Nottingham, MD

Buy That House: Are You Getting a Good Deal?

3 years ago the real estate market was in very good condition. Prices were rising at extraordinary rates. Interest rates were low, so these properties were still affordable even at higher prices. Lots of people were selling and lots of people were buying. Many people were skeptical about this boom in prices, referring to it as a bubble and asking when it would burst. Indeed, it did burst. Prices began to come down. While prices were coming down, many people were reluctant to believe that values were coming down as well. What used to be an appreciating product in most markets was now a depreciating product in most markets. Real estate was losing value almost at the rate that an automobile would lose value. The slow acknowledgement of this changed market was to a large degree for practical purposes. Many buyers had used 100% financing and could not afford to sell at the lower prices. Many buyers had used adjustable rate, interest only, and other financing methods designed to keep their payments low, but with all intentions of either refinancing or selling in a few years as the value of their properties increased. No matter how these owners resisted, they could not stop the receding tide; prices and values were coming down. There were and there still are a few buyers who have dared to come out into this new market. They believe that it is a good time, if not an excellent time to buy. Their philosophy is based on the simple adage "Buy low, Sell high". But low and high are relative terms. If the average value of particular homes in a given neighborhood were $400,000 3 years ago and today those same homes average $325,000, then absolutely they are much lower now than three years ago. But are they a good deal? Typically value is set by what willing buyers are willing to pay to willing sellers for their product. In the recent real estate market, it could be argued that many of the sellers have been reluctant sellers, forced to sell because of affordability concerns. However, there have been so many of this type of seller, that they have become the norm. If a good deal were defined as a purchase which provided immediate equity, a bad deal one which provided negative equity and a normal deal as one that provides zero immediate equity, then one would need to know where their purchase fell relative to this basic scale. In the above example, if a buyer purchased a home for $325,000 today, then it would be a normal deal, regardless of the fact that it is substantially lower than 3 years ago. This buyer could not turn around and sell the same house for a higher amount nor could he get any equity out of it since there would be none. The price of real estate typically will appreciate over time, so it is natural to think that if prices had been established up to a certain number, that anything lower and in the future would be a good deal. Over the long term this may be the case, however over a short term this may not be true. And the short term may be the more critical determinant, because, in general, people do not stay in the same house for a long period of time, but may actually sell about every 5 years. It should also be remembered that in the recent rapid appreciation period of 3 years ago that most real estate pundits believed that the value of real estate was inflated so one should be careful about comparing a deal of today to an inflated figure of yesterday.

Contact Ron Trzcinski at 410-935-5844 for more information.

Buy That House: Lenders are Knocking Down My Door

What came first the credit squeeze or the severe decrease in people looking for credit?

I have a constant flow of lenders beating on my door; begging me for referrals to my Buyers.

Some tell me that they have 100% financing available; one told me that his office would buy down the rate for the first year by 1% without charging it elsewhere within the loan.

I would love to give them my business if I had more to give.

. . . but where are all of the Buyers, especially those who supposedly are having trouble getting financing? Are they waiting for the media to tell them that it is okay to get back into the game? (Fat chance of that happening.)

Closing Assistance Programs are offering $10,000 where the debt would actually be forgiven within a few short years.

I have very nice listings which are very competitively priced along with access to several others which the rest of the Realtors are aggressively marketing.

. . . so where are all of the Buyers? Are they waiting for the government to pass bailout legislation? (Right; and there truly is a Santa Claus.)

There are Sellers, including Builders, who are very anxious to put their homes on the market, but they do not see much movement of the current inventory, so they are holding back.

. . . and why are the Buyers waiting, when the market is at optimal condition for them? Are they waiting for the new Administration and legislature to pass a stimulus plan? (Don't hold your breath.)

So is there or is there not a credit crunch? With so many lenders calling on my office, I would say that there is not, but with so few people seeking credit, perhaps a problem has been created. I can see why investors are not willing to put their money into mortgage backed securities. It is not just because of a few foreclosures, but just as much and maybe more so because no one is taking out loans in the first place.

Be optimistic; my lender contacts are.

Contact Ron Trzcinski at 410-935-5844 for more information.

BRAC Relocation

Are you a part of the Defense Base Closure and Realignment (BRAC)?

If you are part of the many from Fort Monmouth, New Jersey who are being impacted by that base's closure and who are being relocated to Maryland to either Aberdeen Proving Ground or to Fort Meade, then I can assist you in your relocation efforts.

