McGinn Group

How Can Renters Solve the Housing Crisis?

2012-01-13T13:21:00.000-05:00

This article highlights the current investment opportunity in real estate. Even though there is a great opportunity, these articles typically reflect the national picture. Our local opportunity is even better when you add in:

the stability of our regional employment
the Ft. Meade BRAC program (which is initially bringing in 22,000 jobs)
the strength of area schools
local income levels being some of the highest in the country

and you have a pretty spectacular result. There are special investor loan programs available. Let me know if you'd like information on how you can profit from the housing crisis.

Full Article if you prefer -

Residential real estate is not rocket science. We know that this housing crisis is:
1. Explainable – bad lending, mad speculation, wild expectations, government meddling
2. Isolated – bad mortgages, negative equity, strategic default, government meddling
3. Temporary – demand for housing always catches up to supply eventually

Anyone with any experience and perspective will agree that this market will recover over the next 10 years, but what will this particular recovery look like? Since the root of the problem was unprecedented, the solution might be as well.

My belief is that renters are going to solve the housing crisis.

Homeownership rates have fallen by a few percentage points, which has translated into more than four million new rental households in just the past few years. According to the Census, 1.4 million of those were added between July 2010 and June 2011, showing that this trend is accelerating.

As a result, rental rates are growing at more than 5% per year, and this trend is also accelerating.

As a result of this, investors are pouring capital into American housing with a long-term mindset, kicking this trend into hyperspeed.

This crisis will not be solved by enticing home buyers. Their confidence is waiting for unemployment to come down and government to act responsibly, which could take a while.

But investors are confident right now. Why? Because they see the big picture. Rental demand equals stable cash flow. So what can be done to encourage them?

How about eliminating archaic waiting periods for investors who want to buy foreclosures? How about eliminating waiting periods for investors who paid cash and want to tap it with a refinance? Today they have to wait months to put that money back to work. Why not eliminate the overall bias against investors in FHA, Fannie Mae and Freddie Mac and require big down payments to make it safe to lend, and lend?

Better yet, keep your eyes peeled for a private sector player to seize this opportunity to create America’s first national investor mortgage brand. The estimates are that half a million investor loans close every year, and who owns that niche? No one.

The Martial Arts teach you how to use the weight and momentum of your opponent against them (or so they say in the movies). This is the same thing. This drastic increase in rental demand is a by-product of the foreclosure crisis. Use it against the crisis by turning it into positive cash flow investments for those willing to be confident and take a risk in this environment.

Burn off that shadow inventory and create housing options for newly minted renters, which will, in turn, stabilize rental rates, and everybody wins. Good credit renters and buy-hold investors will be the heroes at the end of this saga.

Howard County - Lowest Unemployment in the State of Maryland

2011-12-12T15:26:00.000-05:00

I recently read an interesting article about Howard County's Unemployment Rate.

Our regional economy has performed very well over the past few years especially compared to other areas of the country. It's always important to note that the news we hear in the general media is just that - general. It does not always reflect the local or regional picture. Howard County’s unemployment rate has just been announced as the lowest in the state. It also notes that Maryland's unemployment rate is one of the lowest in the country. More reasons to consider real estate investment in this area!

Article

Howard County’s unemployment rate dropped to 5.1% in October, representing the lowest figure in Maryland. The county’s previous unemployment rate, documented in September by the Maryland Department of Labor, Licensing & Regulation, was 5.4%

“It is very encouraging to see our unemployment rate consistently drop from month to month — evidence of our focus on fostering economic development opportunities through innovation and entrepreneurship,” said County Executive Ken Ulman. “While 5.1% is still unacceptable to us and to those looking for work, I assure you that job creation is a top priority of this administration and we will continue to focus on creating and retaining good jobs in Howard County.”

The unemployment rate in Maryland also dropped in October, from 7.4% to 7.2%, putting the state below the national average and among the lowest in the country.

How to Buy a Home by Age 25

2011-12-05T15:13:00.000-05:00

Here is an interesting video about a goal that can actually be accomplished with some hard work and dedication.

Boyd

PS - Did you know that there are grants available that would give you as much as $32,000 to buy your first home? Contact us for more info on grant programs available in Maryland!

Good News! Consumer Debt is Dropping!

2011-11-29T14:41:00.000-05:00

Isn't it about time we received some good news? Watch THIS VIDEO to get all the details.

The drop in consumer debt is small, but at least it's going in the right direction.

Boyd

The JD Power Seal of Approval

2011-11-21T14:53:00.000-05:00

J.D. Power and Associates is a global marketing firm that conducts surveys to determine customer satisfaction and product quality.

RE/MAX is pleased to be the recipient of a recent JD Power award.

I have been with RE/MAX since 1987, because I believe in the brand.

I guess J. D. Power has just found out what I have known for years....RE/MAX is a great company!

You can read all about it HERE.

Laminate and Vinyl Flooring

2011-11-14T12:53:00.000-05:00

In the last couple of years we have seen a dramatic increase in flooring products which look and perform just like ceramic and hardwood, but at a fraction of the cost. Early laminate floors looked too much like panelling on the floor - yuck! Quality has certainly increased and some of these new products even defy the kneel and tap test to determine whether it's real or not. There are actually applications for vinyl tile which includes applying cement grout for that ultimate look and feel. Anyway, here is a great video which shows how to install some of these products. Autumn and winter are great DIY times so take a look.

How to Lay Tile Over an Existing Vinyl Floor

2011-11-01T16:17:00.001-04:00

A great video for the DIY crowd. It's simple, easy and very inexpensive. This would work for peel and stick tiles as well. I'll highlight some of these new products later.

Obama Announces New Home Assistance Initiative

2011-10-25T16:35:00.000-04:00

President Obama announced a new initiative (Click Here) to help underwater homeowners refinance and take advantage of low interest rates. This is certainly one step in the right direction to help with the housing recovery.

Great News About VA Loans

2011-10-18T07:17:00.001-04:00

The Department of Veteran Affairs (VA Loans) has announced a reduction in the funding fee they charge on new loans.
Beginning November 18, 2011, the fees will change from 2.15% to 1.40% for first time use and from 3.30% to 2.80% for subsequent use.
This is GREAT NEWS and please pass along to any potential buyer you know that might be VA eligible.

Debit Card Fees Are Coming - How to Avoid Them

2011-10-10T03:47:00.001-04:00

By this time just about everyone has heard of Bank of America's plan to charge their debit card holders a monthly fee of $5.00. OUCH!! Just when we have become accustomed to the convenience of using these cards, someone wants to pick our pockets. Here we are in the Great Recession, so who got that bright idea? Actually it is a response by the banks to make up for income lost by the downturn and tightening of government regulations on what they can charge elsewhere. Either way, it ranks (pun intended) right up there with fees airlines charge for bags, carry on bags and sitting in an aisle seat! However, I digress. This article explains the problem and offers some suggestions on how to avoid debit card fees. The strategies can be summed up as follows:
1) Pay with Cash – Remember when it was king? Those days are coming back.

2) Pay with Credit Cards - Rewards have been increasing.

3) Switch Banks - My wife says vote with your feet and walk if needed.

More Homeowners Shorten Mortgage Terms

2011-10-03T12:32:00.000-04:00

How Low are Mortgage Rates?
I was asked this question recently and with some humor replied, “I don’t know. They’re so low I can’t find them!”
One of the bright spots in our economic downturn has been the dramatic reduction of interest rates. We are now seeing mortgage rates at 60 year lows. As an example, a recent 30 year fixed was coming in at 3.875%. If you switch that to a 10 year adjustable rate mortgage it drops to 3.25% and a 3 year ARM comes in at 2.75%.
This article discusses one of the changes in American mortgage philosophy – pay it off quicker. We enjoy the ability to deduct mortgage interest on our personal income taxes. A nice benefit which in the past has encouraged many homeowners to let their debt linger longer. That idea is changing. Paying off quicker is now in vogue. Refinancing to lower interest rates and using the savings to shorten up the payback period is one way of getting rid of debt sooner. In fact savings of over $100,000 can possibly be realized by employing this strategy. Investigating the ideas contained in this article may change your thinking. Something to consider…………

Loan Rates Historic Low!

2011-08-26T16:15:00.002-04:00

30 year fixed FHA at 4.12%! Nothing else to be said. Now, who is going to take advantage of 40 year highs in home buying affordability?

Mortgage Rates Keep Falling – 30 YearFixed Near Record Low

2011-08-22T02:44:00.002-04:00

Here are some interesting quotes from CNN Money. No wonder home buying affordability is at a 40 year high!

Just when it seemed mortgage rates weren't going to get any lower, they started testing new lows.
In the tumultuous days following Standard & Poor's debt downgrades, rates on 30-year fixed mortgages fell to 4.32%, down from 4.39% last week and closed in on a record low of 4.17%. Rates on 15-year fixed mortgages set a new record falling to 3.5%, down from 3.54%.

The savings for borrowers who lock in rock-bottom rates over the length of a mortgage loan can be sizable. For example, a $200,000, 30-year loan with a 4.32% rate generates a monthly payment of just $992, and total interest payments of $157,153. A 5% rate (ordinarily considered low), generates a $1,074 a month payment and $29,357 more in interest over 30 years.

Help – I Hate my Closet!

2011-08-11T08:10:00.000-04:00

We are in and out of homes every day. We see lots of closets that are jammed full and bursting at the seams. Even homes that are large and spacious suffer from crowded closet disease. What to do? Here are some ideas I just came across.

Mortgage Rates Plunge!

2011-08-04T15:53:00.000-04:00

Interest rates are the lowest they have been all year. It's a good time to jump off the fence and take advantage of historic lows. Who’s the next person you know that would like to cash in on the 40 year home affordability advantage?

"Yes, you can still sell your home in this market."

2011-07-11T14:04:00.000-04:00

I came across this interesting article titled “Yes you can still sell your home in this market”. You can read the full article here, but here are some of the highlights:

Be ready for a market that is still changing – what happened last year or last month may be different than today.
Use all the technology you can – it’s important! Go all out on-line.
Price well in the market – buyers are looking for great deals.
Stage like a Pro! You need to win the beauty contest.
Be flexible with buyers – and with buyer’s lenders. If you don’t sell right away, don’t be in a rush to rent.

I Feel Good....

2011-05-06T03:50:00.000-04:00

Startling differences in the health of residents living just a few miles apart are highlighted in a new health rankings report that assesses wellness in nearly all the nation's 3,000-plus counties.

Are you feeling good today? You must be living in Howard County. This latest MSNBC survey ranks Howard County as the healthiest in the state. Check it out to see where your county ranks. If you are feeling a little sluggish, get out and do your part to raise your county’s health quotient.

Squeaky Floors No More!

2011-05-06T03:38:00.003-04:00

My experiment with the Squeak No More system to settle down squeaky floors is over. Here is my report – SUCCESS! This nifty little system (costs $29.00) worked like a charm. The trickiest part of the process is finding the floor joists under the carpet. I used a stud finder but it wasn’t always accurate. The special drill tool they provide to locate the stringers works well. Once you find one joist you pretty well have all the others since they should be 16 inches apart. I left the screw heads protruding above the carpet to give myself a reference guide and then when I had settled the floor down I removed the all the heads. They do break inside the subfloor as advertised. So, now my floors are silent and that is the sweet sound of success! Give it a try if you have a squeaky floor problem.

Time to Buy Again

2011-04-26T02:42:00.001-04:00

"After four years of plunging home prices, the most attractive asset class in America is housing," proclaims Fortune magazine, one of the world's premier business publications, in its April cover story.

Adequate Insulation?

2011-04-21T01:24:00.001-04:00

Yes, it’s spring – really – even though it hasn’t felt like it. Maryland is showing about 1” over normal rainfall and it seems much cooler when the sun doesn’t shine as much. The cold winter months are officially behind us but the hot summer days are just around the corner. Here is an interesting article about determining if you have adequate insulation in your attic. This is an easy and relatively cheap way to cut down on heating and cooling bills so take a quick look and see how you measure up.

