home ownership Archives - Real Estate News and Commentary

August 7, 2022August 7, 2022

Living with your HOA

If you’re buying a new home or a resale within a planned development (or already own is such a community), it’s very likely there is a home owners association, also known as HOA. The HOA has rules and covenants to live by, so to speak. So, you’re not only living with your community, but living with your HOA as well.

Most residents and owners living under the umbrella of their HOA are interested staying within the lines of the rules and covenants. However, it’s difficult sometimes to be aware of all the rules as they sometimes change. Getting an infraction notice isn’t the end of the world, as it’s just the HOA’s way of reminding you of the rules. Most infractions are resolved without a fuss.

It’s not unreasonable for you to want to live quietly in your own home. Nonetheless, when you move into a community that has a HOA, you agreed to be living with your HOA rules and covenants.

There may be occasions where the home owner feels that the HOA’s notice is a nuisance. Sometimes home owners feel the HOA is unfair, they may feel singled out, and their voice is unheard. It’s not uncommon that a home owner may feel as if the HOA is engaging in selective rule enforcement. You may not agree with the HOA action or decisions, however seeking a resolution is mutually desirable.

Responsible community management is not a one-sided affair. It’s also the responsibility of the home owner to maintain the rules and covenants. However, when there is a dispute, what can you do? Fortunately in my area, there are neutral resources to assist in mediating disputes between community management companies, boards of directors and home owners.

The Montgomery County Commission on Common Ownership Communities (housed within the Montgomery County Office of Consumer Protection) was established in 1991 and is committed to providing owners, tenants, residents, boards of directors, and community management companies with information, assistance, and impartial dispute resolution programs. Statewide, the Consumer Protection Division of the Maryland Attorney General can receive complaints under the Maryland Condominium Act, as well as the Maryland Homeowners Association Act for resolution.

By Dan Krell
Copyright © 2022

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Disclaimer. This article is not intended to provide nor should it be relied upon for legal and financial advice. Readers should not rely solely on the information contained herein, as it does not purport to be comprehensive or render specific advice. Readers should consult with an attorney regarding local real estate laws and customs as they vary by state and jurisdiction. Using this article without permission is a violation of copyright laws.

April 9, 2019May 2, 2019

After you move in

Moving into your new home is exciting. You just went through an intensive process that tested your character. You feel a sense of relief it’s over. But the work is not over, it’s just beginning. What you do after you move into your new home can help maintain its value. It also can save you time, money, and keep your home functioning.

Of course, there are the standard items that needs immediate attention after you move in. Changing the locks is the number one item on the new homeowner list for obvious reasons. Deep cleaning the home is a task that is also performed, especially if the previous owner had pets. Keep all warranty information, including a home warranty policy (if you have one), in a safe place so you can find it if you need it. Make sure you know where the water shut off valve and the main electrical breaker is located in case of an emergency. Change of address forms from the USPS need to be completed to ensure you receive your mail. A visit to the DMV is necessary to change the address on your driver’s license.

But what else can you do after you move in to make life easier in your new home? Revisit your home inspection report. If the home seller made repairs, make sure you keep those invoices (your agent should have asked for those receipts prior to closing). If there is a problem with any of the repairs, you can call the associated contractor to reinspect the repair. However, it’s likely that the seller didn’t repair everything in the inspection, or maybe they didn’t repair anything. Review the report to see which items require your immediate attention, or may require attention within the year. Make sure you install any missing safety items (such as smoke and carbon dioxide detectors). Taking care of the urgent items immediately will likely prevent expensive repairs down the road. Keep the list of items likely needing attention in the future, so you can check them when you conduct regular maintenance.

Next on the list , after you move in, is to create a maintenance schedule. For most new home owners, maintenance seems to be a dirty word. After all, you just moved in and the last thing you want to focus on is “upkeep.” But putting off repairs can make the likelihood of damage to your home and repair expense increase over time. Research has even verified that deferred maintenance lowers your home’s value. Your home inspection report also should have information about maintaining systems such as (but not limited to): HVAC, electric, plumbing, roof, and exterior.

If you haven’t yet created a maintenance budget, do it now. Some of the systems may need replacing sooner than others. Check your home inspection report for the systems’ age and average life expectancy. Start saving to replace systems (HVAC, roof, etc.) so it’s not as much of a financial burden when the time comes to replace them.

Life happens and so does the occasional surprise. It is not uncommon for maintenance and other “surprises” to occur your first year in the home. Although it may seem correct to blame the home inspector, they are not perfect. They are limited to what they can see. “Surprises” often occur in a system or area that was not observable during the time of the inspection. It is my experience that home inspectors make themselves available within the first year of ownership to answer questions relating to their report. Some will even reinspect the item in question.

