Southern Maryland Real Estate Blog

What happens if appliances don't convey?

I received a question today regarding conveyance in the purchase of a resale home, and thought it might be good to share:

Hello TeamBenya,

I hope you don't mind me direct messaging a question but I didn't know if I'd get answers I was looking for from non Realtors.

My question is this:

A listing agent fills out a MLS sheet on a property and list all items on it to be included in the sale. If something is listed on there at the time of an accepted offer(example: dishwasher , stove etc) and the items are not there when you get the house because previous owners made clear to listing agent said items are not included in the sale.

Who is responsible for the items because they were suppose to be included in the sale ?

I know some states make the Real Estate that listed the house responsible for what is listed on the MLS . I was just wondering if Maryland follows the same guide lines or not.

We are in the process of buying a house in Silver Spring (short sale) and there are some things not in the house that was stated in the MLS. If our offer is accepted I just want to know what rights I may or may not have. Dont worry if theres only one or two things off the list I'm not going to let it ruin the transaction , but if all the appliances are gone or something to that affect I will be upset then. Hope I'm not confusing you , but anyway I do look forward to your reply.

Thanks,
bunky

This is an interesting situation, please understand that I am not a lawyer, nor do I pretend to give legal advise/counsel.  When purchasing a resale home through real estate in the state of Maryland, an MLS listing has a little disclaimer on it that says information is deemed to be "accurate, but not correct".  It's a way to limit liability.  How far does that go?  I'm not sure, I've never been involved in litigation over inaccurate listing information, and hopefully I never will be.

The fact is that errors are made, and it's not clear if this is an error or not.  Here's why:  On page 2/11 of a MAR residential contract of sale, there should be a list of inclusions/exclusions that convey with the property.  Are they listed on that form?  If not, then there is indication they were not included in the sale.

If the agent was informed in writing that the items did not convey, included them in the MLS listing anyways, and you were not informed prior to time of contract, you may have reason to file a complaint.

Be aware that certain loans, such as FHA and VA programs, may require certain appliances to be in the home and in working order prior to settlement.  If, for example, the stove is required by the lender, but not part of the sale, then there either needs to be a stove in the home at time of settlement.  Who purchases and installs that stove is negotiable, but if a lender requires it, then not having it could be a problem.

Is the agent responsible for the error?  Quite simply, I'm not qualified to make that judgement.  I would suggest contacting the local real estate board that governs your region and speak to them.  You may have grounds to file a grievance for mis-listing the property, and mediation to resolve the dispute may be necessary.  Ultimately, you should talk to your realtor and/or lawyer about your options and see what the best course of action may be.

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

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Santa and the Grinch- Fannie Mae and Freddie Mac cause more trouble

 Looks like Fannie Mae and Freddie Mac have decided to play Santa Claus this year.  The two mortgage giants have decided to freeze all of their foreclosures that are scheduled to happen between now and the new year.

"The two companies say they will halt foreclosure sales between Nov. 26 and Jan. 9, while they evaluate whether borrowers qualify for a new loan modification program.

Fannie and Freddie's loan modification plan aims to help abate the foreclosure crisis by aiding homeowners who have fallen at least three months behind on their payments, but only if their loans are held by the two companies."

This qualifies as a brilliant PR move, but in reality actions like this are just as liable to do more harm than good.  Ask yourself two questions:

1. Is this going to stop people from getting foreclosed on, and allow them to renegotiate their mortgage? and...
2. Is this a benefit to the economy and the housing market?

Aside from the sentimental goodwill of it all, we've got some serious problems with this decision.  This is not a decision to stop the foreclosure, but rather a decision to delay it.  Delays which *should* help people renegotiate their note. 

Anybody know the percentage of people who successfully renegotiate their note after 3+ months of delinquency?  Or the percentage of re-negotiated notes that fail anyways?  (here's a hint, 50% of owners who get "modifications" end up getting foreclosed on anyways!)

If you're delinquent on your note by that much, there's a good chance you simply won't be able to afford getting current again....

Don't think this buys you more time to get your short-sale ratified, either.  If you've got something on the table with fannie/freddie, they've been known to delay foreclosure in order to let a deal settle,  so that may be extra time you could have asked for anyways.  BIG WHOOP.