How to Fix Squeaky Floors Under Carpeting – Also known as “Squeaky Floors Drive Me Crazy!”

2011-04-20T10:56:00.000-04:00

Let’s face it; we’ve all dealt with squeaky flooring in our homes. In fact, you’re probably dealing with it right now! The condition is usually caused by wood rubbing on wood due to loose subflooring. This occurs as your home ages and the wood in the subfloor and joists dries out. When carpet is removed it’s fairly easy to get out a drill and shoot a few screws into the offending area. That usually settles things down. However, the remedy is more elusive once carpet is installed and access to the floor underneath is limited. Check out this link for information on a handy tool that will help you kill the squeaks. I am going to buy and test drive it. I’ll let you know how it works!

http://www.dannylipford.com/video/how-to-fix-squeaks-under-carpeting

Housing – Is it time to buy?

2011-03-26T10:57:00.001-04:00

This article (click here) raises an interesting question. Has the market bottomed and now provided a great buying opportunity or are we headed to dreaded housing double dip? I’ve heard talk about a double dip since we posted some very ugly February home resale (click here) numbers. Since this question is answered at the national level, the response is somewhat varied. Our regional economy is very strong and may provide a clue to the answer. The future direction of interest rates also factors into the trend.

2011-03-07T14:00:00.000-05:00

Recent Industry Update

2011-03-07T08:21:00.000-05:00

Here is a recent industry update. We are showings signs of recovery and most indicators are positive. As in any recovery it’s not a straight line acceleration and we’ll have some ups and downs but the market seems to be gathering itself and moving in a good direction. Who is the next person you know that would like to take advantage of low interest rates and excellent prices?

January Home Sales

2011-02-26T15:07:00.000-05:00

New release of homes sales info (link) for the month of January. We are seeing an increased activity building in front of anticipated rises in interest rates and the cost of FHA loans.

Home Improvements...worth it?

2011-02-23T06:31:00.000-05:00

I found this site recently which purports to show the dollar return on home projects. It makes for interesting reading. Is it reality reporting? What do you think?

Shop Maryland Energy

2011-02-18T08:52:00.003-05:00

Here’s a great opportunity (it comes once a year) to purchase energy star products and not pay Maryland sales tax. If you were on the fence about purchasing………..

Shop Maryland Energy

Maryland's Tax Free Weekend for Certain Energy Star ProductsMarylanders will get a break from the state's 6 percent sales tax on qualifying Energy Star products from February 19-21, 2011. During Shop Maryland Energy weekend, the following Energy Star products are tax free:

Air conditioners
Clothes washers and dryers
Furnaces
Heat pumps
Boilers
Solar water heaters (tax-exempt at all times now)
Standard size refrigerators
Dehumidifiers
Programmable thermostats
Compact fluorescent light bulbs

Shop Maryland Energy weekend will occur in perpetuity (or until legislative amendment) from the Saturday immediately preceding the third Monday in February until the third Monday of February. Additionally, a tax free week on clothing and footwear priced $100 or less will occur every year during the second week of August.

Foreclosures sell at 27% Discount!

2011-02-08T02:38:00.000-05:00

Have you ever wondered how much less a foreclosed home will sell for over a non foreclosure sale? Here is an interesting article (Click Here) out of MIT which indicates that foreclosures will sell at a 27% discount over regular sales. Since foreclosed homes make up a significant portion of our current market this, information can serve as a helpful guide when considering how much to offer on one of these distressed properties.

How’s the Housing Market?

2011-02-02T15:45:00.001-05:00

This is a question I am frequently asked and here is the statistical answer for 2010.

Howard County:

New Listings (inventory) is up 9% from 5,033 to 5,486. Last year we had more homes for sale on the market so it’s no surprise housing prices didn’t really increase in 2010.

Closed Sales down 1.7% - This number is a reflection of a sluggish economy but still surprising considering record setting low interest rates were a tremendous incentive for homebuyers.

Median Sales Price was up 5.9% .Median is one type of average, found by arranging values in order and then selecting the one in the middle. This is a reflection of an increase in sales in specific price categories. For example the median price can rise if more homes in the $400-$500k range sold in 2010 than in 2009. It is definitely not indicating a rise in overall home values.

Average Days on Market is down 22% from 99 in 2009 to 77. This number indicates an increase in buyer confidence. When homes are priced well and in good condition they can quickly go under contract as buyers move decisively.

Other counties are listed under Market Statistics 2010 Summary. Check out your county to see exactly how you fared.

I lost my home in the housing downturn. How quickly can I buy again?

2011-01-20T14:54:00.000-05:00

I am frequently asked this question. Here are current guidelines that help give a good picture of what you might expect. Since millions of homeowners have been negatively impacted by this crisis it’s possible that lender requirements may be modified in the future to reflect the anomaly. There is safety in numbers and since so many have needlessly suffered due to this catastrophic event; guidelines might be relaxed to help victims of the housing crisis regain home ownership more quickly. It would be a good idea to check with me annually to see what changes may occur that could help former homeowners.

Short Sale

A Short Sale is an option of a homeowner selling a home for less than the balance on their current mortgages and the mortgagee agrees to a reduced payoff. The bank’s decision to allow a Short Sale is typically in lieu of the foreclosure process which can result in heft fees for the bank. This process and agreement does not necessarily release the homeowner from the obligation to pay the remaining balance of the loan known as the DEFICIENCY.

FHA requires 36 months in most situations. If CERTAIN GUIDELINES are met that follow Mortgagee Letter 09-52… the homeowner could qualify for an immediate purchase. Did you catch that… RIGHT AWAY. This is an important guideline change that is often misunderstood.
Fannie Mae guidelines right now require a 72 month seasoning for FULL ELIGIBILITY. After 24 months… a borrower could qualify with at least 20% down and after 48 months the maximum LTV is 90%. Their “extenuating circumstances” rule may allow someone to only have to put 10% down in as little as 2 yrs.
Freddie Mac is sticking to their 48 month seasoning… or 24 months if their ”extenuating circumstances” guidelines can be proven/met.
VA guidelines that we’ve seen have looked very similar to FHA’s above; 36 months OR if after 12 months and fitting the similar new guidelines of ML 09-52.
USDA generally requires 36 months OR with the right underwriter’s “waiver” and approval.

Foreclosure

A foreclosure is the legal process by which a mortgagee (typically a bank) obtains a court ordered termination of the home-owners “equitable right of redemption”.

FHA requires a 36 months seasoning
Fannie Mae and/or Freddie Mac require 84 months (SEVEN YEARS) from the completion of the Foreclosure for the Date of the credit pull for the new loan. The old “between 5 and 7 year rule” was changed effective October of 2010. Now there is a 3 yr “extenuating circumstance” rule (90% LTV for a primary residence) with Fannie Mae and its at only 2 yrs with Freddie Mac.
VA follows their guidelines for a Chapter 7 BK with the request that the complete facts / circumstances of the Foreclosure be submitted AND if the Foreclosure was on a VA loan note that “full entitlement” will not be available for the new loan.
USDA generally requires 36 months OR if after 12 months, reestablished credit and an underwriter “waiver”. This is completely up to the discretion of the u/w… do you have a good one?

Bankruptcy

The two most common types of bankruptcy (BK) are the Chapter 7 (liquidation) and the Chapter 13 (reorganization).

FHA will need a Chapter 7 BK to be dismissed 36 months. Someone who is IN a Chapter 13 and is in the process of REPAYING their debts can qualify for a FHA loan after 12 months of proof of repayment, no “lates” on anything on their credit report AND “permission from the court”.
Conventional Financing with the Federal National Mortgage Association (FNMA/Fannie Mae) after a Chapter 7 is allowed after 48 months from the discharge/dismissal date. A two-year waiting period is allowed if certain ”extenuating circumstances” can be documented. The time is extended to 60 months if there is more than one BK within the last 7 yrs.
Conventional Financing with the Federal Home Loan Mortgage Corporation (FHLMC/Freddie Mac) will generally require a borrower to have waited 84 months unless either “extenuating circumstances” can be met ( then its 24 months) OR when ”extenuating circumstances” can’t be met and then what Freddie calls “Financial mismanagement” is assumed and then the timeframe is reduced to 48 months and a list of requirements must be met including a 680 score and a perfect rental history.
The US Department of Veterans Affairs will allow an eligible Veteran to qualify for a VA loan TYPICALLY two years after discharge date of a Chapter 7 BK. There are guidelines that the VA spells out for a Veteran to qualify between 1 and 2 yrs after discharge date according to Chapter 4 of the VA Lender Handbook: if both of the following are met

borrower and/or co-borrower have reestablished satisfactory credit, and
the bankruptcy was caused by circumstances beyond your and/or your spouses control (such as unemployment, medical bills, etc.)

Another situation for a determining that an applicant is a satisfactory credit risk is in situations where the BK was caused by failure of a business of a self-employed applicant and:

the applicant obtained a permanent position after the business failed,
there is no derogatory credit information prior to self-employment,
there is no derogatory credit information subsequent to the bankruptcy, and
failure of the business was not due to the applicant’s misconduct.

For Chapter 13 BK’s the 2 situations outlined that may conclude a VA lender to extend credit are:

Satisfactorily making at least 12 months of payments and “permission from the court”
Finishing all payments satisfactorily
The USDA (US Department of Agriculture) has a Rural Development program that generally will require a discharge date of 36 months.

Mortgages in 2011

2011-01-13T10:10:00.000-05:00

January is the time of year we all like to make our predictions for the coming 12 months. I’ll contribute to the process by starting with mortgages. Here is an article (Link) that tackles what to expect when arraigning a home mortgage in 2011 In my opinion it’s a pretty balanced prediction. Interest rates will slowly rise and as rates rise refinance activity will slow and purchase mortgages will form a larger part of the market and finally, the process will become more complex. I believe we are through the roller coaster period we’ve experienced over the last few years. More stability will occur as we slowly come out of recession.

It’s important to remember that rates are still near historic lows which in my opinion is the silver lining in this recession.

Top Home Buying Selling Predictions for 2011

2011-01-07T06:21:00.001-05:00

This is an interesting article (link) which outlines some interesting ideas about what we might expect in 2011. On balance it is well researched and I believe provides a pretty accurate perspective. Since it is a national article it’s always important to temper the information based on our regional experience. That typically means the data needs to be adjusted more to the positive side since our economy has proven to be more resilient than most.

Happy New Year!

Why Some Houses Sit While Other Houses Sell

2011-01-03T12:30:00.000-05:00

Click below to view a short video:

http://www.youtube.com/watch?v=TUJeJYHj-cE

Tax Laws

2011-01-03T12:19:00.000-05:00

Since tax laws seem to constantly be in a state of change, it can be hard to keep up on tax saving deadlines. Here is one (link) that those older then 70 ½ should be aware of. It is designed to provide relief for retirees whose accounts where whacked by the collapse of financial markets. The minimum withdrawal requirements was re-instated for 2010 and many are unaware of it.

Home Buyers too Scared to BUY! Missing out on great deals.

2010-12-06T14:38:00.000-05:00

I thought this article was interesting. It presents the classic dilemma – the best time to buy is when nobody thinks it is. Well, this is the time, and buyer’s fear works to your advantage. I can understand the fear, but if you have a job and good credit there is probably no better time to do it.

2010-10-22T23:39:00.000-04:00

This is a very interesting article (link) showing that real estate listings where photos taken by SLR cameras seem to have an edge over listings where cheaper cameras are used. This is a strategy I have employed for a good number of years. The ability to take better photos and work with them digitally to adjust lighting (and sometimes photo shop out a telephone pole or two) is a key part of my marketing. I have also found that the number of photos combined with the time of day they are taken also impact how they resonate with people. I spend a lot of time with sellers preparing and staging their homes for the market. I work with a professional stager to ensure the HGTV effect. Since technology and photos have effectively replaced the old first showing, getting this part just right is critical. When my listings come on the market I want them to fulfill every buyer’s dream. Rich classic photos do make a difference.