As a seasoned real estate professional, who is very familiar with the Maryland real estate market, I can provide you with valuable information regarding housing to buy or to rent, loans including VA and FHA which require very little down payment if any, neighborhoods, schools, and the many important facts that you will need to know in order to make a smooth transition.

My affiliation with one of the area's top realty firms, ExecuHome Realty, and my association with the Maryland Association of Realtors, the Greater Baltimore Board of Realtors, and the National Association of Realtors provides me with the tools necessary to help you at this major time in your life.

Contact Ron Trzcinski at 410-935-5844 for more information.

SELL THAT HOUSE : AS IS?

Home sold strictly as is; owner will make no repairs; home inspection for informational purposes only . . . CLICK . . . If I am an investor, then there is more chance that I will look at these houses, because I am expecting to need to do work and I am prepared to handle the work, however, if I am an average home buyer, then I am not necessarily looking for a home which needs work. Now, I realize that "as is" does not by itself mean that a house needs work, but it has a strong connotation that is what is meant. Perhaps you have read some of these remarks about a property:

• Everything is new; sold strictly as is;
• Home Warranty; sold strictly as is;
• Home is in good condition; owner is not capable of making repairs; sold strictly as is;
• . . .

What does this statement mean: "home inspection for informational purposes only"? For whose information? The buyer's, the seller's, the agent's, the bank's, the appraiser's, or . . .? When information exists, then it may need to be acted upon. The inspection results become known material facts that should be disclosed. Some agents will say that they do not want to know the results of an inspection, because they would need to disclose them. Too bad, you must disclose material facts that you know or should have known. When you are standing in front of the judge and he asks if a home inspection was done and you say yes and then he asks why you did not disclose what was in the report and you reply that you did not want to know what was in the report so you did not look at it, I don't think he will look upon that response too favorably. So if a buyer has a home inspection done and he does not like what he sees, then can he get out of the contract? Of course, the answer to this is in the wording of the contract, but what is the intention of the agent when they put this statement in the listing? It is important to clarify this upfront so that the buyer does not get stuck with a house that's "as is" condition is more than he can handle.

A home warranty does not cover prior damage, so this is not a legitimate excuse for selling a house "as is". Certainly, this statement alone does not mean that any given condition was a problem prior to the home warranty, but it does not help.

The owner states in his gruff voice "there aint nothin wrong with this house, I fixed everthing myself; I aint makin no repairs". Sheepishly the agent says "okay, I'll list it 'as is' " When home inspections are done on these houses, almost invariably something is found to be wrong, and perhaps surprising to the agent is that the owner will actually take care of it.

What do you mean that the owner is not capable of taking care of any repairs? If he is not a licensed contractor, then I probably do not want him to do the repairs anyway. Is it a question of money? Usually a contractor can be found who will accept payment at settlement if it is not too far away.

If you want to sell a house then use statements and remarks that will entice potential buyers to want to look at the house, rather than comments which will discourage them.

Contact Ron Trzcinski at 410-935-5844 for more information.

SELL THAT HOUSE: PICTURES ARE IMPORTANT

It used to be, and not too long ago, that getting pictures on a listing in the MLS would take a while. You would have to wait for someone to come out and take the picture. All too frequently this would be a blurry picture from a drive-by photo usually taken at the worst time of day and sometimes on the worst day, like during a snow storm, when the photographer was off from his regular job.

But now when every digital device that we own can take a photo and when we can quickly send it to the MLS, those dark days are a thing of the past . . . or are they. Now when I see a listing without a photo, I start to think that the listing agent is trying to hide something. How can you be in this business and not have the means to take a picture of your listing? You should be able to do this with your cell phone at the very least. Who hires these agents anyway?

The first two to three weeks are the most critical time in selling a house, yet there are still agents who have a listing for that time period with no photos. Much of how a person shops for a home is based upon emotion and if there is no photo then there is no emotion, but rather a click to the next listing.

On the other hand, there is the poor photo or the useless photo.

• You couldn't move the trash cans before taking the shot; well, at least, we know that they have trash pick up at this house;
• The basic bathroom shot: What are you trying to tell us? That the house has indoor plumbing?
• It might be okay to have the primary photo be an inside view of some spectacular room, but then to have no exterior photo is insufficient;
• So you are not the best photographer and your photo comes out a bit too dark, perhaps you could invest a few dollars in a photo touch-up program. I have taken photos from some listings that I have seen and used a simple program to brighten the photos enough just so that I could tell what the photo actually was.

I guess that you could just tell everyone that the house is beautiful, but I doubt that they will get to your remarks if you don't entice them with a decent photo at the start.

Contact Ron Trzcinski at 410-935-5844 for more information.