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November 9, 2018December 13, 2022

Municipal infraction and your home

A common home buyer preference is to buy a home that is not within the confines of a HOA or condo association. Maybe the home buyer’s impression is that HOAs and condo associations bully home owners. But the truth is that HOA and condo association rules are created for a number of reasons, which include health and safety. If you don’t comply with the community rules, they can compel you do so. But even if you don’t live in an association managed community, it’s your civic duty to comply with county and/or municipal ordinances to maintain your home. Disregard for civic responsibility may result in a municipal infraction.

Believe it or not, regardless of where your home is located, your home has to satisfy health and safety standards that are enforced by your municipality (e.g., Montgomery County, City of Rockville, City of Gaithersburg, etc.). Deferred home maintenance can surely affect the value of your home. However, if it is found that your home doesn’t meet code standards, you can receive a notice of a municipal infractions.

Municipal infractions are also another name for code enforcement. In his manual Municipal Infractions and Code Enforcement, Practice and Procedure for Municipalities in the State of Maryland, Frank M. Johnson stated the need for having such procedures by saying:

“Most persons will follow the law voluntarily, but the reality is that when a law isn’t enforced, it becomes less effective for everyone. Even those who voluntarily comply are less likely to take a law seriously when it’s known the law won’t be enforced. In addition, steps to enforce the law often involve the most serious violations which, if not corrected, can lead to results which have a significant community and neighborhood impact.”

Mr. Johnson’s manual was originally written for the City of Gaithersburg, but was also adopted by the Maryland Municipal League (mdmunicipal.org), which is a statewide non-profit association that promotes municipal administration. What started as a local handbook describing the entire process of municipal infractions (from complaint to enforcement), became a statewide template in code enforcement.

Municipal infraction and your home

If you ever received a notice of municipal infraction, or just wondered how the process works, check put the manual. The manual describes why you’re receiving the citation, and how it can be enforced. It also describes the appeal process, as well as what can happen if you don’t comply.

Typically, the municipal infraction process begins by a complaint that triggers an investigation. The investigator will inspect and witness any code violations. If there are violations, the investigator will notify you and attempt to resolve the issue(s). Most home owners resolve the issue(s) with the first notice. However, if you don’t comply (or attempt to comply) with the first notice, you will likely be fined. The court can also order you to correct the issue(s), which is called an “abatement order.” If you don’t comply with the abatement order, your municipality can go on your property (and inside the home if necessary) to fix the issue(s) and send you the bill! If you don’t pay, a lien will be placed against your home, while collection actions are implemented.

What Caused You to Get Cited For a Municipal Infraction?

Montgomery County’s Department of Housing and Community Affairs (montgomerycountymd.gov/DHCA) also publishes valuable information about the process. The Housing Code Enforcement Handbook, is written for the public to understand housing code enforcement in the county. The DHCA states that seasonal issues are the most common code violations reported, such as overgrown grass and weeds, dead trees and snow-covered walkways.

Original published at https://dankrell.com/blog/2018/11/09/municipal-infraction-home

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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.

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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October 25, 2018April 26, 2019

Real estate tin men

Beware the Real Estate Tin Men! “Tin men” was a term used to describe con-artists after the 1987 Barrie Levinson movie by the same name became a nationwide hit. The movie was about aluminum siding salesmen who did whatever they could to sell home improvements in 1963 Baltimore. The story revealed how everyday “schnooks” created the façade of a successful sales person, as well as revealing their unscrupulous sales tactics. The main characters are flawed and likable, so much so that you’re rooting for them as they are cross-examined at their MHIC license hearing.

Modern versions of tin men still exist. They exist in all professions. They are constantly refining their tactics to get your business. They will often tell you what you want to hear.

When it comes to buying and selling a home, beware of the real estate tin men! These are agents who will say and do almost anything for your business.

Many real estate agents still use tin men tactics. Real estate sales is difficult and many agents will do whatever they can to get a leg up on their competition and a chance at a sales commission. There is a subculture in the industry that is focused on pushing the ethical envelope to make money. This philosophy is spread by “gurus” and coaches who teach sales tactics, persuasion, and income strategies.