4 Tips for Setting the Right Sales Price

2010-10-19T16:38:00.001-04:00

From Realtor Magazine – great words of wisdom!

Sellers think their homes are worth more than their real estate professional recommends, and buyers think these same homes are worth less.

It’s a difficult disconnect that makes selling properties a challenge. Successfully marketing a home requires that the price be set carefully -- or it will languish on the market. Among the considerations:

How many homes are for sale in the neighborhood? The more homes on the market, the more important it is to list at the lower end of the scale. "I want buyers to ask why is this house priced so competitively," said NAR President-elect Ron Phipps of Phipps Realty in Warwick, R.I. "I want the answer to be an offer."
Take short sales and foreclosures into consideration when pricing. If the competing properties are in lousy condition, they are less of an issue, but if they are well taken care of, yet priced 25 percent below market, they can be a serious factor.
Negotiate decisively. "Buyers are not interested in back-and-forth negotiations these days," Phipps said. "They are less emotional and more disciplined. They will walk away."
Cut the price when you have to. If no one shows up for an open house, if no one calls and if there are no offers, then the price is too high. That means it's time to make a meaningful price cut.

Media Fails to Inform Home Buyers of Windfall!

2010-10-08T09:10:00.002-04:00

Little Understood Math Benefits Buyers

Over the past 5 months a huge benefit has quietly snuck in under the radar for home buyers and the media failed to inform anyone. Interest rates have steadily tumbled since June 2010 and the 30 year fixed rate of 5.25% five months later is now around 4.25%. What does this mean to you?

For Buyers - Do the Math
A $200,000 30 year fixed loan at a June rate of 5.25% generated a payment of $1104/m. That same loan amount will now drop to $983 at 4.25% which is a savings of 12.5%. Let me put that into perspective for you. You just saved $121 per month or $43,560 over the life of the loan! But that’s not all you saved. It’s really more like $60,000 when you consider tax write offs for mortgage interest and the effect of compounding interest on your money. It’s also a forced savings plan. Most of us would like to think we could save $120/m for 30 years but life gets in the way and we don’t. In effect this is a forced savings plan ensuring you sock it away every month. This scenario does not even contemplate value appreciation or inflation protection your home provides over the coming years.

Huge Savings!

$200,000 - loan you just saved 12.5% or $25,000!

$300,000 - $37,500 Savings

$400,000 - $50,000 Savings

$500,000 - $62,500 Savings

Additional Buyer Savings

Lower sale price on new home also generates closing cost savings of 20%

For Sellers - Do the Math

This works in your favor as well. You will get less for your home today than its peak a few years ago. However, if you purchase a new home you’ll pay much less for that one as well. The gap between sale and new purchase price is usually constant. What is not constant is the interest rate (see savings above) which has dropped. In fact you’ll probably have a lower interest rate on your new home than you did on your old one.

Additional Seller Savings

Lower sale price on old home generates closing cost savings of 20%
Lower purchase price on new home sees the same savings of 20%
Lower interest rates generate savings of about 12% over the life of the new loan

Bottom Line

The best time to buy is when nobody thinks it is. Since we are officially out of recession we are most likely at the bottom of the housing market. We are definitely at the bottom of the interest rate cycle. The moment our economy shows solid signs of recovery you can bet interest rates will shoot up. Low prices, low interest rates, strong regional job market – advantage Buyers!

Who’s the next person you know that could benefit from this opportunity?

What is a Reverse Trifecta?

2010-10-04T13:14:00.000-04:00

A: Trifecta is defined as - any achievement involving three successful outcomes.

Q: So what’s a Reverse Trifecta - where you have one successful outcome based on three achievements?

A: Our current real estate market!

Foreclosure homes and distressed properties make up about 25% of the nationwide real estate market (source link). That impact is being felt even in Maryland where regional job security is stronger than most areas in the country. So by my definition here’s the Reverse Trifecta. The three achievements leading to the successful outcome are 1) deeply discounted home prices 2) historic low financing 3) good jobs.

The result is a once in a generation opportunity for home buyers. Call me and let me know if you know of anyone who might want to take advantage of this great market.

July market stats for Howard County

2010-08-21T02:05:00.003-04:00

Click Here to View July Stats. Notice the increase in units sold year to date – an increase of 10.5%. Median sales price has remained pretty flat and the number of days on market has decreased 33.5% over last year. Listing inventory has increased by 11.3%.There has been a significant slow down in sales July 2010 compared to 2009.

In summary the Howard County market has seen increased numbers of sales and decreased days on market while prices have remained stable over the past 12 months. Listing inventory has increased and that means there are still some good buys out there. With interest rates in the 4.5% and lower range for 30 year fixed, it’s a great time to buy!

Shadow Inventory

2010-08-09T10:53:00.005-04:00

This is a term to describe homes that are in the foreclosure pipeline that haven’t hit the open market yet. This interesting article identifies the cause of the greatest recession since the Great Depression as “our nation’s over-leveraged, over-valued position in housing.” It is a sobering viewpoint that it may take some years yet before we work out of the down housing market. One key factor is “Shadow Inventory” and its impact once these homes hit the open market. Summarizing the article, it could be some time before we see a rise in home prices, interest rates are likely to remain low, credit will be tight and qualifying for a home loan will be a rigorous process (particularly difficult for the self employed) and buying opportunities will be plentiful. Keep in mind that our regional economy is probably one of the strongest in the nation. That bodes well for us in the short and long term.

$75 Million Dollar Handyman’s Special

2010-07-22T14:48:00.000-04:00

Check out this article – a 90,000 square foot home is up for sale in Windermere Florida. It has a 20 car garage, 3 pools, and indoor roller rink and 23 bathrooms. It looks kind of ugly to me, but what do I know? The only think can think of is, waking up, feeling like a midnight snack and having to take a bicycle to the nearest of the 10 kitchens because it’s too far to walk! Sounds like too much work for me! :)
http://www.msnbc.msn.com/id/37854402/ns/business-real_estate/

Columbia / Ellicott City Rank #2 in the Nation for Best Places to Live!

2010-07-15T06:15:00.000-04:00

This report was just released and it shows that Columbia and Ellicott City rate the #2 slot for best places to live! It’s always nice to know that the quality of living this area has to offer is receiving the recognition it deserves. I was very excited to note that the accompanying photo displays the Patapsco Female Institute ruins where we held our client appreciation party last fall.

When Renovating My Home Where is My Money Best Spent?

2010-07-13T16:10:00.000-04:00

I get asked this question often and the answer is; there is no easy answer. But there are some basic guidelines that can help prioritize your projects and make sure you get the most bang for your buck. I came across this article on HGTV Pro. It gives a good idea of where priorities ought to be when planning your next project. Once you have an idea of what you would like to do, feel free to give me a call. I’ll be happy to share some good information about where your dollars will go furthest.

Why Americans Get Ripped off on Mortgage Loans

2010-07-07T07:48:00.000-04:00

An interesting article I found on the Wall Street Journal. Your loan will be around for a good long while after you purchase or refinance your existing home loan. It’s always a good idea to really do your homework when considering mortgage options. I have a number of lenders I work with who I trust to thoroughly explain your loan options and make sure they are looking out for your best interests. Contact me if you would like to speak with any of them.

Interest Rate Alert!

2010-06-30T07:57:00.000-04:00

Here are some rates today June 29, 2010
They will never get lower than this! If you know someone who would like to take advantage of these historic rates, please call!

30 yr fixed at 4.5% NO POINTS

15 yr fixed at 3.875% NO points

5/1 ARM 3.5% NO POINTS

FHA rates ( ADD .25 DISCOUNT POINT FOR VA LOANS)

30 yr fixed 4.5% no points

5/1 ARM 3.5% no points

FHA AGENCY JUMBO

30 YR FIXED 4.5% + NO POINTS

Low E Glass and Doors

2010-06-28T14:33:00.000-04:00

Here is a great article about Low E glass in widows and doors. There are still incentives for energy efficient windows and doors in Maryland through to the end of the year. It’s a good time to consider upgrading windows and doors.

Great News!

2010-06-25T16:42:00.000-04:00

We have now launched a new search program that we are making available to our clients. It’s called Listingbook and it’s one really neat and powerful program. Here’s what it can do for you.

Create your own searches and then customize them to your specifications
Get up to the minute sales info such as Days on Market, Price Changes, Price Reductions, Sold Info
Save your favorite homes on a Watch List
Organize your multiple searches using a simple online interface
Set up property alerts

This fully integrated communication tool allows you to stay on track and not miss any important information. It’s one of the ways I put good information into your hands – quickly. Using these features you can closely watch the market in the way you want to watch.

Feel free to give it a drive or recommend it to your friends. Here is the link http://www.listingbook.com/ select me as your agent and I will be able to help customize your search and provide you with an enhanced information package.

Housing Market Diagnosis: Bipolar

2010-06-10T13:46:00.001-04:00

There are lots of factors pulling and tugging at our housing market and these can vary dramatically depending on where you look – Maryland – Nevada – Florida – Michigan – California etc. Our regional economy still performs well due to the steadying influence of the government. Other areas are not so strong. The bottom line is we are going to bounce around for a while yet while seeing a modest improvement later in 2010. This article really paints an accurate picture of some of the uncertainty we are seeing. Don’t forget. uncertainty can provide opportunity.

Existing Home Sales Soar In April

2010-06-01T16:04:00.000-04:00

Home sales jumped as a result of the April 30th deadline for the government grants. The winter storms took a lot of momentum out of the market but just before the deadline we experienced a surge. (click here) Since the deadline we have experienced a mixed bag of activity, some areas and price ranges have continued active while others have definitely languished. I expect to see a little more stabilizing occur over the next few months as our economy continues to improve. In the meantime, interest rates are still a great bargain, in fact one analyst pointed out that the lower rates we are seeing now could actually equal the $8,000 grant if new buyers remain in their homes for the next 4-5 years.

Deal of the week: Check out the 10 year fixed. 3.875% with 0 points!

2010-05-21T15:24:00.000-04:00

I often say that interest rates are one of the most important and frequently overlooked facets of the home buying process. Since buyers will pay for many years after the purchase of a home, the interest rate on the “rent” of the money is just as important as the original purchase price. I just received this update advising of a loan product with 3.875% rate with 0 points from one of the lenders I work with. Now that’s a pretty great rate.

There are some really excellent interest rates out there at this time. Who is the next person you know looking to take advantage of these low rates, give me a call.

Buyer Surprises Before Settlement – A New Wrinkle to be Aware Of

2010-05-17T15:02:00.001-04:00

Applying for mortgage? Starting June 1, you could face another credit screening
By Kenneth R. Harney
Saturday, May 15, 2010; E01

If you're thinking about applying for a home mortgage, here's some important news: Beginning June 1, your lender is likely to order a second full credit screening immediately before closing.

The last-minute credit report will be designed to find out whether you have obtained -- or even shopped for -- new debt between the date of your loan application and the closing. If you've made applications for credit of any type -- for furnishings and appliances for the new house, a car, landscaping, a home equity line, a new credit card, you name it -- the closing could be put on hold pending additional research by the lender.

If you've actually taken out new loans that are sizable enough to affect the debt-to-income ratio calculations used in your original mortgage approval, the whole deal could fall through. The added debt load could render you ineligible for the mortgage because you suddenly appear unable to handle the payments without a strain on your household budget.

The June 1 changes are part of a new effort by mortgage giant Fannie Mae to cut down on slipshod underwriting by lenders and fraud by borrowers. Fannie's "loan quality initiative" will require lenders not only to pull two credit reports for each mortgage transaction but to perform additional verifications of borrower occupancy plans for the property, Social Security numbers and Individual Taxpayer Identification Numbers.

"There's an almost irresistible urge" for many mortgage borrowers, said Don Unger, chief executive of Advantage Credit of Evergreen, Colo. "The lender says, 'Okay, you're approved for the loan,' and you immediately think about shopping for all the things you need for the house. You go to Home Depot" or other major retailers, "and you put in an application."

