Could Your House Be Haunted???

Recently I had a settlement delayed by a day. The reason: The house was haunted. No, not by ghosts or vampires or even bats. It turned out there were some mechanic’s liens on the house that had ridden in on the deed unnoticed by the now-seller of the home when it had been purchased back in 2005.

A mechanic’s lien can be attached to a home when a contractor has performed work for the owner but wasn’t paid. This type of lien is actually pretty high up on the priority list for items to be taken care of at settlement. The problem was that in those hot and heavy days of pre-bust real estate during that time, the actual filings had been stacked up (literally—in a stack!) at the time that the now-seller had settled on the home and so were technically unrecorded at the time of the title examination. Now, however, at the sale of the home, those liens reared their demonic heads as an encumbrance on the deed. Scary little boogey-men!

Fortunately, the seller had also purchased title insurance when the home had been purchased. The title insurance agency covered the liens—no problem—and will be the ones to attempt to recover the funds from the previous owner—instead of the owner being out the money or potentially losing the sale.

I can’t stress enough just how important it is to get title insurance. It’s a one-time payment usually made at settlement. While not an insignificant amount of money, having title insurance can protect you from any ghosts lurking in the attic or skeletons in your home’s closets!

Best,
Lisa

October: The Turtle Month

For the Seneca Indians of upper New York State, October was the Month of the Turtle. In their legend about Bear’s Race with Turtle, the bear was walking through the woods and he stood up tall and saw many distant hills. Bear loved to brag and so he thumped his chest and announced, “I’m the biggest animal in the forest!” And nobody made a sound, because Bear really was awfully big.

When Bear got an itchy spot, he scratched up against a tree but the whole tree broke with a SNAP! Bear was so impressed with himself he roared, “I’m the strongest animal in the forest!” and nobody said anything, because Bear really was very strong.

He sprinted down a little hill like a child, and was so impressed by how fast he ran that he now thundered, “I’m the fastest animal in the forest!” But Bear heard a little voice pipe up, “No, you’re not, Bear. I’m a lot faster than you!”

The Bear couldn’t believe his ears and then he couldn’t believe his eyes. That voice came from a little green turtle, who said, “Really, Bear, I’m a lot faster than you are.” They began to disagree and argue. They made so much noise that other forest animals came to see what all the ruckus was about. They all decided that the only way to settle the matter was to have a race the very next day. Fox was chosen to be starter and judge. The race would be around the lake. Since it was frozen, Elk was asked to stomp holes through the ice around the lake edge. Bear would race around the shore; turtle would have to swim to each hole, pop up and say something, and then continue.

Fox ceremoniously started the event. Bear started out walking and talking to his friends to prove how easy this race was. But he had only taken a few steps when Turtle’s head popped up at the second hole. “Come on, Bear! Try to catch up!” he taunted.

Bear was shocked. He took only a few more steps when Turtle’s head once more popped up and shouted,“I’m way ahead of you!” Bear began to run faster and faster until he was so out of breath he thought he would drop. Turtle kept popping up in hole after hole, “Come on, Bear! You’re way behind!” By the time Bear was only halfway around the lake, Turtle had finished the race!

The other forest animals cheered when Fox declared Turtle the fastest animal in the forest. Bear was exhausted and humiliated. He didn’t even finish the race. He dismally lumbered home to his cave and slept the whole winter long.

There was a big party in Turtle’s honor and finally all the forest animals went home. Turtle crawled down to the lake and tapped three times on the ice. Suddenly through all the holes, came Turtle’s brothers and sisters, cousins, aunts and uncles and they all looked just like Turtle! Turtle said, “Thank you, my kinfolks. Today we have proved that while we Turtles are slow of foot, we are not slow of wit!”

Consider the Turtle. It lives both on land and in the water. It is always home. It is not distracted. It is purposeful. It is resourceful. It is observant. The Turtle listens; they sense vibrations in the water through their skin and shell. They see well, and they pay attention. What a difference from most of our lives, where we simply move from one task to the next, without much awareness, other than getting it done.

The Turtle knows it’s not about size, strength or speed. It’s about smarts.

My associates and I at Lisa Teach & Associates pay attention and don’t become distracted. We listen to you. We don’t waste time and effort in unpurposeful activities. We are resourceful and knowledgeable about homes. Let us use our turtle talents to help you, whether you’re buying or selling.

