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

I’ve had several clients recently who have come up against a common challenge in buying a home right now, and I’m not talking about tough lending standards!  It’s hard enough to be a first time home buyer in Southern Maryland;  Trying to understand the loan process can be stressful, understanding all of the moving parts involved in a real estate transaction is difficult, and now investors are coming into the market with a passion!

What’s Happening?

Unfortunately this means that home buyers are forced to compete with cash-flushed investors who are ready and willing to make a splash in real estate again.  With banks under pressure to sell off the foreclosures and REO properties they currently have, investors are quite often making the bank a deal they can’t refuse, specifically, CASH! (Rel. Link: Washington Post: Cash Investors Trigger Bidding Wars)

Investors Are Hard to Compete With

The reason investors are hitting the market so hard is simple.  There are a ton of cheap homes for sale right now!  Investors are experts at identifying great deals, and they have the ability to write offers that traditional buyers simply can’t compete with.

When an investor writes an offer, they often have the ability to write a contract that includes a proof of funds (POF) letter showing they have the liquidity to purchase cash, which means that the banks don’t have to worry about appraisals, underwriter approvals, termite inspections, or perhaps even a home inspection!

When compared to a home buyer who needs a loan to purchase the property, an investor could go to closing within 10 days, while a home buyer may need 30-45 days (or more) to get through inspections, appraisals, and underwriting.  It’s a no-brainer for the bank, a cash offer has very little chance of falling apart, and in some cases the bank may even take a lower priced offer if the purchaser is writing for cash.

Banks Are Underpricing Homes

The other issue that buyers can find frustrating right now is that banks are often deliberately underpricing foreclosure properties.  You see, banks WANT to getting these sort of bidding wars started.  By getting multiple bids simultaneously on a single property, banks can force people to offer more money on the home, using the fear of losing the property as motivation for offering more money.

What Are Investors Doing With These Homes?

What the investor does with the home depends on what their goals are.  For some, they are investing into rehabbing the property so that they can sell it in tip-top shape for a profit.  For others, they are holding on to the properties and using them as rental units.  The profit margins can be very lucrative:

Home Price: $150,000

Closing Costs: $2,500

Total Purchase Cost: $152,500

Annual Taxes: $1,400-$1,600

Rental Value: $1,450/mo or $17,400/yr

Annual Income: $15,800

Annual Return on Investment (ROI): 10.3%

With an ROI of more than 8%, the profit potential is very attractive for possible investors!  Unfortunately, until sales prices or rental values change, investors have a very good reason to be buying homes, and individual buyers are going to continue to see this trend continue.

~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

[youtube=http://www.youtube.com/watch?v=b9pDkekZ6E4]

This Beautiful home with loads of upgrades is located right in
Waldorf! Large kitchen, and gorgeous family room! It’s Located in White Oak Village subdivision and move in ready! The
Open floor plan makes this home feel large and inviting. Beautiful
private deck with Large fenced back yard. and playset for the kids!
Don’t miss your chance to see this fantastic property!

~Jonathan Benya- Realtor
301-653-8116

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

(P.S., you can click on the images to zoom in on them!)

If you have any questions or would like more information about one of these fabulous properties, please feel free to give me a call!  One of our luxury home experts can help you identify and broker an outstanding deal one your new home!

~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

May 2009

What Does This Mean?

Unfortunately, prices have fallen from where they were 12 months ago.  A quick look at the sales statistics from April shows us some promising information, however:

April 2009

The average home sales price for April 2009 was $267,170.  In may, that number was $281,235, or an increase of just over 5% in sales price!  Not only that, but there were 86 homes sold in April, and 119 homes sold in May.  That’s a 28% increase in home sales over the last month!

So we know that home sales are up, sales prices are starting to rise, but why is the market starting to look a little brighter?  Well, part of it is that prices and affordability are enticing more buyers.  That, along with 45 year lows on interest rates, as well as the $8,000 new home tax incentive, means that first time buyers are seeing value in the soft market.

It’s too early to say turnaround, but home sellers are seeing some encouraging information here!  Let’s hope that this is the start of a broader economic recovery!

~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 saw a wonderfully terrible photo in a listing recently, and it reminded me of just how many factors come into play when photographing real estate.  They say a picture is worth a thousand words, and this one says more than that.  It’s a perfect example of things to AVOID when marketing a home!

If you’re dogged by bad listing photos, give Thomas Benya a call (301-653-1499). He can help you analyze your homes features and stage your property to make the marketing pictures and videos pop!

~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

Fortunately, I took it all in good stride. I hate having people force decisions down my throat, and I don’t ever want to be “That Realtor Guy” who pushed someone into buying a home they didn’t love; especially when that someone is a friend of 14+ years!

With the current economic downturn and low interest rates guiding us, we finally found a fantastic option! We had been looking at every foreclosure and short sale imaginable, but in the end we actually decided on new construction!

This is her first home, and she’s excited that the idea of being a homeowner will soon be a reality! I’m excited that she’s decided to purchase without being pressured into something she doesn’t love, and here’s the best part!

Guess how much her townhouse is going to cost:

1. $275,000?
2. $260,000?
3. $250,000?
4. $240,000?

Would you believe me if I said that it was less?

I can’t disclose how much our contract for these new construction townhouses is for due to client confidentiality, but here’s what I can tell you:

For a 3 bedroom, 2 bath, 3 story Townhouse with brick front and a 1 car garage, prices are starting at $230,000!!! for that price we’ve been looking at foreclosures in need of serious repair! Less than $250k can get you brand new construction in Waldorf, complete with your own garage!

I know I’ve got other clients who are now looking at buying a new townhouse rather than struggle with foreclosures that “need work” (“needs work” is a polite way for Realtors to say “prepare to hire a general contractor”!)

If you’re looking for new construction in the Waldorf or Charles County are, give me a call and I can help you find and negotiate great deals on your new home!

~Jonathan Benya- Realtor
Century 21 New Millennium
9405-A Chesapeake St
La Plata, MD 20646
301-653-8116
Charles County Real Estate Blog

Properties under contract in Waldorf: 73

Average time to contract for properties currently under contract: 133.4 days

Properties under contract for $100k-$200k: 16

Average Days on Market (DOM) for those properties: 118.75 days

Properties under contract for $201k$-300k: 30

Average DOM for those properties: 125.53 days

Properties under contract for $301k-$400k: 23

Average DOM for those properties: 153.73 days

Properties under contract for $401k+: 4

Average DOM for those properties: 133.25 days

So what does this tell us? For starters, it shows that properties priced below $300,000 are at the most popular price point right now. It also shows that properties priced above $300,000 are likely to sit on the market significantly longer.

Statistics like this give us a good idea of exactly what home buyers are looking for, and what they are able to afford. It’s very hard to sell McMansions in comparison to a moderately priced townhome, and people are trending towards homes priced under $300k.

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