In the past, that might not have raised an eyebrow -- or even been detected. But under the new double-check policy, when the Home Depot application shows up as a "hard," or borrower-initiated, inquiry on a credit report, Unger said, the lender "is going to have to contact" the merchant and determine whether credit was extended, in what amount, and how this might affect the applicant's home financing transaction.

Marc Savitt, president of the National Association of Independent Housing Professionals and a mortgage broker in Martinsburg, W.Va., said it's not an uncommon scenario. "Most often the new debt involves furniture or other goods for the house," Savitt said. "However, we have seen debt for new cars and other major purchases."

Terry Clemans, executive director of the National Credit Reporting Association, recalls one case in which the home buyers "went out and gorged on $40,000 worth of new furniture and all types of stuff" after their loan approval -- incurring monthly payments far beyond what they could possibly afford. Under the new policy, they would likely be shot down before closing.

Fannie Mae spokeswoman Janis Smith said lenders "will have to look for things like new credit accounts, increased credit lines, increased balances on existing accounts, undisclosed or newly recorded liens, second mortgages -- anything that may have changed since initial application that might impact a borrower's debt-to-income ratio."

As a practical matter, some lenders are likely to ask their credit reporting vendors to perform the actual investigations when new debts or inquiries pop up on borrowers' files. Fannie Mae's instructions say that "lenders must determine that all debts of the borrower incurred or closed up to and concurrent with the closing" are considered in the final loan analysis.

Unger, however, said all this may not be as straightforward as it sounds. For example, if the credit report is pulled immediately before closing to comply with the "up to and concurrent" requirement, there may not be sufficient time to check out inquiries -- especially those in which no actual drawdown of debt has been reported to the national credit bureaus. He also questioned whether entire loan packages might need to be re-underwritten -- a time-consuming process -- based on credit data discovered at the eleventh hour.

In that event, poof goes your closing.

How should home buyers and refinancers prepare for the new credit check procedures? Lenders and credit reporting company executives say everybody needs to follow just one basic rule: abstinence. Between your application for a mortgage and the date of closing -- which might be a span of 45 to 60 days or more -- resist the irresistible.

Don't apply for new credit unless you discuss it in advance with your lender and get a green light.

Home is Where the Heart Is. Eh?

2010-04-19T08:19:00.001-04:00

I came across this article today about a Lynx that was trapped in Canada and relocated to Colorado in 2005 as part of a reintroduction program. Over 200 Lynx were relocated to re-populate the species after they had died out in the state. Over the past 5 years this Lynx (BC-03-M-02 as he was known to the biologists - I think I’d call him Homer) methodically made its way back to where he started, demonstrating a remarkable homing instinct. The sad new is that he perished in a trap once he arrived back in his home territory in Canada. Although the story has a sad ending it does say a lot about how important home is to all of us on this planet. But, this story does have some good news. Homer fathered two litters during his stay south of the border so his family genes will be around for a long time to come. Travelling cross country in hostile territory for over 2000 Kilometers through three states and one province– I’d say that’s pretty good for a 25 pound cat who knows how important home is.

NEXT CYCLE of the First-Time Homebuyer Program (FHP)

2010-04-07T07:08:00.002-04:00

Here are the program highlights:

Opens April 19, 2010, and continues through Dec. 31, 2010 or until all available funds are disbursed, whichever occurs first.
Program provides matching funds of up to $7500 per household for down-payment and closing-cost assistance to low-and moderate-income homebuyers.
Qualified lenders in Maryland include: BankAnnapolis; Advance bank; Chesapeake Bank of Maryland; Hamilton Federal; MECU of Baltimore; Rosedale Federal S&L Assn.; Slavie Federal Savings; First Mariner; Ideal Federal Savings; Presidential Bank; Columbia Bank; First United Bank & Trust; First Shore Federal; K Bank; Carrollton Bank.
Participation lenders may have geographic or demographic restrictions.

If you or someone you know would like to take advantage of this program or would like more information call or email me.

8 Tips to Take Advantage of the Homebuyer Tax Credt Before Time Runs Out.

2010-03-29T13:13:00.004-04:00

The deadline for Homebuyers grants is fast approaching and there are just about 30 days left. Here are some good tips to remember when considering the grants and their impact on your home purchace or selling decision. I have had lots of people calling to ask questions about the program and how it affects them. Do you have questions?

Interest Rates Expected to Stay Low

2010-03-17T03:53:00.002-04:00

A recent Washington Post article quoted Fed Chairman Ben Bernanke as saying "the federal funds rate is likely to remain exceptionally low for an extended period." He has said the same thing in every statement for the last 14 months. That is about as clear a signal as possible about where Ben stands on long term interest rates. Rates will continue low until things change and at some point things will change, for the better. At this time, however, it looks to me that the Fed Chairman is saying out economy hasn't yet recovered enough to allow interest rates to push higher. We have a ways to go before our economy swings into more positive territory. We are seeing some tentative early swings, but at the present we are still struggling a little. When change comes, it will come quick and interest rates will adjust quickly as well. I blogged recently abou the Four Windows of Opportunity. This window of opportunity - low interest rates is still open. For now.

If you know of anyone interested in locking in a low interest rate on a new home purchase, give me a call.

First Time Home Buyer Credit--How Do I Get My Money From the IRS?

2010-03-09T03:35:00.003-05:00

I came across this information which is really helpful as you apply for the First Time Home Buyer Credit. It's a little wordy (isn't everything at the IRS?) but very accurate and I guess that's what counts when it comes to your taxes. Anyway, take a quick look as it may answer some of your questions about this important grant. I'm seeing lots of first-time buyers starting to zero in on this credit. Move-up buyers purchaing a new principal residence and qualifying for the $6,500 grant are taking advantage as well.

Who is the next person you know that would like $8,000 or $6,500 for their next home purchase?

Home Prices Gain for Seventh Straight Month

2010-03-01T06:54:00.003-05:00

It seems like our housing market is doing the slow but sure bumpy recovery thing, but here is a report that shows we are starting to make some headway. This index is up more than 3% since last May but is still below its May 2006 peak. Reports like this will continue to jump around a lot but the overall trend will be upwards, especially if we continue to see evidence that our economy is improving.

Plastic Granite

2010-02-25T06:46:00.001-05:00

We’ve all longed for that elegant and classic look and feel of granite countertops in our dream home. We often thought about doing it in our current homes but then the reality of the cost benefit analysis kicks in and we come to the conclusion it’s either unaffordable or it would over improve our homes or both. New products seem to be hitting the market at a torrid pace these days and here’s one that is really interesting – plastic granite or in other words Formica on steroids. Take a look and see for yourself. This could be a cost effective alternative for your next home improvement project.
Click Here to View a Video Demo.

Ice Dam Problems

2010-02-19T14:02:00.002-05:00

The recent heavy snows and storms have created a situation that we have not really experienced here before – Ice Damming. I have been receiving lots of phone calls and emails from people having problems with water coming into their homes as a result of ice dams on their roof. The purpose of this communication is to share some helpful information that will allow you to trouble shoot and prevent further damage. Because you have not had a problem yet doesn’t mean you won’t. The warmer weather and strong sun should take the snow off most roofs over the next few days. The melting snow could initially create more problems as the water builds up behind the ice dam. Here is what you can do.

See my recent post below about ice dams to understand the problem:

Call a professional roofing contractor if you experience problems

Don’t go up on your roof unless you know what you are doing - roofs covered with snow and ice can be slippery

Don’t remove ice with an axe or other sharp tools unless you are experienced. Roofing shingles are not made to withstand heavy blows and in the cold weather they are brittle and can crack or break leading to leak problems in the future

Here are a couple of home remedies I have come across that can be helpful:

Put ice melt into nylon stockings and tie the ends closed to create a "sausages." Place these in a couple of places along your roof, perpendicular to the edge. The chemicals will slowly melt and create a channel for the water to flow through.

If you have a long enough garden hose, attach it to a hot water source and use that stream of hot water to melt channels through the ice dam. You can also melt and clear away the snow about four feet back from the edge of the roof to prevent further accumulation.

Use the same method to thaw ice in gutters. You do not need to get all the ice out of the gutter – just enough so it loosens up. As soon as water is flowing in the gutter it will widen out the channel on its own.

Other helpful ideas:

Keep snow cleared away from exterior heat pumps so they can operate unrestricted.

Make sure your sump pump exterior drain pipe is clear so if your pump kicks on it will have a place to expel the water.

Make sure the storm water drainage openings in your street are clear so when snow starts melting it will not back up and create a lake in front of your home or on your property.

Remove icicles off your roof edge if possible – especially the big ones. They are dangerous and can actually rip the gutter or fascia boards right off your home. Be very careful when you do this!!

We are currently experiencing days where melting occurs, and then temperatures drop at night so a re-freeze occurs. This is good because it creates a controlled release of snow. However, we will likely experience a rapid melt at some point so be prepared to handle an excess of water. Try to keep snow and ice back from your home and make sure there are drainage channels for water to flow away from your home. If there is any chance of water working its way back to your house try to address that issue before the melt begins.

Good luck and call if you have any questions

Welcome to Snowmageddon 2010!

2010-02-10T03:15:00.006-05:00

It’s hard to believe the weather we have been experiencing over the past few days. In my area we had around 32-34 inches Friday and Saturday with another 10 to 20 inches on the way overnight and through tomorrow (Wednesday February 10, 2010). Our lives are full of cancellations and delays. Travel is difficult and a little scary. People are not used to snow packed roads and snow banks that tower over 10 feet high in some places. Intersections are interesting – making a left hand turn is an exercise in faith. You can’t clear traffic until your car’s nose is already into the oncoming lane. Wow! This weather has raised a lot of concerns about snow load and a phenomenon called Ice Damming. No pun intended. I thought I’d share some info that might be helpful.

Be safe out there and pray for spring!

Snow load – most roofs are engineered to handle the snow loads we are experiencing. Safety advisories warn people that removing snow from your roof can be dangerous for obvious reasons, but it can also create problems. First, the additional weight of people tromping around on a roof already heavy with snow can actually cause the very condition you are looking to avoid – collapse. Secondly, it is easy to damage roof shingles removing snow since they are not designed to be scraped with a shovel. It may be best to hire professionals if you feel you need to have snow removed. For most pitched roofs, there should be no problem.

Ice Damming - this condition occurs when snow build up on the edge of a roof and creates a dam sending water back up under the shingles and into your attic. Here are some helpful links to identify the problem and what to do to resolve it.

Explanation of an Ice Dam

Fast Fixes for Ice Dams

Info on and Fixes for Ice Dams

Info on Ice Dams and Fixes #2

Trends in Housing Year End 2009 Report & Highlights

2010-02-08T06:35:00.004-05:00

The strength of our regional market is evident in these figures just released (link). We are performing pretty well and prospects are bright for continued recovery in our housing market in 2010. Prices in some areas rose a little and days on market (time it takes for a home to go under contract) has dropped. This indicates a market that has definitely leveled off and is preparing for recovery in the coming years.

View the Press Release
Downlaod the PDF

View the Video Highlights

The Four Windows of Opportunity--Great for Buyers and Sellers

2010-01-25T14:54:00.013-05:00

Our current housing market presents four windows of opportunity, and like most windows they will all close at some time. Right now Buyers are presented with a unique set of cirumstances--a perfect storm of advantages which may not be around for much longer. Here are what I call the Four Windows of Opportunity, the benefits to buyers and sellers and when to expect these windows to close.

If you or someone you know is looking to take advantage of this collision of benefits, please contact us as soon as you can.

Here they are:

1) Homebuyers Grant

2) Low Interest Rates

3) Low Home Prices

4) FHA Financing Changes

1) Home Buyers Grant

Buyer Benefits $8,000 for first time buyers - does not have to be repaid. See link for more details.
$6,500 for buyers who purchase a new residence even though they already own a home - does not have to be repaid. See link for more details.

Seller Benefits First time and move up buyers coming back into the market creates demand for homes which benefits sellers.

