Just When You Thought You Have Heard It All – DOW Plummets
Just When You Thought You Have Heard It All – DOW Plummets
Why Hasn’t Our Home Sold Yet? It Must Be Your Fault!
As our inventory of listings grows, homes go unsold and sellers begin to wonder what should be done to get their home sold! So I set out on a quest to see what real estate agents think you should do when your home hasn’t sold. I found the following blog posts that help explain why your home hasn’t sold and what to do about it.
It’s human nature to blame your real estate agent. But it may not be your agent, it could be your price. Jean Atkins – who I worked with for many years – would say “price overcomes all objections“. While agents dread making the “price reduction phone call”, sellers should be expecting the call. Especially when inventory levels are high and showings are infrequent or non-existent … when it’s a buyer’s market!!!
Here are three quick rules to rely upon to know if it’s price, location or condition.
Solution – REDUCE PRICE AT LEAST 10%
Solution – REDUCE PRICE AT LEAST 5%
Solution – FAIR MARKET VALUE IS THE SOLUTION
So, when it comes to figuring out why your home hasn’t sold, it often comes down to three things: price, location and condition. The only price opinion that matters is the buyer’s opinion!!!
Just When You Thought You Have Heard It All – Showing Feedback
After a showing on one a listing, the agent wrote in response to the automated request for feedback:
If your buyer is not interested, what factor(s) caused this decision?
Buyer didn’t care for the floors being off level…made her dizzy! Nice main level though!
When this feedback came in my assistant called me laughing hysterically to share the humor in this feedback. It seems that now I have heard it all – the buyer wasn’t interested in the house because it made her dizzy.
However, in all seriousness, sellers can and should correct somethings when they get negative feedback, but maybe there are other things that they shouldn’t correct. Perhaps off level floors in a home built in 1940 are indicative of structural problem. But then again, level floors could be out of character for a 40′s bungalow. Were there to be a structural problem then the problem should be addressed.
Sellers should correct negative smells, sights and sounds that are in their control. Take out the smelly trash, clean up the unsightly clutter, and oil the squeaky door. But most of all, sellers should take feedback in stride and not get too wound up over picky buyer responses. At least they’re getting showings. A long-time Realtor friend of mine would tell them “price overcomes all objections”.
Ultimately the only really meaningful feedback is a contract of sale. Any showing that doesn’t result in a contract of sale really means that the buyers didn’t see the value in the home. No feedback is also feedback. When agents fail to provide their buyer’s feedback about a house, there could be good reasons why … and sellers probably already know it … it starts with price. Especially in a buyer’s market.
Where Are Americans Moving – Anne Arundel County, Maryland
Forbes.com recently posted an interactive tool on their website that allows you to explore where people moved during 2007-2008. Information was compiled from the Internal Revenue Service. The screen shot capture (below) shows migration patters from Anne Arundel County, Maryland.
According to the U.S. Census Bureau, the population of the US was estimated in 2009 at 307,006,550 people of which 5,699,478 or 1.8% of the total population lived in Maryland. In the nine year period from April 1, 2000 to July 1, 2009, the Bureau estimates that Anne Arundel County grew by 6.4% to a population of 521,209 or about 9.1% of the total population of the State of Maryland. The 2006 population estimate for Annapolis was 36,408.
While the Forbes.com interactive data map is great, there’s more to the story that meets the eye. The IRS publishes detailed migration data that’s available to anyone who wants to download it.
According to the IRS in 2008 in Maryland there were 81,116 address changes. That’s about 1.42% of the total population. It’s important to remember that the data reflects changes in household taxpayers which might mean a whole family moved or just one member of a family. Of the 81,116 there were 16,613 taxpayers migrating into Anne Arundel County and there were 16,798 taxpayers who moved out of Anne Arundel County. That’s about 10% of all the Maryland taxpayers who moved in 2007-2008. There were 13.8% taxpayers that moved into Anne Arundel County from in-state. And, Anne Arundel County lost 15.7% of it’s taxpayers to out-of-state moves. Overall a 1.9% loss of taxpayers in the 2007-2008 tax years. The chart below summarizes the IRS data.
|2007-2008 IRS Mirgration Data||Outflow||Inflow||Net|
|Anne Arundel County||16,798||16,613||-1.1%|
|Anne Arundel County In-State||7,664||8,721||13.8%|
|Anne Arundel County Out-of-State||8,733||7,364||-15.7%|
Detailed data reveals that the majority of taxpayers moved from Prince George’s County into Anne Arundel County and moved from the county to Baltimore County. The most out-of-state taxpayers came from Fairfax County, Virginia and moved to the District of Columbia. There were also many taxpayers that moved from or to a non-US address (APO/FPO address) changes filed with the IRS. Of special interest might be that there were 127 taxpayers that came into the county from Honolulu County (that’s Hawaii) while 103 taxpayers went to Honolulu County (it’s likely that these were military service related moves).
