Category Archives: Benefits of using a REALTOR

What Does It Mean to Sell a Home “As-Is?”


What Does It Mean to Sell a Home “As-Is?”

 All too often I see homes listed as being sold “as is”.  There are certainly pros and cons of listing a home as-is.  And buyers and sellers need to know what that truly means.

I have seen listings that proclaim this property is “turn key” ready or “shows well”.  And then it indicates that the property is “as-is”. The seller’s version of an as-is property is that the seller does not intend to make any repairs to the property. This may or may not be a wise move. Some repairs are relatively simple and certainly should not get in the way of closing a deal.

The buyer’s version of an as-is property is that there must be something wrong with the property – and they are most likely correct.  It also tells the buyer that there is something wrong with the property and I’m not telling you (buyer) about it.  It takes us back to the days of “caveat emptor” (let the buyer beware).

But sellers and buyers need to understand that by simply checking off a box that says, “as-is” it does not relieve the seller of revealing latent defects.  Latent defects are faults in a property that could not have been discovered by a reasonably thorough inspection before the sale. Whether a property is being sold as-is or not, these defects must be disclosed to a potential buyer.

Certified Home Inspectors have come a long way in detecting defects in a property, but there are still many latent defects that can go unnoticed.  One example of a latent defect is a septic system that is no longer in use.  Even though the tank may be empty, in time, the concrete will fail and there will be a section of land that will sink into the old septic tank.  Many of the older properties did not record where the septic tanks were located, and it is possible that current home owners have no knowledge of the old tank.  Nevertheless, if the seller has knowledge, it is incumbent upon the seller to disclose that fact.

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

 

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What Every REALTOR® Wants You to Know About “Loose Lips Sink Ships”


What Every REALTOR® Wants You to Know About
“Loose Lips Sink Ships”

During the World Wars, posters were placed in key locations reminding military personnel and contractors that unguarded conversations could divulge information to the enemy that would give them the upper hand in combat. Some information, however minor, could be the missing link to the enemy. In real estate, “loose lips, sink ships” may not actually sink a ship, but it can sink a real estate transaction.

I have said this many times before, and will undoubtedly say many more times: If you are in the market to buy a home, you need to sign a buyers’ representative contract with a REALTOR®. That agent will work diligently on your behalf. You can have confidential conversations with your buyer’s agent, and you can rest assured they will keep the information confidential.

When you are house-hunting, attending open houses is a good way to see what is in the market. If you have already signed a buyers contract with an agent, let the agent at the open house know your agents name as soon as they greet you. The open house agent should respect that relationship. They can certainly provide basic information about the house and answer any questions you may have but, should not inquire about any financial arrangements you may have for a mortgage.

All too often, I see potential buyers come into an open house and start a dialogue with the agent hosting the open house. Inevitably, the question will come up if they are pre-approved for a mortgage and what price of home are they looking for. The conversation takes a bad turn when the buyer(s) make the comment that they are looking for a home “no higher than $500,000”, but because they want the listing agent to know they are solid buyers if they make an offer, the buyer(s) will add, “But we’ve been pre-approved for $600,000.” That information will go from the buyer(s) lips to the seller’s ears in a nanosecond. And if you decide to make an offer on that house – or any house with that listing agent – there will be little room for negotiation.

Another example is if the buyers’ really like the house, and they are under the gun to find a home because they have given notice at their apartment and it has already been rented to a new tenant.

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

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New Year Home-Buying Resolution


New Year Home-Buying Resolution

 If buying a home will be one of your New Year Resolutions, here are some tips that can help you achieve that resolution.

There are too many myths and issues floating around that can discourage potential home buyers’ – especially first-time home buyers.  Let’s take a look at a few of these.

 

Tip #1  You do notneed to have 20% down payment in order to get a mortgage. Although banks like to see home buyers have “some skin in the game” like 20% down, you can buy a house with as little as 3.0% down with some programs and with a Veteran’s VA loan or a USDA loan you can buy a house with zero down payment in many circumstances!

 

Tip #2  Do not wait until it is too late to make your move in buying a house.  Generally speaking, it will take 30-60 days from the time you have a ratified contract on a property to get to the closing table. All too often, I have clients who are renting, and they decide to buy a house and they have to move or renew their rent in 30 days or less.  It’s not going to happen, and they wind up renewing their lease again.  Plan ahead!  If you are not sure about your credit score or if you know its low, my suggestion is to talk to a REALTOR® 6-12 months before you are looking to buy.  That way, if there are issues on your credit history you have some time to try to resolve the issues.