Window Closes - April 30, 2010 (homes need to be under contract by April 30, 2010 and closing before June 30, 2010 - Click here for details). Usually, it takes three months or longer to sell a home. That's why it is critical sellers put their home on the market right away. Otherwise they might not leave themselves enough time to both secure a buyer for their current house and find a new home by the April 30th deadline.

2) Low Interest Rates

Your home purchase price is a one time event. Mortgage payments are a monthly event and will be around for a long time. You reap these benefits for years.

Buyer Benefits Interest rates for 30 year fixed mortgages are still hovering around the 5% range. Some loan programs can take those rates significatly lower. These rates are at historic lows and are not likely to go lower.

Seller Benefits Low interest rates bring buyers back into the market creating demand for homes. Sellers become buyers and take advantage of the same low rates.

Window Closes - Sometime Late 2010. There is no question that as we work our way out of the Great Recession rates will trend higher. Timing on this one is my best guesstimate. It could wiggle around a little depending on how the economy is fairing. Remember these rates are artificially low right now because of the Obama Housing Recovery initiative. We'll hear lots of chatter on the news as the rate increase process gains momentum.

3) Low Home Prices

Buyer Benefits Home prices seemed to have bottomed out. Deep discounting is rarely seen these days as homes coming on the market already reflect adjusted prices. We are seeing prices as low as 2002 levels in some areas. This is probably as close as anyone can get to perfectly timing the bottom of the price cycle.

Seller Benefits Buyers coming back into the market taking advantage of lower prices creates demand for homes. Your home may sell for much less than its value a few years ago, but the one you are buying will have dropped as much if not more.

Window Closes - Sometime 2011 or 2012. Prices will again begin to creep up once excess inventory disappears. We don't expect to see rapid price rises at that time but there will be a definite upswing at some point. Conservative lending practices and higher interest rates will keep any rapid rise in check.

4) FHA Financing Changes

Buyer Benefits We just received news about changes to FHA financing that will benefit buyers purchasing foreclosed Banks Owned or HUD properties (click here) which takes effect February 1, 2010. There are other changes looming which will not help buyers using this type of financing. The increasing of FHA insurance premiums and along with increased credit requirements will impact buyers (click here). Seller assistance (now at 6%) will be reduced to 3%. FHA loans are underperforming in most markets so expect to see more negative adjustments to this program.

Seller Benefits Buyer using FHA financing creates demand for home sales, which in turn helps sellers.

Window Closes - Spring 2010. We are waiting to hear when these changes will take effect but understand it will be soon - probably spring of this year.

Change to FHA Guidelines--Buyers Win Big!!

2010-01-22T13:09:00.001-05:00

Here is a summary of proposed changes to FHA Guidelines that should be passed February 1, 2010. Buyers using FHA loans will be able to purchase bank owned, foreclosed and HUD owned properties – properties which are often the best deals. These changes will allow buyers using FHA loans access to affordable properties – an important advantage in our current market. FHA financing allows for low down payments – as low as 3 ½ percent as well as allowing up to 6% of the purchase price for seller assistance to cover closing costs. Some changes are on the horizon for FHA loans which will cost buyers more money, so the window of opportunity to maximize the use of these loans may close soon.

Click Here for More Information

Mortgage Market in Review

2010-01-18T10:23:00.004-05:00

The upshot of the following article is that interest rates remain low but there is some bouncing around from week to week. Long term forecast is for rates to rise so this is a great time to refi into a 30 year fixed or buy that first time home and transition out of renting into something of your own.

Mortgage Market in Review

Market Comment Mortgage bond prices rose last week pushing mortgage interest rates lower. The bond market rallied nicely Tuesday following moves by China to curb growth. Oil prices fell almost immediately providing a much-needed reprieve following the recent run up in prices tied to severe cold weather across the US. The consumer price index data showed tame inflation, which also helped rates improve. For the week interest rates fell by about 1/2 of a discount point.

The inflation data Wednesday will be the most important economic release this week. Signs of stronger than expected inflation would not be good for mortgage interest rates. The bond market is closed Monday in honor of the Martin Luther King holiday. Interest rates may be volatile Tuesday as trading resumes following the extended holiday weekend.

LOOKING AHEAD

Economic Indicator: Martin Luther King Day
Release Date & Time: Monday, Jan. 18
Analysis: Important. Shortened trading week may result in volatility when trading resumes Tuesday.

Economic Indicator: Producer Price Index
Release Date & Time: Wednesday, Jan. 20, 8:30 am, et
Consensus Estimate: Unchanged, Core up 0.2%
Analysis: Important. An indication of inflationary pressures at the producer level. Weaker figures may lead to lower rates.

Economic Indicator: Housing Starts
Release Date & Time: Wednesday, Jan. 20, 8:30 am, et
Consensus Estimate: Up 1.0%
Analysis: Important. A measure of housing sector strength. Weakness may lead to lower rates.

Economic Indicator: Weekly Jobless Claims
Release Date & Time: Thursday, Jan. 21, 8:30 am, et
Consensus Estimate: 445k
Analysis: Moderately Important. An indication of employment. Higher figures may result in lower rates.

Economic Indicator: Leading Economic Indicators
Release Date & Time: Thursday, Jan. 21, 10:00 am, et
Consensus Estimate: Up 0.5%
Analysis: Important. An indication of future economic activity. Weakness may lead to lower rates.

Economic Indicator: Philadelphia Fed Survey
Release Date & Time: Thursday, Jan. 21, 10:00 am, et
Consensus Estimate: 18.2
Analysis: Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.

LEI

The index of leading economic indicators (LEI) is a weighted average of eleven economic variables that "lead" the business cycle. It is constructed for forecasting future aggregate economic activity. The eleven variables that make up the LEI measure workers’ hours, initial unemployment claims, new factory orders, vendor performance, contracts and orders for plant and equipment, new housing permits, changes in unfilled orders, prices of raw materials, stock prices, money supply and consumer expectations.

Each of the variables that comprise the index has a tendency to predict (or lead) economic activity. For example, new orders for manufactured goods, new orders for plant and equipment, and new building permits are all direct measures of the amount of future production being planned for the economy.

Analysts monitor the LEI in an effort to predict future economic growth. When the LEI report is up, mortgage market participants expect credit demand to increase and inflationary pressures to build. Thus, when the LEI report is rising, interest rates tend to rise as well.

The LEI report is a valuable forecasting device that correctly predicts most economic turning points. The percentage change in the LEI is reported monthly and is an indication of the activity that will occur within the next three to six months. The LEI tends to turn down before peaks in the business cycle. Continuous declines are generally accepted as evidence that a recession continues.

Nine of the eleven components that make up this index are known before the release of the report, so the index is easy for economists to predict. Thus, although this is important predictive data for market participants, surprises are not common with the release of this data.

Article Provided by
Bill Hylind Chevy Chase Bank
Phone: (410) 872-8460
Fax: (410) 312-0301
wghylind@chevychasebank.net

Mortgage Rates Begin New Year with Slight Drop

2010-01-15T03:00:00.002-05:00

Rates for 30-year home loans inched downward this week, the first decline in a month, but remained above last month's record lows. That's a great piece of news to begin the New Year. If I were a betting man I would wager that interest rates are about as low as they are going to get at this point and will likely begin to trend up as we work out of the recession. If you are considering refinancing or the purchase of a new home, now is a good time to take advantage of these low rates. This coupled with the First Time Home Buyer's grant of $8,000 and $6,500 for move up buyers purchasing a principle residence means it's a great time to make a move.

Buy the Home Twilight was Filmed In!

2009-12-16T15:02:00.002-05:00

For all you vampire lovers – blood is in the water. The home Twilight was filmed in is up for sale and the price is being reduced! Click Here for More Info!

Picture Courtesy of money.cnn.com

Introducing our New Feature--Home Improvement Section

2009-12-14T08:19:00.008-05:00

I have been blogging for over a year now and enjoy the opportunity to communicate with our many readers. I have had a growing interest in sharing more info about Home Improvement. The housing downturn has turned up lots of neat ideas on topics from how to save energy (Green Tips) to fixing your leaky faucets to low cost home updates. I am going to launch this new feature with an interesting new green gadget – the Dual Flush Toilet Conversion. It’s an interesting topic to start with but one that is near and dear to all of us. Ok – let’s carefully move on :)

Here’s the link – enjoy!

Housing Recovery in Early Stages

2009-12-08T16:15:00.002-05:00

We are now beginning to see solid signs of recovery in the housing market. This report (click here) is one in a pattern of news items that begin to document the housing recovery. Price increases are certainly a sign that things are beginning to firm up, but a full recovery is still a ways off. It is however an early indicator that prices for the most part are as good as they are going to get. Coupled with low interest rates 30 year fixed conventional @ 4.99% and FHA @ 4.875% represents tremendous value opportunities.

As the recovery gains traction, we will see interest rates begin to rise and this period of unbelievably low rates will have passed.

Here are the Facts on the New Home-Buyer Tax Credit

2009-11-25T12:37:00.001-05:00

3rd Quarter 2009 MRIS Trends in Housing Report: The State of teh Regions Housing Market

2009-11-20T14:14:00.001-05:00

Investors Drawn Back into Real Estate

2009-11-13T06:02:00.008-05:00

Today I was reading an article entitled - Low priced Foreclosures and High Hopes for Appreciation Draw Investors back to Real Estate.

This is actually happening in my market. In fact we are seeing multiple offers on foreclosed properties becoming the norm as savvy buyers move to take advantage of current market conditions. Continuing low interest rates coupled with the $8,000 First Time Homebuyers Gift (Grant), plus the expansion of the program to include $6,500 for current owners purchasing a new residence is creating lots of buying activity. Buyer perception about affordability of homes has increased to the point where they now realize they can now afford 70% of the homes on the market based on the median income of $52,029. Buyers are waking up to the opportunities in a hurry!

First Time Home Buyers Grant Extended and Expanded to Current Homeowners!

2009-11-06T12:05:00.004-05:00

Congress passed the Homebuyers Tax Credit Program Expansion set to expire November 31, 2009. Here is a quick summary.

The program, which was set to expire November 30, 2009 has been extended and expanded. It will continue to assist First Time Homebuyers by providing an $8,000 credit with the existing rules still in place. The program has also been extended to Current Homeowners who now qualify for $6,500 for the purchase of a new residence if they have lived in their existing home 5 of the last 8 years. The extension will terminate April 30, 2010 and will apply to contracts entered into before that date and which close before July 1, 2010.

For all the details click here.

Click here to read about the Four Windows of Opportunity.

Thanks for helping me better serve our Real Estate Community.

Existing Home Sale Contracts Rise for 8th Straight Month

2009-11-04T04:44:00.005-05:00

Some good news in the housing market surfaced in September (Click Here to Read the article).The September Pending Home Sales Index which tracks sales of existing homes rose 6.1%. This was a higher than anticipated increase. The feeling is that it is spurred by the upcoming expiration of the first time Homebuyers Credit (set to expire at the end of November). That deadline looks like it will be extended into 2010 at this point. Housing may not be out of the woods yet, but this report is the latest in a line of positive indicators. The report quotes “An excess of homes remains on the market despite recent improvements," he said. "Although current inventory is getting closer to price equilibrium, foreclosures will continue to enter the pipeline." Our region has seen in increased level of activity as well and is experiencing the same trend.

Thanks for helping me better serve our Real Estate Community.

Are Distressed Homes Worth It?

2009-10-22T14:15:00.003-04:00

I recently read a great Wall Street Article which talks about the advantages and disadvantages of purchasing distressed homes. Having obtained my CDPE (Certified Distressed Property Expert) designation I can attest to the fact that it is a complicated and lengthy process that demands patience and nerves of steel. For the right people and in the right circumstances the distressed property process can pay off big. This year I have worked on a good number of transactions where buyers did really well, and I mean really well! I’ve noticed the ones that were successful showed lots of patience and persistence.

