I have a client who recently purchased a foreclosure in Waldorf, MD as an investment.  The deal itself was straightforward.  He was paying cash, could close immediately, and wasn’t asking for closing help.

The bank was insistent that we use their particular title company.  It’s not uncommon to see that, banks often like to work with one company over and over because the processors are familiar with each other, and (in theory) it should help move the transaction along quickly.

The problem was that the title company was one of those bad apples.  They forgot to show up for settlement, and in order to get the closing done we ended up hiring a notary to sign all of the paperwork and have it hand delivered to their office, which was 70 miles away.

We were fortunate to have a notary that was able to get the settlement paperwork notarized in the absence of a title officer.  We were more fortunate that they were able to deliver the paperwork to the title company that day!

The biggest lesson for us was that we will never in a million years do business with that company if we can avoid it!  The title company that dropped the ball does a LOT of business, and I had never heard a complaint about them before, so we didn’t realize how disorganized they really are.  The important thing about discovering a bad apple is knowing better than to continue eating once you find half a worm!

~Jonathan Benya- Realtor
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000 – office
301-653-8116 – cell

Charles County Real Estate Blog
SOMD Home Search
Southern Maryland Custom Homes & Land

In comes the concept of the low-ball offer. Low-balling is where you offer considerably less than the asking price on a home. It’s easy enough to write (You always have the right to offer as much as you think is fair), but writing the offer and getting the offer accepted are two very different things!

So how do you convince the banks to accept less than they want for a foreclosure? Well, there’s a couple of ways to increase your chances of getting that offer accepted.

With a buyers market, the more enticing the TERMS of the contract are, the better your chances of getting the deal to closing. Think about what perks you have to offer in the contract. Here’s an example of things that can make your
offer more attractive:

1. Offer a quick closing- The less time the bank has to hold the property, the better off they are.
2. Don’t request repairs- Banks are selling as is, and with a low-ball offer, structure it such that you are contingent upon an INSPECTION WITH WALK-AWAY rather than repairs
3. Avoid contingencies- If you want the banks to consider a low-ball offer, there has to be a good reason. Bogging down a contract with multiple contingencies is a good way to get the offer rejected.
4. Offer cash- With a cash offer, there’s no risk of loans not being accepted, which can be very appealing to the bank.
5. Look for homes with “market rot”- Homes that have been up on the market for more than 150 days are good targets because the bank has been holding them for longer than they would like. They probably need to lower the price, and are more likely to take an offer.
6. Write a letter- Sounds cheezy, but outlining why you’re offering this sort of price can help the bank make sense of the offer. Every little bit helps, and I’ve seen things like this actually make a big difference.

Related Posts:

What Does “AS-IS” Mean?
Waldorf, MD Foreclosure Update for August, 2008
Foreclosure Buying Tips Part 1
Foreclosure Buying Tips Part 2
Foreclosure Buying Tips Part 3

~Jonathan Benya
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000
301-653-8116
Southern Maryland Real Estate Blog

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In order to apply for this program, you must:

• Have a loan originated prior to 2008
• Be paying paying more than 31% of your monthly income on your mortgage
• The program qualifies for PRIMARY RESIDENCE ONLY
• Have your income verified

The program will not take effect until October, 2008, runs through September, 2011, and here’s the kicker (There’s always a catch, right?):

Lenders can pick and choose which loans to refinance under the program!

This means that if your lender isn’t in the mood to adjust your loan, you’re out of luck!  The catch is that the bank WILL be losing money on the deal, as the loan is essentially going to be giving owners 10% equity (Loans can only be up to 90% LTV), so I would imagine that even though 400,000 people are theoretically “eligible”, far fewer are going to be given a break as the lenders will be eating crow on the deal.

This isn’t a free money deal for the homeowners, however:

If you sell during the next five years, you must agree to share 50
percent of any profits from the resale with the government. What’s
more, homeowners can only retain equity gains based on a sliding scale.

The homeowner would have zero equity from a sale in the first year,
with the amount rising 10 percent in each succeeding year and capping
at 50 percent from a sale in year five and thereafter.

The equity must be repaid because the maximum amount on the new loans will be capped at 90 percent of the current market value.

