Pat Savani

There has been a paradigm shift in the delivery of daily news. Recent articles have been posted on the web regarding the "Demise of the Newspaper" and how that may be the end of investigative journalism; that four major newspaper companies that include the Los Angeles Times, Chicago Tribune and The Philadelphia Inquirer have sought Chapter 11 bankruptcy protection in recent months.

News is not dead but the vehicle it is delivered in has changed. A shelf life of a day isn't long enough. Dated information isn't good enough. Newspapers aren't in the news paper business, they are in the business of reporting the news.

Using the daily newspaper as a marketing vehicle has also changed. If you want current, timely access to products and pricing would you look in a newspaper or on the Internet?

There was a time when a seller putting their home for sale looked to see if their broker advertised the property in the paper. Now if it is in the paper, the seller is probably the only one looking to see if the ad is there. It's called seller appeasement advertising. It really doesn't attract any buyer inquiries but it makes the seller feel good to see the picture in the paper.

The real estate industry struggled with changing their paradigm regarding the publishing data relative to properties for sale. The concern was that the control of the data made the industry relevant. The industry found after releasing the data that they were not in the data business. Allowing the data to be posted everywhere did not minimize the role a real estate professional played it actually raised the bar on the quality and the delivery of the data provided. Data does not create value. The interpretation of data, use the data, delivery of the data, and successfully building the relationship with and between the parties utilizing the data is the value the real estate professional brings to a transaction.

The news industry will need to identify the demand for and the correct vehicle for the delivery of daily news in print. Their challenge is re-inventing themselves and remaining relevant and that is what all businesses struggle with everyday.

In our Annapolis office we have been using this to successfully negotiate a win win solution for our buyers and sellers.

In this example the buyer pays $45,000 more for the house but pays $15.00 less in payment than their lower offer and saves more than $50,000 in interest over the life of the loan.

Don't let the negotiations fail use a buy down to reduce the buyer's rate by 1%.

Consider this example. The buyers like the house and makes an offer that achieves their max monthly P and I payment of $2191.67. The seller won't go that low. They can't agree on price, but they can still make the transaction happen with a buy down.

Things to consider-

1. Are the parties motivated to make the transaction work?

2. Does the buyer sees the value in the property, but is more concerned with the monthly cost than the total sales price

3. The seller is willing to pay the points necessary to buy the rate down to achieve the buyer's monthly payment target.

Example:

List Price $450,000

Financing - FHA loan $434,250 at 5.5% fixed for 30 years, payment P&I* would be $2456.62

Buyer offers:

$400,000 with a FHA loan of 386,000 at 5.5% fixed for 30 years, payment P&I would be $2191.67

The buyer is not sure they can afford to pay the $450,000 price. However, they like property and can see the value.

The seller has some flexibility but $400,000 is too below market.

Seller counters with $445,000 and 3 points ($12,882.75) to buy down the rate.

The buyer with a FHA loan of $429,425 at 4.5% fixed for 30 years, payment P&I $2175.83

The buyer pays $15.00 less in payment and saves more than $50,000 in interest over the life of the loan.

This creative approach has saved multiple transactions this year and the buyers and seller have appreciated the expertise the agents brought to the transaction to make it win win for their cleints!

(P&I* principal and interest on the loan)

Multiple contracts are happening more as the Anne Arundel County spring market heats up. Here are some tips to have your offer viewed favorably.

1. An offer is more than just sales price, try to consider all the terms of your offer from the seller's vantage point. Settlement date, financing, inclusions, inspections, home warranties, repairs, seller concessions and the earnest money deposit are all part of an offer.
2. When competing I ask the buyer to consider making an offer at terms where they will have no regrets if their offer is unsuccessful. Nothing is worse than the frustration of loosing the house at terms that you would have offered given a second chance.
3. When each party, buyer and seller, feel that it's a fair negotiation a deal is usually struck. Most folks don't accept an offer where they feel totally beat up. Everyone needs a win even if it is a small won.
4. Consider including a deadline for the seller's response. This creates some urgency and does not allow your offer to be used as a negotiation tool to generate offers from others.
5. Be sure to be pre-qualified by a mortgage officer and if possible pre-approved, it will put your offer in a more favorable light.
6. If you have a home to sell put it on the market contingent on you finding your home of choice. When you are a non-contingent buyer it improves your negotiating position.

With housing affordability up and lots of well priced inventory it's great time to buy. Good luck!

Pending Sales for the region by week

• These graphs are published by MRIS the regional multiple listing service, servicing Maryland, Washington DC, Northern VA and Southern PA
• The graph shows February sales continuing to out pace sales for the same time period in 2008. As buyers recognize the benefit of lower interest rates and increased affordability.
• The Anne Arundel County graph below shows the number of new listings taken is down. The reduction of inventory is balancing supply and demand and is positively affecting the increased sales pace.
• The market continues to be price sensitive and sellers priced at market value are the first to sell.

New Listings for the Month of January for Anne Arundel County

$8000.00 Tax Credit

Opportunity for first time buyer in the new tax $8000 credit!

Visit http://www.federalhousingtaxcredit.com/ to view all the particulars.
Just a few points of interest:

•· A parent homeowner, buying a home with a first time home buyer child may qualify for the credit.

•· Owning a rental property or vacation home and not a primary residence in that last 3 years may qualify you for receiving the credit.

•· After your purchase you may be able to decrease your withholding because of the tax credit to increase your take home pay to benefit from the tax credit on as more immediate basis for that year.

•· This credit is not a loan it is an actual credit

Visit the website posted for all the details to see if you qualify!