As is often the case the bigger the risk, the greater the reward. Buying foreclosures can involve some element of risk, particularly in the home inspection process. Many lenders only sell “as is” and buyers may take some chances on the physical condition of the home. Typically these defects are pretty easy to identify if you have a good home inspector. Armed with that info home buyers can then decide if they are comfortable making the purchase.

Are distressed properties for you? Here are some good questions you might ask yourself before moving ahead.

1) What is my timeframe? In other words - when do I want to occupy? Short sales involve a very lengthy approval process that can last between 3-6 months before final approval is granted to close the transaction.
2) Am I prepared to lose a home and start over? Short sale lenders may not approve the sale and you might have to start all over. You could lose 3-6 months if this happens. See question #1 for impact.
3) Am I ready to add some sweat equity? Foreclosures often require some cosmetic, minor or sometimes even major repairs. You will need to decide what cost or work level you are prepared to contribute.

Have more questions? Email me and I’ll be happy to share some good info with you.

Thanks for helping me better serve our Real Estate Community.

2009-10-22T07:40:00.005-04:00

A Realtor in Maryland...
I am a Realtor in Maryland and can personally help you or someone you know in the Baltimore, Silver Spring, Rockville and Annapolis areas. In the areas I don't personally service, I can connect you with experienced colleagues who are part of our regional network.

Or Anywhere Else...
If you're not looking for a home in Maryland I can help you find an experienced Realtor anywhere across the country and in Canada. I belong to a network of realtors that I can recommend. Instead of blindly trying to find a realtor, get in touch with me and I'll do all the work finding the right Realtor for you. Not all real estate agents are experienced or full time. My referral network has the best credentials to represent you at the highest level. The combination of personal service coupled with knowledge and experience will ensure a great transaction. I have done all the interviewing and vetting. I will provide you with some names and you can then select the one that you feel most comfortable with, knowing that they are already highly qualifed professionals.

Here's the best part...
The cost for medoing all that leg work for you is nothing!

My personal cell: 443-310-8824
Email: boyd@boydmcginn.com

Selling Homes in a Challenging Market - A Price War and a Beauty Contest

2009-10-09T16:36:00.002-04:00

Selling a home in this market involves a very important two-step approach.

First, sellers have to be priced aggressively. That does not mean they have to give away their home, but in this market homeowners simply cannot afford to be priced higher than their competition. Otherwise they will die on the vine waiting for buyers who will never come. One of my key responsibilities is completing market research in order to see what similar homes are asking and have sold for in the area. I thoroughly analyze the data and then sit down and review pricing strategies with sellers to determine the best possible price. A well-priced home that is a real looker presents a very compelling opportunity for buyers. That leads us to the second step.

Sellers need to have their homes ready to wow buyers – this is the beauty contest. Imagine buyers everywhere watching HGTV. When they are ready to buy they have a clear idea of what they want as far as decorating and home design is concerned. It seems most have Champagne tastes on a Ginger Ale budget. That can discourage sellers who see themselves spending tens of thousands of dollars getting their homes into selling shape only to disappoint buyers’ high expectations. It may come as a surprise that it is possible to present a home in a very exciting way without breaking the bank. My secret weapon in this step is Kristi of Energizing Spaces. I call her "the House Whisperer."

Together we work with sellers to develop a lean budget and then through a combination of using the seller’s own furniture and decorating accents along with items from Kristi’s decorator library, Kristi uses her great design ideas to help transform homes into HGTV classics. Sellers are amazed at the results both in shortened selling time and increased price. Using this two-step approach we have (even in this challenging market) managed to attract multiple offers for our sellers to consider. Now that’s a winning combination! So, who do you know who wants to win the price war by coming first in the beauty contest? Tell them to contact me for all our insider secrets.

Thanks for helping me better serve our Real Estate Community.

Homes: Sell at a Loss, Buy at a Discount

2009-10-06T15:58:00.005-04:00

The Issue

A question I hear all the time these days is – "I would like to upgrade and buy a new home, taking advantage of low prices and low interest rates, but how can I do that while I still own my existing home? Can I sell my home at a loss and still buy a new one?"

The Solution

The answer is yes, you can and here’s how:

It is possible to sell your home at a loss as long as you have enough equity to break even. I have even helped clients complete transactions where they brought money to settlement in order to complete the deal. They then purchased their dream home at a drastically reduced price. So your first step is to get an idea of what your home is currently worth. Call or email me, I can help.

Obtain a loan pre-approval – find out what you can afford to buy now that interest rates are low. I am seeing 30 year fixed loans around and just below 5% these days. Talk to your lender or contact me and I will connect you with a lender who will review all loan options with you.

Shop Like a Shark – Once you are ready we can find the right home for you. When it comes to negotiating I am like a Pitt Bull and there are lots of great deals I can bite into for you.

If you or someone you know is interested in taking advantage of the opportunities in our current real estate market, call or email. I can get some good information into your hands.

Thanks for helping me better serve our Real Estate Community.

Chocolate Calculator

2009-09-29T16:22:00.006-04:00

Isn't the internet interesting!? A friend sent me this recently. Try it!

Don't tell me your age; you'd probably lie anyway-but the Hershey Man will know!

YOUR AGE BY CHOCOLATE MATH
This is pretty neat.
DON'T CHEAT BY SCROLLING DOWN FIRST!It takes less than a minute. Work this out as you read. Be sure you don't read the bottom until you've worked it out!

1. First of all, pick the number of times a week that you would like to have chocolate (more than 1 but less than 10)

2. Multiply this number by 2 (just to be bold)

3. Add 5

4. Multiply it by 50 -- I'll wait while you get the calculator
5. If you have already had your birthday this year add 1759... If you haven't, add 1758.
6. Now subtract the four digit year that you were born

You should have a three digit number The first digit of this was your original number (how many times you want to have chocolate each week)

The next two numbers are
YOUR AGE! (Oh YES, it is!!!!!)
THIS IS THE ONLY YEAR (2009) IT WILL EVER WORK, SO SPREAD IT AROUND WHILE IT LASTS.

Interest Rates Fall – Opportunities Galore!

2009-09-22T12:45:00.011-04:00

I noticed last week that interest rates for 30 year home loans edged down again and are close to record lows, which provides another excellent opportunity for home buyers to save money. The average rate was 5.04, which is really a great rate! It seems the Fed’s strategy to spend over $1.25 trillion on mortgage backed securities is having the desired effect of driving down rates for home loans. Apparently that money will run out by winter and will most likely result in a rising trend for rates about six months from now.

I hear early reports that we are beginning to work our way out of recession even though it doesn’t feel like it yet. Low interest rates, combined with low prices, combined with the $8,000 First Time Home Buyer’s grant, provides an awesome opportunity for buyers. I think I sound like a broken record, but it is true!

Who do you know that’s ready to cash in on this once in a generation opportunity?

Thanks for helping me better serve our Real Estate Community

Client Appreciation Party – Sound of Music Sing-Along

2009-09-09T15:12:00.002-04:00

On September 18, 2009 the McGinn Real Estate Group is hosting our annual client appreciation party. This year it will be held in Ellicott City at the Patapsco Female Institute (see link for Historic Venue Info) and we will be presenting The Sound of Music in Sing-Along format. This style of movie presentation has become quite popular in Europe and other places such as the Hollywood Bowl in California. It is much more than just watching this classic family movie. Attendees are invited to participate by coming dressed in theme costumes. So be prepared not only to sing along to songs such as "Do Re Mi" and "Edelweiss" but to really get into the act. Here is an idea of what we will be doing. For example, whenever you see a mountain, everyone yells “mountain!” When you see the Baroness, you hiss. As Liesel says something cute, everyone says “ahh.” When the bad guys appear you boo and when they are trying to find the von Trapps, everyone waves flashlights around. Prizes will be awarded for costumes so use your imagination. We have included some neat ideas in the blog.

The Patapsco Female Institute is a stunningly beautiful historic site. Since we have the site for the evening feel free to come early (any time after 5:00 pm) and bring a box supper. There are lots of picnic tables or you can spread blankets and enjoy the beauty of the grounds. There isn’t a bad seat in the place so you can take your time and enjoy yourselves. We are anticipating it getting dark just about 7:30-7:45 pm.

Remember – seating is limited so sign up quickly and prepare for a great time! Pray for good weather and plan to join us for a wonderful evening. We will make the Hills of Ellicott City come alive with the sound of music!

Thanks for helping me better entertain our Real Estate community.

Will Congress Extend the $8,000 Tax Credit for First Time Home Buyers?

2009-09-04T13:46:00.006-04:00

About 14 weeks from now this important tax credit is set to expire. The big question is whether or not congress will extend the program another 6 to 12 months. I have experienced first hand the impact of this program since its inception in late 2008. It has been instrumental in encouraging people to buy their first home. In my opinion it has been a very important factor in stabilizing and correcting the housing decline. Since no housing recovery can occur without the first time buyers getting back into the market it stands to reason that until we are fully and completely recovered this program will be critical to the process.

Time is an important issue here as well. Since the home purchase process can take around 8 to 14 weeks from start to finish (including searching and getting under contract) we are now at the point where that window of opportunity may be closing and buyers could be left without the incentive at a time when it is still needed. Economists at the National Association of Realtors have estimated that $63,000 in downstream “ripple effects” is generated on a typical home purchase. That could include things like furniture purchases, landscaping, renovations etc. Even if that number is a little on the high side it is still plain to see that home sales have a significant impact on our economy.

One of the key points that seems to get lost when the real estate downturn is discussed, is that housing is the biggest industry of all, bigger than the auto industry, the steel industry and general manufacturing. When housing is sick, everything is sick. So, the best way to heal housing is to keep important incentives in place that encourage home buying and selling. That in turn will begin to heal the overall economy and we will move more quickly to work our way out of this deep recession. We might want to send that message to our members of congress and encourage them keep working to get this incentive extended. I don’t think it needs to be a bigger credit or more extensive than what it is at this time, but let's at least extend the existing program so more can benefit from it.

Thanks for helping me better serve our real estate community.

Lima Beans--My Newfound Joy

2009-08-31T15:54:00.003-04:00

Yes it’s hard to believe that anyone could love lima beans – they sure take a beating in the forum of public opinion. I grew up hearing horror stories about how everyone hated lima beans, but mothers everywhere seemed compelled to buy them and force kids to eat them all up so there was not one left on the plate. I guess it was mothers’ way of getting even for all the crazy stuff kids did. For most of my life I was only exposed to them when I had my vegetable soup. There was sure to be one or two floating in the bowl somewhere. I thought I liked them, but there were never enough to know for sure. One time I bought a bag of frozen lima beans. That was a disaster! They tasted like sludge mixed with wet cardboard. From that point on I was curious but simply ignored them.

This past year my wife Ninon got us involved in a community gardening project. She managed to get a 25 X 25 foot plot and we plunged into gardening in Maryland. One of our plot neighbors, Bob, is a gardening expert, and also works at the University of Maryland in their Agriculture Department. He is an encyclopedia of great info and has been an invaluable resource to us this past summer. One day he mentioned in passing that he was growing lima beans. He said he loved the taste of fresh cooked lima beans in butter along with a little salt. I filed that info away and never thought much more about it until we were visiting a garden stand in Delaware close to Bethany Beach. As we were purchasing corn and tomatoes I noticed boxes of lima beans still in the pod – big hairy green pods! So I decided to buy just one box and give them a try. A few days later I shelled them, boiled them and put on a little butter and salt. They were simply delicious! Before I knew it I had eaten them all without sharing any with Ninon. So the next time we went down to the ocean we bought some more. This time we made a dish called Succotash which is made with fresh corn (not on the cob) mixed with lima beans in a cream sauce.

Well for those of you old enough to remember Sylvester the Cat in Bugs Bunny - Suffer’n Succotash! – It was wonderful! Way beyond excellent! So, if you are interested in a new food adventure here is a recipe for Succotash and if you are quick (because they are almost finished for the season), go down to your local farmer’s market and pick up some lima beans and give ‘em a try. Your mother will be impressed!