This has a big impact on OUR area because of all the military families in the area that are struggling to make payments.  If you get re-assigned in a year, you lose all of your financial gain in the home!

The entire 694-page bill can be viewed at: http://www.house.gov/apps/list/press/financialsvcs_dem/hr3221_bill_text.pdf

Want more information on the new bill, and what it means to you?  Call Jonathan Benya at 301-653-8116 and I’ll be more than happy to help explain what to do and how to do it so you can take advantage of this opportunity!

~Jonathan Benya
Century 21 New Millennium
9405-A Chesapeake St.
La Plata, MD 20646
301-653-8116
301-609-9000
http://www.teambenya.com

    In reality, it’s a bit more complex than that.  It seems that everybody wants a home that needs little to no work, and often those "as-is" properties seem to need something, but the seller isn’t interested in addressing those concerns.

Am I Allowed To Get an Inspection?

    Rule #5 of buying a home:  ALWAYS GET AN INSPECTION! "As-is" does not necessarily mean the house is in terrible shape, nor does it mean you cannot have the house inspected.  Think of it this way: 

What would happen if you bought a home "as-is", without inspection, and found out later all of the wiring was shoddy and the plumbing leaked throughout?  Now your walls, ceilings, and carpets are ruined because of the water damage and the house is a 3-alarm fire waiting to happen because of bad wiring.

    In Southern Maryland, you have the RIGHT to get a home inspected.  In fact, if you choose not to inspect, you should be required to sign a waiver stating that you had the option, and decided against hiring an inspector.  Why?  Because your agent needs to cover their you-know-what!

Will The Seller Make Repairs?

    Here’s a tricky situation, particularly in regards to foreclosures.  The short answer is: NO.   The more complicated response is that IF the situation is right, you might be able to get some work done by the bank, or perhaps get an escrow credit to pay for the work. 

    There are a lot of determining factors involved in getting that done, and you need to have a Realtor working on your side, representing your interests, who has experience in negotiating with bank owned properties.

How Do I Avoid Buying A Basketcase?

    First and foremost, make sure you have your own representation!  This means that your Realtor is working for YOU, not the owner!  You should have experts on your side who have seen the pitfalls and know exactly what to avoid and when they are looking at a great opportunity.  As a matter of fact, I happen to know a really great team of people…. (wink, wink )

    In all seriousness, it’s my opinion that ANYTHING is negotiable, even if the official line states "as-is"!  The  other key thing to bear in mind is that you should have the right to a home inspection, and by all means, make full use of your rights!

~Jonathan Benya
Century 21 New Millennium
9405-A Chesapeake St.
La Plata, MD 20646
301-653-8116
301-609-9000
http://www.teambenya.com

    Because I work with foreclosure buyers on a regular basis, I see homes with mold every week.  Often times my clients will ask me what to do about mold growth because they REALLY like the house and the price it’s listed at.

    The answer is simple:  They REALLY like the price because mold problems can be REALLY expensive to rectify.  We all know that mold likes to grow in dark, damp places, right?  It’s a safe bet to assume that if you see mold growing on the walls in a home, the growth is probably much worse on the inside of the wall.  If the mold growth is due to basement flooding, is there any chance that mold is growing around the heater or air conditioning unit?  If so, it’s possible that mold could be creeping up the ductwork.

    My recommendation is this:  If you’re looking to buy a home and it has a mold problem, the safest bet is to just move on.  Why risk your health and well-being to save a few bucks on a home?  (Bear in mind that molds such as Stachybotris are carcinogenic and have been known to cause respiratory problems, headaches and bloody noses with short-term exposure.  This stuff is potentially lethal!)

    If you’re determined to purchase, get air quality samples taken and tested.  Have a remediation specialist evaluate the home and explain the cost of repairs/removal.  Spraying bleach on the mold and calling it a day doesn’t quite cut it.  Mold can and will grow back if not properly treated and removed.

    I don’t want to sound like a doomsayer, but in all honesty, why on earth would anyone want to place themselves and their health in such a high-risk situation?

