Frederick Md Homes For Sale – The Historic District

There are Three Hot Topics when we talk about predictions for the Frederick Real Estate Market in 2012. Affordability, Distressed Properties, and Inflation.

Concerning Frederick Home Buyers

Affordability is not just the buzz word, it is the Hot Topic. With the combination of low prices and historically low rates, affordability is at an all time low. Take a look at these infographs for an explanation:

In other words, the percentage of the average household’s budget that goes towards housing costs is below the 30 year average, in fact, the lowest since 1971.

The ratios of average housing prices to average income is also below the 30 year average. And…

The combination of prices and low rates makes for an average housing payment that is below the 30 year average.  It is truly one of the most affordable times to buy a house in the last half century.   That is if…

• Your job is stable
• You have some cash for a downpayment [3.5% for FHA], and
• You plan to stay in the home for 5 to 7 years.

Concerning Frederick Home Sellers

Homeowners and Home sellers are primarily concerned about the value and selling price of their home. The not-so-great news is that we will continue to have a steady influx of distressed sales, ie. short sales and foreclosures, for the next 5 years, maybe longer, depending on the economic recovery.

Concerning Everyone

Inflation is on everyone’s mind. Real Estate is still a good investment and hedge against inflation. Consider these statistics:

and…

This last chart gives a low inflation outcome and a high inflation outcome. Either way, making mortgage payments at today’s low rates for the next 30 years is a guaranteed hedge against inflation.

_____________________________________________________________

The Highland  Group
Chris & Karen Highland *        301-831-9947
Turning Point Real Estate “ 301-831-8232
email us: isell4u2@msn.com
Text Us: 301-401-5119

DOM – Days on Market

When you see listing information presented on various websites and in printed forms, you’ll more than likely see some real estate terms that we Realtor’s take for granted.   Here are a few explanations for some terms you may not be familiar with:

DOM or DOMP:   Days on Market or Days on Market Proper.   DOMP is the total number of days the property has been listed, including listings with a previous agent or broker.   DOM is the total number of days of the most previous listing agent.   If a home is temporarily taken off the market, the DOM resumes when it is put back on the market. If a home is off the market for 3 months or longer, the DOM resets to zero and the home gets a new listing number.

What does this stat tell us?

The average DOM for Frederick County has been about 110 days.   The average home takes about that many days to get a contract.   The average is different for various communities; in the City of Frederick, the average is about 95 days, Urbana about 70 days, and in the smaller communities in the outskirts of Frederick County it has been taking 150 + days to sell a home, over 200 days for Walkersville.

When you see a home that has been on the market for a time that is double the average for that community, you start to question what is going on with that home… is it overpriced? is it in poor condition? is it a short sale that has been in negotiation for a long time?  

Buyers will want to use DOM statistics to be a part of their negotiating strategy. If the seller is just unrealistic about their price, keep moving on. If the condition is less than desirable, you might be able to get a price concession.   If the home has been on the market for less than the average and the seller has given 2 or more price reductions, that is usually a sign that they are motivated.   Whatever the outcome, DOM is a statistic worth noting.

Sellers will want to keep an eye their time on the market.   As time marches on, your home will get “stale” on the market and will cause buyers to ask the questions above.   Don’t let time slip away from you and put you in the stale bargain basement.

______________________________________________________
                                       

                     
                                                                                                                                                                                                                                                                                                                                                                                             
The Highland Group – Real Estate Teams

Chris & Karen Highland *
Frederick County MD Real Estate Agents

301-831-9947              
  Real Estate Teams, LLC
Karen@highlandrealestategroup.com

“Is it better to rent or to buy in this real estate market?”   The question is asked regularly, no matter what the conditions of the market.   It’s a question many wary people are asking after the last mortgage meltdown has affected our economy.   It’s a neccessary and timely question, I think we’ve learned all too well that not everyone should buy real estate.  Following are some Questions to help guide anyone to the answer that is right for their particular situation.  

1.   General Questions:

Stability of Location:   How long will you likely be living here?   If you might have to relocate within 5 years, you might consider renting a better option.   Although we think we’re seeing the end of declining values, you want to make sure you’ll have enough value in your home to be able to sell when the time comes.   Caveat: If you can get a home for a significant below market value, (as in the case of a foreclosure or short sale) you’ll insulate yourself against the problem of resale.

Stability of Income:   If your employment is precarious, consider renting.  

Bad Credit:   Credit scores are more important than ever.   If your scores are not what they need to be, you may have to rent for a while until you can bring your scores up.   Read my previous post:    Raise Your Credit Score 100 points in 45 days.

