Real Estate Information

This afternoon I attended a very informative lunch meeting organized by C & F Mortgage in Waldorf. The information provided was very current to our market place, but most of all, insightful as to where the transactions of buying and selling a home are headed in the near future.

We have already seen a record number of banks fail this past month, and it has been predicted that even more banks will go by the way side.  Interest rates will go up as a result of the Government having stopped buying Mortgage Backed Securities at the end of last year, and the oversupply of debt. Also there is every indication that taxes will continue to rise. It was suggested the rates will rise to 6% and 7%.

Many more foreclosures are coming. The percentage of defaults currently have largely been sub-prime. In 2010 we will begin to see more prime mortgage defaults leading to Foreclosure.

Appraisal guidelines and loan program restrictions will become even tighter, and continue to force home values down. 

Nationally,the months of June and July have shown signs of a strengthening real estate market, while locally we remain down about 10% to last year.

It was also suggested that Fannie Mae and Freddie Mac will close up shop.

The current $8000 tax credit ends on November 30, 2009. While there are proposals in Congress to extend the tax credit and even increase it, without any further intervention, the real estate market will become more difficult for both buyers and sellers, and remain so for several years to come.

The FDIC has reported today, the number of problem U.S. banks and thrifts on an official watch-list rose sharply to 416 in the second quarter of 2009 from 305 in the prior quarter, as the industry recorded a $3.7 billion loss.

The previous quarter banks were reporting a profit of $7.6 Million in profits, but as the struggling housing market swung into the second quarter, profits also swung in a negative direction, primarily due to costs associated with rising levels of bad loans and falling asset values.

Analysts point to the continuing housing slump and a deterioration of commercial real estate, as well as losses in the new construction sector for this downturn. They continue to predict more banks to falter as we move forward.

Ironically, we still hear that our economy is improving.  Tell that to Middle America.  With hundreds of thousands of new foreclosures coming on the market, there seems to be no end in sight.

The industry did show some improvement. Net interest margins, or a bank's cost of funding, improved at a majority of institutions. Overall capital levels also improved. The industry reported that on average, the leverage capital ratio increased during the quarter to 8.25 percent from 8.02 percent.

The combined assets of "problem" institutions rose to $299.8 billion from $220 billion. Problem banks are troubled institutions whose regulatory rating has been downgraded due to issues related to liquidity, capital levels, or asset quality.

Prince George’s County Maryland has always been a great place to realize your American Dream, and the Prince George’s County Commissions are doing their part to make that dream a reality for more and more Americans. In an effort to combat two issues that the current housing crisis has cause;  Homebuyers not having enough money to qualify for a home, and the abundance of homes that have been foreclosed on that seem to be littering communities all over the County, a down payment assistance program has been developed for the purchase of Bank-owned properties.

The program offers down payment and closing cost assistance to purchase a vacant foreclosed home. Eligible homebuyers must be either first time homebuyers or cannot have owned a home in the previous three years.

There is an income requirement:

Applicants for DPCCA must have gross annual household incomes at or below 120% of the area median, adjusted for family size.  An income chart is provided below.

Effective Date : 4/27/2009
Median Family Income : 103,100.00 USD

Required Cash
50% or Below : 1,000.00 USD
60% -80% : 1,500.00 USD
%80 - %120 : 2,000.00 USD

This loan is a deferred payment, 0% interest. It must be your primary residence for at least 10 years, and you do not have to repay the loan if you stay in the home for 10 years or longer.

This program will provide down payment and closing cost assistance loans for purchases of vacant foreclosed properties in eligible zip-codes in Prince George’s County. The down payment and closing costs assistance will be higher for purchases in Target Areas or for Workforce Housing.

20607, 20608, 20705, 20710, 20715, 20716, 20720,20721, 20613, 20722, 20743, 20623, 20735, 20740, 20747, 20744, 20769, 20770, 20781, 20782, 20783, 20784, 20785, 20706, 20707, 20708, 20712, 20745, 20737, 20746, 20748, 20772, 20774.

Of the 33 zip codes above the following are considered Target Zip Codes:

20716, 20743, 20747, 20744, 20783, 20785, 20706, 20708, 20746, 20748, 20772, 20774

For more information on qualifying for this program, call DeHanas Real Estate Services at 301-870-1717 or 301-638-3443.