    Also, bear in mind that if a home is being sold as-is and the owner or listing agent knows that there is a mold problem, they are REQUIRED to disclose that information.  It’s what we call a "material defect" in the home.  Not disclosing that sort of information can lead to some pretty serious lawsuits, so it’s important for Realtors to understand this and "do the right thing"!

~Jonathan Benya

Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-653-8116
Waldorf and Southern Maryland Real Estate
www.teambenya.com

Do Foreclosures Affect My Home’s Value?

    In Charles County in the last 60 days, there have been 12 foreclosures that have been sold, and a total of 135 (resale AND REO) homes listed and sold.  This means that foreclosures make up almost 9% of the total market in terms of sales.

    A lot of homeowners have been wondering how much of a bearing foreclosures have on their own homes value, and it really needs to be evaluated on a home by home basis.  Here is what people need to bear in mind:

• There are 1,487 homes for sale in Charles County today (02/29/2008).

• There are 86 Foreclosed Homes on the market today (a record high in volume, and 5.7% of total market volume).

    If 5.7% of the market’s volume is generating 9% of the total sales, it is obvious that there is a disparity.  Foreclosures are more *likely* to sell.  Why is that?

    Well, there are numerous factors involved here, but it seems apparent that the incentives to buy a foreclosure (namely, the price) outweigh the risks and problems (difficulty communicating with the banks, poor condition, etc.). 

    There’s another way to look at the puzzle as well.  In the last 60 days, 16.5% of the total volume of foreclosures in Charles County have sold.  Only 9.1% of the total homes on the market sold in the same time period (60 days).

    If you’re suffering from difficulty selling your homes because of foreclosures in your neighborhood, it’s important to make sure that your homes best features are being showcased!  Standard resale (i.e., not a foreclosure, short-sale, etc.) has some serious advantages! 

     The biggest things to consider are the differences between your homes and foreclosures when it comes to condition, ability to close quickly, and the ease of contract approval!

What’s The Market Really Like?

For Sellers
     Right now there’s a 12 month overstock on Foreclosures in Charles County, and a 21 month overstock on listings in general!  It’s an intimidating figure for anyone considering trying to sell, and the argument is a "lose now, or lose later" situation for some people, so trying to sell a home in this market is not a decision that should be taken lightly.

For Buyers
    The potential to find a property that is right for you; at the right price is huge!  The difficulty is in easily identifying the best deals.  Because there are so many properties available for sale, you need to be careful to ensure that you’re seeing the best possible deals out there.  This is why working with an experienced qualified Realtor is so important!

Related Links:

Current (3/1/2008) List of Foreclosures in Charles County (PDF Format)

Current (3/1/2008) List of Foreclosures in St. Mary’s County (PDF Format)

Current (3/1/2008) List of Foreclosures in Calvert County (PDF Format)

If you have any questions about the current Foreclosure Market in Southern Maryland, feel free to ask!  If you’d like to try and find a deal by searching for a foreclosure, I’d be more than happy to set up an automatic search for you so that you can find out about the best deals as soon as they hit the market!

~Jonathan Benya
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000
301-653-8116
Waldorf and Southern Maryland Real Estate
www.teambenya.com

"Banks don’t want your house; they want your money. They want to work with you so you can keep your house. With the market like it is, lenders don’t want to foreclose on you."

    If this were genuinely the case, why is there such an onslaught of REO homes nowadays?  I think it’s a genuine sentiment, but the current mortgage problems like this are occurring anyways, and people, particularly those at risk of foreclosure, need to understand this!

    I cannot stress enough how important constant communication with your lender is when you are facing a risk of foreclosure.  Banks are becoming more and more flexible with homeowners (finally), but the reality is that if there’s ANY possibility of getting the note renegotiated, or getting the house sold before foreclosure, why WOULDN’T you try?

    Banks ARE negotiating on a case by case basis, and it’s worth the attempt.  As the Washington Post article noted, the banks are likely to take a loss once they’ve foreclosed, so why not negotiate NOW to help minimize their loss AND avoid the credit damage and humiliation involved with being forcibly evicted from your home through foreclosure?

