Both the National Association of Realtors (NAR) and the National Associtation of Home Builders (NAHB) report substantial numbers of sales being thwarted by lower than expected appraisals. 

Overall, you must remember that an appraisal is basically one person’s interpretation or opinion on what your home is worth.  The appraisals are (sometimes arguably) done by experienced professionals who base their opinions upon the current local market for similar homes.  When that pool of properties (referred to as comps or comparables) includes mostly foreclosed or distressed homes, it can be tricky to assess a home’s true value.  Sure, your home may be worth $400,000 based on what you paid and the upgrades you did, but when the same house with the same upgrades sells for $329,000 down the street as a foreclosure, buyers are less likely to shell out the extra money for yours.

Back to Market Basics

It’s all a long, drawn out way of saying. “it’s elementary, my dear Watson.”  When two retailers have the same item you want, you buy the item at whichever retailer is selling it cheaper.  Appraisers are simply doing their best in a market they’ve never seen before. 

If you are looking to sell and you have questions or concerns about what the true market value of your home is in the current market, contact me today!   

~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

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, said that the Federal Housing Administration is going to permit its lenders to allow homeowners to use the $8,000 tax credit as a down payment, provided you are using personal funds for the first 3.5% of the downpayment.

Donovan’s statement came in an address to several thousand Realtors® gathered at The Real Estate Summit: Advancing the U.S. Economy, a special daylong session at the Realtors® Midyear Legislative Meetings & Trade Expo in Washington D.C.

If you’ve been looking at buying your first home, but the down-payment requirements have kept you from doing so, then this might be your chance to take advantage of a fantastic change in FHA policy.  Feel free to give me a call to find out more information or ask questions about how to take advantage of this program!

~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

The guidelines for HAP have been revised to also include:

• Military personnel with PCS orders who are unable to sell their homes
• Wounded warriors required to relocate for medical reasons, and
• Surviving spouses of fallen service members

Who Is Now Eligible?

Eligibility requirements for the expanded HAP program are:

• Permanent reassignment requires move of more than 50 miles.
• Reassignment ordered between 1 February 2006 and 30 September 2012 (or earlier date designated by Secretary of Defense).
• Property purchased (or contract to purchase signed) before 1 July 2006.
• Property sold by owner between 1 July 2006 and 30 September 2012, or earlier date designated by Sec. Def.
• Property was the primary residence of the owner
• Owner has not previously received these benefit payments.

What Does This Mean?

Essentially the DoD will reimburse up to 95% of any loss on the sale of your home, provided the home was originally purchased before July 1, 2006.  The DoD MAY also elect to purchase your home from you for up to 90% of it’s current value.

Unfortunately to DoD has not yet released the detailed compensation guidelines, so they will not be approving any applications just yet.  They are, however, recommending that any Military Personnel who may be eligible should submit their applications ASAP.  Applications received now will be held until guidelines are released.

How do I apply?

In order to apply for the HAP program,all you have to do is go to the Hap Website and download the application form.  They have complete instructions there and will be notifying applicants once the guidelines are released.

~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

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

Jeez, even the dog doesn't want to be in this house!

There’s been a huge increase in Southern Maryland Short Sales over the last year thanks to the ongoing housing crisis. More often than not, they end up as foreclosures, many times because the path to negotiating is at best, murky.

When working with a lender to get a short sale agreement, there are several things that they are going to ask for, including tax returns, financial statements, investment records, etc. They’re also going to ask for a hardship letter.

So what is a “Hardship Letter”, exactly?

It’s essentially a personal letter to the bank explaining why you can’t possibly afford to pay the mortgage anymore. The thing to remember about the hardship letter is this: The sadder, the better!

This is really where you want to work closely with your Realtor to brainstorm on all the reasons why you can’t pay the mortgage. Sick mother? Kids with serious medical bills? Devastating car accident? Job lost due to faltering economy? This is your time to say so!!

Whatever you do, don’t lie about it, but make sure you are maximizing the hardship you are experiencing. The banks are willing to work with people, but excuses such as admitting you falsified loan docs to get the house aren’t exactly going to make the bank jump for joy.

It DOES make a difference!

The banks can only work with the information they are given, and the more hardship they can establish, the better off your chances of getting the short sale approved are.

Questions about how to survive a short sale or get your hardship letter written? Send me an email to jonbenya@mac.com and I’ll be more than happy to help!

~Jonathan Benya- Realtor

Century 21 New Millennium

301-653-8116

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

    People often think that their home is the nicest one on the block(it’s a natural bias), and it can be difficult to examine their home critically.  It’s important to understand that this is a natural feeling, but selling a home is a business transaction (a BIG ONE!), and it should be treated as such.

Finding A Price

    The first step in selling a home is establishing it’s value, and this is done with a Comparative Market Analysis (CMA).  A CMA is essentially a comparison of other homes that are similar and have been on the market recently.  Any local, licensed Realtor should be able to do one for you, typically free of charge  There are 3 major categories to a CMA:

• Active Listings= What Comparable Homes MAY sell for (This will be your competition!).

