Waldorf, MD

I firmly believe that getting a home inspection when buying a home in Charles County or Waldorf is a MUST DO sort of thing. Home inspectors are worth their weight in gold when they catch a huge flaw in a property that nobody else noticed.

Sometimes however, they seem to get a little over-zealous. On a recent home inspection, an inspector informed the buyer that he found "major structural problems" in the foundation of the home and that repairs would cost big bucks. The buyer became nervous and the seller offered to pay a structural engineer to look at the home.

The structural engineer decided that the home was just fine, and there was no risk of the home being "structurally unsound". What the inspector saw was normal settling, and there was no cause for concern.

Of course, this went over like a lead balloon to the buyer. They were certain the engineer was going to find major problems, and the buyer has the right to walk away from the contract for any reason related to the inspection. Who knows if it was a lack of faith in the engineer, or too much faith in the inspector, but the contract was rescinded. This brings up a good lesson:

Inspectors are not necessarily structural engineers. they can point out an area of concern, but unless they are also licensed structural engineers, they may not be the best source to advise a buyer on the structural integrity of a home.

It would seem that it makes a whole lot more sense to recommend a structural engineer be hired to assess the situation rather than panic people. In this case, it cost the seller $800 (for the structral engineer to inspect) and the contract on their home over an issue that turned out to not be a structural concern. The buyer was within their right, and the concern is understandable, but it stinks when you as a seller offer to come out of your pocket to ensure the quality of the home.

~Jonathan Benya- Realtor
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000
301-653-8116
Southern Maryland Real Estate Blog

FHA and Conventional Loan guidelines were revised this morning, this time to prevent the so-called "buy and bail" folks trying to escape their overpriced mortgages.

Haven't heard of a "buy and bail" scenario? It goes something like this:

Until now, people who decided to rent their home instead of sell it were allowed to claim 75% of the rent on their current property as "income", which they could use as income towards the purchase of another home.

There have been people exploiting that to avoid selling their home, and then letting their previous home fall to foreclosure, leaving their lender holding the bag. (This sort of thing is also known as "mortgage fraud" in certain circles...)

The new guidelines are designed to prevent people from doing that. You can still qualify to use that rental income as revenue towards purchasing another home, but only if you have at least 25% equity in your previous home.

For people with rental properties as investments, this shouldn't affect you much. What this does affect is people looking to move their primary residence and don't have enough equity to sell. The concept of renting your home until the market gets better may no longer be a possibility.

If you have any questions about how this decision may affect you, please feel free to give me a call!

~Jonathan Benya- Realtor
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000
301-653-8116
Southern Maryland Real Estate Blog

Why are so many homes sitting on the Southern Maryland real estate market without a buyer? The answer is simple: The sellers are cat juggling!

Remember the Steve Martin movie "The Jerk"? Father Carlos Las Vegas De Cordoba shows Navin Johnson (Martin) an absurd video clip of cat juggling and Martin proceeds to cut a big fat check to Father Carlos to combat the evil cat jugglers. It's funny because the idea of cat juggling is absurd, and paying a church to stop it is even dumber.

Overpricing your home in a buyers market is a lot like cat juggling. It's completely absurd, and the only people who would even consider buying your home would be a true sucker. Even placing your home on the market for 2-3% more than the market comparisons show would be dangerous ground.

Think like your buyer: With two identical homes on the market, why would you write an offer on the higher priced home? You wouldn't, and neither would any other buyer with two cents worth of common sense. You'd write the offer on the lower priced home, because there's less hassle.

At some point sellers realize that nobody is really as stupid as Navin Johnson, and cat juggling makes absolutely no sense. In the meantime, buyers are forced to look at a lot of overpriced junk in order to find the right home, and cat jugglers are left fuming that their home hasn't sold.

~Jonathan Benya- Realtor
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000
301-653-8116
Southern Maryland Real Estate Blog

There seems to be a common misconception about buying a real estate foreclosure in Charles County. Banks are trying to get as much money as possible for the real estate they own, but they typically demand that their homes are sold "as-is" (What Does "as-is" mean in real estate?).

This does NOT mean that you should skip the home inspection! Quite the contrary, if you're trying to buy a primary residence, the inspection is absolutely crucial!

Don't believe me? Well, would you buy a car without knowing it runs? Buying a home without an inspection is the same concept. Does the furnace still work? Have the pipes burst? Have termites eaten through the walls? You just don't know without that inspection! I can see the marketing slogan now:

Lovely home with rustic living (furnace is shot, bring blankets), In-ground pool possible (Basement is flooded), and lots of natural light (Termites were hungry)!

Danger Will Robinson, Danger!

All you wanted was a great deal, and instead you end up with a money pit. While the inspection won't fix the problems, you are saving yourself from possible FINANCIAL DISASTER by knowing what sort of problems (if any) may exist. When it comes time to write a contract to purchase a foreclosure, bear this in mind:

1. The home is being sold as-is, and
2. The bank is not likely to do any repairs on the home, so....
3. The inspection is for "informational purposes only" (That's Legalese for: Don't even THINK of asking for repairs!)

If you want to keep yourself protected, make sure that any inspection being done for "informational purposes only" has a "walkaway" clause. This means that if you find something wrong with the inspection that you don't like, you can cancel the contract, get your deposit back, and find another property that suits you.

Banks are doing everything they can to relieve themselves of liability. As a buyer, you need to make sure that you and your Realtor are keeping your financial interests protected!

Got questions about buying a foreclosure? Give me a call!

~Jonathan Benya
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000
301-653-8116
Southern Maryland Real Estate Blog

Trying to buy one of the multiple foreclosures (REO, or Real Estate Owned) for sale in Waldorf, MD or Charles County MD? Most folks who are trying to buy a foreclosure are looking for a great deal, and while there are some deals to be had, it seems like there is just as much overpriced junk that needs to be reduced in order to sell.

In comes the concept of the low-ball offer. Low-balling is where you offer considerably less than the asking price on a home. It's easy enough to write (You always have the right to offer as much as you think is fair), but writing the offer and getting the bank to accept the offer are two very different things!

So how do you convince the banks to accept less than they want for a foreclosure? Well, there's a couple of ways to increase your chances of getting that offer accepted.

With a buyers market, the more enticing the TERMS of the contract are, the better your chances of getting the deal to closing. Think about what perks you have to offer in the contract. Here's an example of things that can make your offer more attractive:

1. Offer a quick closing- The less time the bank has to hold the property, the better off they are.
2. Don't request repairs- Banks are selling as is, and with a low-ball offer, structure it such that you are contingent upon an INSPECTION WITH WALK-AWAY rather than repairs
3. Avoid contingencies- If you want the banks to consider a low-ball offer, there has to be a good reason. Bogging down a contract with multiple contingencies is a good way to get the offer rejected.
4. Offer cash- With a cash offer, there's no risk of loans not being accepted, which can be very appealing to the bank.
5. Look for homes with "market rot"- Homes that have been up on the market for more than 150 days are good targets because the bank has been holding them for longer than they would like. They probably need to lower the price, and are more likely to take an offer.
6. Write a letter- Sounds cheezy, but outlining why you're offering this sort of price can help the bank make sense of the offer. Every little bit helps, and I've seen things like this actually make a big difference.

Related Posts:

What Does "AS-IS" Mean?
Waldorf, MD Foreclosure Update for August, 2008
Foreclosure Buying Tips Part 1
Foreclosure Buying Tips Part 2
Foreclosure Buying Tips Part 3

~Jonathan Benya
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000
301-653-8116
Southern Maryland Real Estate Blog