~Jonathan Benya
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000
301-653-8116
Waldorf and Southern Maryland Real Estate
www.teambenya.com

    March 5th is the date, and the Showplace Arena in Upper Marlboro, MD is the location!  Here’s the skinny:

    Prince George’s County is sponsoring the event, along with HUD and a bunch of other agencies.  There will be 13 national loan servicers there, and they’ll be talking with homeowners that are concerned or worried about the mortgage market.  The goal is to explain how to avoid getting into a bad loan, how to avoid foreclosure, and so forth.

    Workshops will be running from 2pm-8pm, and if you would like to register, all you have to do is call 800-CALL-FHA.

(Special Thanks to The Real Estate Wonk for Blogging this to my attention!)

~Jonathan Benya
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000
301-653-8116
Waldorf and Southern Maryland Real Estate
Southern Maryland Real Estate Blog

I had to think about this for a bit because I think everyone would love to be able to punch in a search term such as this to find fantastic real estate deals!  Unfortunately it’s easier said than done.  If you were able to find bargain priced homes simply by using an automated, free, public search tool such as yahoo! or google, wouldn’t we all be able to get rich and retire young?

Not that I’m against retiring rich and young, persay!  I think this sort of search term highlights the importance of working with a savvy, competent real estate agent!  Do I know of undervalued properties on the market?  Of course I do.  Am I going to start blogging about them?  Probably not. 

I have clients who are looking for the "deal" on the next property they buy.  Why would I risk my clients chances of getting the contract in first on a great investment opportunity by broadcasting it to the entire world?

If you’re looking for a great investment property or even a primary residence that you could pick up cheap,  I happen to be great at finding them!  Give me a call or drop me an email and I’ll be more than happy to make sure that you’re the first to know when a great investment property pops up on the market! 

As a side note, if you found this website because you were using similar search terms; I highly suggest you get a Realtor to help you identify the best undervalued homes on the market right now.  I happen to know a few in my team that are great at finding those golden opportunities!

~Jonathan Benya
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000
301-653-8116
j.benya@c21nm.com
Waldorf and Southern Maryland Real Estate
Southern Maryland Real Estate Blog

What’s Good:

    The number of active, available homes on the market has fallen again.  As fewer and fewer homes are listed
for sale, the difficulty in selling should (at least in theory) ease.  June of last year saw over 1,100 active listings, while in
December that number was closer to 950.  There’s a couple of reasons
for this. 

    First, many people don’t like to deal with the hassle of trying
to sell their home in the middle of winter.  Holiday stress is high
enough without having to worry about people showing up at all hours of
the day to tour your home.  I expect that the number to climb again as
the spring approaches, and you can see that historically, the number of
active listings always falls during the holiday season.

    The second reason is that a number of homeowners have decided to
rent their home rather than sell it, so as homes are rented out they
are no longer listed for sale.  Creative moves like this are becoming a
serious option to more and more people these days.

    The average sales price of a home in Calvert County did manage to rise again this month, but buyers continue to sit on the fence and sellers get more anxious, and with sales and pending settlements at a 10 year low, I don’t see this as indicative of a market improvement, but rather it is skewed by a few sales of select large homes.

What’s Bad:

    Sales rates have continued to fall, as
have the number of pending settlements.  This figure is particularly
disheartening to sellers right now because it underlines the difficulty
the are currently experiencing.  Traditionally sales tend to pick up
once winter ends and I know quite a few sellers who are anxious to see the cold weather snap and the rate of sales rise.

    The average number of days on market has jumped again.  at over
175 days, this is the highest Charles County has seen in 7 years.
While this should not be a surprise, it does not look like it is going
to change anytime soon, and I would anticipate that this will continue
to climb while the market deflates.

Wrap Up:

    The Housing Slump continues to place pressure on the local Southern Maryland real estate marketplaces.  Foreclosures
are also continuing to rise with many lenders anticipating an increase
in foreclosure this year over 2007.  Lending criteria is also
continuing to creep upwards while interest rates have managed to hit a
2-year low this past week.  Be sure to check back every month to see
the latest analysis of what’s going on in your back yard!

~Jonathan Benya

Century 21 New Millennium

Waldorf and Southern Maryland Real Estate for Sale

Southern Maryland Real Estate Blog