Original published at https://dankrell.com/blog/2019/04/09/after-you-move-in/

By Dan Krell
Copyright © 2019.

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November 1, 2018July 21, 2019

Buyer and seller attitudes about real estate market

Economists are officially pessimistic about the housing market. This is the general sentiment following another month of declining home sales. Experts are pointing to a number of factors for the slowdown, including increased interest rates and housing affordability. But what are home buyer and seller attitudes about real estate? The National Association of Realtors’ most recent Housing Opportunities and Market Experience survey hints at a busy spring!

Economic attitudes about real estate market

An October 19^th NAR news release (nar.realtor) reported that September’s home sales were the weakest in several years. The nationwide trend affected all regions. NAR chief economist Lawrence Yun stated:

“This is the lowest existing home sales level since November 2015…A decade’s high mortgage rates are preventing consumers from making quick decisions on home purchases. All the while, affordable home listings remain low, continuing to spur underperforming sales activity across the country.”

First-time-home-buyers are finding the housing market increasingly challenging. This segment’s participation needs to be strong for a healthy home sales. September’s low thirty-two percent first-time-home-buyer participation is attributed to rising interest rates and home prices.

But low housing inventory is also an issue. September’s housing inventory decreased to 1.88 million existing homes available for sale (from the 1.91 available during the previous month). NAR President Elizabeth Mendenhall stated:

“Despite small month over month increases, the share of first-time buyers in the market continues to underwhelm because there are simply not enough listings in their price range.”

Economists at Fannie Mae believe that the housing market will continue to disappoint. In an October 18^th press release (fanniemae.com) Fannie Mae Chief Economist Doug Duncan stated:

“Our expectations for housing have become more pessimistic. Rising interest rates and declining housing sentiment from both consumers and lenders led us to lower our home sales forecast over the duration of 2018 and through 2019. Meanwhile, affordability, especially for first-time homebuyers, remains atop the list of challenges facing the housing market.”

But what do economists really know about the future? Let’s hear it directly from the consumer!

Home buyer and seller attitudes about real estate

NAR’s Housing Opportunities and Market Experience survey tracks opinions from renters and homeowners about homeownership, economy, and the housing market. The release of their third quarter 2018 survey indicates that sixty-three percent of respondents strongly or moderately believe that it’s a good time to buy a home. Although optimism is somewhat diminished from the second quarter’s survey, there continues to be a positive sentiment about buying a home. The survey’s positive sentiment continues even though a majority of respondents believed that home prices will continue to increase in the immediate six months. Additionally, a majority of respondents believe that qualifying for a mortgage may be an obstacle to a home purchase.

The survey also concurs with other metrics indicating high consumer sentiment for the economy. In light of the recent slide in home sales, NAR’s recent Housing Opportunities and Market Experience survey reveals “a near-record high of sixty percent of households believe that the economy is improving.” Adding to the strong sentiment is the survey’s increased monthly Personal Financial Outlook Index, which indicates that respondents believe that their financial situation will be better in six months.

The survey also indicates a record high of home sellers who believe it is a good time to sell a home. But given the seasonal decline of housing inventory, it is likely this will translate to a surge of home listings in the spring. The added inventory combined with high consumer sentiment will boost the housing market. So sayeth the consumer.

By Dan Krell
Copyright © 2018.

Original located at https://dankrell.com/blog/2018/11/01/attitudes-real-estate-market/

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July 13, 2018April 29, 2019

Homestead tax credit – are you getting yours?

It’s been eleven years since Maryland forced all qualifying homeowners to reapply for the Homestead Property Tax Credit. Prior to the change in the application, applying for the Homestead Tax Credit was almost automatic for homeowners who claimed a primary residence. However, many abused the program to get tax credits on non-principal residences by claiming multiple properties or rental properties as their primary residence. The 2007 change was implemented to reexamine ownership, so as to stop the abuse of the property tax credit program.

The Homestead Property Tax Credit was created to assist homeowners with significant assessment increases on their principal residences. The credit limits the amount of taxable assessments. The state requires each county and municipality to limit taxable assessments to ten percent or less. Most of Montgomery County is limited to the state cap of ten percent. The Homestead Credit limits the property tax that the homeowner pays to the allowed limit.

According to the State Department of Assessments and Taxation website (dat.maryland.gov), the Homestead Property Tax Credit is granted if during the previous year: the property was not transferred to new ownership; there was no change in the zoning classification requested by the homeowner resulting in an increase value of the property; a substantial change did not occur in the use of the property; the previous assessment was not clearly erroneous; the dwelling must be the owner’s principal residence and the owner must have lived in it for at least six months of the year (including July 1 of the year for which the credit is applicable), unless the owner was temporarily unable to do so by reason of illness or need of special care.