Best,

Lisa

A Taxing Time

Yesterday was September 30—the property tax date here in Maryland. Taxes are always a touchy subject but even more so in the last couple of years with the economy being front and center of most everyone’s concerns.

Property taxes are computed by applying the tax rate by the assessed value of the property. Notice I said ASSESSED, not appraised. Those are different numbers. Tax records are public and should be information you’ll find in the listing.

Beware! Sometimes the tax bill for a given property will be misquoted at settlement and an insufficient amount of funds escrowed. You may discover this the first time you tax notice comes or, more likely, when an audit of your escrow shows a deficiency. Suddenly, your monthly payment increases! The most frequent culprit is a tax figure on your HUD sheet that is only one of the two annual payments that are collected here in Maryland.

Another thing to know is that you can appeal your property tax assessment before January 1 in the two years when you’re property is not assessed if you feel that you have sufficient reason that the value of your property has declined. Market value has decreased in the recent downturn and so should your assessment. The following maps show locally when each county is doing their assessments. Green areas were assessed January 1, this year. Red shows areas set for assessment January 1, 2013. Yellow areas will re-assess January 1, 2014. For more detailed information for your address, you can contact your county office of taxation.

Frederick County assessments

 

Montgomery County assessments

 

Washington County tax assessment

You need the help of an agent experienced in your area for a CMA (Comparative Market Analysis) to firm up a case for re-assessment. I offer to help my clients with this service to get the most for their home dollars.

Best,

Lisa

Winds of Change

Wow, it’s been almost a month since I last posted here. Lots of things have been changing and have had my full attention. First I’ll tell you something I’m excited about and then I’ll share something I’m really excited about.In a couple of days, we’ll be officially “autumn” and the typical changes you’d expect to see are occurring. People start complaining that the sun goes down too early and isn’t awake for their morning commute. Children start back to school and families change their routines to include homework, sports and school activities. Stores start hanging up Christmas stuff. The changes, each one small in the grand scheme, accumulate over time.

Make Your Mortgage Meltdown-Proof

“Those who don’t know history are destined to repeat it.” —Edmund Burke

 

The year 2008 saw the collapse of real estate when bad mortgages crushed the economy. I’m going to talk about six reasons why.

 No Money Down. The purpose of a down payment is a two-edged sword. Putting money down automatically gives you equity in your home and reduces what you owe. Everybody gets that. But what a down payment also does is it makes sure you have some skin in the game. When you’ve got a fair investment in your home, you’re simply more likely to do whatever you have to to make your payments. A home that the buyer hasn’t put a fair amount of their own money into is a “walk away,” and those vacated homes not only end up in foreclosure, but houses left standing empty are not healthy for neighborhoods, either.

 No Docs Loans. During the really insanely busy times of the housing boom before 2007, lenders were quick to hand out loans that required little or no documentation and verification. Borrowers (just like any of us) had a tendency to overstate their income to expenses and then got into trouble when it came time to pay actual payments out of actual income. They fell behind and then—well, you know the rest.

 Adjustables. This type of loan can be useful to help younger buyers get into a house. Payments start off artificially low with a very low interest rate. After a period of time, the interest rate resets to the market rate and many people find themselves unable to make the higher payment, but they have the opportunity, then, to pull equity and refinance. Well, it only works that way when prices are going up. When housing prices drop, borrowers are unable to refinance and are then face high payments. Unfortunately, job stagnation or loss also accompanies housing price drops, making a bad situation even worse.

 Longer Amortizations. Another way lenders sold more mortgages was to offer 35- and 40-year loans. These longer loans appealed to 20-somethings, but older borrowers got them, as well. A much larger home, then, has lower payments, but the interest rate is slightly higher, which, not surprisingly amounts to more interest paid to the bank. Borrowers also build equity much more slowly on a longer mortgage, making it harder to move.

 Reverse Mortgages. Homeowners 62 and older can obtain a reverse mortgage as a way to use home equity to provide income. What you don’t see on the TV ads for them are the very high fees that chew up that equity, as well as that “lottery” mentality that happens when there’s a big pot of money and no brakes on spending it. Once the equity has been pulled out, either in payments or in a lump sum, the bank owns the home.