Unlike the world of 1963, when a salesman could easily lie to make the sale, today’s easy flow of information makes it unlikely that a real estate agent would flat-out lie. The internet has created a savvy and knowledgeable consumer by allowing easy authentication of information. However, the internet has not changed the real estate agent’s reputation for bending the truth, otherwise known as “puffery.”

Rapport is often built on appearances. Like the 1960’s tin men, many real estate agents also employ smoke and mirrors to help them appear successful. Although some still drive cars and dress beyond their means to “fake it,” many agents rely on technology for their trickery. The art of deception is widely used by agents who dare to manipulate data. Many real estate agents, who supervise other agents, take credit for MLS sales they had nothing to do with so as to appear they have many more sales (than they actually do). Likewise, many agents pay for fake internet reviews. Although many platforms screen for false reviews, agents continue to find ways to get fake 5-star reviews on websites, including incentivizing unsolicited otherwise 5-star reviews from clients.

Many real estate agents rely on gimmicks as a means of getting business. A popular agent promotion is “I will buy your home if it doesn’t sell.” The reality is that although the agent may offer to buy your home if they can’t sell it, the conditions actually don’t make it a viable option. Another oversold gimmick is “cutting-edge” marketing. The promise of cutting-edge marketing used to mean advanced and new. However, today cutting-edge real estate marketing is overshadowed by the truth that homes are primarily viewed on real estate internet portals, such as Zillow (all MLS listings are posted to these portals).

Most Realtors are ethical and do the right thing. A recent article by Jim Dalrymple II even touts broker (and agent) humility as the “new method” and business model (Humility, not arrogance, is the new real estate leadership trend; inman.com; October 17, 2017). And although real estate agents have increasingly been leaning towards transparency and authenticity, you should still beware of tin men.

Original located at https://dankrell.com/blog/2018/10/25/real-estate-tin-men/

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October 19, 2018July 21, 2019

Real estate services personality

The “one-size-fits-all” service model is becoming an all too familiar experience in every day life. You encounter it when you go to the doctor’s office. A day at the mall is certainly a one-size-fits-all adventure. Now, there is also the pressure towards automated buying and selling systems in the real estate industry. Real estate services that is one-size-fits-all? The idea of a one-size-fits-all real estate transaction is becoming trendy from both online companies and local real estate companies.

How do real estate services treat clients?

The move toward systematizing consumer encounters comes from the corporate goal of profiting from efficiency. Don’t get me wrong, there is nothing wrong from a business making money. After all, making money is the basis of our economy. And the one-size-fits-all system for home buying and selling is a business solution during a healthy housing market where homes sell quickly.

However, the systematization of the service industry, including real estate, is not welcome by all consumers. There is some acknowledgement that a systematized real estate transaction can have unfortunate outcomes when the plan is derailed. Not all real estate transactions are easy, nor do all homes sell quickly. It is a fact that that most home buyers and sellers still want an expert they can count on to help them navigate one of the most expensive and stressful transactions of their life.

Customer service research

Gauging the effects of a systematized service industry on the consumer is a growing interest. One recent study examined customer service reactions when the provider system fails (Diaz, Gomez, Martin-Consuegra, Molina; The Effects of Perceived Satisfaction with Service Recovery Efforts: A Study in a Hotel Setting; Ekonomie a Management; 2017, 20:4 p.203-18). The study suggested that customer issues are inevitable. They conclude that customer service models should have strategies to address and resolve issues to maintain positive customer relationships.

Another study suggested that when it comes to automated service, some service industries are better suited than others (Scherer & Von Wangenheim; Man Versus Machine-How the Service Channel Affects Customers’ Responses to Service Encounters; AMA Winter Educators’ Conference Proceedings; 2016, Vol. 27). The authors suggest that a consumer’s expectation is guided by how a service is provided. Satisfaction levels are increased when personal services are delivered by a human. Furthermore, they found that consumers who prefer technology or automated services tend to be ego-centric. These “self-service” consumers attribute success to their abilities, while shifting blame to externals when there is a failure.