Overall Anne Arundel County has experienced a minor loss of taxpayers when compared to other States, counties and cities that are experiencing a massive exodus of taxpayers. Some of those taxpayers are coming to Anne Arundel County, but, most are not.
Is It Time to Rent or Buy In Annapolis, Maryland?
Bret Arends at the Wall Street Journal recently wrote “A Fresh Look at Rent vs. Buy” in the Wall Street Journal. With an opening line of “Why on Earth would you buy down here when you can rent?” it seemed like an irresistible read. In the article he discusses Trulia.com’s look at major real estate markets across the country in their attempt to answer the question “Is it cheaper to buy, or to rent?” When looking at the total cost of home ownership including principal, interest, taxes, insurance and all other costs versus renting they offered the following guidelines:
Trulia.com when so far as to put a “rent vs. buy” calculator on their website. According to Trulia.com’s Top 50 City Rent v Buy Index Baltimore is has a 12 Price-to-rent Ratio and Washington DC has a 14 Price-to-rent Ratio. So it looks like it for both Baltimore and Washington DC it’s now cheaper to own than to rent according to their analysis. In follow-up I thought that it was time to take a careful look at both Anne Arundel County and Annapolis, Maryland rent versus buy to see just how well the local area compared using this approach. The formula for calculating the price-to-rent ratio is:
Price-to-Rent Ratio = Sales Price divided by (Rent Price times 12)
There were 220 properties rented in Anne Arundel County in May, 2010. The average rental was for $1,801 per month. The average sale price for May was $344,866. Using the rent vs. buy formula, the price-to-rent ratio for Anne Arundel county is 15.9 – which puts it into the “it might make sense” to buy over renting zone.
There were 59 properties rented in Annapolis, Maryland in May, 2010. The average rental was for $1805 per month. The average sale price in Annapolis in May was $503,884. Using the same rent vs. buy formula, the price-to-rent ratio for Annapolis is 23.3 – where the cost of owning a home is much greater than renting.
So, while it might be better to own in the greater Baltimore area, in Anne Arundel County the decision to buy versus rent will depend on your situation. However in Annapolis, it may make more sense to rent instead of purchasing because the cost of owning exceeds that of renting.
Property Tax Reassessment Anne Arundel County Maryland
If you purchase a home this year between January 1st and June 30th, you should consider reviewing your property tax assessment, especially considering that property values have declined and tax assessments may not accurately reflect the value of your home. You must appear your property tax assessment within 60 days of the transfer. After filing a written appeal you will be scheduled for a hearing or your written appeal can be reviewed instead of a hearing.
Even if you didn’t buy your home this year, but you did receive a Notice of Assessment you have 45 days after receipt of the notice to file an appear. Notice of Assessment are sent every three years and show the old market value as well as the new market value. And, unfortunately the new market value may not have caught up with current market conditions.
Appeal hearings are in in person or over the telephone, but can be made in writing therefore eliminating the need for an actual hearing. For more information, please consult the State Department of Assessments and Taxation’s website and the following resources:
An appraisal should not be required. You should be able to justify your appeal to lower your tax assessment by using recent comparable sales. Some neighborhoods will have high turn over and many similar homes while other communities will not.
If you need assistance in identifying comparable sales for you area, please let me know … I’d be glad to help. Remember, the deadline for submitting an appeal for homes purchased this year between January 1st and June 30th is 60 days after the date of purchase.
Six Reasons Why Homes Don’t Sell
If you are interested in owning a home in Annapolis, Maryland or the surrounding area and want to tour any property currently on the market, or if you have a home to sell in Annapolis, Maryland and want a professional consultation on current market conditions, please contact me at 410-923-3217 or e-mail me at firstname.lastname@example.org or visit my website at LiveInAnnapolis.com.
How Does Rent-to-own Work?
Rent-to-own, also known as lease option to purchase, is where a landlord/owner and tenant/buyer agree to terms whereby at sometime in the future the tenant buys the landlord’s property. There are benefits to both the tenant/buyer and to the landlord/owner. The basic benefit to a buyer is he/she can lock in a price at today’s level and purchase (or not) sometime in the future, while the landlord hooks a buyer who cannot purchase today but could sometime tomorrow. Of course home prices will go up or down. The buyer is likely counting on home prices increasing, while a landlord is likely hoping that prices will stay level or decline only slightly. If they drop too low, the buyer may not exercise the option. And, the price may need to be renegotiated based on future market conditions.
From the tenant’s perspective
From the tenant’s perspective, a lease option to purchase can be a great way to buy a home following the end of a lease and before the expiration of the lease option. It also means being committed to purchasing the home or risk losing the option fee (which can be anything from $1 to 1, 2, 3 or more percent of the purchase price). While most owners are probably not willing to take a single dollar as an option fee, the option fee is credited back to the buyer at the time of settlement.
