Bob Burkhard's Blog

Is This A Good Time To Buy A House?

Bob Burkhard (Cummings & Co. Realtors) — Tue, 22 Jun 2010 16:56:03 -0700

In these economic times most people are shopping for the best deal they can find. They wait to buy until there is a sale. When Macy’s has a sale, people show up to take advantage of high quality items that are offered at a lower price. Not only can you buy clothes, computers, cameras, etc. on sale, but you can now buy a house on sale. As you look for houses on the various websites, it probably won’t have a big SALE sign on it, but it probably is on sale. I am not saying FOR SALE. I am saying ON SALE. Now that the Federal Tax Credit program has ended you may feel that you missed out on a great bargain. That is not necessarily true because all those sellers whose houses did not sell during that period are anxious to get their houses sold now. They usually won’t tell you that their house is ON SALE in so many words, but there are indicators if you know what to look for.

In order to take advantage of these bargain deals, it is important to have a good credit history. Paying your bills on time every month is the easiest way to maintain good credit and get the best mortgage rate. If you are unsure of what your credit looks like, you can get a report for free once each year. Go to https://www.annualcreditreport.com/cra/index. There is absolutely no charge and no pressure to buy anything as a result of obtaining your credit information.

To find out if you qualify to purchase a house, speak with a reputable mortgage lender who can get you pre-approved before you start looking for a house. By getting pre-approved, you know how much you can afford up front and don’t waste your time looking at houses you can’t afford. Keep in mind that all lenders are not the same but your real estate agent should be able to refer you to some great lenders

Buying or selling in this market takes know-how. Let my 20+ years of experience work for you. Let me show you how to find homes that are “ON SALE”.

Bob Burkhard

Baltimore, MD

www.greatmdhomes.com

What Every First Time Home Buyer Should Know

Bob Burkhard (Cummings & Co. Realtors) — Fri, 18 Jun 2010 09:00:19 -0700

Buying your first home is an important and exciting investment in your future. It can also be an intimidating adventure. The problem is that you don’t know what you don’t know, and that lack of knowledge can cause you to make significant and costly mistakes. It doesn’t have to be that way though. There are many skilled professionals available to give advice and guide you through the process. There is also a lot of general information available from many different sources including the internet, books, videos, etc. but there is no substitute for the experience of someone who has done it before and is willing to guide you through the process from beginning to end. A real estate professional who specializes in working with first time homebuyers knows the steps and knows how to steer the new buyer through the maze to a successful conclusion.

Many buyers believe that the first step after deciding to buy a house is to go on the internet and start looking at houses. The process really begins long before that step is reached. Part of the decision to buy a house has to be asking yourself the question “can I afford to buy a house at this time, and if so, how much can I afford?” There are many factors that have to be considered in order to answer that question and the best source for help in answering that question is a loan officer from a reputable mortgage company or lending institution. All lenders are not the same so it is important to choose one with a stellar reputation that will be there when it is time to deliver the money to the seller. With the upheaval in the credit and financial markets in recent months, lending rules have changed dramatically. So not only do you need an experienced real estate agent, you need an honest, dependable lender that knows the new, ever changing, rules and is there to help the new buyer select the right loan program for them.

It isn’t enough for an agent to be able to write an offer and present it to the seller. Agents who help first time homebuyers must also be willing to be teachers who can take the time to fully explain the myriad terms used in real estate and guide them to a successful purchase. With an uncertain future in real estate, it is important to not pay too much for a house. You need good advice from an experienced agent to help you offer the right amount for your dream house. If the market continues to go down, you don’t want to be stuck with a house that is worth less than you paid for it. Buying a house isn’t complicated but there is a definite process that must be followed or the buyer most likely will lose direction and become frustrated. Remember, you are probably buying the most expensive investment in your life and you want it to be a successful, enjoyable experience.

www.greatmdhomes.com

What Does It Take To Sell My House?

Bob Burkhard (Cummings & Co. Realtors) — Thu, 03 Jun 2010 12:11:03 -0700

It takes two things working together to sell a house and one will not work without the other. A Fair Price and Exposure.

Price is determined by many factors which include condition of the house, location, market demand, competition nearby, motivation of the buyer and seller, comparable sales, etc. Many sellers think that if they price their house high, that will give them room to negotiate the price down to an amount that they can be happy with. Buyers have a price range in mind and do their searches within that range. If a house that should be in that price range is priced too high, it won’t even be seen. Even if the buyer looks slightly above their price range, they will still only offer what they perceive the value of the house to be. So why not price the house correctly in the first place and take advantage of all those buyers that have a specific price and location in mind. The truth is that the market sets the price, not the seller and not the agent. Remember, it also has to appraise for the sale price and appraisers are very conservative in the current market. Keep in mind that the nicest houses almost always sell fastest.