Prince George’s County Maryland has always been a great place to realize your American Dream, and the Prince George’s County Commissions are doing their part to make that dream a reality for more and more Americans. In an effort to combat two issues that the current housing crisis has cause;  Homebuyers not having enough money to qualify for a home, and the abundance of homes that have been foreclosed on that seem to be littering communities all over the County, a down payment assistance program has been developed for the purchase of Bank-owned properties.

The program offers down payment and closing cost assistance to purchase a vacant foreclosed home. Eligible homebuyers must be either first time homebuyers or cannot have owned a home in the previous three years.

There is an income requirement:

Applicants for DPCCA must have gross annual household incomes at or below 120% of the area median, adjusted for family size.  An income chart is provided below.

Effective Date : 4/27/2009
Median Family Income : 103,100.00 USD

Required Cash
50% or Below : 1,000.00 USD
60% -80% : 1,500.00 USD
%80 - %120 : 2,000.00 USD

This loan is a deferred payment, 0% interest. It must be your primary residence for at least 10 years, and you do not have to repay the loan if you stay in the home for 10 years or longer.

This program will provide down payment and closing cost assistance loans for purchases of vacant foreclosed properties in eligible zip-codes in Prince George’s County. The down payment and closing costs assistance will be higher for purchases in Target Areas or for Workforce Housing.

20607, 20608, 20705, 20710, 20715, 20716, 20720,20721, 20613, 20722, 20743, 20623, 20735, 20740, 20747, 20744, 20769, 20770, 20781, 20782, 20783, 20784, 20785, 20706, 20707, 20708, 20712, 20745, 20737, 20746, 20748, 20772, 20774.

Of the 33 zip codes above the following are considered Target Zip Codes:

20716, 20743, 20747, 20744, 20783, 20785, 20706, 20708, 20746, 20748, 20772, 20774

For more information on qualifying for this program, call DeHanas Real Estate Services at 301-870-1717 or 301-638-3443.

Good news for First time home buyers in Charles County, Maryland. Help has arrived in the form of a Settlement Expense Loan Program (DSELP).

The Charles County DSELP program has raised their limits so that more first time buyers are able to qualify..  You can now qualify if you make the following

 Family size              INCOME

1                                56,000

2                                64,000

3                                72,000

4                                80,000

5                                86,375

6                                92,800

This program is great for first time home buyers, that need help with there  3.5% FHA down payment. 

The Housing Authority administers the Settlement Expense Loan Program (SELP) for Charles County. The Program is sponsored by the Housing Commission of Charles County, with the support of the Charles County Commissioners. This Program provides direct financial assistance up to $6,000 to qualified low-and moderate income, first time home buyers, with settlement expenses associated with a home purchase in Charles County.

For more details and to see if you qualify, E-mail or call Leisa Brown with Bank of America Home Mortgage at 240-216-6261.

The real estate market outlook, based on results for the month of July 2009, continues to show signs of improvement in several areas, compared to last month as well as this time last year.  There were 103 homes sold in Charles County during the month of July compared to only 121 homes sold in June, which represents the only statistic moving in a negative direction. As a result the current overall inventory supply stands at 12.5 months. On a great note, pending sales are up over 50% compared to this time last year.

While home prices continued to decline, the rate of decline lessened to 9.02% over a year ago compared to a decline of nearly 17% in June. With the demand of lower priced homes on the rise, we saw the median price jump $10,000 to $275,000 over June, but still down over 8% from last year. One of the reasons for this strengthening is because the banks are becoming more rigid in the negotiations of offers for Bank-owned and short sale properties. They are not as quick to drop prices as they once were.  Although the Bank-owned inventory remains high, the lower priced homes appear to show strong signs of meeting the “bottom”.  Homes priced over the median price range are still feeling a “price squeeze” and we are continuing to see falling prices as a result.