Thanks for helping me better feed our Real Estate Community!

Picture Courtesy of goodguide.com

Facebook Faux Pas

2009-08-20T14:48:00.006-04:00

I recently came across a situation where the widely expanded use of social network sites can create some problems. The buyer of a property decided to post his negotiating strategy on his Facebook wall. Unbeknownst to each other, the buyer and seller had a mutual friend, so the seller could see the buyer’s Facebook page. The buyers had posted that they really liked the home, and were willing to go up to $xxxxx for it. When they made a lower offer, the seller refused to come down in price knowing what the buyer was really willing to pay.

This is a good reminder that what is posted on public sites is, in fact, public - and could come back to haunt as it did in this case. Developing negotiating strategies is one of the important values we bring to real estate transactions. Confidentiality is a key component of this process, something that we guard very carefully. This example reminded me how important that can be.

Thanks for helping me better serve our real estate community.

Image Courtesy: Microsoft Office Online

Regional Housing Report

2009-08-04T14:04:00.005-04:00

Here is the latest MRIS Trends in Housing Report that is published quarterly. It notes some interesting factors at play in our market.

Prices seem to be firming a little based on 2nd quarter improvements. Prices in some areas could drift lower by year end, but lower listing supply seems to indicate pricing traction.
Days on Market are down sharply from this past quarter and a year ago. Homes are selling more quickly than before.
Ratio of Inventory is showing continued decline. This is an indicator that demand is beginning to outpace supply.

What does all this mean? Well the simple answer is that these are early signs of an improving market. Since housing decline led us into recession, it makes sense that housing recovery will lead us out. I have picked up on some early signals in the overall market that indicate we are beginning to emerge from recession although the job market continues to be a little soft. These are national indicators and I still maintain that our regional job market is stronger.

What have I seen? I have been busy with both buyers and sellers since late 2008 continuing through into 2009. July and August typically see significant slowing in real estate sales but this year July has been busy. August seems to be building strong as well. Prices have not increased but levels of activity are up sharply.

We are not out of the housing correction period but I am certainly seeing our market shift from an aggressive buyer’s market to a more moderate buyer’s market. Interest rates remain very competitive and that factor along with the $8,000 first time buyer incentive will continue to encourage buyers to move into the market.

Click Here for the Report.

Thank you for helping me better serve our real estate community.

Are You Having a Hard Time Keeping Your Balance?

2009-07-21T07:34:00.005-04:00

Life has its challenges. Not the least of which is finding balance. My oldest son Alec was attending a conference recently when someone asked the speaker, "How do you balance all of life's responsibilities?"

He responded that he doesn't think of balancing his responsibilities as much as he thinks it's more like the circus performer who spins plates. The plate spinner has all these plates on poles, and if one slows down too much he rushes to it to spin it faster again, and he goes from plate to plate, giving attention where it is needed most.

So isn't that like life? Instead of beating ourselves up because we aren't finding a perfect balance (because everything is constantly changing), we should focus on giving attention where it is needed most at that time. Sometimes work will be more demanding, and sometimes family will be more demanding, sometimes our charity-work will be more demanding. We just adapt to the situation, and keep all those plates spinning!

A Fresh Start

2009-07-01T05:19:00.003-04:00

Recently I met with some clients who found themselves in a situation where they could no longer afford their home. A combination of salary reduction and an interest rate increase left them unable to pay their mortgage. Values had dropped on their home and they were underwater on their loan - meaning they owed the bank more than what their home was worth. Our first meeting was very difficult for them and I could see they were overwhelmed with the situation. They always had good credit and now they were facing foreclosure. They were unfamiliar with the process and did not really understand their options or that they even had options.

I was able to review their situation, develop a plan to put their home on the market as a "Short Sale" and avoid a possible job loss that foreclosure could have caused. Working closely with the lender I sold their home and they were able to make a fresh start.

The most interesting part of the process was settlement. It was actually a very positive experience and despite the difficult circumstances there was a lot of excitement at closing. After everything was over my clients took me aside and explained how happy they were to be free of the stress of the situation and how excited they were to start fresh with their credit undamaged by foreclosure. For them it was a very positive outcome.

I admit I was a little surprised. That day I learned firsthand how good people can feel once they have the opportunity to be free of oppressive debt.

I recently obtained my Certified Distressed Property Expert designation (CDPE) in order to more effectively understand the needs of distressed homeowners. If you know of anyone who is in a difficult situation with their home, let them know they do have options. I would be pleased to give them good information that will help them move forward in a positive way.

Thank you for helping me better serve our real estate community.

Deal or No Deal

2009-06-24T05:16:00.007-04:00

If you've ever seen the show "Deal or No Deal" you've likely noticed how common it is for contestants to be lured into taking additional risks to see if they can get through just one more case and keep their dream of big money alive. Sometimes it works out for them and they win big. However, more times than not, the contestant tries to push the envelope too far and ends up squandering a sure thing in hopes of obtaining that alluring million dollar prize.

We've seen the same thing happen in the real estate industry lately as clients risk a sure thing - buying the home that is available at an already deep discount in the hopes of saving a few dollars more on that elusive steal of a deal. They get distracted and miss the great opportunity that is right in front of them. This desire to catch the market at its absolute lowest point and save that extra money can backfire and cost much more in the purchase of a home. The truth is that none of us knows "what case will be opened up next," and betting on the future can be a bit of a risky proposition considering the turbulent climate that surrounds us.

The reason I bring this up is out of concern that many are missing out on the current opportunity that is before us. The turmoil in the economy has created a situation where we can help you find a really attractive home at a hugely competitive price - the proverbial great deal. To find out exactly how to take advantage of the opportunity that still exists, give me a call at 443-310-8824.

Thanks for helping me better serve our real estate community.

Image courtesy of www.NBC.com

Six Degrees of Separation

2009-05-26T09:01:00.006-04:00

Earlier this month a Washington Post article talked about "Six Degrees of Separation," you know - that theory that you are only about 6 people away from knowing anyone else? But is it just a joke, or is there some truth to it?

There has actually been some real research done on this. In 1967 a sociologist randomly chose individuals in the Midwest and asked them to send a package to a stranger in Massachusetts. They were not given an address, but given the name, occupation, and the approximate location of the individual. They were asked to send the package to someone they thought might know the stranger, or would at least know someone else who might know the stranger.

Guess what!? Each package reached its destination, after being sent to (on average) five to seven people. Amazing.

Then in 2001 a professor at Columbia University devised a similar experiment, using the internet. His experiment was done on a much larger scale! He used 48,000 senders in 160 countries, and 19 "targets." The average number of people the email had to go through? Six.

Here's an example from my own life! Have you seen the video of Susan Boyle (I think nearly everyone who uses the internet has!)? Well - I asked my neighbor Mary (who's from Scotland) if she knows her (I asked her more as a joke than anything else), and she does! Her brothers know her well. So I am only two people away from Susan Boyle!

Which famous person do YOU know - maybe six degrees away?

(Image courtesy of USMagazine)

Faith and Football

2009-05-12T16:58:00.003-04:00

My blog typically centers on real estate related topics. This one however is a little different. I have noticed that much of the news made by professional athletes these days seems the kind that makes parents cringe whenever they hear it.

I would like to highlight a particularly interesting and positive event that will happen May 16th. This event is called Faith and Football and it is being hosted by my church – The Church of Jesus Christ of Latter Day Saints (Mormons). Although my church is hosting this event, those participating are men of faith from different religions. But what they have in common is a belief in God, and their faith that sustains them and has contributed to making them the great people they are. The event focuses on “Learning That Great Football Coaches and Players Can Also Be Great Men.” What a positive theme, and hopefully one that will be very influential in the lives of football fans of all ages.

Those participating in the event include:

LaVell Edwards, College Football Hall of Fame Coach, Brigham Young University
Derrick Mason, Two-time NFL All-Pro, Baltimore Ravens Wide Receiver
Lenny Moore, Pro Football Hall of Fame Player, Baltimore Colts Legend
Edwin Mulitalo, Super Bowl Winner (Ravens), Ten-year NFL Veteran
Ken Niumatalolo, Head Football Coach, US Naval Academy
Burgess Owens, NFL All-Pro, Super Bowl Winner, Oakland Raiders
Stan White, Baltimore Colt All-Pro and Ohio State All-American
Andy Reid, Two-time NFL Coach of the Year, Head Coach, Philadelphia Eagles

Feel free to visit the web site http://www.faithfootball.org/ . All are welcome to attend. There is an afternoon as well as an evening session. Although tickets are limited, there is no cost. This will be a wonderful event for sports and football enthusiasts everywhere. This is my invitation to you – come join us, bring your friends. Attend a great event where these men will "share their experiences and motivate all of us to be better.”

MRIS Trends in Housing Report

2009-05-04T10:24:00.005-04:00

Below is a Short Video and a link to the Housing Report.

Report

May Riddle Answer!!!

2009-04-28T08:02:00.002-04:00

Don't be Fearful. Be Factual.

2009-04-28T07:09:00.008-04:00

If Buyers and Sellers were just to take the news at face value it would be very easy to get scared in today's market. The better thing to do right now is to look for the facts. We hear about 8% unemployment but what we don't hear is that means that 92% of Americans have jobs and are getting their salary every single month. We hear how the market is doing and how the banks are failing but we don't hear much about how interest rates are at a six decade low right now.

There's a huge inventory of wonderful, great-value homes that are on the market right now; selection is high, interest rates are low, prices are low, and it's a fantastic time to be a Buyer. This also opens the door of opportunity for Sellers as well. Your home may not be worth what it was at its peak, but neither is the one you will buy. The fact is that since you will most likely purchase a home that has a higher value than yours, its 15-20% value drop translates into a greater reduction in sale price than yours. That means the math works to your advantage. If you couple that with low interest rates you are getting a double bonus.

Don't be fearful, be factual.

Thanks for helping me better serve our Real Estate Community.

Kind of like "On Star" for Real Estate...

2009-04-21T10:58:00.006-04:00

I am really excited to blog about some new technology I just launched. It's called Voice Pad and here is how it works.

Let's say you are driving through a neighborhood and you come across a home with a For Sale sign out front. This home looks very nice and you are interested in finding out the asking price along with other details such as number of bedrooms, bathrooms, if there is a finished basement, or lot size. At this point you think, "I'll email Boyd tomorrow and get the info." While this is a good way to get the info, wouldn't you really rather know right then and there while you are looking at the property?

Now I have a solution for you. My new technology allows me to set you up with a dedicated phone number that you put in your cell phone speed dial. When you see a home, you call Voice Pad. Immediately they answer and provide you with detailed info for that home. It's kind of like On Star for real estate. It is really fast and is also very simple. I have test driven this technology and if it is easy for me it will be a breeze for you. It's also fast. I'm no lover of slow phone systems that take forever to get info into your hands. This is so quick you'll have what you want in an instant.

If you or someone you know could use this technology, email me at boyd@boydmcginn.com and I'll get you started.

Let me know if you are interested.

Boyd

A Bell Won't Ring

2009-03-31T06:27:00.007-04:00

I heard a quote recently which said, "when home prices hit bottom you won't hear a bell ring." Bottoming out is something that is more clearly identified six to eight months after the event has occurred. Depending on the market it can even take a little longer. However, I have been seeing some positive signals lately and there are some early indicators that we might be getting pretty close to bottom.

Here is what I am seeing:

February home resale figures jumped by 5.1%

February new home sales also jumped 4.7%

Interest rates are officially at historic lows

These are national reports and it is important to note that our regional market performs better. These reports may be early indicators that housing is beginning to move in a better direction

Our area is not completely recession proof, but we have felt much less of an impact because of the economic strength of our region. Here is my experience locally:

I noticed an increase in buying activity early December 2008 - primarily first-time buyers but some move-up buyers as well.

January 2009 started strong and continues busy - mainly first-time buyers and some move-ups.

Whenever a home comes on the market and is priced right, it will often produce multiple offers.

