Corporate Relocation Made Easy

by Dan Krell

One of the top reasons for people to move to a new city is because of job relocation. Moving is not always easy, but relocating your entire family to a new city is especially a huge endeavor that requires lots of planning and assistance.

Whether you decide to relocate thirty miles away or 2,000 miles away, it is always overwhelming. One of the first things you may want to do is find out about the town you plan to live. There are many relocation resources online that can help with your planning. Websites such as Relocation Essentials (, or Home Fair ( offer community information, school information, planners, demographic statistics, and city virtual tours.

Additionally, you may want to talk to a local Realtor in the new town , as well as friends, family, and even your Professional association to learn about the town from first hand experience. Networking can help with assisting with family needs that are not offered in your relocation package.

Another item you should be familiar with is your corporate relocation benefits. Although many companies offer a relocation package, benefits vary from one company to another. Most companies contract with a relocation company to handle relocation requests. The terms of your relocation package may vary depending on the level and tenure of your employment as well as the distance of your relocation.

Although, most relocation companies allow you to choose the real estate professionals you want to work with including Realtors, some do not. So, before you sign the listing agreement with your favorite Realtor, ask the relocation company if there are any restrictions.

Common elements of a typical relocation package include a moving allowance, closing cost help, and a buyout. Whether you are moving across the country or across town, it is not cheap and depending on the terms of your package, a moving allowance can pay for the entire cost or just provide you with a stipend. Additionally, you may be required to use a specific moving company. If not, compare reputable moving companies to see which one will be best for you.

Another common element of a relocation package is closing cost assistance. Corporate America knows that relocation is not cheap and one of the large expenses is purchasing a new home. To lure top prospects, some relocation packages offer special financing including paying all closing costs. Most relocation packages offer a stipend that may cover most of the closing costs. As lender requirements vary, make sure your lender will allow any relocation stipend.

Many companies offer a corporate buyout as an additional benefit to your relocation package. The buyout is actually performed by the relocation company that your company contracts with, and is a guaranteed sale at price that is determined by the relocation company. Depending on the terms of your relocation package, you are usually allowed to attempt to sell your home before it is bought by the relocation company.

If you are relocating for a new position within your company, you are restricted to the terms of your current relocation benefits package. However, if you are relocating because of a position with a new company, you can attempt to negotiate a custom relocation package that will offer the services and financial assistance necessary to make the move easier.

This column is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally pubished in the Montgomery County Sentinel 12/26/2006. Copyright © 2006 Dan Krell .

Why Title Insurance is Important

by Dan Krell

Title insurance should not be an enigmatic item listed on the settlement sheet, and there should be no question as to its validity. Here is a very basic attempt at demystifying title insurance and why it is important.

Title insurance, like other forms of insurance, is governed by the Maryland Insurance Administration (MIA). Title companies and title attorneys are licensed by the State to sell title insurance.

Title insurance is an assurance that the home buyer receives a clean title from the home seller. Clearing a title of all liens and mortgages is not always an easy task. The first step is for the title attorney to order a title abstract.

A title abstract is simply a synopsis of the chain of title, or a history of ownership, that has been recorded in the office of land records in the county court house. The title abstract indicates all owners, mortgages, liens, encumbrances, and easements attached to the property. The title abstract also indicates previous sales and mortgage and lien satisfactions.

Because all the information in the title abstract is obtained from recorded information, it is inevitable that mistakes occur. For example, it is common for mortgage release letters to be lost, misfiled, or never filed at all. Sometimes there are years of information that is lost or destroyed resulting in a break in the chain of title.

Once received, the title attorney will review the abstract and look for any blemishes including unreleased mortgages or liens and breaks in the chain of title. If there are any blemishes found, they need to be cured before issuing a clean title. The home seller can remedy most blemishes by supplying all required documents or paying to release attached liens and mortgages. Sometimes it may be necessary for the home seller to show their title insurance policy so as to indicate they were given a clean title.

Sometimes there are items not filed in the office of land records that may affect the ownership of your home. Some of these items may be heirs of previous owners or undocumented lien holders who may make claim to your home. Title insurance can protect you from these claims. It is rare, but making a claim with the title insurance company can resolve these issues.

If you are obtaining a mortgage to purchase the home, your lender will require “lender’s coverage” title insurance. The lender’s coverage protects the lender in case there are any unrecorded liens, easements, or other unrecorded defects.

