Southern Maryland Real Estate Blog

Foreclosure Flipping in Southern Maryland

 I'm seeing an increase recently of investors looking to buy and flip foreclosures.  For the savvy investor there is a big opportunity to make a nice chuck of change, but it's not as easy as Flip This House makes it seem.  Selling a home is still tough in this market, but far from impossible if you're smart about what to buy.

Why More Investors Are Looking:

Local prices are down considerably.  Homes that sold for as much as $330,000 at market peak are now going for $275,000-$290,000.  Not only that, but the increase of available homes allows buyers to be picky.  Most buyers would prefer to purchase something that doesn't need work, and your fixer-uppers become harder to sell.  Tough luck for the seller, and music to the ears of a sharp investor.

What kind of Foreclosure are they looking for?

In a word, cheap!  The real estate market still has the most movement under $300k, and getting a home that can be flipped for less than $300k reduces the risk considerably.  For example, if you can find a foreclosure for $160k that needs $30k or less in work, can you sell it for $250k or more?  If so, you may have just found a potential flip!

Factoring in the market slump:

Remember that market depreciation averages 1% per month right now.  If it's going to take you 3 months to complete a flip, then you should be factoring in a 3% deflation in it's final value.

How do you find good foreclosure flips?

The key is to be searching, everyday!  I'm up every morning at 7:30 am and the first thing I do is update my list of new foreclosures and new properties that are on the market.  When something comes up, my computer automatically sends it to any investors who might be interested in the property, and if they like it, we go see if it might be worth the investment. 

It's important to move quickly, if a good deal hits the market, there is a good chance that others are looking as well, and you don't want to miss out.  Last week I wrote an offer on a property in Waldorf that had been on the market less than 24 hours.  I was already competing with 2 other bids!

In summary:

The three things that are most important to a successful foreclosure flip are:

1. Be quick about buying and selling the property
   
2. Make sure your profit margin is solid
3. Know what the sales conditions will be like when you're done.

If you've got that under control, you should be in good shape!

~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

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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

Are Granite Countertops Killing You?!?

    Yes, I know that they're expensive, but killing your wallet is one thing.  I'm talking about your health on this one! The NY Times posted an article today about granite countertops.  In an era where everything we do and eat is potentially hazardous to our health, what's one more household risk, right?

    You see, Granite emits VERY MINOR levels of radiation.  In a few rare cases granite emits higher than average levels, and the EPA is apparently seeing a rise in calls from home inspectors regarding the safety of our beloved counter finishes.

“It’s not that all granite is dangerous,” said Stanley Liebert, the quality assurance director at CMT Laboratories in Clifton Park, N.Y., who took radiation measurements at Dr. Sugarman’s house. “But I’ve seen a few that might heat up your Cheerios a little.”

    Perhaps it could be marketed as a selling feature(You'll never need to use the stove!), but realistically the odds of your own counters being risky is remote.  If you're concerned about it, your best bet is to get a radon inspector out to your home to test your homes' radiation levels.  It should probably run you about $100-$300 dollars, and you'll know for sure if there's a problem.

    It begs the question:  "How long will it take to cook an egg on a counter like this?"

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

Is Good News Afoot? Charles County Maryland Real Estate Market Report, July 2008

    Could it be?  Is the real estate market in Charles County Maryland actually looking up?  It's to early to tell right now, and the pressure caused by recent interest rate increases has pushed loan applications down 6% over the last week, and pending sales are down right now as well.

    I know what you're thinking: if rates are rising and pending sales have fallen, what the heck is the good news, right?  well, there's a few early indicators here that might just be good news for struggling sellers! 

Sales Volume

    First off, Sales are up.  Not by much, but we are seeing a few more sales each month, and that number is slowly (VERY SLOWLY) rising, but it's going up none the less, which is a start.

Inventory

    Second, the number of available home has stopped rising over the last 3 months.  It's even (Dare I say it?) Dropping.  This is important because it shows that the skyrocketing supply of available homes has started to drop.  Remember real estate is all about supply and demand, and right now we need to see that supply drop!

Prices

    Prices and Values are a bit of mixed nuts right now.  The average sold price rose to $330k, while the median fell to $300k.  Oddities like this are to be expected while drastic market shifts are happening.  The long and short of it is that homes under $300k are moving the most, but the stagnation we've seen in the $400k+ range is finally starting to move a bit.  This means the average sales price trends higher even though cheaper homes are selling faster.