 Non-traditional Mortgages. Personal finance isn’t normally taught in school and so in many cases a homeowner doesn’t understand what they’re signing up for. Balloon payments, interest-only and other exotic mortgage products appeal to people who otherwise couldn’t qualify, to get into a home. Unfortunately, all these products consist of negative amortization, increasing the amount you owe every month instead of lowering it. At some point, the debt becomes unmanageable and the dream of home ownership turns into a nightmare.

With the market warming back up, banks will again be offering many types of mortgage products to buyers. Hopefully the recent economic disaster will move borrowers to be better educated about what they’re getting themselves into.

Call Lisa Teach & Associates whether you’re thinking of buying or selling!

Home, Schooling.

Just for fun! Here’s a house made of 5,000 books at the Gallery of Modern Art, Oxford.

Here we are at the end of August and schools all over the country are taking in. Schools are often a big factor in real estate. People like to move without disrupting their children’s current school year which makes the spring the hottest time for transactions and end-of-school-year settlements. But more importantly, families will sometimes decide to make moves into better school districts.

Sellers, even those without children, also do well to understand the schools in their area as that information can be helpful to your buyer. Listings can show the local schools for that particular address. Sometimes, however, that information is left off of the listing, either due to the seller not letting an agent know which schools are local, or because the agent doesn’t do the research. Some schools have “reputations,” either to the good or for bad, but a school name in a listing, while helpful, isn’t the be-all-and-end-all for families looking at a home. Buyers have got to do their legwork.

One way potential buyers can understand local schools is to talk directly to the sellers or to neighbors of the house they’re considering. Another way may be to approach (SAFELY) children who may be playing outside and just ask them what they think about their school. A call to the local school might be difficult during summer months or near the end or beginning of the school year, but mostly school staff are happy to share Web sites for their schools and other information.

In our area, the local counties have the following Web sites where you can start looking into the individual systems and from there dive deep into the schools you’re interested in learning more about.

Frederick County:  http://www.fcps.org

Washington County:  http://www.wcps.k12.md.us

Montgomery County:  http://www.montgomeryschoolsmd.org

Other things to take into consideration are whether your child will ride a bus or walk. If a child is a “walker,” exactly where will she/he be walking to get to the school? Is it along busy thoroughfares or relatively quiet neighborhood streets? Are there crossing guards or student school patrols there to assist younger children?

Still another aspect that should concern homebuyers is the proximity to a school. Yes, I already said that, but here’s another way to think about it. Is your home close to a school where there are going to be lots of buses and car traffic a couple of times a day? Will school bells and kids at recess be waking you up if you work nights or shifts? Will there be older students from a middle school or high school loitering around near your home or, worse, cutting through your property? Will high school drivers be parking on your street?

Obviously other things to consider will be child day care and how that’s going to interface with the school. If you’re thinking about a private school, where are they relative to the house you’re considering and how will that impact your commute, if at all? Homeschooling families will want to look into any differences in the rules if they move between counties and local homeschool families’ associations.

Schools give us lots to think about. As a neighborhood specialist, I’m deeply involved in specific neighborhoods and can “educate” my clients about schools in those areas. Call Lisa Teach & Associates!

An Alarming Source of House Fires

Here we are in the dog-daze of August and it’s been soooo dry here in our area. Many places nationwide are experiencing an higher-than-usual fire hazard. Read here about how the stuff in your junk drawer, even one that’s organized, can randomly start a fire and put your home at risk for damage or loss.

The main culprits in your junk drawer (and I know you have one!) are the batteries that are being stored. Under certain circumstances they can create a spark that, in turn, ignites other flammable junk drawer suspects: Post-its, receipts, envelopes, cigarettes lighters, eye-glass cleaners. The article suggests keeping batteries in the original packages or covering the “business end” with electrical tape while in storage.

I’ve also heard that keeping batteries in the refrigerator or freezer extends their life. Freezer storage isn’t really recommended for alkalines (only about a 5% life extension) and you also have to let them return to room temperature to use them. NiMH and Nicad batteries, however, keep 90% of their life in the deep freeze, though they also need to be room temperature to use. Battery manufacturers suggest a cool, dry place so I’m thinking the refrigerator fits the bill, if only to keep them away from other dangerous junk drawer-mates.