• Sold Listings= What Comparable Homes HAVE sold for.

• Expired/Withdrawn Listings= What Comparable Homes DID NOT sell for (Homes here were priced wrong in relation to their condition).

Dude, Where’s My Upgrades?

   A big concern to keep in mind is that all of those extras your home has may or may not positively impact the value when it comes time to sell.  Here’s a good example:

   
Let’s say you’ve just remodeled your bathrooms.  In the renovation, you installed $10,000 solid gold toilets.  They’re fabulous, probably the best looking toilets in the whole county!  Now, all you have to do is find someone willing to pay $10,000 more for your house because the toilets are solid gold.  "They’re worth $15,000 if you melted them down!", you say.  That’s great, but you are trying to accomplish two very difficult tasks.

1. Find a buyer for your house in a slow market
2. Find a buyer for your house that’s willing to pay an extra $10,000 for prettier toilets.

    Unfortunately, you’re not likely to see the value return in a case like this.  The home has been over-improved.  That’s not to say all upgrades are worthless, but they need to be suitable for the property. 

I Was Certain It Was Worth More!

    A CMA is designed to give a range of value, not a definitive number.  For a precise figure, you need to pay an appraiser to do an appraisal on the property.  If you don’t like the range that an agent comes up with, that’s okay!  Chat with the agent about why you think the numbers are off, and see what you guys can come up with.

     Agents aren’t perfect, and every real estate agent figures CMA’s differently.  This is a very important point!!! ***The agent with the highest CMA isn’t necessarily the agent who’s going to get you the best price for your home!***  The agent with the best marketing ability and negotiating skill is going to get you the best price for your home.

    Think about it like this:

    Two agents interview to list your home, One with a great marketing plan, and lesser CMA value, and one with a so-so marketing plan, but a value of $45,000 higher.  One agent is off on the price, plain and simple.  The solution?  Ask the agent with better marketing to try listing at a higher price!  This way you don’t risk leaving money on the table, AND you get the best marketing possible.

    Understanding how to best price your home is the first step to being able to get your home sold!  This is Part 2 of the Savvy Seller Series here at www.teambenya.com.  Be sure to check in next week when we will be posting the next edition, focusing on home presentation and staging!

Related Links:

The Savvy Seller Part 1: Your Next Home Will Be Bought or Sold Online!

~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

     With as many hours as I work each day, it’s made me think about WHY I insist on working such long hours.  I think it has a lot to do with upbringing.  My brother and I both grew up on the water, and it was the greatest experience I could have ever asked for as a child.  We went crabbing daily, fishing just as often, and we typically ate whatever we caught that day when dinnertime came.

(For those of you In Southern Maryland or coming to the area, head to Captain Billy’s for dinner, and order the crabs.  You’ll thank me later.  Unless you’re allergic to shellfish, in which case you should probably ignore me)

You’ve Got To WORK For The Reward

     My parents were by no means wealthy, but they worked very hard for what they have, and among a list of things too long to mention, they taught us how to:

1)  Enjoy the basics.
2) Understand that if you enjoy your work, the long hours you put in are easy.

     Fishing for dinner?  We’ve done it.  We didn’t get the fancy Jet Ski’s or power boats our friends got as kids.  We got a sailboat instead, the kind that fits one, possibly 2 if someone hangs off the side of the boat.

Jib Jabbering

      Sailing that boat was work, bar none!  It taught us some very important life lessons, though, and to this day, we still have that old boat, and I have zero interest in powerboats.  I remember being disappointed that I didn’t have the latest and greatest toys as a child, and I didn’t fully understand what my parents were doing, but there’s no way I could thank them enough today.

     Whenever I wanted to go sailing, it took an hour just to prepare the boat, and another 30 minutes to take the gear down afterwards.  I saw the link directly:  A little work, and a little reward.  I learned to enjoy working, and was glad to do so.  It’s carried over into my adult life.  I enjoy my work immensely, and so I don’t feel a need or desire to take time off often.

     At any rate, because it’s now mid-March, I need to take a day off, and go to Annapolis.  I need new sheets for my little boat, and I’m running out of time if I want to have it in the water by May first!  I wonder, will that qualify as time off to relax, or do Thomas and I need to find a new way to unwind?

      (In case anyone was wondering, Thomas was the one sailing in the previous picture.  He’s on the left, on the right in the fashionable orange jacket is a dog.)

    For Charles County and Calvert County, the new limit for a FHA loan on a single family home is $729,750.  For those of you who know the area well, that’s an astronomical number when you consider the average sales price of a home is closer to $300k!

St. Mary’s County is considerably lower, the new limit is now $400,000, and while St. Mary’s is considerably cheaper to live in, this is still a remarkable change.

    Also, Prince George’s County has been adjusted to $729,750 as well.  The biggest benefit for buyers is likely to be in P.G. County, and hopefully this will help to keep loan rates down as less people will have to consider Jumbo financing.

~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