A homeowner who vacates their home for major improvements, or plans to raze the home to build a new home may qualify for the Credit if the following two conditions are met: (1) the property was the homeowner’s principal residence for at least 3 full tax years immediately preceding the razing or starting the improvements; and (2) the building of the replacement home or the improvements must be completed within the next succeeding tax year after the tax year in which the razing or the substantial improvements were commenced.

Since 2007, many homeowners and home buyers have been unaware of the Homestead Tax Credit. Additionally, since then, many homeowners who may qualify for the Credit did not reapply. Many homeowners who purchased homes since then have also not applied for the Credit. Besides being unaware of their eligibility for the Credit, they may not have understood the Homestead Tax Credit and the application process. But this will change because of two bills passed by the Maryland General Assembly (HB990 Homestead Property Tax Credit Notification on Acquisition of Property, and HB305/SB158 Homestead Property Tax Credit Program Eligibility Awareness).

Beginning July 1^st, the State Department of Assessments and Taxation is required to mail a notice about the Homestead Property Tax Credit to individuals who purchase a home. And effective October 1^st, the State Department of Assessments and Taxation is required to identify homeowners who may be eligible for the Homestead Property Tax Credit Program (but failed to apply) and provide information on applying for the Credit with each assessment notice. For more information about your Homestead Property Tax Credit eligibility status and application process, please visit the State Department of Assessments and Taxation website (dat.maryland.gov).

Originally published at https://dankrell.com/blog/2018/07/13/homestead-tax-credit-maryland/

By Dan Krell
Copyright © 2018.

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June 16, 2017July 14, 2019

Homeownership crisis?

The housing market made significant strides last year with regard to home sales and home prices. However, even with housing’s good news, the homeownership rate continues to be at generational lows. Economists and real estate professionals are stumped. Is there a homeownership crisis?

The homeownership rate for the first quarter of 2017, reported by the U.S. Census Bureau (census.gov), was 63.6 percent. This is a slight improvement from homeownership rate recorded in 2016. However, in their analysis, the Census Bureau stated that when the rate is adjusted for “seasonal variation,” there was no statistical difference from the 63.5 percent rate recorded in the last quarter of 2016.

The homeownership rate peaked at 69.2 percent in 2005, but has steadily declined since the Great Recession. Industry experts have been flummoxed as to why there have not been more home buyers taking advantage of historically low interest rates in an upward economy. (Freddie Mac reported last week that the national average interest rate for a 30 year fixed rate mortgage was 3.94 percent; freddiemac.com). Even mortgage lending has become looser, as some mortgage companies have rolled out low and no-down payment programs in recent months.

A homeownership crisis in the making, why is there lack of interest in homeownership? A recent study co-sponsored by the Fisher Center for Real Estate and Urban Economics, UC Berkley and the Rosen consulting Group (Hurdles to Homeownership: Understanding the Barriers; June 2017) asserted to have the answer to this question. According to a NAR press release (realtor.org), the study was announced this month in honor of National Homeownership Month, and presented at the National Association of Realtors Sustainable Homeownership Conference.

The authors discussed regulatory issues that has hindered housing and mortgage lending. They also identified issues affecting would-be home buyers, which include: student debt; availability of mortgages; housing affordability; low home sale inventory; and “post-foreclosure stress disorder.”

You may already have heard much about regulatory issues, consumer debt, mortgages, affordability, and low housing inventory. But, what is “post-foreclosure stress disorder?” The Rosen Consulting Group coined the phrase to give a name to the concept of perceived home buying risks derived from a financial crisis.

Even though a number of consumer surveys continue to indicate a strong positive sentiment towards homeownership, the authors point to post-foreclosure stress disorder as a major influence on home buying decisions. They believe that many individuals have been directly and indirectly affected by the Great Recession, and therefore have changed their behaviors based on perceived financial risks. And the greater the financial risk, the greater the caution exercised. They claim this is confirmed by a Federal Reserve survey where 80 percent of respondents indicated they would like to own a home someday, but only one in six who were financially able to purchase a home felt that renting was the best choice for now. The authors stated that although the trauma of the Great Recession will fade over time, they assert the need to rebuild confidence in homeownership benefits.

Post-foreclosure stress disorder may account for a decline in the homeownership rate, but this is not a homeownership crisis. It is shift in values and a major shift in lifestyles. Surveys have indicated that millennials are expected to be the largest group of homebuyers, but many millennials don’t want to be anchored by owning a home. They want to be able to take advantage of global opportunities without the burden of having to sell a home. There is a shift away from the old standard of being house-centric to mobility.

By Dan Krell
Copyright© 2017

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