Real Estate – 2018


Real Estate – 2018

The world of real estate has been making a slow, but steady come back since the real estate crash of 2008.  This year will be no different, however, the increases will be more dramatic.

Real Estate Market Trend is Strong

The National Association of REALTORS® is predicting home prices to rise 5.5% during 2018.  The main reason for the increase is the continued low supply of homes on the market.

In addition to the increase in home prices, home mortgage interest rates are expected to rise to 5.0% by the end of 2018.

By today’s figures, a home that sells for $300,00 with an interest rate of 4.0% would result in a P&I (principle and interest) of $1,432.

If you factor in the increase of home prices of 5.5% and the increase of mortgage interest rates to 5.0%, that same home would have a P&I of $1,797.

If you are thinking of buying or selling, talk to a real estate professional – talk to a REALTOR® who can give you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to text or call me at 301-712-8808 or email me at RolandLow1@gmail.com.

Roland

Advertisements

Foreclosure Red Flags: What to Watch for When Buying a Foreclosed Home


Foreclosure Red Flags: What to Watch for When Buying a Foreclosed Home

 All too often, buyers have the impression that buying a foreclosed property will be ‘dirt cheap’.  But that is hardly the case for the average home buyer.  Generally speaking, a foreclosed property will come with a lot of repairs – and yes, expenses with the purchase of the property.

Here are some red flags that potential home buyers should be aware of when it comes to buying a foreclosed property.

Most foreclosed properties come with an addendum for an ‘as-is’ sale.  This is a legalese way of saying “buyer beware.”   As long as you, as the buyer, know what you are getting into, it may be worth your while; but if not, you may wind up with extensive repairs to the property you now own.

I had a buyer who wanted to put in an offer on a foreclosed property a few years ago.  The buyer was a ‘flipper’ who most likely would have leveled the house and rebuilt on the property.  The condition of the house was not really important to him.  The septic system was non-functional, and normally would require a new septic system.  This would be a cash offer and he was ready to move.

However, when I looked into the public records I found that the septic system on the property would not pass code and that the size of the lot would not allow him to install a new septic system.  This lot will be owned by the bank until public sewer and water came through or they sold to a neighbor as an empty lot.

When a foreclosure is being sold, the seller will sell ‘as-is’ and the buyer will be on the short end of the straw.

In another situation, a foreclosed property has what is known as the “falling down factor”.  If you have ever looked at a foreclosed property, most of them are in total disrepair.  The homeowners either do not care or do not have the funds to maintain the property and it will most likely be in serious need of repair.  As long as you have a clear picture of the condition of the property and have either the know-how or means to repair it, you may be OK, but that is not the worst-case scenario.

There is also another risk that buyers of any property need to be aware of, but especially a foreclosed property and that is the hidden lien.  Home owners could have made purchases that would result in a lien being placed on the property.  In the vast majority of cases, liens are identified during the closing process, but if they are not, or the lien becomes known after the closing, the lien travels with the property, not the homeowner.  So, if an undiscovered-lien surfaces after the closing, that lien is now the responsibility of the new home owner.

If you are thinking of buying or selling talk to a real estate professional – talk to a REALTOR® – who can give you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to text or call me at 301-712-8808 or email me at RolandLow1@gmail.com.

Roland

Home Upgrades and Your Taxes – What You Need to Know


Home Upgrades and Your Taxes – What You Need to Know

The first of the year always brings about a lot of ways to make improvements in our lives.  Whether it is to eat healthier; lose weight; reduce debt or to remodel your home it is important to understand what is involved to make those things happen.  If you are planning on making home improvements –especially if you are thinking of selling your home – that you need to be aware of.

In order to take advantage of tax breaks associate with home renovations, it’s important to know the difference between a repair and an improvement. The IRS defines a repair as anything that is necessary to keep your home in good condition, but doesn’t necessarily add to the value of your house.  An improvement is anything that prolongs the useful life of your home and has the potential to increase the resale value of your home.  If you want to take advantage of the available tax perks, your projects need to fall under the home improvement category.

You can learn more about the difference between repairs and improvement on IRS Publication 523.  It is always a good idea to talk to your tax professional regarding your particular tax situation.

If you are thinking of buying or selling talk to a real estate professional – talk to a REALTOR® – who can give you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to text or call me at  301-712-8808 or email me at RolandLow1@gmail.com.

Roland

Millennials’ and Home Ownership


Millennials’ and Home Ownership

Millennials are the next wave of Americans to enter the homeownership field.  And a lot depends on how they perceive homeownership.

If you look at various reports about millennials, you will read everything from they are not interested in owning a home to they simply cannot afford homes today.  In many ways both of these statements are true, yet we need to look at the history of homeownership to understand what is going on in the world of real estate.

The group of people we know as ‘millennials’ or generation ‘y’ was born somewhere between 1980 – 1995 to 2000.  There is no precise date of when millennials were born, but what is important is the period that they grew up in.

If you think back to when this age group was coming into their own, the real estate market was unlike it had ever seen.  Prior to the real estate crash of 2008, home prices were increasing at a staggering rate.  People could buy homes and turn around and sell then in a relatively short period of time and make a fortune.

Because of the belief that home owners could not lose, mortgage companies had no problem giving out mortgages with what were called “no-doc loans”.  “No-doc loans” did not require any supporting documentation of employment; savings, ability to pay, etc.  Couple that with the teaser mortgage interest rates and we had a real estate market out of control.  The straw that broke the camel’s back occurred when mortgage companies were selling the mortgages as sound bond mortgages, when in fact the bonds had little value to them.  Like a tidal wave rushing to shore, the real estate market came crashing down.