 

TIP #3 Who comes first, the chicken or the egg.  If you talk to a mortgage officer, they will undoubtedly tell you that the first person you should talk to is a mortgage officer.  If you talk to a REALTOR®, they will undoubtedly tell you to talk to a REALTOR® first.  Here is the truth – it really doesn’t matter who you talk to first – as long as you are making headway in buying a home.  My suggestion – as a REALTOR® – is to talk to the REALTOR® first and here is why. The REALTOR® is going to work with you from start to finish.  If you talk to a mortgage person from, let’s say ABC Bank, they will provide you with mortgage options that the bank sponsors.  These options may not work for you.  If that is the only options the bank offers, you may walk away believing that you cannot get a mortgage.  A REALTOR® will work with mortgage brokers who have access to a wide range of mortgage options and may be more likely to be able to find a mortgage that works for you.

 

Tip #4  The old dilemma is whether you should pay down debt or save money to buy a house. This is a perfect example where it pays to talk to a REALTOR® who can get you in touch with a mortgage person who can work with your specific needs.  Whether you pay down debt or save money is going to depend in large part about your specific situation.  I recently had a client who talked to a mortgage officer prior to calling me.  He was pre-approved and we began looking at houses.  When the couple found a house they liked, the closing costs for this house was so high it put them out of the market.  I referred them to a mortgage officer I have worked with many times and he was able to find them a mortgage with significantly less closing costs and they were able to close on the property.  It pays to shop around.

Tip #5  This tip is very important!  When you are looking for a house to buy, be sure you are looking on a reputable website. Many of the popular websites are what we call secondary websites.  For example: When a property is listed with an agent it is put in the MLS (Multiple Listing Service).  These listings go out to all the brokers such as Coldwell Banker almost instantly.  Other websites, are not actually real estate websites – their business model is advertising. They pull data, such as listings, from the MLS and place it on their website with the hopes that you look at their site to find a home.  The problem is that their business model is not very interested in updating their website once the home has a contract, sold or just taken off the market.  I get calls all the time where someone found a home they like, and it was sold a year ago.  If you are working with a Coldwell Banker REALTOR®, they have a link that you can access the MLS through their website to ensure you are getting the most accurate information.  Or, you can search the MLS through www.realtor.com.

 

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.

 

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

What Every REALTOR® Wants You To Know About Home Inspections


Buying a new home can be a very stressful time. In addition to taking on a large amount of debt, buyers have a sundry of other expenses that keep popping up, such as closing costs, insurance, moving expenses and the home inspection to name a few.

inspections

In my opinion, the home inspection is one of the most important steps for buyers to take and one that too often they try to forego or circumvent. My approach is to get into a verbal arm wrestling match with buyers who try to avoid have an inspection by a qualified, licensed home inspector. And here’s why:

First of all, a home inspection by a qualified, licensed home inspector can identify a wide range of issues that may be lurking just out of sight to the buyer. Even if an item is working properly at the time, it may be just a matter of time before the owner could expect to have to repair or replace. Even if the item doesn’t need to be replaced at the time, it could possibly be a negotiating tool to adjust the price.

The second issue that I think needs attention is for buyers to not use an uncle or family friend to “take a look” at the property and see what they think. Having a family friend give their thoughts on the property may encourage the buyers one way or another, but in all likelihood unless that uncle or family friend is a licensed, qualified home inspector, their opinion will not considered acceptable as it pertains to the contract.

Maryland real estate contracts states that the buyers have the right to have the property inspected by “ … a qualified professional engineer, licensed home inspector, or other expert . . .”. Whether or not an uncle or family friend would qualify as an expert could complicate the contract as it relates to the property inspection.

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

What Every REALTOR® Wants You To Know – About Commissions


In order for the real estate market to work, there has to be sellers and buyers. It is the role of the REALTOR® to bring those two clients together. Anyone who has ever bought or sold a house will confirm that the world of real estate is a complicated and convoluted transaction.

commission-split-graphic

The role of the REALTOR® is to bring those clients together and work through all the details to make it happen. Whether you are a buyer or seller you should have a REALTOR® who will look out for your best interests. By doing so the REALTOR® earns their commission.

In the vast majority of transactions the seller will provide the commission fee. And although that money may seem like a large amount it really breaks down to a lot less than people realize.

In todays market the listing commission runs between 6% – 7%. Although I will mention that those fees are always negotiable, although most brokers will require agents to maintain a 6% – 7% range.

For the person of this article, lets assume that the seller is listing their house for $250,000 and signs a listing contract with a commission of 6%. The commission that would be paid by the seller at the closing if and when their house sells would be $15,000.

