homebuyer Archives - Page 20 of 25 - Real Estate News and Commentary

May 23, 2014July 3, 2019

Local level home owner and buyer protection

Home owner and buyer consumer protection exists at all levels of government. For example, the creation of the Consumer Financial Protection Bureau (consumerfinance.gov) in 2010 brought together in one department oversight and enforcement for federal consumer financial laws. Likewise, Maryland has a Consumer Protection Division housed within the Office of the Attorney General (www.marylandattorneygeneral.gov); which provides information to assist consumers in making educated decisions, as well as offering mediation services to resolve consumer complaints. Some of the housing related consumer advocacy offered by the CPD includes: the administration of the Home Builder Registration Unit; and education about the Maryland Foreclosure Counseling Services Law, as well as “flipping scams.”

Many local governments also have a number of specific protections for home owners and buyers. An advantage of living in Montgomery County MD is the availability of housing related services and assistance with specific housing issues to home owners, buyers, renters and landlords.

To assist home buyers in understanding the associated costs of home ownership, Montgomery County requires sellers to disclose utility and estimated property tax information. Enacted in 2007, Bill 24-07 requires home sellers to provide an accurate estimate of what the property tax would be for the first full year of ownership. Home sellers and real estate agents access the estimated property tax information from the Montgomery County Office of Consumer Protection website (montgomerycountymd.gov/ocp).

The OCP also enforces the County’s utility bill disclosure law that requires home sellers to provide a history of the prior 12 months of electric, gas, and heating oil bills for a property, or a usage history for the same time period. Additionally, the seller must provide Montgomery County Department of Environmental Protection approved information to help the buyer with energy conservation choices and options. If you’re selling your home, your listing agent can provide you with the approved Greater Capital Area Association of Realtors® forms to fulfill these obligations.

County residents finding themselves at odds with their Home Owners or Condo Association can ask for help from the Office of Common Ownership Communities. Housed within the OCP, the OCOC offers information and a dispute resolution program for home owners, boards, management companies, and managers. The OCOC pledges transparency, integrity, and a commitment to the highest ethical standards.

If you’re buying a new home in Montgomery County, you are provided with an extra layer of protection through Montgomery County Code Chapter 31C, which requires new home builders to be licensed by the Montgomery County OCP as well as provide a new home warranty that meets specific criteria.

If you own rental property or are a tenant within the County, you’ll find the Office of Landlord – Tenant Affairs (housed within the Department of Housing and Community Affairs) a resource of valuable information. Besides publishing a Landlord – Tenant Handbook, the commission provides information on licensing, security deposits, evictions, leases, and rent increases. Besides informing of general rights and responsibilities of landlords and tenants, it offers a free and quick avenue for tenants to seek amicable dispute resolution (http://montgomerycountymd.gov/DHCA/housing/landlordtenant).

Home owners and tenants who have issues with their cable TV provider can seek assistance from the Office of Cable and Broadband Services (montgomerycountymd.gov/cable). Housed within the Office of Technology Services, the “Cable Office” administers the County’s cable TV franchise agreements; the office investigates and resolves subscriber complaints.

Check with your real estate agent about local home owner and buyer protections. Many consumer protection agencies (such as those listed above) have websites where information is posted to educate consumers.

Dan Krell
© 2014

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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.

May 15, 2014November 23, 2021

Picky home buyers and real estate slowdown

Why would a major real estate industry player predict a slowdown in home sales? The L.A. Times reported on May 5^th (Real estate giant predicts slow home sales for months to come) that Realogy Holdings Corp, the parent company of Coldwell Banker, Century 21 and Sotheby’s, claims that a slowdown in mid and low bracket homes could hurt the brokerage business and could prove to be a difficult 2014.

Meanwhile, a recent “Real-Time Seller Survey” conducted by Redfin (refin.com) indicated that 52.4% of home sellers were confident about selling their homes; however 40.9% of sellers were concerned about affording their next home. This may be why 40.3% of those surveyed planned to price their home above market value – maybe not the best strategy. The May 8^th Business Wire article (Redfin survey: 40% of home sellers plan to price higher than market value) quoted Redfin agent Paul Reid as saying; “Buyers this year are far less tolerant of overpricing, and homes that aren’t priced appropriately are likely to sit on the market until the seller is forced to reduce the price … Buyers often interpret a price drop as a sign there is something wrong with the home, leading some to negotiate even more aggressively or lose interest altogether.”

Economics aside, some experts say that a slowdown is in part due to institutional investors having all but left the market as distressed properties are decreasingly a part of the housing landscape; and the housing market is once again reliant on the owner occupant home buyer – who is often characterized as “picky.”

A lot has been said about “picky home buyers” since 2008, and the fact is that home buyers have not changed much – indeed, they may even be pickier today. It could be that the lessons of the financial crisis are still fresh in their minds; home buyers as group seem to be a hardy and savvy group. 2008 was a transition year, as home buyers shirked distressed properties for homes that exuded value. “Cheap” did not necessarily mean the home was a bargain to those who planned to be owner-occupants. Many home buyers were turned off to short sales and foreclosures, not just because of the process but because of the realization that the combined cost of the home purchase with repairs often exceeded the price of a re-sale that was in move-in condition.

Even though there is a perceived dearth of available homes for sale today, doesn’t mean that home buyers will pony up for an overpriced home. Home buyers are typically looking for a combination of location, quality, and value. According to Lyn Underwood (Home buyer turn-ons and turn-offs; McClatchy-Tribune Business News. April 26, 2014), home buyers are attracted to homes for a number of reasons; some of the top home characteristics include an updated kitchen with stone counters and maple cabinets; an open floor plan; new or refurbished wood floors; and flexible spaces (rooms that can be used for a number of uses).

If you’re selling this spring, don’t take home buyers for granted: don’t over price your home; and stay away from cheap renovations meant to look expensive (buyers are turned off by poor workmanship, sloppy installation, or inferior materials); and keep your home neat and tidy when showing. Your listing agent can provide guidance on preparing and pricing your home to sell in today’s market.

Original published at https://dankrell.com/blog/2014/05/15/picky-home-buyers-and-real-estate-slowdown/

Dan Krell ©
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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. This article was originally published the week of May 12, 2014 (Montgomery County Sentinel). Using this article without permission is a violation of copyright laws. Copyright © Dan Krell.

April 24, 2014November 23, 2021

Preparations before you buy a home

So, you’ve been checking out homes online and have been bitten by the “bug.” You’ve patiently waited out the market and feel it’s time to jump in but not sure where to start. Whether you’re a seasoned or first time home buyer; don’t make the common mistake of overlooking the essential preliminary activities of the home buying process.

Experts agree that checking your credit report prior to starting the home buying process is essential. Your credit report is the basis for the credit score that is often used by mortgage lenders to decide if you qualify for a loan, and it may also be used as a means to decide your interest rate. If your credit report is inaccurate, it can cost you time and money.

Believe it or not, mistakes on credit reports are more common than you might think. According to the Consumer Financial Protection Bureau (CFPB), you’re entitled to a free annual credit report, which can be obtained for free from the “official” credit report website (annualcreditreport.com). The free report does not include a credit score, however, you can get it from the credit repositories for a fee; the CFPB cautions that the scores you receive may not be the same scores that lenders use for decisions on extending credit.

I often talk about doing due diligence, and many home buyers are attentive and thorough in negotiation, and home inspections; but many are not as careful when choosing their real estate agent and lender. Although buyers tend to work with the first or second agent they meet; there is a consensus that you should interview several real estate agents so as to know what to expect and to ensure you receive the service and attention you require. The same goes for any service provider you may use in the process, including the mortgage lender. And even though it has become more common for buyers to talk with several loan officers about mortgage programs and interest rates; however, it is recommended that you ask about lender fees as well.

Don’t be shy in choosing in choosing other service providers either – it’s going to be your home after all. Choosing a home inspector, pest inspector, and title company can take a little time, and it may seem easier to go with whomever your agent recommends; but sometimes price or proficiency is sacrificed for convenience. For example, a few moments of time to interview home inspectors can be the difference between having an adequate home inspection or a very thorough one.

Before you spend time visiting homes, it is highly recommended that you get qualified for a mortgage by a lender. An approval indicating that your income and asset documents and credit report were reviewed by the loan officer gives added credence to any purchase offer.

Don’t forget to make a housing budget. In addition to your mortgage payment, insurance, and property taxes, the budget should include utilities, maintenance and other expected expenses. The budget should also project increases in these payments as well. Rather than keeping to the maximum loan qualification, a realistic budget can reveal your comfort level on the price you’re willing to pay for a home.

Besides your real estate agent, more information about credit reports, mortgages and the home buying process is available from the CFPB (consumerfinance.gov) and HUD (hud.gov). With preparation, your home buying journey will be more enjoyable!

by Dan Krell ©
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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. This article was originally published the week of April 21, 2014 (Montgomery County Sentinel). Using this article without permission is a violation of copyright laws. Copyright © Dan Krell.

April 3, 2014November 23, 2021

House shopping strategies without using MLS

The low housing inventory is discouraging many home buyers. Low inventory along with increasing home prices and buyer competition can make shopping for a home today a frustrating endeavor. If you’re a serious home buyer, there may be other strategies to finding homes for sale other than those listed in the multiple list system (MLS).

The “For Sale by Owner” sign in the yard is a tell tale sign; however did you know that many FSBO’s can be found listed in the MLS? These are listed through brokers who are paid a flat fee as an MLS listing placement service. And although most are listed online, not all FSBO’s are found in the MLS. You can also find FSBO’s on numerous “by-owner” sites, as well as Zillow, Trulia, or Craigslist.

Listservs and internet groups are another way to find non-MLS homes for sale; however, neighborhood groups often restrict membership to residents. Leveraging your personal and social networks by announcing your search for the non-MLS home for sale will most likely prompt them to inform you about what they have heard through their networks and neighborhood listservs/groups.

The National Association of Realtors® 2013 Profile of Home Buyers and Sellers (realtor.org) indicates that 92% of buyers search the internet. Besides FSBO’s; online services such as Zillow, Trulia, Craigslist, also list foreclosures auctions, pre-foreclosures, and of course broker listings too. The internet is also where scammers are lurking, waiting to prey on you. Be wary about phone numbers that are out of the area; experts agree that you can avoid most scams if you deal with local individuals with whom you can meet in person.

Buying a foreclosure is often suggested as an avenue to buy a non-MLS home. Although most bank-owned homes become listed in the MLS, you have the opportunity to purchase a home at the foreclosure auction. If you’re an auction novice, seek out a real estate professional to assist you; homes are purchased “as-is” and you usually do not have the opportunity to inspect the interior. Mistakes that are often made by inexperienced auction bidders include misunderstanding the terms of the auction, overestimating home values on those they bid, as well as getting carried away and over bidding. Pre-foreclosures are often listed in the MLS as short sales; however, it is necessary to be aware of local laws (such as the Maryland Protection of Homeowners in Foreclosure Act) when approaching distressed home owners who have not listed their home for sale.

Searching through expired and withdrawn MLS listings is another way to find eager home sellers. Your real estate agent can provide you with such a list; however, it is not easy and you may quickly discover the reasons why many of these homes did not sell.

Even though, many alternate strategies for finding a non-MLS home for sale can be achieved without a real estate agent you should consider hiring an agent; besides representing you and assisting in structuring and facilitating the transaction, it is also common for agents to use these strategies to search on behalf of their busy clients.

A down side of the search for the non-MLS home for sale is that instead of competing with other home buyers, you’re competing with many real estate agents; not just those agents representing home buyers, but also the many agents searching for their next MLS listing.

by Dan Krell ©
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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. This article was originally published the week of March 31, 2014 (Montgomery County Sentinel). Using this article without permission is a violation of copyright laws. Copyright © Dan Krell.

February 27, 2014July 4, 2019

RESPA empowers home buyers and consumers

Although the Real Estate Settlement Procedures Act (RESPA) is one of those laws that you don’t hear much about, it’s a consumer protection statue that has been around for while. Enacted in 1974, RESPA was intended to help home buyers be better shoppers by requiring the disclosures regarding the nature and costs related to the real estate settlement process. Keeping RESPA relevant, there have been modifications and clarifications through the years, most notably the change of administration and enforcement in 2011 from HUD to the Consumer Finance Protection Bureau (CFPB).

RESPA is generally known for empowering consumers in the real estate process by allowing consumers (in most cases) to choose service providers, and prohibiting kickbacks (e.g., unearned fees) for referrals. Section 8 of RESPA prohibits real estate service providers from giving or accepting a fee, kickback or anything of value in exchange for referrals of settlement service business involving a federally related mortgage. While Section 9 prohibits a home seller from requiring the home buyer to use a particular title insurance company, either directly or indirectly, as a condition of sale.

RESPA also requires the disclosure of affiliated business arrangements associated with a real estate closing. An affiliated business relationship is considered to exist when there is a direct or indirect referral from a service provider to another provider of settlement services when there is an affiliate relationship or when there is a direct or beneficial ownership interest of more than one percent. The disclosure of such a relationship must specify the following: the nature of the relationship (explaining the ownership and financial interest) between the provider and the loan originator; and the estimated charge or range of charges generally made by such provider. This disclosure must be provided on a separate form at the time of the referral (or at the time of loan application or with the Good Faith Estimate if referred from a mortgage lender). In most cases, you’re not required to use the referred affiliated businesses.

RESPA violations are serious, and penalties can be severe. For example, HUD (hud.gov) lists the penalties for violations of Section 8 “… anti-kickback, referral fees and unearned fees provisions of RESPA are subject to criminal and civil penalties. In a criminal case a person who violates Section 8 may be fined up to $10,000 and imprisoned up to one year. In a private law suit a person who violates Section 8 may be liable to the person charged for the settlement service an amount equal to three times the amount of the charge paid for the service.”

The real estate industry takes RESPA very seriously; the industry educates service providers about empowering consumers, as well as regulation compliance. And although modifications of RESPA are to keep up with the real estate industry; some still claim that there are sections of RESPA that remain vague, as demonstrated by the Supreme Court opinion of Freeman v. Quicken Loans, and further clarifications (such as the RESPA Home Warranty Clarification Act of 2011).

In the past, RESPA violations were pursued vigorously by HUD; resulting in settlements as well as criminal investigations. Today, the CFPB (consumerfinance.gov) has taken over the reins, and continues the pursuit of RESPA violations with the same if not increased vigor. More information and guidance about RESPA can be obtained from the CFBP (consumerfinance.gov).

by Dan Krell
© 2014