looking at offers with terms that favor the buyer. You will most likely offer closing assistance, up to 5% of the contract price. You will more than likely need to be flexible with the settlement date. Expect the buyer to have a home inspection, or have a home sale contingency.

1. Be open to offering agent incentives.  If you are not getting showings on your home, you will probably resolve the problem by offering agent incentives, ie higher commission and/or a selling bonus.  When you are looking at comparative properties that have sold in your home, take note of any agent incentives. This is an area in which many home sellers don’t realize they are competing for agents to bring buyers. With so much inventory on the market, it is easy for a prospective listing to go unnoticed. Do something to get their attention.

SEARCH FOR HOMES