2.   Questions Specific to Your Market:

Stability of Values:   Is your local market declining, holding steady, or increasing in values?   A local realtor can give you statistics and up-to-the minute prices for the neighborhoods you are looking for.   Remember that one area can be declining in home values while  nearby community can be bottoming out or increasing in value.   If prices are still declining, you might want to think about waiting.   But consider other factors as well, like interest rates and demand.   Read my previous post:   To Buy or Not to Buy

Demand Vs. Inventory:   General market forces affect real estate values.   When demand is growing and inventory is shrinking, prices will hold steady or increase.   You’ll want to consider the inventory, if it’s shrinking, your choices will be fewer.  

3.   Industry Questions:

Interest rates:   People underestimate the effect of interest rates on their monthly mortgage.   Economists are calling for an increase in mortgage interest rates by the end of the year as a result of the inevitable inflation coming to our economy.   If the home prices were to decrease more by next year, an increase in the interest rate is likely to offset that decrease.   Previous post:   The Cost of Waiting

Tax advantages:   To many people the deductable interest rate is a very important part of their finances.   Others don’t experience much difference.   Be sure to consult a financial planner about how much the tax write-off will be an advantage to your situation.

First-time buyers tax credit:   The $8000 first-time buyer’s tax credit expires on December 1, 2009.   Whether the credit will be expanded and/or extended is up in the air.     Making $8000 by choosing to buy this year is a very important aspect for first-time buyers.

Resources:   Consult a financial planner or tax attorney for your personal situation.   Use the Rent-or-Buy Calculator to crunch the numbers yourself.

Your own decision to buy or rent is a personal decision which takes thought, a little advice, and some number crunching.   In the end, its a  life-style choice.   Contact us to see homes for sale on the Frederick market.   Or use our free property search:

                                                                               The Highland Real Estate Group
                                                                       Chris & Karen Highland *      301-831-9947
                                                                                               Real Estate Teams, LLC
                                                                                       email us: isell4u2@msn.com  

Its not only first-time home buyers who feel confused by some of the real estate jargon that they come across,  sometimes  home buying veterans can be confused.   Here™s my attempt to demystify some of the Real Estate  lingo for Frederick home buyers and sellers:

Backup Contract:   Sometimes sellers advertise that they will take a backup contract in case the contract they have on their home falls through.   If a contract is shaky for any reason, and the house has had a lot of interest,  it can be an effective tactic.   If a buyer has the time to wait, they might be lucky enough to get the home.

Contingency Date:   When an offer is written with contigencies, like   a home inspection, financing contingency, radon inspection, etc., each of those contigencies have dates in which they must be met and answered.   If you look at the very first sentence in the MAR contract, it says œtime is of the essence.   These dates must be met or the contract is voidable.

Escalation Clause:   When a buyer writes an offer sometimes they add an escalation clause.   It will say something like, if another offer comes in that™s higher, we™ll escalate our offer to $X amount more than that offer, with a limit of $Y.   Personally, Chris and I don™t like escalation clauses.   First of all,  when it comes to  negotiating, the buyer is signalling to the seller how high they are willing to go, so the seller might as well just counter with that number.   Secondly, it is illegal for a seller™s agent to reveal the details of an offer to anyone other than the seller.   It seems like you would have to reveal those details to the buyer with the escalation clause, doesn™t it?   They just make things messy, in our opinion.

DOM, DOMP:  When you see listing information or market statistics you™ll see these terms.   DOM stands for Days on Market for a particular listing, DOMP stands for total days on market, including  any other  previous brokers who had it listed.     A property has to be off the market for 3 months to  become an entirely new listing.

Excl. Right:  There are different types of listing agreements, exclusive agency, exclusive right to sell, modified exclusive, but most of the time you see ˜exlusive right to sell™.    This means that one agent has the exclusive right to sell the house.

Fee-simple:   This is the most common and highest form of ownership.   We see this most often.   We have a couple of neighborhoods with ground-rent in Frederick, which is another form of ownership,  more common in Baltimore County.   The other types of ownership  are Co-op and Condominium.

Kick-out:   If any of the contingency dates are not met, the seller has the right to void the contract and take another.

LA:   Listing Agent

Pre-Qualification vs. Pre-Approval:   A prequalification letter takes about 5 minutes on a phone call to a lender.   It is common that an offer must be accompanied by a pre-qualification letter, and it should be from a reputable, local lender.   This says to the seller, œthis buyer is capable of getting the money for this house.   A pre-approval is something that takes a few weeks, and is not a bad idea in today™s market.   It says, œthis buyer is already approved for the loan to buy this house.