Time On Market

    Also, note the the average time on market (DOM) jumped above 140.  When you look at this in relation to the volume of available properties, it tells us that fewer and fewer people are putting their homes up for sale, and that more people may be willing to wait the market out.

Summary

    I'm not ready to start shouting that the market has recovered; we've still got a long road ahead of us.  It's signs like this that may indicate slowly improving conditions, if this is just a blip, we'll see numbers fall along with the interest rate hikes and coming fall sales market.  Stay tuned!

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

Another One Bites the Dust: Caruso Homes Files for Bankruptcy

    As you may already know, KB Homes has pulled out of the region, Shuttering the Middletown Woods sub-division and putting the land they hold up for sale.  It was a blow to local builder confidence, and now it looks like there's more evidence of how much some builders are struggling in this tough market:  Caruso Homes has filed for Bankruptcy.

    Supposedly they are doing this to re-structure rather than close-up shop.  If it's a way for them to bring down their prices, great.  Take a look at their current prices, and you'll notice that they're flat out too high.  Filing bankruptcy sheds light on an interesting phenomenon:  Builders profits have been cut to the core.  Bankruptcy means that Caruso cannot slash their prices any further at this point without drastic measures.

    Will this allow Caruso Homes to drop their prices further?  Definitely!  At the same time, I'm sure it's going to upset the folks they owe money to. ($500,000 from 84 Lumber alone!).  As soon as Caruso announces their price reductions, I'll let you guys know.  Stay tuned for more on that!

Related Links:

KB Homes Pulls Out of Charles County

Adventures in New Home Buying

Are New Construction Price Negotiable?

New Homes in Waldorf, MD: Autumn Hills Subdivision

"Finding it All" When Buying a Home

 

~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

Charles County Foreclosures List Updated (May 8th, 2008)

    Foreclosures are up slightly in Charles County, and here is the latest list of properties available on the market that are bank-owned.  It includes foreclosures in Waldorf, La Plata, White Plains, Newburg, Hughesville, and all of Charles County!

Bank Owned Homes For Sale in Charles County

    If you have any questions, or would like to be added to our automatic daily updates, please give me a ring or drop me an email and let me know!

~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

The first step to selling your home: Finding A Price ~Part 2 of the Savvy Seller Series~

    The Real Estate Market in Charles County is tough right now, period.  Even experienced tried and true agents are seeing less sales, less showings, less of everything but listings!  It underscores how hard it is for people who are in the process of selling their home, or getting ready to put their home on the market.

    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

Charles County MD Home Sales Report, April 2008

Team Benya's Monthly Market Report-  Charles County, Maryland

What's Happened:

    For the first time in 7 months, home sales in Charles County, MD have actually seen some growth!  Earlier this year we were looking at home sales in the range of 50-60 units per month, and now that number is closer to 100!

    Pending Settlements, the number of homes currently under contract, have gone up as well, so there is a bit of bright news in the market this month.  We've also seen the number of homes available on the market level off as well, so now we'll have to wait and see if the trend continues.

    Between February and March we have also seen that the average price of a home in Charles County (roughly $312,000) didn't fall, the average number of days on market (158 days) has leveled off as well, due partially to the increased amount of home buyers we have seen in the last month.

What Does This Mean?

    It's great that we're seeing potentially positive changes happening in the market.  It's a little premature to say that we're going to see prices rise again in the near future, but at least we are not seeing the values continue to fall. 

    Foreclosures are having a big impact on the market right now, and they make up a significant portion of sales, and unfortunately those properties are what traditional sellers are forced to compete with.  The good news to it is that the amount of transactions taking place each month is growing!

     Home owners who are trying to sell should be seeing increased traffic through their homes, provided they are priced right and marketed well.  I've noticed an increased amount of traffic through my listed homes right now, and it's a big relief to my clients to see that the market might be trying to stabilize.

    For buyers, sitting on the fence has been forcing down prices, and we're starting to see some good deals emerge, which in turn has caused the local market to drop price-wise, and it seems that prices are stable, and we're starting to see more buyers take advantage of both the lower prices and the preferable interest rates that are available.