Just as in other insurance policies there are different levels of coverage of title insurance. A basic owner’s title insurance policy typically assures clear title to the property and covers against incorrect signatures, on documents, forgery, fraud, and defective recordation of covenants, encumbrances or judgments.

Extended coverage may include coverage for building permit violations from previous owners, covenant violations from previous owners, living trusts, and a variety of encroachments and forgeries. Title insurance does not cover against liens placed after the effective date of the policy.

Some policies cost more than others because of the difference in title insurance companies and levels of coverage. When comparing title companies, you should also ask about title insurance coverage and rates. You can access more information about title insurance at the MIA website,

This column is not intended to provide nor should it be relied upon for legal and financial advice. This column was origiinally published 12/18/2006 in the Montgomery County Sentinel. Copyright © 2006 Dan Krell.

High Expectations for the 2007 Market

By Dan Krell

The past year’s real estate market was not what people expected. With much speculation and pessimistic media reports many expected the worst. The worst never happened and the numbers for 2006 were respectable, as home sales go.

It was interesting to see the inventory grow as the number of active listings increased through the year. In fact, 2006 has had the most active listings at one time since before 1999! Many home sellers were taken aback by the amount of competition they faced for potential home buyers; while at the same time home buyers were overwhelmed with the amount of choice.

Now that we are heading towards the end of the year, many home sellers are taking their homes of the market after a disappointing fall and many days on the market. These home sellers are anticipating re-listing their homes in the spring. In fact the number of active single family homes listed in Montgomery County has hovered around the 4000 unit mark since June, however recently dropped to about 3000 units in November (which is still more than last year at the same time) ( While some of those homes did sell, most did not.

Although the average home price has steadily increased in the county, many neighborhoods are seeing depreciation in the form of lowered sales prices. The home price average in Montgomery County is more likely skewed due to the increase of home sales in the million dollar or more range. November showed a decrease in sales in all price ranges except $1.5M or higher. There was an increase of almost twelve percent in sales in November as compared to the same time last year for this price range; there were 296 sales of homes priced $1.5M and higher in November 2006 in Montgomery County.

Many are anticipating a brisker market this upcoming spring. Many forecasters are predicting a nationwide recovery in the real estate market place. While perusing the optimistic reports about the 2007 real estate market don’t expect a huge appreciation in home values. Many forecasters predict a balanced market across the nation. Economists for the National Association of Realtors predict that the number of existing home sales will maintain at the roughly the same level as 2006, however new home sales will continue to slide into 2007 (

Locally, the outlook is also positive due to a strong economy, relatively low unemployment, and relatively low interest rates. Another positive sign for the market in 2007 is the foreclosure rate. A recent article in the Baltimore Examiner ( reported about a 12% drop in Maryland foreclosures from 2005, while the rest of the country realized a 27% increase during the same time!

As the spring market arrives, we will see many homes returning to market along with new listings of existing homes. Adding to the many options available will be the high builder inventory, which has been accumulating through the fall.

Spring will also bring many home buyers to explore the market as well. However, with many choices to consider, the average days on market for listed homes will remain high. Let’s face the truth that the market has slowed; however, the good news is that we are not heading into oblivion.

This column is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel 12/13/2006. Copyright © 2006 Dan Krell.

Big Banks in Real Estate Brokerage

By Dan Krell

One of the biggest controversies in the real estate industry has been disputed since 2001, yet many realtors and most consumers are unaware it exists. What is it? The controversy is allowing banks to participate in real estate brokerage.

The controversy has root in the Gramm-Leach-Bliley act of 1999, also known as the Financial Modernization Act of 1999, which generally gave banks more freedom in affiliating with other financial institutions, such as securities and insurance brokers. In 2001, the Federal Reserve Bank and the U.S. Treasury Department felt that buying and selling a home was also primarily a financial endeavor, so they pushed for legislation to allow banks to become real estate brokers.

Banking proponents assert that allowing banks to participate in real estate brokerage is good for consumers. They state that it would increase competition and allow consumers the true “one stop shop” for financial services, and allow the reduction of costs and fees associated with the purchase of a home.

The proposed legislation was defeated consistently for several years. It remains to be seen if this will reappear in the next congress.