Real estate services for all personalities

The growing body of research may explain why real estate agents have not become extinct in a technological world. Instead, the profession has endured. Moreover, Realtors have embraced technology (for better or worse). As new technologies make the home buying and selling process easier, the industry will undoubtedly adapt. The fad of systematizing the real estate transaction, as well as buyer and seller encounters, is in reality a “one-size-fits-some” solution. In other words, there is a place for the automated and systematic real estate transaction, but it’s not for everyone.

Before you embark on your home buying or selling journey, you should think about your needs. What are your expectations?

As a real estate consumer, you have a duty to explore your options for real estate services. You should interview and compare real estate services. Questions to ask your real estate agent before you buy or sell a home:

Is there one point of contact, or do you have to deal with a “team” of people for different situations.
What do you do if the point of contact is not available?
How do they handle unexpected obstacles or emergencies?
Ask for recent client references whom you can call.

By Dan Krell
Copyright © 2018.

Original is located at https://dankrell.com/blog/2018/10/19/real-estate-services-personality/

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October 11, 2018April 26, 2019

Quick sale investor promise?

Is a quick sale to a real estate investor worth it?

House flipping is a misunderstood industry. Sure, these investors promise a quick sale, but legitimate home flipping is valuable to the real estate industry and the community. Home flippers revitalize run-down homes, and market appealing homes to home buyers. In a low inventory housing market, home flips have become a significant percentage of home sales in a low inventory market.

House flipping data

ATTOM Data Solutions (attomdata.com), the data solutions behind Realtytrac, recently released its Home Flipping Report for Q1 2018. The report indicated that there were 48,457 U.S. homes that were flipped, which represented 6.9 percent of all home sales. Although the number of homes flipped decreased 3 percent from last year, the percentage of flipped homes in the home sale inventory increased! The number of flipped homes decreased to a two-year low, but the home flipping rate is the highest since 2012. The average gross profit of $69,500 is at the highest point since ATTOM started collecting the data in 2000.

Given the stats and profits, it was just a matter of time for the mom and pop home flipping business to become corporatized. Using the power of the internet and corporate financing, companies such as Opendoor, Offerpad, and recently Zillow have become players in house flipping business. Whether corporate flippers are profitable or have a sustainable business model is for another column. But, there is no doubt that home sellers are seduced by one-click instant offers and promises of a quick closing.

How real estate investors operate

House flippers are known to buy foreclosures and other financially distressed properties. However, these real estate investors also go after other properties too, as long as it’s financially feasible (it’s a business after all). Other types of targeted homes include estate sales, divorce sales, long-time rentals, and outdated or obsolete homes. So, if you haven’t already received a letter offering you a quick offer and fast closing, it’s just a matter of time.

For some home sellers, a quick sale to an investor is fitting. The seller is disposing of a home that would otherwise continue to be a financial burden and deteriorate further. However, many realize they can sell for more on the open market (MLS).

Is a quick sale to an investor all it’s cracked up to be?

If you’re thinking of selling your home (or even currently selling), you might be fascinated by the idea of a quick sale. But for most, the dream of selling for a large sum and closing quickly is just a fantasy. You should realize that home flipping is risky business, and the investors build their costs into their offer. So, be prepared for a really low offer. A typical investor offer is about 70 percent of the home’s value minus rehab, carrying, and marketing costs.

Before you sell to an investor, do your due diligence. Compare multiple investor offers. Verify that the investor is legitimate. Be wary of investors who include extended contingencies. Be aware that “wholesalers” will tie up your home while looking to sell their purchase contract to other investors. Although most investors promise “cash” deals, the reality is that most investors actually borrow money. It is not uncommon for investors to back out or default on a deal because their financing doesn’t come through. Most important, have your attorney review any contract before you sign.

Also, talk to a Realtor. You could possibly sell your home for more than the investor’s “instant” offer. Marketing your home on the MLS at a price appropriate for its condition could net you more.

Original is located at https://dankrell.com/blog/2018/10/11/quick-sale-promises/

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