    If you would like more information about the Charles County Market, Foreclosures, Listings, or New Construction Developments, please ask!  I have a wealth of local information and resources and I'm always willing to assist people in navigating this tricky 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

Your Next Home Will Be Bought or Sold Online! ~Part 1 of the Savvy Seller Series~

    It's true!  I'm not talking about a few clicks of the mouse to sign the settlement papers (not yet, anyways), but the home buying process has become less about flipping through the newspaper and driving around to open houses, and more about surfing the net to see what's available instead.

Even as a Realtor, it can seem overwhelming to post home information to all of the different home search sites available out there.  Which site do you use, Realtor.com?  Trulia?  Zillow? Hotpads?  Kajiji?  Craigslist??

In the land of property marketing, the Internet is King!

    Your choice of website as a buyer is not as important as it is for sellers, however.  Owners looking to sell need to make sure that they're on every site possible, which means finding an agent who really knows the web and is aware of the latest trends and preferences of picky buyers.

    The toughest part about it is that you may not even realize how important your online marketing is!  When a buyer comes to me looking for a home, we look at specific criteria:

• Beds
• Baths
• Size (square footage)
• Garage
• Location
• Etc. 

    Those buyers rarely take my lists as gospel, they're also going to look at home, online, and when they're searching on their own time, they may find that property they want to see that doesn't quite match the criteria they gave me. 

    You need to make sure that those buyers have the opportunity to see your home, regardless of which site they're searching on.  Over 80% of all home buyers start their search online, and many times those buyers have already seen a wide range of potential offerings before they even step foot into a Realtor's office.  If, for example, a buyer tells me they want a home in Waldorf(Waldorf, MD photos),  but they home home and search the entire county, they may end up finding their next home is really in White Plains or La Plata (La Plata, MD photos)!

80%!!  

    If that means 20% of buyers aren't using the internet now to find a home, You're relying on 1/5 of the total market to hold your home's buyer.  It's an incredibly limiting factor!!  It's an absolute necessity now to make sure your home is plugged in to as many search sites as possible.  Right now, my listings are uploaded onto over 30 (30!!) different online search sites (and that number grows every quarter), simply because exposure is how homes are sold, period.  You can have the nicest home in three states, but how do you expect to sell it if nobody knows it exists?

Which Websites Work?

     I can clearly see that not all search sites are created equally, and realtor.com is the best ROR (Rate Of Return), but to me it's an irrelevant question.  Why Wouldn't you use ALL OF THEM???  Exposure is the goal, right?  More Sites = More Exposure, so make sure your listing can be found everywhere!

    I've also had people ask me if websites such as this blog help as well, and my first response is "Well, you read it, right?" ;-)  In all seriousness, I have helped people buy AND sell through this blog, so it certainly doesn't hurt!  Again, it's the concept of exposure.

Why The Web?

    Well, the bottom line here is that people have finally become comfortable looking for homes online, and they've come to expect to see their next home before they even pass through the door.  Buyers are already hip to the lingo:  Virtual Tours, Slideshows, etc., and quite simply, the convenience of it all makes sense and attracts people to the medium.  You could be searching at the office or at home in your bunny slippers!

This is Part 1 of a series of articles designed to educate sellers on how to maximize their returns and get their home SOLD in a buyers market!  Check back every Wednesday for the next edition of the Savvy Seller's Blog Series!

~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

Charles County Maryland Real Estate Market Report, March 2008

     It's slow, but I'm happy to say that we are seeing movement in the real estate market here again!  Typically mid-March to the end of June is the busiest time of year for real estate sales, so it's great to see the shift towards an increase in sales.

     We've seen an increase in not only the number of sales in February, but also the number of pending settlements, as well as the number of listings.

     It's not all roses, however.  Homeowners are still finding it difficult to sell their home in this market, and the average time on market for a home these days is now up to 160 days, up from 147 a month prior.  The average sales price has held steady, and the median sales price is even up a bit, but it's not a good indication that home values are rising at this time.

     This sort of market is the very definition of a buyers market.  Interest rates right now are near 5.8%, and home values are correcting very quickly.  Personally speaking, I've seen a dramatic increase in the number of people looking to cash in on the market, and the number of buyers has greatly increased in the last 30 days.

~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