So odds are that this won't really HELP many people save their home (and it won't help anyone who's working with a lender other than fannie/freddie), so will it stop them from being thrown out into the snow on Christmas Eve?  They didn't say they would halt eviction filings (Which typically take about a month) on homes they had foreclosed on, so it's still possible to get thrown out the week before Santa comes if you were foreclosed on at the beginning on November.  As Ebenezer Scrooge said:  Bah, Humbug!

It's obvious they've given the newsies a nice little holiday PR piece, but this is going to create trouble in the next few months.  This little stunt will make market inventory volume fall artificially, and make the market look like it's getting better.  Once they start foreclosing again, they'll be 2 months behind, which means a flood of properties on the market simultaneously, NATIONWIDE, and foreclosure rates and stats will spike again.  When foreclosures jump up, people panic, assume the worst, run around like headless chickens; you name it, they do it.

When the market is seen as more unstable (and prices fall harder than anticipated in Q1 '09) due to this freeze, you know who to thank.  While I understand the need for trying to modify so many of these loans, why are we risking the already weak housing market with another potential blow?  It's like a boiler building steam.  If you don't open the release valve, pretty soon it's gonna blow.

~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

Join The SOMD RE Blog Community and get free news and updates via email!

Maryland Short Sale Negotiation- The Art of the Hardship Letter

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
9405-A Chesapeake St
La Plata, MD 20646
301-609-9000
301-653-8116
Charles County Real Estate Blog

Join The SOMD RE Blog Community and get free news and updates via email!

Hope for Homeowners Act of 2008; Who does this help in Maryland?

It's official: The Hope for Homeowners Act of 2008 has been signed by the president and now we shall see who this helps.  For struggling homeowners in Maryland, here's a quick breakdown of the criteria to qualify:

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

Foreclosure Prevention Workshop in Waldorf on May 9th!

Housing Foreclosure Prevention Workshop.

    With increasing distress over the slumping housing market and mounting foreclosures, Rep. Hoyer has announced a free foreclosure prevention workshop to brief homeowners on their financing options and assist them in taking steps to avoid foreclosure.

    The workshop, which will include the participation of many of the areas loan servicers, will be on Friday, May 9, from 9:00 a.m. to noon at the Greater Waldorf Jaycees located at 3090 Crain Highway in Waldorf.

Link to Bay Net Article

~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

Waldorf Open House on Saturday, May 10th~ 10am-4pm!

For those of you who are interested, I'm going to be holding an open house this weekend!  The Open House will be at 10662 Sourwood Avenue, in Waldorf, MD and this is a gorgeous house!

Listing Information Link

Doors will be open from 10am-4pm, so don't miss your chance to see a gorgeous home for a price you can't beat!

This home is in the Autumn Hills subdivision, just 4 doors down from the model!

This Saturday May 10th, 2008 10am-4pm!!

~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

Adventures in New Home Buying

    I got a call this week from a woman who had read my blog post "Are New Construction Prices Negotiable?", and she was curious about how to deal with builders in Prince George's County who seem to be playing some sort of "Shell Game" when it comes to dropping the price, charging more for upgrades, and generally causing confusion in regards to how much the bottom line is really going to be.

    I'm a firm believer that builders do this intentionally.  They're struggling for profits, and in the housing pinch they're forced to drop the prices to get you as a buyer in their door.  Once you're at their model, you're on their turf, and their job is to do everything they can to jack the final price of the home up.

    It's then taken a step further when each model representative makes it a point to brag about how energy efficient they are, or how stainless and granite is standard, blah blah blah.....

    I made a suggestion to this buyer that there may be another option to explore that might make a bit more sense if flexibility is an option.  New construction typically takes 4-6 months to complete, and in communities that have been builder for more than a year, it's highly possible that you may be able to find a short sale in the community that could be purchased for considerably less that you could have the home built for

    It allows you to negotiate the price of the house completely, not be beaten up by the builder over the cost of each individual upgrade.  It also places you in a great bargaining position with both the homeowner and the bank that's holding the note:  You're able to purchase the property for less that it was bought new, and the bank gets to avoid another foreclosure dragging on their profit margins.

    It may not be a perfect solution for everyone, but for true bargain hunters looking for a sensible, affordable alternative, this is a great option.