The opponents to the legislation have declared that the purchase of a home is not finance but commerce. The National Association of Realtors’ position was and is that finance and commerce should remain separate. Additionally, this type of legislation would be anti-competition as it would increase the general power of the financial institution which would decrease the availability of consumer choice (

Additionally, there is concern over conflicts of interest. Besides that banks might push their listings just as they push to sell their proprietary mutual funds, loan officers and underwriters might be influenced to make poor loans on homes that are in the bank’s inventory. Can you imagine being turned down for a mortgage by your local bank, finding out later that your friend, who has a similar credit history, was approved because he was buying one of the bank’s listings?

Reducing costs and fees in the real estate transaction is always a great idea. The position that allowing banks to become real estate brokers would drive the cost of purchasing a home is questionable. Banks have a history of increasing fees as well as adding charges to services. A recent survey (December 1, 2005) confirms the view that banks have found ways to increase fees as well as hide service charges. ATM fees, returned check fees, and account maintenance fees are examples of the current focus of increases.

For a first time home buyer, the purchase of a home can be overwhelming and confusing. It is difficult enough for an average home buyer to understand the complexities of the transaction yet be able to see if the settlement sheet is padded with extra charges. Hopefully, the home buyer’s Realtor is able to spot any charges which are excessive or fake. However, if the Realtor is taken out of the process, the home buyer might not be able to spot any sham or excessive charges.

The issue of banks becoming real estate brokers is not just an issue of competition, but it may ultimately become an issue of privacy as well. Although the controversy is dormant for now, it is yet to be decided. As banks continue to push for more freedom, the debate could turn into a nasty battle.

This column is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel 12/26/2006. Copyright © 2006 Dan Krell.

Things to Come in 2006

By Dan Krell

In reading some of the real estate forecasts for 2006, I was reminded of H. G. Wells’ novel, “The Shape of Things to Come.” What does H. G. Wells have to do with Real Estate? Nothing. Well almost nothing. Any self respecting science fiction enthusiast knows that the 1933 novel about the future of mankind was eerily prophetic about the outbreak of the Second World War as well as some technological advances. However, the novel was pure science fiction.

So I had to ask myself, “what is it about economic forecasts, real estate market predictions specifically, that seem to be prophetic in one regard and erroneous in other details?” I believe that in order to get a balanced perspective you have to get information from various sources and pull the pertinent plausible statements to form the picture. The same holds true to the coming year in the local real estate market.

So what lies ahead?

The National Association of Realtors predicts 2006 to be the second best year in history for sales activity ( David Lereah, chief economist for the NAR, stated in a NAR press release on December 12 that he feels that economic conditions will be positive for the housing market in the coming year. He states that general economic conditions will be good to help sustain a stable real estate market.

Conversely, the UCLA Anderson Forecast (, the folks who accurately predicted the recession in 2001, predicted in a recent press release that there will be a “weakness” in the national economy due to problems in the housing sector. Their vision is a weaker economy through 2007 because of a slower housing market and loss of construction and housing related jobs. The bottom line is that they believe that there is a rough road the next few years, but there will be no recession.

Interestingly enough you might think that Realtors who are active in the local market would have cohesive and consistent outlook on the future. That is not the case. Local Realtors who are quoted in Realty Times ( share differing opinions about the state of the present market and offer differing views about the near future.

So, what can we make of all this confusing information? Well, with regard to mortgage interest rates, the Fed is expected to have at least one more increase planed, so it will remain to be seen where mortgage interest rates level off. Currently, mortgage rates are higher than they have been in recent history, but still hover at a respectable 6.25%. Additionally, home sales have dropped off from last year’s pace but prices are still increasing. So economically, it seems as if there is a sense of return to equilibrium.

What people have described as a bubble bust, or a downturn in the real estate market, is actually a return to a more balanced market. The dysfunctional expectation that a home should sell for $25,000 (or more) than the last home sold, and have many home buyers place an offer on one home in a moments notice will change to the more reasonable expectation of selling at market value and having a buyer contract on a home in several (or more) weeks.

Equilibrium. Normality. No matter how it is said, it is a vision of things to come.

This column is not intended to provide nor should it be relied upon for legal and financial advice. This article was originally published in the Montgomery County Sentinel 12/19/2006. Copyright © 2006 Dan Krell.