As for properties in Foreclosure, Realtytrac.com reported 110 new properties in default for the month of July in Charles County. The rate of new defaults continues to out-pace the total monthly rate of sale, which is an ongoing trend. The total number of properties in Charles County that are in some state of foreclosure (including Bank-owned) has risen to 954 properties, compared to just 887 during the month of June.  The number of properties in a state of Foreclosure continues to rise, and all these numbers are not reflected in the MRIS Trends Report because the majority of these homes are not currently being actively sold at this time.  Also noteworthy are Realtytrac.com statistics showing a National increase of foreclosed properties increasing more than 9% over the previous 6 months.

Speaking of “Foreclosure”, as a Certified Distressed Property Expert (CDPE), my first responsibility to clients who are facing foreclosure is to council them on how to keep their home.  First and foremost a homeowner in this situation must keep communications with their bank open.  While the majority of my “distressed property” clients have not had much success with getting their mortgage companies to provide the needed modifications, it is certainly worth trying. Because of the outlook of the current housing market, and homes in default outpacing sales, many of the homeowners who choose to proceed with a short sale will undoubtedly still find themselves in Foreclosure.

Recently I sent out information to my clients asking them to contact their Congressmen and Senators to support the bill that provides every home buyer with a $15,000 tax credit.  You can go to www.Congress.org to find out who your local representative is. Please call in your support for this bill. It will go a long way towards the recovery of the housing market, and may very well turn falling home prices around over night, saving many homeowners from going to Foreclosure.

On a final note, the month of August is looking very strong. While this month is typically one of the slowest months of the year, we have seen increased buyer activity in all price points. Rental activity also continues to remain strong. 

If you know of anyone looking for a career in real estate, now is the time to begin one.  DeHanas Real Estate is looking for high quality people to help our clients buy, sell and rent homes.  A number of new systems we have recently instituted within our organization are producing a large volume of business.  In the past, we have found some of our best agents are former clients.  Please call us to discuss the opportunity at 301-870-1717.

I am a strong advocate of self-budgeting, frugal shopping and penny pinching, but it is amazing to me what mistakes some people will make in an effort to “save money”. You have heard the old adage “If you think an expert is expensive…wait until you hire an amateur”.  Truer words have never been spoken especially when it comes to For Sale By Owner situations.

Some people will say the “market is red hot” others will tell you it is “barely moving”. You hear it over and over again. And both statements are true depending on your price point. There becomes a point during the transition from buyers market to sellers market that going FSBO can be met with some success in some price points.  That time has come and gone in the Southern Maryland Market for the foreseeable future.

Full-time, real estate professionals have the advantage of knowing what is going on in the market place before anyone else, especially when they successfully complete as many home sale transactions as DeHanas Real Estate Services does. The market has become increasingly competitive for home sellers, and the buyers are being rewarded with, what were just a few years ago, unimaginable deals.

The trends go something like this: When a sellers market begins, prices start to climb and the buyers can expect to pay full price with some closing assistance, and a little flexibility on the terms of the contract. However as the demand for housing goes up, prices rise, closing assistance goes away and contract terms turn in favor of the seller. The ‘real deal’ can no longer be found in money savings, but in getting the house of choice. The trend works in reverse when it becomes a buyers market. Interestingly enough, the Southern Maryland market is experiencing both a buyers market and a sellers market, depending on the price point you are working within.

Multiple offers are back!  That’s right, there are homes for sale that are receiving 4 or more offers at the same time, something we have not seen in several years. A “For Sale By Owner” will most likely never see this “phenomenon”, and as a result, will not have the opportunity to have realized a higher net profit from the sale of their home. When a home seller is in a multiple offer situation, the price and terms become more favorable than it would had there not been competing offers.

Another interesting phenomenon is the way buyers are finding homes for sale.  It takes too much time and effort for a home buyer to drive around and look for homes for sale. A huge majority are finding their home of choice via the internet. The real estate agent who is the most tech-savvy has the best opportunity of creating a multiple offer situation, by their ability to get the information to the public the fastest.

So how should a seller go about finding the most aggressive real estate agents?  It is actually easier than you think.  Look in the papers, on TV, in homes magazines, on Internet search engines, referrals from friends, and yard signs.  If you see a trend of the same agent coming up over and over again, that is the agent who will offer you the best opportunity to increase your bottom line. You should also choose an agent who is in the business on a full time basis.

For a free market evaluation, and analysis of your home, call DeHanas Real Estate Services, expert home sales agents offering a full line of real estate services. 301-638-3443 or 301-870-1717. Or log onto our website at www.dehanas.com.