Other types of home fire hazards are listed in the article. It’s easy to get immersed in life and overlook these potential sources of home fires. Children in the home should be made aware of things like leaving laptops on their beds or other soft furnishings. Fire—it’s not just playing with matches anymore.

If you’re selling your home, you might be concerned that househunters are peering into your junk drawer. Instead of labeling it “Keep Out,” here’s a great article on organizing your “junque.”

–Lisa

Mid-Year Distressed Property Analysis

A new report by RealEstate Business Intelligence for the first half of 2012 is showing some interesting trends. Due to some speculation here in the area, RBI undertook this report to look at fallout rate, days to settle, geographic breakdown, and price trends. The report also compares foreclosures to short sales.

The first thing RBI found was that an increasing number of short sales are not settling successfully. I have my own ideas about why which I’ll be covering in another post, but just suffice it to say, buyers interested in short sales NEED to have the help of a Certified Distressed Property Expert, such as myself, to help them through the process. I think these failures are due to the “average” agent working these short sales and missing vital financial, as well as legal, issues, resulting in extremely long days to settle and multiple problems with lenders due to poorly prepared sales documents. Wary buyers are more likely to move on to the increasingly healthy traditional rather than get involved in a protracted or troubled sale.

Also impacting the days to settle metric is that long processing times have creating a bottleneck—much like we saw back in the “good ol’ days” back before 2008 when settlement companies had a tough time keeping up with all the contracts that were closing. Short sales days to settle remain high reflecting both traditional seller confidence coming back, as well as shrinking days on market for those traditionals. Foreclosure pendings are doing slightly better than short sales.

The report documents that 44 out of 45 local market regions here experienced a drop in distressed property sales from June 2011. Frederick County still ranked in the top 10 for short sales, however, joining other middle market regions (as opposed to, say Arlington County, Virginia, for example, where the overall market has tended to stay more healthy, and opposed to Garrett County, Maryland, for example, where the real estate market has been pretty low and static).

Overall, the active inventory for all distressed property sales is at the lowest point since 2009 across the region and about half what it was in the fall of 2010. Distressed activity is down an average 22%, with shorts at about double the amount of foreclosures. As would be expected in such a scenario, short sale prices are trending downward—3.6% in our region, while foreclosure prices are marginally increasing.

Traditional market share is similarly increasing, and so the expectation is for upward price pressure going into fall. This increasing health of the traditional market is reducing the overall impact of the distressed segment. As mentioned, I firmly believe that short sales are going to spell trouble with so many fail to settles. Obviously, with the inventory high, there are deals to be had. I really can’t stress enough how expert help for these transactions is absolutely crucial. Contact me no matter what sort of property transaction you’re interested in. My vast and deep experience can make the experience seamless and trustworthy.

In case you’re interested in more particulars, you can see it here.

Quick Fixes to Improve Your Home’s Appeal

While the trends are showing consistently better asking to selling price ratios and fewer days on market, sellers are still showing a reluctance to get their homes out on the market. Part of that may be that they’re waiting for overall prices to improve and continued assurance of buyer demand. Another thing might be that they’re looking around at the house they’ve had to “sit on” for the past several years and it’s looking a little dowdy, they think. So they rush to invest a lot of dollars into upgrades they think will get them a good selling price.

Conventional “wisdom” in real estate has been that the kitchen sells the home; many times sellers, in their hope to increase the value of their property, will invest in new, swanky appliances. Whereas a buyer might have an appreciation for high-end appliances, it’s seldom a deal-breaker to have well-kept lower-priced brands in there (even in this era of Iron Chef’s and the Food Network). It’s better to put the money into improving dirty or worn carpeting and even stowing clutter off-site. These things give the impression that the house was not well-maintained and might not have adequate storage. The idea is to let the buyer see themselves in your home—not necessarily fulfilling fantasies.

Now, that’s not to say that investing some effort to update a kitchen is a bad thing. I blogged earlier this week about a cool product—Giani Countertop paint—that can very inexpensively dial up worn, stained, chipped or just “old” kitchen counters. Giani also has a new line of cabinet paints to where you don’t even have to remove your stuff (although you might want to drape it to protect it) while you give it a new look. Painted cabinetry can really give a kitchen a modern look while not incurring the expense of new cabinets (and what can sometimes be a really long period without the use of your kitchen). Changing out the hardware is another key to re-styling a kitchen. Most people have not spent too much time in the Lowes cabinet hardware aisle to see what’s new on the kitchen drawer pull runway, but just that little change can really change the look of your kitchen or bath inexpensively.