~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

Huge 6 Bedroom Home For Sale in Waldorf, MD at $650,000!!!

10662 Sourwood Avenue Waldorf, MD 20603

Autumn Hills Subdivision

$650,000

This is a deal you don't want to miss! This home has it all, just look at the list of amenities you'll find here!

6 Full Bedrooms

6 1/2 Bathrooms

2 Fireplaces

2 Car Garage

Hardwood Floors

Gourmet Kitchen with Granite Countertops!

Huge, Gorgeous Windows!

Built in 2006 (only 2 years old!)

2008 Tax Assessed Value:  $727,100

Asking Price: $650,000!!!!

Don’t wait on this one, real estate like this won’t last long when it’s priced this way! You couldn’t have this home built NEW at this price!!  This home is a short sale, and the owners and bank are motivated!  Call Jonathan at Team Benya at 301-653-8116 today to schedule an appointment to see your next home!

Maryland Undervalued Properties For Sale

This was actually one of the search terms that someone used on yahoo! search this evening.  The search led them to this 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

Another "Finger in the Dike" Solution to the mortgage crisis: Project Lifeline

    Project Lifeline has been formally announced, and it's being touted as another way for homeowners to avoid foreclosure.  Like it's counterpart, Hope Now, Project Lifeline is another "relief" program designed to soften the economic impact of the sub-prime mortgage crisis.

    Here's what was announced on the AP News Wire:

Homeowners threatened with foreclosure would in some instances get a 30-day reprieve under an initiative the Bush administration announced Tuesday.

Dubbed "Project Lifeline," the program will be available to people who have taken out all types of mortgages, not just the high-cost sub-prime loans that have been the focus of previous relief efforts.

The program was put together by six of the nation's largest financial institutions, which service almost 50 percent of the nation's mortgages.

These lenders say they will contact homeowners who are 90 or more days overdue on their monthly mortgage payments. The homeowners will be given the opportunity to put the foreclosure process on pause for 30 days while the lenders try to work out a way to make the mortgage more affordable to homeowners.

"Project Lifeline is a valuable response, literally a lifeline, for people on the brink of the final steps in foreclosure," Housing and Urban Development Secretary Alphonso Jackson said at a joint news conference with Treasury Secretary Henry Paulson.

In coming days, lenders will begin sending letters to homeowners who might qualify for the new program. Homeowners won't qualify if they have entered bankruptcy, if they already have a foreclosure date within 30 days, or if the home loan was taken out to cover an investment property or a vacation home.

    Ah, there it is.... the stipulations!  Remember the issues with "Hope Now"?  Well, we've got the same problems here.  Are you less than 30 days behind?  Don't bother calling, you're not in enough trouble yet as far as they're concerned. 

    Is your foreclosure date less than 30 days away?  OOPS, tough luck for you, too!  If the home is Vacant, Secondary, or Investment, you can't use this program, either.  Oh, and it's only a partnership with 6 different financial institutions, so what happens if they're not the ones holding the note?

    So let's say you do meet the criteria, what the heck can this program actually do for you?!?  Well, it gives them the chance to "freeze" the foreclosure for 30 days while you try to work with the lender to make the mortgage more affordable.

    Let's see here.....  You're 90+ days late on your mortgage, you credit score is getting tanked by the lender, and they're going to hold off on taking your home for 30 days to help you refinance into an affordable note?!?  It seems to me that anyone in this situation is going to have a tough time trying to refi because the foreclosure is beating up their credit score and debt to income ratio (DTI)!

    It sounds to me like this is another crappy plan with a very limited scope.  It feels like lenders and the government are rolling out initiatives like this one and Hope Now to improve their poor public image.  If you want to help consumers, great, but DO IT!  Don't keep rolling out plans that are so limited and complicated that makes the plan so difficult to use. 

    I don't like the idea of spending time and money to craft complicated programs that won't make a significant impact.  That money could be far better spent help people avoid falling behind in the first place, but nobody's managed to roll out that plan yet.  On second thought, if a plan were to be developed to help prevent delinquency, the eligibility requirements would probably be just as limited as the current plans.  Maybe the next plan should be for Red-headed lefties between 5'10" and 6'2" and a slight lisp!  You might just be able to get more people to qualify that way!

~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