Like many other industries, real estate has become a war-zone of heavy competition. Agents find themselves contending with each other for an ever decreasing “piece of the pie”, while banks, insurance companies and relocation companies are also vying for their share of local markets.

Common catch-phrases become the ammunition used by many brokers to set themselves apart from their competitors. One such phrase is “full service”.  This term was once used to differentiate the “one-stop-shop” brokerage, from the brokerage who relied on the four “P’s”; Pitch a sign in the yard, Put it in the MLS, Place and ad in the paper, and Pray that it sells. But because it has been overused by companies who don’t provide services, it has lost its meaning.

It is no secret that today’s consumers want to be well represented, and they want the service that goes along with that representation. The challenge for many hardworking agents is showing how true-full-service helps the seller obtain a larger bottom line from the sale of their home.

A comprehensive marketing plan that is consumer driven, and not ego driven is the foundation of services a home seller should expect. And the agent should be able to show how their plan will increase the sellers bottom line. Does the agent have an interactive website? Can their web site be easily found in the Internet search engines? Are they able to capture potential buyer-leads? How? Will the agent provide brochures? Virtual tours? On-line photo albums? Does the agent advertise in a variety of homes publications? How far reaching is their advertising?  What other services does the agent have that might save time and money?

When all is said and done, there is a simple formula that will show the home seller that a brokerage providing a broad variety of services leads to a higher bottom line.  An agent should always know their “list price to sell price” ratio. This figure is the average of all of their listings selling price divided by the initial list price.  The higher the average the more likely the home seller will receive a larger bottom line; perhaps the single best service a “true full-service” brokerage can offer a home seller.

For a free home valuation, and to discuss your custom marketing plan provided by DeHanas Real Estate Services, call 301-638-3443 or 301-870-1717.

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 aforementioned 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 90 days. Don’t rely on the pricing opinion you received 6 months earlier, as it will have changed.

I would love to hear your feedback on this posting. Did you learn something new? Has it helped your thought process on the subject?  It would be my pleasure to provide you with a free CMA on your home.  Please e-mail me at don@DeHanas.com

Now here’s some news we can really get excited about!  Did you know every time a home is sold it generates an average of $63,000 of cash flow into the economy within the first year. It includes money spent on home décor, landscaping and lawn care, mortgage, title and real estate companies. So, why don’t we do for the real estate industry what has recently been proven successful to the auto industry.

There is a new $900 billion stimulus plan working in Congress.  One amendment, which is now a part of the proposed stimulus plan, includes a $15,000 tax credit for purchasing a home.  Georgia Senator, Johnny Isakson, is the main sponsor of this bill.

Specifically, Isakson’s amendment to the pending economic stimulus bill would provide a direct tax credit to any homebuyer who purchases any home. The amount of the tax credit would be $15,000 or 10 percent of the purchase price, whichever is less. Purchases must be made within one year of the legislations enactment, and the tax credit would not have to be repaid.

The amendment would allow taxpayers to claim the credit on their 2008 income tax return. It also seeks to prevent misuse by only allowing purchases of a principal residence and by recapturing the credit if the home is sold within two years of purchase.

Another provision in this bill addresses the current tax credit now in place for first time home purchasers. The bill will forgive repayment of the current tax credit.

Although nothing has been passed officially into law yet, here are a few of the key items of interest related to real estate in the stimulus bill:

• The $15,000 tax credit can be taken over one year or spread over two years.
• The $15,000 tax credit doesn’t have to be repaid.
• The $15,000 tax credit will apply for anyone who buys a home - not just first time home buyers.
• The $15,000 tax credit is a credit - not a deduction: meaning you will get the full $15,000.
• The $15,000 tax credit is the lesser of $15,000 or 10% of the purchase price of the home.
• The $15,000 tax credit will be allowed for homes that are bought within one year of if and when the bill is passed.

I am highly encouraging everyone I know to pick up the phone and call their Senator or Congressman.  It is very easy to get contact information. Go to www.Congress.org and enter your home’s zip code.  Then CALL your Senators and Congressmen and tell then you want them to support the proposed $15,000 tax credit for all home purchasers.