This is the real estate market that millennials’ grew up in and has tainted their view of home ownership.  Yet study after study clearly shows that home ownership is a high priority to that age group.  Their focus is on completing education and paying down debts before taking on a mortgage.  One of the other misconceptions is that the mortgage industry has been preaching that you need 20% down in order to buy a house. May be a good practice, but is not true.

Here is what I see as the future of the real estate market.  There is a large group of millennials who are pent-up demand for home ownership. As these potential buyers begin to slide into the market, there will be little supply of homes available which will drive the price of homes up.  As the price of homes increases, more and more sellers will list their homes resulting in a robust housing market for the next few years.  It will be a slow, but steady growth.

If you are thinking of buying or selling, talk to a real estate professional – talk to a REALTOR® who can give you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to text or call me at 301-712-8808 or email me at RolandLow1@gmail.com.

Roland

2018 FHA Loan Limits – Maryland


2018 FHA Loan Limits – Maryland

The FHA just announced the loan limits for FHA loans for 2018. The limits vary by state and by county so it is important to talk to a REALTOR® or mortgage office to know the limit for your location.

In Maryland:

Carroll County                         $517,500                     (same as 2017)

Frederick County                     $679,650                     up from $636.150

Washington County                $453,100                     up from $275,665

If you have questions for any other county in Maryland, please feel free to contact me.

If you are looking to buy or sell, talk to a real estate professional – talk to a REALTOR® – who can give you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to email me at RolandLow1@gmail.com or text or call me at 301-712-8808.

Roland

What the Tax Bill May Mean for Home Owners / Buyers


What the Tax Bill May Mean for Home Owners / Buyers

 In a highly unusual move, the National Association of REALTORS® has come out with a position on the tax bills currently in Congress.  The NAR, normally a non-political association, has come out strongly opposed to the bills in both the House and the Senate, and here are the reasons why.

  • According to the NAR’s research estimates, home values will drop 10% on average during the first few years. If this bill becomes law, the decline in home values, especially for recent home buyers, may find themselves underwater with their mortgage.
  • The one trillion dollar increase in the national debt that stems from the tax cuts could cause interest rates to increase, “exacerbating the negative aspects of the tax bill for current and prospective homeowners.”
  • As of the date of the National Association of REALTORS® report, the house version of the bill will eliminate the deduction for home equity loans, but will retain deductions for the primary residence. The Senate bill will eliminate the mortgage interest rates completely. The deductions will be allowed for investment properties for both the mortgage and any home equity loans.
  • Deductions for property taxes will be limited; however, the deductions for investment properties will not be limited.

The real estate market has made significate gains in the last few years as it recovers from the 2008 collapse of the economy and more precisely the real estate market.  Nevertheless, the real estate market still has a way to go for substantial growth.  The National Association of REALTORS® and this writter does not believe the bill before the House or the Senate will do nothing but harm the economy and the real estate market.

Roland

Advice for Home Sellers


Advice for Home Sellers

 Selling your home can be one of the most difficult tasks most people will undertake.  It is a complicated financial, marketing, negotiating ordeal that few people are prepared to undertake.  Even with the help of an experienced real estate agent, the ordeal can seem overwhelming.

Let me share some advice that will hopefully help you in this process.

First and foremost – and I cannot stress this enough – you must find a REALTOR® who can provide you with the experience and expertise to handle this daunting task.  All too often, potential sellers reach out to an agent they met at the open house of the property they want to buy.  The problem is that the agent at the open house is there to represent the sellers’ interests, not yours.  The other scenario is that the agent you select is your Aunt Betty Ann’s cousin twice removed whom you have never met and it was just expected that you would use this agent.  Select your own agent who will give you the professional advice you need to maximize the selling price of your home and be on top of things every step of the way.

It is important that agents and clients have a clear understanding of what communications need to take place and how they would like to communicate.  I had some clients who wanted me to communicate with text messages to each of them. They would then talk amongst themselves and the wife would call me with an answer or questions. It worked great, but I needed to know that upfront.  I learned this by asking them during our initial meeting how we wanted to communicate.

The second important issue in selling your home is determining the selling price.  All too often, agents succumb to listing the property for the amount the sellers want to sell it for and not the actual market price.  As an agent, I have an obligation to provide the accurate price that the house will most likely sell for.  In this business over pricing your home is the kiss of death.  Don’t do it.  Homes that linger on the market have a much greater chance of not selling or for a price lower that what you could originally obtained.  Price it right.

The third issue is preparing your home to sell.  This is one of the most difficult areas for real estate agents.  I previewed a very expensive home several years ago that the kitchen table had the morning breakfast dishes left.  The family obviously left in a hurry to get out the door that day, but what I remember about that house is not the fabulous lay out, but rather the dirty dishes left on the table.

In this area, it is important that agents are afforded the right to critique the presentation of the house.  If there are things that need to be decluttered or repaired, be sure to do that.  Unfortunately, at that point in a sellers’ life they are probably focusing on the home they are buying and not on the home they want to sell.

If you are thinking of buying or selling talk to a real estate professional – talk to a REALTOR® – who can give you the information you need to make an informed decision.

As always, if I can help with any of your real estate needs, please feel free to text or call me at  301-712-8808 or email me at RolandLow1@gmail.com.

Roland

 

 

 

 

Whether you are a first time home buyer, moving up, scaling down or an investor in real estate, this blog has something for you!

%d bloggers like this: