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September 15, 2019February 8, 2020

Autumn Home Selling

What was once considered a winding down period for the year’s home sales, has become housing’s second wind. Autumn is not only a time when the leaves start falling, but it also has become a target selling season for home sellers who miss the spring market. Autumn home selling is also a second chance for those who could not sell their home earlier in the year. In fact, the fall has become an active home selling season.

The general consensus for the autumn home selling phenomenon is that home sale inventory is low. But the truth is that the fall tends to be when home sale inventory begins to decrease anyway. Many home sellers who didn’t sell their home during the spring or summer will be pulling their homes off the market. Sure, new listings are available during the fall, but not as many as there were in the spring. Fall is a time for home buyers and sellers to strike while the iron is hot. The combination of fewer listings along with serious home buyers and sellers makes the fall housing market a brisk selling time.

This year, autumn home selling may be different. Existing home sales have declined year-to-date (compared to last year). The National Association of Realtors reported that as of June, existing home sales are about 2.2 percent behind last year’s sales. Year-to-date Montgomery County home sales are 2.1 percent below last year’s sales. This decline actually started last fall. The home sale drop-off stifled what could have been a record year for 2018 home sales.

Autumn home selling

If you’re selling a home this fall keep an eye on neighborhood home sales. Setting a reasonable list price will be key to getting your home sold. Keep in mind that although home sale prices continue to climb, monthly appreciation is slowing. The S&P CoreLogic Case-Shiller Home Price Index (spindices.com) reported a year-to-date nationwide 2.29 percent increase. You get a sense of the magnitude of decelerating appreciation when compared to 2018’s increase of 4.55 percent, and 2017’s increase of 6.24 percent nationwide. The year-to-date Montgomery County average home sale price is about $554,932, which is only an increase of 1.2 percent from the same time last year (MarketStats by ShowingTime).

Over pricing your home can be a disastrous mistake during the fall market. Don’t be greedy, and be prepared to adjust your pricing strategy. There are many storms brewing that can easily scare home buyers. If the list price is too high, you may end up with low ball offers because of a protracted time in the MLS.

Although having less competition makes it a good time to sell your home, it can also be challenging. Fall weather can be significantly different day to day. Be prepared to adjust the thermostat. Make sure your HVAC system gets a fall service so it will be ready for colder temps.

Don’t forget to keep up with your home’s curb appeal. Although you may want to get lazy about maintaining your lawn, don’t let it grow too high. Also, remove excessive leaves from the ground too, as this can also diminish your home’s curb appeal.

Make accommodations for home buyers to visit your home. Many home buyers will probably schedule tours after work, when it will be getting dark. Open houses are still a good option for a fall home sale. Turnout may be scant, but fall open house visitors are more likely to buy.

Original article is located at https://dankrell.com/blog/2019/09/15/autumn-home-selling/

By Dan Krell
Copyright© 2019

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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.

September 4, 2019September 4, 2019

Home Buyer Beware

Whether you admit it or not, buying a home is a stressful endeavor. Even if you’ve purchased a home before, the process can be somewhat nerve-wracking and overwhelming. Taking time out of your already busy schedule to search and visit homes, as well as applying for a mortgage can make life hectic. So, who needs the added worry that that the home seller and/or listing agent is trying to hide something from you? Home buyer beware.

Maryland requires the home seller to disclose any known latent defects, regardless if they are choosing the disclosure or disclaimer option. To be clear, the Maryland Real Estate Commission’s Residential Property Disclosure and Disclaimer Statement states that a seller must disclose “Material defects in real property or an improvement to real property that: (1) A purchaser would not reasonably be expected to ascertain or observe by a careful visual inspection of the real property; and (2) Would pose a direct threat to the health or safety of (purchaser and/or occupant).” Regardless, there is still a “home buyer beware” atmosphere.

How can you proceed confidently with your home purchase if there is a sense of distrust? To counteract the home buyer beware phenomenon, focus on “trust and verify.” The concept of trust and verify is about taking disclosures at face value and exercising due diligence. To the best of your ability, confirm the accuracy of what is disclosed, as well as investigate any areas of concern. Many items can be verified online, or by calling the locality where the house is located.

Home buyer beware

Of course, you should always conduct a home inspection. However, prior to hiring your home inspector, ask about their scope and limitations of the inspection. Home inspectors are considered generalists, such that they are not typically an expert in any aspect of home construction, or the home’s structure and systems. However, they are trained to identify potential common problems. They will also recommend that you consult an expert for further information on anything that is outside the scope of the inspection. And although home inspector licensing laws prescribes minimum inspection standards, there is no guarantee that everything will be inspected thoroughly beyond a visual inspection (e.g., chimney or pool). Make sure your inspector meets your expectations so as to thoroughly inspect all systems of the home.

If the home was expanded, verify that additions and/or modifications to the home were permitted by the local jurisdiction. Unpermitted additions can create a number of issues, including having your lender deny your mortgage. It’s not uncommon for additions/modified items (such as a deck, and even electrical improvements) in a home to go unpermitted. This is usually because the home owner did it themselves, or hired a contractor who cut the corner of getting a permit. The permitting process certifies that repairs/renovations comply with local building and zoning codes. Making sure any addition or home expansion was permitted and passed final inspection gives peace of mind that the completed project meets local building health and safety standards.

Keeping home buyer beware in mind, due your due diligence. There are many other aspects of the home which can be verified, including (but not limited to) schools and zoning. If you’re buying a home to go to a specific public school, verify that the house is within the school’s boundaries and if there are plans to redistrict. If you plan to have an air-b&b in your home, make sure the house is appropriately zoned. You should also check zoning and the local planning office to make sure your potential building/addition plans are not restricted.

By Dan Krell
Copyright © 2019

Original located at https://dankrell.com/blog/2019/09/04/home-buyer-beware/

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August 27, 2019August 27, 2019

Stock Corrections and Housing

Each time the stock market plunges there’s speculation about a wide spread economic contagion. Talking heads and news headlines predict doom and gloom, as well as speculating about the effects on the housing market. Because Wall Street reacts to all types of news and events, the effect of a stock crash on the housing market can vary. But are stock corrections and housing slumps connected?

If you want to see direct effects of stock corrections and housing slumps, you need only look at the stock market corrections in 2015 and 2018. Both stock market shocks were reactions to events in the US and globally. The extended stock sell-off during 2015 was a reaction to China’s currency devaluation as a result of their low GDP as well as poor economic data that came from the EU. The steep equities decline that happened during August through September of that year was bad timing for the housing market, as it occurred when the fall market was gearing up. Consumer confidence dropped and home buyers were concerned about home values. As a result, home sales slowed during the fall of 2015.

Moving forward, February 2018 is one of the most volatile trading months in recent history. That month saw two of the largest daily losses of the Dow Jones Industrial Average (both over 1,000 points). The market correction was due to Fed rate increases and concerns of inflation. The stock market correction occurred before spring home buyers were out in full force, so the short-lived event had minimal effect on home sales. Although home prices continued to post gains, existing home sales declined the second half of the year after an active spring and summer.

Are stock corrections and housing slumps connected?

This month’s stock market one-day plunge was likely tied to tariffs, trade and currency wars. The large decline occurred after China devalued its currency so as to make its consumer goods cheaper in the face of increasing tariffs.

Regardless of the impact of equities, it’s important to point out that home sales have been inconsistent throughout the year. A July 23^rd NAR press release indicated that existing home sales are 2.2 percent lower than last year. Chief NAR economist Lawrence Yun stated, “Home sales are running at a pace similar to 2015 levels – even with exceptionally low mortgage rates, a record number of jobs and a record high net worth in the country…” Although it may feel like we are repeating the housing cycle of 2015, it’s for different reasons. Like then, home sale inventory is low and home buyers are anxious about increasing home sale prices. However, differences include low mortgage rates, high consumer sentiment, and a stronger economy.

Although the overall effects of current stock volatility on the housing market may be minimal, equities corrections are typically harsher on upper bracket and luxury homes. Demand for starter homes will remain high, while upper tier homes will have to adjust pricing. Yun stated “Imbalance persists for mid-to-lower priced homes with solid demand and insufficient supply, which is consequently pushing up home prices…”

Although stocks rebounded the next day, we really don’t know yet if this is the beginnings of stock correction or a one-day event, so there is no way to gauge an immediate effect on home buyers. However, A July 17^th NAR report indicated that foreign home buyers have been affected by a slowing global economy and low US home sale inventory. The NAR Profile of International Transactions in U.S. Residential Real Estate 2019 indicated a 36 percent decline of foreign investment in U.S. residential real estate from last year. It’s likely that foreign investment may further erode as a currency war develops.

By Dan Krell
Copyright © 2019

Original located at https://dankrell.com/blog/2019/08/27/stock-corrections-and-housing/

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August 11, 2019September 3, 2019

Home Office Spaces

If you have a home based business or telecommute, you’re one of the millions of Americans who probably have or want a home office. What seems to be a staple of modern living wasn’t always so.

The home office most likely developed from the “study” that existed in the larger homes of the well-to-do. These rooms were usually separated from the rest of the house providing privacy for the home owner to read, meet with others, and of course conduct business. As the middle-class grew, their leisure time did too. The two or three bedroom home was getting too small. Home owners desired a separate designated space to read, hobby, and do other work. The standard middle-class home grew in size and added other features, such as a family room, rec room, and the home office. Although the home office, like other specialty rooms, lost its popularity after the Great Recession, it quickly regained popularity as the recession subsided.

Although the room may have looked like a standard office with a desk and chair, early home offices weren’t really used as a full-time space for the home owner’s job. Most mid-century occupations required employees to report to a place of business. However, as technology developed, the ability to work from home increased. According to Allied Telecom (alliedtelecom.net), Jack Niles coined the term “telecommute” in 1972 when he “remotely” worked on a NASA communication system. Working from home gained popularity during the 1970’s energy crisis, when employers needed to reduce energy consumption and employees found they spent increasing amounts of time in rush hour traffic

The demand for the office space didn’t serendipitously coincide with home buyer activity, but actually increased due to changes in the Americans workforce. Additionally, the popularity of the office space can most likely be gauged by the growth of affordable technology. The advent of home computing in the 1980’s allowed many office workers to bring their work home. Modems allowed employees to remotely connect to their employers. However, it wasn’t until the development of the internet and subsequently broadband that full-time telecommuting jobs and home based businesses flourished.

A home office is very important to home buyers. According to the Q2 2018 American Institute of Architects Quarterly Home Design Trends Survey (aia.org), thirty-five percent of respondents indicated that having an office space is a trending home feature.

Of course, home design has changed through the years. Besides allocating a room for a home work space, technology has had a hand in redefining the office space. The home office has transformed from the dedicated room to do actual work, to a “home tech flex space” that may contain a desk, printer, and router, while Wi-Fi allows the home owner to roam the home (even outside). It’s not uncommon to see your neighbor on their deck working on their laptop.

Finding a home that fits your lifestyle is essential. If you’re a home buyer who telecommutes or has a home based business, you want a home office. Unfortunately, you know that housing inventory is low, and homes with this feature are further limited. To help with your search, consider homes that have flexible spaces that can be used as your office. Also, because there are many home renovation loan programs, including loans with streamlined options, you might consider homes that have the potential to expand for a home office.

By Dan Krell
Copyright © 2019

Original located at https://dankrell.com/blog/2019/08/11/home-office-spaces/

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July 29, 2019August 2, 2019

Take it or leave it

If you’re listing your home for sale with a Realtor, you will likely encounter a one-page disclosure that’s important yet often neglected. The purpose of the “Inclusions/Exclusions Disclosure and Addendum” is to communicate with the home buyer what conveys with house and what you intend to take. This helps you decide to “take it or leave it.” If completed as intended, the disclosure can help you avoid a dispute with the buyer after closing.

It’s understandable that, after completing a stack of listing documents and disclosures, home sellers want to quickly check the boxes of the obvious items that convey with the sale. However, in their haste, many sellers overlook or forget about the fixtures they intend to take it or leave it when they move. Common items that home sellers take include the chandelier (and other lighting fixtures), bathroom mirrors, brand new washer/dryer, or the extra freezer.

The up-to-date GCAAR Inclusions/Exclusions Disclosure and Addendum helps you decide what fixtures and personal property convey. The first paragraph states: “The Property includes the following personal property and fixtures, if existing: built-in heating and central air conditioning equipment, plumbing and lighting fixtures, sump pump, attic and exhaust fans, storm windows, storm doors, screens, installed wall-to-wall carpeting, window shades, blinds, window treatment hardware, mounting brackets for electronics components, smoke and heat detectors, TV antennas, exterior trees and shrubs. Unless otherwise agreed to herein, all surface or wall mounted electronic components/devices do not convey…”

You’ll notice that the disclosure specifically mentions wall mounted electronics and mounting brackets. This wording was added because new norms emerged with new technologies that created disputes about what was considered “permanently” attached. As wall mounted TV’s became commonplace, home buyers expected plasma TV’s to convey and unsightly wall mounts to be removed.

A more recent technology incorporated into a home that has become commonplace is the solar panel. Do they convey or not? Many home owners who install solar panels don’t actually own them, they are leased. Of course, confusion and disputes regarding solar panels have occurred, and are now listed in the Lease Items and Service Contracts section. To help clarify what leased items convey and transfer, the Inclusions/Exclusions Disclosure states: “Leased items/systems or service contracts, including but not limited to: solar panels & systems, appliances, fuel tanks, water treatment systems, lawn contracts, security system and/or monitoring, and satellite contracts do not convey unless disclosed here…”

It’s not uncommon for a dispute to arise at the walkthrough because the home seller decides to take a fixture or appliance that is not listed as an exclusion. Regardless whether the seller misunderstood or had a last-minute change of heart, the home buyer may be demanding the return of the item(s). And since the Inclusions/Exclusions Disclosure and Addendum is part of the contract, the buyer may have recourse.

Take it or leave it?

If you’re selling your home, deciding to “take it or leave it” may be the last on your mind. But take the time to read and complete the disclosures carefully. When completing the Inclusions/Exclusions Disclosure don’t be afraid to over communicate your intentions about taking or leaving fixtures and appliances. Make sure you list items you will take as “Exclusions.” It also helps to tag these items indicating “Does Not Convey,” so home buyers are on notice when they visit. Also, don’t forget to identify older appliances or fixtures that are staying, so the buyer doesn’t assume you are removing them. And of course, ask your agent for assistance if you’re unsure if specific items are fixtures and should be listed in the disclosure.

By Dan Krell
Copyright © 2019

Original located at https://dankrell.com/blog/2019/07/29/take-it-or-leave-it/

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