I am noticing a return of confidence as buyers take advantage of low prices and historic low interest rates.

As interest rates dip buyers move off the fence and when they do, they move decisively to purchase well-priced homes.

As I speak with other real estate professionals I'm receiving confirmation that they are having a similar experience. Whenever the market is making a change, real estate agents who are on the front lines every day usually see that change first. I am seeing some positive signals right now.

Have you come across any positive signals?

Could Be a Good Idea

2009-03-06T11:11:00.004-05:00

President Obama has launched a very aggressive stimulus program and the details are just starting to filter down. I won’t pretend to know everything about the bill and if or when it will actually do what it is intended to. There is a parade of talking heads on TV every night better qualified than I to answer that question – unfortunately they never agree on anything. There is some agreement on one point however – by the time the economy recovers nobody will know for sure what exactly caused the recovery and when. It will likely be a combination of factors starting with the stimulus program that was just launched, a natural swinging back of the economic pendulum, or maybe just the fact that your washing machine gives up the ghost and it's time to buy a new one whether you want to or not. At some point we will venture out and begin to spend again. The world has to spend to live.

During this time of uncertainty some novel ideas pop up about how best to deal with certain aspects of the problem. I came across one the other day that made some sense to me. This is an article that appeared in the Washington Post February 22, 2009 written by Ricardo J Caballero, head of the Economics Department at MIT.

http://www.washingtonpost.com/wp-dyn/content/article/2009/02/20/AR2009022003230.html

Perhaps this idea may gain some traction and be one of the factors that puts our economy back on solid ground. What do you think?

$8,000 First-time Home Buyers Incentive

2009-02-26T16:37:00.002-05:00

The Obama government has provided an incentive for first-time home buyers who purchase homes from the start of the year until the end of November 2009. They may be eligible for a tax credit based on 10 percent of the value of the home or $8,000 (whichever is least). Remember a tax credit is very different from a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.

The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.

Tax Credit Versus Tax Deduction

It’s important to remember that the $8,000 tax credit is just that – a tax credit. The benefit of a tax credit is that it’s a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all is said and done. So, if a home buyer were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, they would owe nothing.

Better still, the tax credit is refundable, which means the home buyer can receive a check for the credit if he or she has little income tax liability. For example, if a home buyer is liable for $4,000 in income tax, he can offset that $4,000 with half of the tax credit, and still receive a check for the remaining $4,000!

Homes that Qualify

The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying homes include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principle residence also qualify.

Higher Loan Amounts

More good news – there is an extension on the additional tier of conforming loan amounts which had been first established in 2008. This tier of home loans are those greater than $417,000, and with a maximum that depends on the area, but is not greater than $729,750. These loans will again be eligible for rates that are slightly higher than conforming loan rates, but less expensive than the standard “jumbo” loan rates.

Phase-out Examples

According to the plan, the tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.

FIRST-TIME HOMEBUYER TAX CREDIT COMPARISON CHART

As Modified in the American Recovery and Reinvestment Act (Major Modifications Italicized)

February 2009 - Click image to enlarge.

Foreclosure vs. Short Sale

2009-02-04T09:06:00.006-05:00

There is a lot of discussion these days about Short Sales and Foreclosures. I think it might be helpful to understand some of the terminology and how each option might impact an owner of a property who is in jeopardy of losing their home. Here's a quick and simple definition of the two and some additional information that helps understand the impact of Foreclosure vs. Short Sale. If you have any questions or would like additional information, please call me.

Thanks for helping me better serve our Real Estate Community.

Foreclosure:
When a homeowner defaults by failing to make payments on his or her mortgage, the bank or financial institution that holds the mortgage note may foreclose on the property. Foreclosure gives the legal ownership of a property to the bank to allow the bank to recoup its investment. Foreclosure proceedings vary by state but usually involve court appearances to ensure the foreclosure is warranted.

Real Estate Short Sale Definition:
A short sale means that you sell the property. But you get a lower price than what you owe. Then you go to your lender (or both lenders if you have two loans) and get them to approve the sale of your house.

The purpose of a real estate short sale is to avoid expensive foreclosure for the lender and get the borrower out of debt with the least possible credit history damage. Lenders have no interest in owning property as they have to pay property taxes and pay for necessary repairs and borrowers would be happy to walk out free of mortgage debt.

However, lenders may or may not agree to take the short sale as full debt satisfaction. As a result, they could file a deficiency judgment for the remaining loan amount and the borrower's credit and capability of taking another home loan soon after the short sale will be damaged.

Foreclosure vs. Short Sale
Homeowner Consequences

Issue	Foreclosure	Successful Short Sale
Future Fannie May Loan – Primary Residence	A homeowner who loses his home to foreclosure is ineligible for a Fannie May Backed mortgage for a period of 5 years.	A homeowner who successfully negotiates and closes a Short Sale will be eligible for a Fannie May backed mortgage after only 2 years.
Future Fannie May Loan – Non Primary	An investor who allows a property to go to foreclosure is ineligible for a Fannie May backed investment mortgage for a period of 7 years.	A homeowner who successfully negotiates and closes a Short Sale will be eligible for a Fannie May backed investment mortgage after only 2 years.
Future Loan With Any Mortgage Company	On any future 1003 application, a prospective borrower will have to answer Yes to question C in Section VII of the standard 1003 that asks “Have you had property foreclosed upon or given title or deed in lieu thereof in the last 7 years?” This will affect future Rates.	There is no similar declaration or question regarding a Short Sale.
Credit Score	Score may be lowered anywhere from 250 to over 300 points. Typically will affect credit score for over 3 years.	Only late payments on a mortgage will show and after sale mortgage will be reported as paid or negotiated. This will lower the score as little as 50 points if all other payments are being made. A Short Sale’s effect can be as brief as 12 to 18 months.
Credit History	Foreclosure will remain as public on a person’s credit history for 10 years or more.	Short sale is not reported on a credit history. There is no specific reporting item for “Short Sale.” The load is typically reported as “paid in full, settled.”
Security Clearances	Foreclosure is the most challenging issue against a security clearance outside a conviction of a serious misdemeanor or felony. If a client has a Foreclosure and is a police officer, in the military, CIA, or any other position that requires a security clearance in most cases clearance will be revoked and the position will be terminated.	A Short Sale on its own does not challenge most security clearances.
Current Employment	Employers have the right and are actively checking the credit of all employees who are in sensitive positions. A Foreclosure may be grounds for an immediate reassignment or termination.	A Short Sale is not reported on a credit report and is not a challenge to employment.
Future Employment	Many employers are requiring credit checks on all job applicants. A Foreclosure is one of the most detrimental credit items an applicant can have and can challenge employment.	A Short Sale is not reported on a credit report and is therefore not a challenge to employment.
Deficiency Judgment	In many states, depending on the kind of loan, the bank has the right to pursue a deficiency judgment under the personal covenant on the loan.	Depending on the type of loan some lenders who accept a Short Sale may be able to pursue a borrower for a deficiency judgment. In many successful Short Sales it is possible to convince a lender to give up this right as part of the Short Sale.

Property Tax Assessments and Homestead Tax Changes

2009-01-12T12:11:00.021-05:00

This is the time of year when the triennial property tax assessments begin to appear in Maryland. They begin to arrive any time between mid December and the end of January. Every three years your property value is reassessed and your tax rate is based on that new assessment. Last year I sent out a special alert regarding these changes in order to help save you money -- perhaps lots of money. Here it is again so take a close look and see if this has any impact on your taxes -- especially in light of the drop in home values over this past year.

Thanks for helping me better serve our Real Estate Community.

Property Tax Assessment

Every three years your property value is reassessed for tax purposes. With the recent decline in real estate values you want to be watching very closely that your assessment is not too high. If you feel your assessment is too high here is what you do:

(Click to Enlarge)

If you missed the time period for appeal or if you are not in your year for assessment you can use this section to reapply.

Petition for Review Application There is no formal application for assessment appeals that are not Petition for Review. The homeowner would have to follow the directions on the attached information sheet, which can also be found at http://www.dat.state.md.us/sdatweb/appeal.html.

Homestead Tax Credit Changes

Last year the Maryland State Assembly made changes to the Homestead Tax Act which now requires that you reapply to keep this important credit on your principal residence. If you are being reassessed this year that application will be inlcuded in with that information. Be sure you don't miss it. DO IT NOW!!!!!

Explanation for Homestead Tax Credit
(Click to Enlarge)

Commonly Asked Questions
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Information from the State Department
of Assessments and Taxation
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Online Homestead Application Note: to the best of my knowledge, this can only be used by homeowners who have their Homestead Tax Credit information that was mailed from the SDAT.

Application that Homeowners can print and mail with or without their information that was mailed from the SDAT.

Keep in mind, to the best of my knowledge you can only apply for this credit upon receipt of your tri-annual assessment notice or within 180 days of the purchase of a property.

Special Note -- Make sure you don't miss this form in the paper blizzard the state sends you!

It’s Christmas and I’m the Sous Chef

2008-12-25T17:55:00.005-05:00

(Making Reubens with my son Doug and son-in-law Mike.)

Today is December 25th and Christmas is upon us. The distances that separate our family are gone. Sounds of laughter fill our home (actually my son’s home on the Wasatch front in Utah) where mothers and grandmothers caution good behavior – with limited success. For us, this time of year centers on important family traditions. Let me share two.

Food – the McGinns are all about the food. Whenever we get together the menu is a hot topic of discussion and food traditions are honored. This year I have been assigned the job of being the Sous Chef to my two sons. I think I actually assigned myself in a fit of giving. By definition a Sous Chef is (from my Google search): “Middle Management. You are between a rock and a hard place. You have a little power, but not all of it. You have a dash of authority, and maybe a pinch. Sometimes your chef will back you, and sometimes not. But your job is to back your chef, no matter what.” My children love to cook and even more they love to boss me around. This is the yin and yang of life – the balancing of a great many years of me running them around. You must understand however that my definition of Sous Chef involves me helping them in my way – not necessarily their way. So I guess I am not really a Sous Chef after all – I’m a Daddy Chef and they do their best to put up with me.

So here are a few of our favorite festive meals:

Reuben Sandwiches – a Christmas Eve meal tradition now four years old and introduced by Eldon and Abbey – dear friends who are family

Spare Ribs – Grandma McGinn’s special recipe – ribs slow cooked in tomato based sauce with a dash of vinegar - which Ninon has perfected

Trifle – a traditional Old English dessert – made with white cake, whipped cream, berries, and custard – all mixed together in a glorious melange

Turkey and all the trimmings is our Christmas Day dinner which is not complete without my mother’s dressing (stuffing) – simple and good

Open Food Session – any meal planned by one of the kids using a menu of their own choosing. This results in a cornucopia of interesting and highly delicious meals such as Black Pepper Mango Salsa Pork Chops, French Onion soup and Kristin’s “stewp” just to name a few.

At all times I run around, oversee the events, give advice, keep the schedule on track and generally make a nuisance of myself – that is helping in my way and I love it.

Number two is Gifts of Love. My sweet wife determined years ago that because this time of year is about the giving we ought to be giving on a higher plane. So she introduced gifts of love. Putting thought into giving is important - it’s really another way to say I love you. Christmas Eve we gather to record little gifts of love that we promise to give each other during the coming year. Ideally they have no monetary value. When the kids were little we had lots of “doing dishes” or “snow shoveling.” A common adult theme has been “advice about …” or “help blossoming.” Some become very creative like “Photoshop help,” or “wholesome activities” (given by my son Doug to Alec’s wife Kristin - it means no playing with knives and lighters with our grandkids), and “homemade haircut” (Kristin will cut Doug’s unruly hair and we will watch with glee).

I love these traditions. They become even more important as I get older. We live in a culturally diverse area with traditions from different lands and I have many friends with their own traditions that center around Christmas, Hanukah and even Kwanzaa. Love of family and friends and the spirit of giving seem to be common threads. I wish you all the best in this truly wonderful season - the best time of the year.

Thanks for helping me better serve our Real Estate community.