Short Sale:   When a property is sold for an amount œshort of what the owner owes on it.   Permission must be worked out with the lender.

Third-Party Approval:   This is when the negotiated contract must be then approved by a third party.     Most commonly nowadays it is a  lender(s) approving a short sale.   But it can also include a legal approval for a business partnership or a trust, or another investor.   Lately, we™ve had some experience with HAP, Homeowner™s Assistance Program, which is a program to help our military personel who™ve been transferred and have to sell their home for less than they owe.   That is also a third-party approval.

Contact us with any questions about the Frederick County Real Estate Market, or use our free Frederick County Property Search:

The Highland Group- Real Estate Teams
Chris & Karen Highland *      301-831-9947
Real Estate Teams, LLC
email us: isell4u2@msn.com

Frederick home buyers and sellers should be made aware of certain information before they decide to buy or sell or rent a home.

On the first scheduled contact between agent and client, the State of Maryland requires a written disclosure of the issues of Agency.

Agency- Agency is simply a relationship between a client and an agent such that the agent is authorized to represent the client in certain transactions.   Years ago, there used to be only one type of agency, all agents  worked for the seller.   Because of the efforts of consumer activists, other types of agency have come into use in Maryland:   Buyers agency, Sellers agency, Dual Agency, Cooperating Agent, and Presumed Buyer agency.

In  Buyer agency, the agent represents the buyer, with a written agreement.   If a buyer wishes to be represented exclusively, they must enter into a written buyer agency agreement.

In a Presumed Buyer agency, there is not yet a written agreement.   The agent is presumed to be representing the buyer and can  show the buyer homes and provide services, but may not  prepare an offer or negotiate a sale for the buyer.

A Cooperating agent works for a real estate company different from the company the seller™s agent works for, and can assist a buyer but has duty to the seller.

Dual Agency happens when the buyers™ agent and sellers™ agent both work for the same broker, and the buyer is interested in a property listed by the same broker.   The broker is called the ˜dual agent™ and doesn™t act exlusively in the interests of either the seller or the buyer, and cannot give undivided loyalty to either client.

Contact us for a free consultation about buying or selling a home in Frederick MD.

The Highland Group – Real Estate Teams
                                                       Chris & Karen Highland *      301-831-9947
                                                                               Real Estate Teams, LLC
email us: isell4u2@msn.com

As Frederick County Realtors, we get that question a lot.   Although I don’t always know the answer, lots of times I have anecdotal evidence or hearsay that might answer a buyers question.   But the truth is, I shouldn’t say what I really think, whether its good or bad.

While clients are seeking out my opinion, I cannot legally say anything that may be construed as discrimination or steering.   Also,  opinions are subjective.   My  view may be based on some experience that has nothing to do with facts.

What  I can and will do is direct people to the resources that will give them the facts they need to know to make this important decision about buying a Frederick home.

• Sites like Family Watchdog and the Maryland Sex Offender Registry can give you information about sex offenders in the area.
• The Frederick County Sheriff’s website has a useful Crime Map.   Sometimes demographics are too broad and don’t drill down to the neighborhood level.
• Demographics information can be found on the US Census site or the Maryland Neighborhood Profiles site.
• For school information:   The Maryland State Department of Education website, The Frederick County Public Schools site, and a popular site, Great Schools, has a lot of information and features parental comments and discussion.
• Call the local sheriff’s station and ask about a neighborhood.   They will have the facts and will be happy to share.   Years ago Chris showed a home  which had a row of barbed wire on top of the back fence.   The buyers  asked him what was up.   He simply directed them to call the local sheriff’s office and ask, which they did.   They were told that there had been multiple calls to the police for drug traffic and prostitution in the alley behind the house.    Wow, That was news to us, and needless to say, the buyers kept looking.
• Drive around the neighborhood during busy times of the day, like when the school bus arrives in the morning, and when people are coming home from work.   Drive around on a weekend afternoon, just observe.

*         *         *         *         *

                                                 
                                                                                                                                                                                                                                                                                                                                                                                             
                                                                  The Highland Group – Real Estate Teams                                        
               Chris & Karen Highland *  Frederick County MD Real Estate Agents

301-831-9947
Real Estate Teams, LLC
isell4u2@msn.com                            
                                               
                                                                              Pictures of Frederick