That may sound like a lot of money, and it is, but that fee does not go directly to the listing agent. It is split between the two brokers involved, the listing broker and the buying broker. For the sake of this article, lets assume that the brokers have agreed to split 50%/50%. At closing then $7,500 would go to each broker.

That fee of $7,500 would then be split between the broker and the real estate agent who actually handled the transaction. For simplicity, lets assume that the split is again 50%/50% although that percentage is very variable between agents and brokers. The amount that is now credited to the agent who handled the transaction is now $3,750.

The brokers fee is used to cover office space, telephones, television advertising, computer software, etc.

The agents fee which is now about $3,750 has to cover costs that many small businesses have to cover; such as a photographer to take pictures of the house (if the listing agent), signs, flyers, advertising, insurance, membership to the REALTOR® association, fees for the MLS, buy Sentrilocks for your front door, etc. You also have to remember that as an independent contractor, which is what most agents are, they also need to pay taxes on that amount. That amount is now down to about $2,500 for the sale of the house.

For that amount the seller’s REALTOR® will:

• Prepare a comprehensive market analysis
• Visits you, walks through the home, makes recommendations, answers your questions and fills out the listing contract
• Lists the home on the MLS
• Meets the professional photographer at your home and hangs out while that person takes photos and video
• Markets your home on various websites and print ads, and installs signage
• Holds an average of 2 Open House events
• Takes calls from prospective buyers and buyer’s agents and makes showing appointments
• Communicates with buyers or their agent regarding an offer
• Presents that offer to you, makes recommendations and prepares a counter offer
• Finalizes a contract with you and files it with the broker
• Meets the property inspector, appraiser, and sometimes handymen and waits around while they do their jobs so that your contract fulfills
• Communicates with the buyer’s agent regarding contingencies in the contract
• Presents you with additional addendums to the contract, as needed, sometimes preparing counters to those addendums
• Communicates with the escrow officer to make sure that the payoff on your mortgage is in order and that all paperwork is ready
• Attends closing with you
Nevertheless, most REALTORS® love what they do and work extremely hard to bring sellers and buyers together.

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

Five Ways for Buyers’ to Kill a Real Estate Deal


Anyone who has ever bought real estate will attest that buying real estate is a process and not a quick process either. Often times buyer’s feel that it is a waiting game from the time of contract acceptance to the closing, but in reality there are many, many things that are going on behind the scenes that will get them to the closing table.

the-more-you-know-about-the-home-buying-process-th1

During this emotionally charged time for buyers’ often times they will make decisions that can adversely affect the outcome of buying a home. It is critically important that buyers’ maintain a steady financial posture during this time. Any expenses out of the normal day to day living should be discussed with your mortgage officer or REALTOR®.

Here are five areas that can be damaging to a real estate transaction:

1. Buying on credit. Often times home buyers are excited about moving into their new home and want nothing more than having all new furniture or even some new furniture. This is a problem that surfaces on a lot of transactions and buyers should avoid like the plague. Any additional debt will affect your debt to income ratio and could prevent you from getting a loan. Even if you apply for new credit, the simply inquiry that the creditor will do on your credit bureau may lower your credit score and again affect your ability to buy. The rule of thumb – don’t take on any new debt without first talking to your mortgage officer.

2. Missing a payment. Buying a home is an exciting time but it can cause a lot of stress for buyers. Additional stress can lead to missing payments on an account that you would otherwise be meticulous about paying. Many lenders may require a certain period of no-late payments to qualify for the mortgage, such as 12 months. One late payment may preclude you from qualifying or result in a larger interest rate that will be with you for a long time.

3. Be Careful with withdrawals AND Deposits. During the loan process, underwriters will be scouring your accounts for withdrawals and deposits. Withdrawals will reduce the funds you have available and may concern the underwriters. Unexplained deposits will be red flags as to where the funds are coming from. These funds will be examined throughout the process and will be reviewed again right before closing to ensure everything is still intact.

4. Co-signing a loan. You may have a friend or family member who is the most responsible person around but co-signing for a loan while you are in the process of closing on a house may be the kiss of death for your loan. Even though you may not be directly responsible for the co-signed loan, if they default, you are now on the hook for the payments. Because of that underwriters will factor those payments into your debt ratio and it may knock you out of the mortgage.

5. Changes in employment. Next to taking on additional debt during the loan process, changing employment is the second problem for home buyers. Even if the change in jobs brings more money, lenders will look at it as a risk. Often time new employees work for a few months on a trial basis and may ultimately lose the job they thought was a step up. Lenders want to see a stable, reliable income that is likely to continue in the foreseeable future.

The secret to getting to the closing table is to communicate with your REALTOR® and mortgage officer during the process and take their advice.

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