Exposure is referring to getting the word out to the public. Most home buyers today are computer savvy and do their research and searching on the internet before they ever get into their cars to go look at a house. Newspapers used to be the primary method to expose the public to houses for sale. They are becoming a useless method of advertising because of the decreasing readership, and are being replaced by the internet. If the listing information is not detailed and does not have pictures of the inside rooms as well as the yard, buyers probably will skip right over it, and the house will get limited showings. Brochures should be a part of every listing because they offer the opportunity to give more information about the house and illustrate what the advantages of the house are to the buyer. The brochure can be a hard copy that is available at the house to the public or it can be a part of the listing on the internet. If a house is getting good exposure and potential buyers are looking at it and it still is not selling, you have to take a close look at the price or the condition of the house.

Buyers today are very savvy and are looking for the best value for their money. If you can deliver a good product, at a fair price, it will sell. Remember, you only get one chance to make a good first impression. You have to stand out from the competition.

What Day Of The Month Should I Close?

Bob Burkhard (Cummings & Co. Realtors) — Wed, 26 May 2010 11:14:15 -0700

The reason that some people like to close at the end of the month is that they will need less money out of pocket at the closing. This is because they will need less “prepaid interest” on the mortgage.

Interest on the mortgage begins accruing on the date you close on your house. Since most mortgage payments are usually due on the first of the month, if you close early in the month, you will have to pay the interest on the mortgage from that date, until the end of the month. This interest will be paid in advance at closing.

On the other hand, if you close at the end of the month, say on the 29th, you will only pay a day or two of prepaid interest at closing. Interest will then begin accruing and will be due a month later. It doesn’t really cost any more to close early in the month, you just have to pay interest sooner.

If closing costs are an issue, then it is probably better to try to arrange a closing for late in the month. Keep in mind also what the seller’s needs are. The seller may not be willing to wait until the end of the month to close the transaction. In a market where houses are in great demand ( a seller’s market ), you may have to close earlier in the month to make your offer more attractive to the seller.

How do we get the housing market going?

Bob Burkhard (Cummings & Co. Realtors) — Wed, 14 Jan 2009 10:45:37 -0800

As the real estate market continues to languish, and prices continue to drop I don't see the government doing much to help. The politicians keep talking about doing something to help those that are in danger of losing their homes to foreclosure but even that seems to be going nowhere. I believe the solution is developing programs that will stimulate buying. Once that happens, prices will stop dropping and there will be fewer foreclosures because home owners will be able to sell their homes. The $7,500 tax credit program that the politicians created was pretty much useless, as evidenced by the lack of interest in it. The new $8,000 tax credit is more beneficial since the buyer does not need to pay it back if they stay in the house for 36 months. Low interest rates are great but if the buyers can't afford the down payment, closing costs, and yearly property taxes, low home prices and low interest rates still do not get the market moving.

I know that local and state governments rely heavily on transfer taxes and property taxes to fund their various programs, but at some point they have to realize that they have pushed those taxes over the limit. People can no longer afford to buy or keep the homes they own. We are now at a point where the housing market has almost come to a stop and the government is taking in less revenue as a result. Local municipalities think that the solution is to reassess the home values higher and that will solve their revenue problem. In fact, it does just the opposite. Houses become even harder to sell, foreclosures go up as a result of the high property taxes, and the downward cycle continues. The greed and wasteful spending programs of government have forced them to continue to find new and creative ways to increase revenue. The result is what we are seeing now in all facets of our economy.

So what is the solution? History has shown over and over again that lowering taxes actually generates more revenue as a result of increased market activity. If the federal government truly wants to get the housing market moving again it must provide the states and local governments incentives to reduce the tax burden on homeowners and home buyers. This could come in the form of payments directly to the states for each home sale or direct payments to the home buyer. The Downpayment Assistance Programs that were eliminated recently should be reinstated, with some strict credit score criteria. This program allowed the seller to contribute to a nonprofit organization that would then provide a portion to the home buyer for downpayments. When used properly, the DPA costs the government nothing and provides the critical downpayment help that can help get the home buying/selling moving again. Another approach would be to eliminate the restriction on the amount that the seller can contribute to the buyer's closing assistance. Elimination of the restriction or reinstatement of the DPA could be tied to the buyers' credit scores. A higher score would allow a higher downpayment contribution from the seller. The problem many potential buyers have is not their ability to meet the monthly mortgage payment. Rather it is the ability to come up with the outrageous downpayment and closing costs. Here in Maryland we have some of the highest closing costs in the nation.