From the landlord’s persepctive
From the landlord’s perspective, a lease option to purchase can mean having a tenant who has a vested interested in purchasing the home at the end of the lease period. But it goes further than that. Even thought the tenant doesn’t own the property yet, knowing that they might buy it someday may mean taking better care of it while they live there. Of course it may not. But, there’s more at stake than just a place to live for a year or two before moving on.
Basic mechanics of a lease option to purchase
Most real estate agents have access to a standard rent to own or lease option to purchase agreement that will outline the terms that the landlord and tenant agree to at the time the tenat leases the property. The lease option to purchase agreement is drawn up separately from the lease agreement. The lease agreement will govern the terms of tenancy, not the terms of some future purchase. The lease agreement might.
First, there’s an option fee that is paid up front by the tenant, is credited back to the tenant if the tenant purchases the home before the option expires, otherwise is non-refundable.
OPTION CONSIDERATION – As consideration for this Lease Option to Purchase, the Buyer/Tenant shall pay the Seller/Landlord $_________________ (the “Option Fee”), which is non-refundable and receipt of which is hereby acknowledged by the Seller/Landlord. The Option Fee shall be credited to the purchase at settlement if Buyer/Tenant timely exercises this Option to Purchase, if Buyer/Tenant is not in default of the Lease Agreement and proceeds to settlement on the Property.
Second, there’s a monthly rental premium that is is collected and credited back to the tenant when and if the tenant purhcases the price.
PURCHASE PRICE - The total purchase price for the Property is $_______________. Provided that Buyer/Tenant timely exercises this Lease Option to Purchase, is not in default of the Lease Agreement, and settles on the Property, Seller/Landlord shall credit towards the purchase at closing the sum of $______________ from each monthly lease payment that Buyer/Tenant timely makes. Buyer/Tenant shall receive no credit at closing for any monthly lease payment that Seller/Landlord received after the due date specified in the Lease Agreement.
Source: Sample Lease Option to Purchase
Lease Option to Purchase is Not a Agreement to Buy
While a lease option to purchase is not an agreement to buy, it does spell out the rental premium credited by the landlord to the tenant at the time of settlement, the amount of non-refunable option fee which shall be credited to the buyer at the time of settlement (unless the option goes unexercised), and the sales price at which the owner will sell the property to the tenant. However a lease option to purchase is not a contract of sale, which the owner and the tenant, turned buyer, should draw up at the time the tenant decides to buy the property.
The Real Estate Agent Role
The role of the real estate agent in lease option to purchase can be to assist the landlord and tenant in negotiating price and terms, filling in the lease, lease option to purchase, and contract of sale forms for review and signing by all parties. The real estate agent provides valuable marketing for an owner that has a home who wants to attract a tenant that wants to rent to own. For the buyer, agents have access to a list of rent to own homes that might be of interest to a prospective buyer/tenant.
There were 22 homes priced priced between $1,000 and $5,950 in the greater Annapolis Maryland area. The average asking price is $2,253 with an average days-on-market of 86. To explore the list of homes that for sale with a rent to buy option click here!
If you are interested in rent to own homes in Annapolis, Maryland or the surrounding area and want to tour any rental currently on the market, or if you have a home to sell in Annapolis, Maryland and want a professional consultation on current market conditions, please contact me at 410-923-3217 or e-mail me at email@example.com or visit my website at LiveInAnnapolis.com.
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Warning: This information is not intended to constitute legal advice and should not be relied upon in lieu of consultation with appropriate legal advisors in your own jurisdiction.
Summer Place at Riva Trace in Annapolis Maryland
Rocky and I took a walk through Summer Place at Riva Trace in Annapolis, Maryland this morning. Although it was only 10:30 am the temperature was already in the 80′s and the humidity was coming in. Rocky wanted to walk down to the community pier so we headed off in that direction first. Then climbed the hill and walked back along Summer Village Drive. There was a yard sale in progress (too bad I left my wallet at home). So instead we just stopped and talked to some neighbors along the way. As we walked I took these photographs in the community.
The path to throught the woods to the community pier.
Look what I found dad!!!
The community pier at Riva Trace.
Rocky are you ready for “catch and release”?
Ginger Creek off the South River off the Chesapeake Bay
I wish I could remember what these flowers are called?
The intersection of Summer Village Drive and Gingerview Lane
A Summerview Drive Townhome
A Townhome off Summerview Drive
The entrance monument and pavillion at Summer Place
There are 13 homes priced between $269,500 and $620,000 on the market in Riva Trace in Annapolis, Maryland (as of today, June 12, 2010). The average asking price is $421,146 with an average of 3 bedrooms and 3 full baths, and have been on the market an average of 102 days. To review the list of homes waiting for new owners click here!