Reinventing your layout might also be a tool, along with your agent’s input, that will help sell your house. If you happen to have a three-bedroom home in an area where there are a lot of four-and five-bedroom homes, a den might be re-imagined into a bedroom to give you better competitiveness in your neighborhood. Similarly, bedrooms can be repurposed into “bonus rooms” such as nursery/toy rooms, craft rooms, or electronic “cottages.” Consulting with your agent is a MUST here, though. She/he understands the area, the neighborhood and the buyers and can advise you.

Adding seating to outside areas is another way of attracting buyers. Perhaps your yard has a little natural away-haven, but with your five kids playing out there you just never bothered to place a small table and a couple of chairs there, or maybe a hammock. Creating a destination outdoors—or several—makes your yard unique and conjures up feelings of rest and tranquility—instead of lawn mowers and weed-whackers.

These rustic planters with fall colors is warm and seasonal, and easily picked up when you’re ready to move.

Another outside tip about landscaping. Don’t do it. Seriously. It’s really hard to gather the motivation to put a lot of phsyical labor into a yard you’re leaving. Instead, plant or buy multiple terracotta planters and create groupings on the front walk/stoop area or back patio or just anywhere. The color and freshness is inviting and, again, leads people to imagine themselves as living there. And then when you move those planters can go with you to your new home. If you’re selling in winter, containers of winter greens and small evergreens and alpine plants will do it.

When planning any upgrades, you want to consider the personality and function of your particular home. A neighborhood of young families attracts buyers who aren’t typically looking for the plush master bedroom with elaborate bath amenities. Instead focus on the yard and stain the deck. Higher-end city homes can focus more on entertaining and hospitality by maybe putting French doors on a dining room or moving stuff out to create a guest room/guest bath.

Lisa Teach is a neighborhood specialist and former designer. She can bring lots of experience and expertise to the table to help you sell your home quickly and for the right value. By contacting Lisa Teach & Associates you can avoid costly mistakes in prepping your home for sale.

Countertops That Go From Woes To Wows

One of my assistants made me aware of a cool product that I want to share with you. Whether you’re looking to upstyle to sell or simply to update your kitchen countertops for yourself, Giani Granite Paint for Countertops is an easy-to-use, terrific alternative to costly and time-consuming kitchen re-do’s.

The information supplied at gianigranite.com is easy to understand. The process is simple. You can paint formica, ceramic, wood or even cultured marble to look like a granite countertop, without the upkeep hassle, radon worries, and financial outlay of granite. There are video’s and an Ask Us section to help you learn the steps.

The Giani Countertop kits come with just about everything you need and everything’s well-labeled. There’s some prep that includes a thorough cleaning of the existing countertop surface and then taping and applying protecting coverage to walls, cabinets and floors.

Here’s are some before shots from the Giani Facebook page. This kitchen looked good–in the ’70’s.

 

  

And here are the amazing after photos:

 

Quite a difference, right? There are three color combinations in kits that will cover 22 square feet, or about 11 linear feet of standard-depth countertop. The look is completely customizable–a little more of this color, a little less of that. You even get a practice board to use to get the hang of the painting. After the painting steps are completed and thoroughly dry, an Italian automotive-grade poly topcoat is applied, sanded to the surface texture you like and then reapplied to make a bulletproof, water-resistant surface. Each step builds on the last and in about 24 hours (with drying times) you’ll have a remarkable looking countertop that will have your friends guessing if it’s really granite.

A close-up of the painted granite surface done by an homeowner with Giani Granite Countertop paint.

Giani is available from the Web site. My assistant actually bought hers at Wal-mart here in Frederick but their supplies there were limited. As I mentioned there’s also a Facebook page for Giani where people have sent in their photos to brag about. Giani also has cabinet surface solutions. Giani Countertop paint also will dial up a bathroom, table tops and other surfaces. Your imagination truly is the limit.

Whether it’s sales strategy or staging, Lisa Teach can help. Contact Lisa Teach & Associates today.