The high closing costs and high property taxes are continuing to inhibit a positive housing market. Until this issue is properly addressed, I just don't see how the market can recover. On the other hand, if this problem can be solved, the housing sector can lead the nation out of the severe economic slowdown we now find ourselves in.

Short sales and banks argh!!

Bob Burkhard (Cummings & Co. Realtors) — Wed, 30 Jul 2008 16:00:14 -0700

The latest REALTOR magazine has an editorial in the Voices section talking about "sidestepping Short Sales". It inspired me to start thinking about why it takes so long to get answers from banks that are involved in short sales and why it takes months to get a decision.

The solution for the banks seems so simple to me. I picture a desk in the lenders' office piled to the ceiling with folders for short sales. I used to manage large school picture photo labs. Every year we got busy at the beginning of the school year. I simply hired enough people to process and print the film and mail it out to the students' families. Without the right number of people doing the jobs, my desk would have looked like the desks in the loss mitigation office of the bank... piled high to the ceiling with cans of unprocessed film. If that was the case, I would have been receiving calls and receiving letters from disgruntled customers. After a while, as the piles of film expanded, I would no longer be able to even answer the calls. And if I did, I probably couldn't find the right can of film to process to satisfy the customer. Furthermore, if I was receiving letters, they would be getting lost as well, angering more people. Pretty soon the competing photo companies would be putting me out of business.

I haven't been inside the offices of any loss mitigation clerks but I visualize that that is exactly what is happening. The piles of folders probably just keep growing as the economy worsens. In addition, Realtors stop showing the short sale houses because of the uncertainty of the process. Now the banks' financial picture is getting worse because the owners are no longer making their mortgage payments and the houses are not getting sold. It's a vicious cycle and the simple solution is to hire the right number of people, extend their hours, and delegate jobs to reduce the piles and start the money flowing into the banks and satisfying customers again. Once this starts, Realtors will begin showing these houses again and the inventory in the banks' portfolios will shrink.

Seems like a pretty simple solution to me. But then I'm just a self employed businessman/Realtor; what do I know?

Getting Your House Ready To Sell

Bob Burkhard (Cummings & Co. Realtors) — Fri, 25 Jul 2008 08:41:07 -0700

Getting your house ready to sell

It was just a couple of years ago that the Sellers held all the cards and were able to choose between multiple offers for their house. Demand was strong and supply was low. Buyers were involved in bidding wars to get the house that they wanted. They were accepting flaws in the house and even waving the home inspection in many cases to make their offer more attractive to the sellers.

All that has changed. Everyone should realize that we are now in a strong Buyers Market. In a buyer's market the buyer holds most of the cards and can dictate the terms (within reason). Buyers now can be (and are) picky about everything in a house that they are about to buy. If they don't find what they are looking for in one house, they will move on to the next one until they find what they want.

As a real estate professional, I walk through houses that are for sale almost every day and I am amazed at the way they are presented by the sellers. Either their agents are not giving them good advice on how to prepare the house for sale or they choose not to follow that advice. Sometimes it is a combination of both. When I see pictures in the listing in the virtual tour of the inside of the house that show junk and clutter everywhere, toilet seats up, dirty dishes on the counter or in the sink, I wonder how they expect to sell the house. Almost worse than that are the listings that have no pictures at all of the interior of the house. When most of the listings today have several exterior and interior pictures, why would a real estate agent or a seller choose not to present the house in the best possible light through multiple pictures? With the vast majority of buyers doing their initial search for a house online, pictures are essential. I personally will often skip over listings where I can't get a preview of what the house looks like through pictures. Buyers searching on their own do the same thing.

With so many houses competing for a few sellers, your house has to stand out.

Is it worthwhile to install new carpet rather than offer a carpet allowance? A note in the remarks section of the house listing saying that a carpet allowance is being offered, is a red flag that the house is not ready to sell. The buyer will conclude that if the carpet needs replacing, there are probably other items that need fixing or replacing and they will move on to the next. In this market it is smart to replace warn carpet. You will get the investment back in being able to attract a wider audience and sell the house faster. You only get one chance to make a good first impression. Have the house ready before you put it on the market. I give all my sellers a checklist of items to clean, repair, replace prior to listing their house.

And don't forget "curb appeal". If the house doesn't look good when the potential buyers drives up, they will never get out of the car.

Time and money spent upfront pays off in faster sales and more money for the house when it sells.