There are 2 homes priced at $329,000 and $365,000 respectively under contract in Riva Trace in Annaplis, Maryland (as of today, June 12, 2010). The average asking price is $347,000 with an average of 3 bedrooms and 3 full baths, and have been on the market an average of 50 days. To explore the list of homes that under contract click here!
There were 6 homes priced priced between $249,900 and $499,900 that sold within the last 90 days in Riva Trace in Annapolis Maryland (again, as of June 12th). The average asking price is $390,750 and the average sold price was $369,650 with an average days-on-market of 120. These homes sold at an 88.75% discount off their asking prices when originally listed and 94.07% off their last listed price when they finally sold. To explore the list of homes that have sold within the last 90 days click here!
If you are interested in owning a home in Riva Trace in Annapolis, Maryland or the surrounding area and want to tour any rental currently on the market, or if you have a home to sell in Riva Trace in Annapolis, Maryland and want a professional consultation on current market conditions, please contact me at 410-923-3217 or e-mail me at firstname.lastname@example.org or visit my website at LiveInAnnapolis.com.
Home Inspection Reports, Material Facts and a Bank’s Responsibility to Disclose
Recently I represented a buyer that had an interest in an bank-owned property. The home was well priced and in a desirable location. There were some problems vaguely disclosed by the listing agent in the MLS reports. When I took the buyer to see the property, one glaring problem was obvious – there was concrete poured into the drains in the sinks and tubs and commodes. Despite this obvious problem the buyer wrote an offer to purchase the property. There was another buyer that also wrote a contract. And, unfortunately the other buyer was selected by the bank. While my buyer was disappointed, we watched the MLS for the closing date which stretched out until suddenly the property was returned active to the market.
I consulted with the buyer to determine if there was interest in writing another offer on the property. Since there was, the obvious next step was to see what I could learn about the property from any home inspection that was conducted by the other buyer. I contacted the listing agent to see what I could learn – not much more than I already knew. I also contacted the other buyer’s agent to see what the agent could share with me. I learned a lot about the property from the other buyer’s agent. I got back in contact with my buyer and shared what I had learned from talking to both agents. Of course the very next question that came up was could my buyer see the other buyer’s home inspection.
Most home inspectors will tell you and their clients – the buyers – that the report is their property and for their information. Ok, that’s all fine and dandy, but who’s property is the report when a copy is given to the seller – in this case a bank. Is the report still the property of the buyer? Or is it now also the property of the seller?
The report on the house in question probably contains information that might maked a difference in the buyer’s decision to purchase and what price to offer. I contacted both the other buyer’s agent and the listing agent both in an attempt to obtain a copy of the report. In all likelihood the report documents the discovery of material facts and/or latent defects that should be disclosed by the seller – in this case the bank – to the buyer. The buyer’s agent suggested getting the report from the listing agent. The listing agent response was not to release the report without the buyer’s authorization. So, we’re stuck between a rock and hard place for the moment until either the buyer releases a copy of the report or authorizes the listing agent to release a copy of the report.
In Maryland, “a lender or an affiliate or subsidiary of a lender that acquired the real property by foreclosure or deed in lieu of foreclosure” is exempt from the requirements to disclose or disclaimer under Section 10-702 of the Real Property Article, Annotated Copy of Maryland. While I understand why lenders are exempt from disclosure when they have no first hand knowledge of property condition, once they learn about condition through buyer inspections, should they continue to be exempt? Now they have documentation of the property’s condition, if obtained as a result of a buyer inspection. Vague representations by the listing agent as to condition in the statement “Property is sold as is, seller will make no repairs. Plumbing & electrical issues. Inspections are for buyer’s information only.” certainly doesn’t constitute disclosure but in the words of the Lost in Space Robot “Danger Will Robinson, Danger!”.
Lenders may hide behind their exemptions and as-is contract clauses, but it ultimately is the responsibility of the buyer to learn as much as they can about the property through their own investigations before completing a purchase. A inspection prior to writing a contract of sale – if allowed by the bank – should be arranged. If that cannot be done, the buyer should insist on at least using the “As-Is Addendum” whereby the buyer can conduct inspections within a reasonably negotiated period of time, and, where the buyer has the unilateral right to terminate the contract upon the discovery of any adverse conditions is dissatisfied for any reason what so ever.
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Stephen Howell and Rocky (his lab-mix from the SPCA of Anne Arundel County in Annapolis) now live in Winter’s Chase at Riva Trace in Annapolis, Maryland. He works in the Annapolis real estate market. His website lets people search the Washington and Baltimore metropolitan area MLS. Buyers can also search for waterfront homes along the Chesapeake Bay. His website has current real estate data on Annapolis, Anne Arundel County, and Maryland.