Foreclosure 101: They aren't the steal of a deal that Buyers think they are...

We sell a ton of foreclosures every year - last year approximately 375 of our listings that settled were BANK OWNED.

Because of our success in the Rozansky Realty Group with these properties - we get a number of referrals for Buyers who want to purchase a foreclosure. Now obviously the reason why they want to buy a foreclosure is because there is a misconception that there is instant equity when one successfully settles on a home that was foreclosed upon. Time and time again when meeting with a potential buyer for the first time, I try to explain that these homes are actually being sold for market value.

The banks are taking significantly losses on most of the homes that they now own and we sell. They are trying to net the most money from the transaction just like any Seller. The Asset Managers - employees hired by the Bank or Servicing Company - are not emotionally involved in the transaction. They don't care who buys the property, just as long as it settles (and preferably settles on time).

Now I can't speak for all of the companies out there - but from our experience it seems that most of the homes sell for around market value (what ever that is these days). There is a good opportunity on occasion for a buyer that intends to occupy the home to get a little sweat equity - but I don't see investors submitting offers in droves and able to flip the homes for double what they paid for it!

If you are obtaining FHA financing and buying a condo you must read this...

When purchasing a home many things come into play - most importantly what are you going to buy and how are you going to buy it? Are you using financing...if so then what type?

If the answer is that you are buying a condo and using FHA financing then this is vital information to have in your search - all condominium buildings must be approved by FHA. The only way to know if a potential community is approved for certain is to check on line with HUD (Housing and Urban Development) directly. If you have a good agent - like me - then they will do this on your behalf before you even go out to look at it! Who needs to fall in love with a place that they can't buy?!

The link to the website is: https://entp.hud.gov/idapp/html/condlook.cfm

Now, there is talk of FHA requiring all currently approved buildings to reapply but there have been no formal regulations passed yet...as always I will keep you updated as I find out more information.

The Bethesda BANK Foreclosure I wish we could sell…but we can’t…

There are several banks and servicing companies that hire our group, Rozansky Realty Group, to manage and market for sale their REO properties. REO stands for Real Estate Owned.

On occasion we have a Bethesda foreclosure – currently there are only 5 active foreclosure listings and 2 foreclosure listings that are under contract in all of Bethesda.

We have been managing a property for a Mortgage Servicing company – AHMSI – for almost a year and still can not legally put it on the market and make it available for showings because the previous owner left behind some personal property in the garage before we ever visited the house.

The process is complicated but here’s some basic “Foreclosure 101”

Two things can happen to the occupants and their belongings when a property goes to foreclosure:

1. If they currently reside in the property they can get evicted. An eviction is the removal of a tenant from a property owned by another person. In each state there are different laws regarding the actual procedure of having some one evicted. In an effort to oversimplify the process for our purposes – assume the property notice has been given to the occupants (tenants).

The Sheriff, as well as a representative of the owner (in our case some one from our office) and possibly a moving crew come out to the property and escort occupants out of the home and place all personal belongings on the curb for 24 hours (any remaining items left on the curb can be hauled away after the time period passes).

2. They can leave on their own terms before the posted eviction date. Some banks even offer a “Cash for keys” program in which they offer financial assistance to occupants in exchange for keys to the residence.

On occasion, occupants abandon a property and leave behind personal property. They might leave before we are able to make contact with them and there is no one way of knowing if they will come back. When they leave personal property (beyond trash) the bank or servicing company is forced to pursue a personal property eviction.

The particular property that I want to tell you about (but I can’t…at least yet) is stuck in that very personal property eviction stage. It has been there for a year!
It seems safe to assume if the previous owners haven’t come back for the small pile of personal items in the garage that they have managed to live with out for the past 365 days that they probably don’t want them. The foreclosure attorneys have advised that we are finally approaching the end of this process and hopefully will be able to market this home before the end of the year! It’s a pretty one in a great neighborhood…I will be certain to post more information as it becomes available.

First time HOME BUYERS - don't forget to file form 5405

For all of the buyers who have managed to find a home (which seems to be a great feat in this current market) and settle before the deadline of November 30th, 2009 make sure to complete FORM 5405 and submit along with your Tax return in the Spring to benefit from the $8000 credit.

Keep in mind that the credit will have to be repaid to the Federal government if the home does not remain your primary residence for three years following the purchase date.

Lastly, the credit can be claimed on a 2009 tax return, due April 15, 2010. If the closing occurs after April 15, 2009, a taxpayer can still claim it on a 2008 tax return by requesting an extension of time to file or by filing an amended return.

Here is a link to the form needed to file the claim:
http://www.irs.gov/pub/irs-pdf/f5405.pdf

For additional reference please consult the IRS website www.irs.gov and/or your personal accountant.

Parkwood in Bethesda and Kensington, MD - Why live there?

What are key criteria that one looks for in their home search?
From experience - location is typically the most important factor for most homebuyers.

Lets talk about LOCATION

Parkwood offers affordable homes in an extremely convenient location.
As a proud resident myself, I can confidently say that Parkwood is lovely place to live. The towering trees serve as protection the charming homes that come together to form the quiet community convenient to I-495, Beach Drive, Connecticut Ave and 355. It is less than a mile walk to the metro and as well NIH. We are less than 2.5 miles from Downtown Bethesda.

There are sidewalks and paths through out the community for dog walking, exercising, biking and more. Bordering to Rock Creek Park and Beach drive – we have access to miles of parkland paths with little interruption from cars.

Though I might be a little bias – I can clearly state the facts about what makes this location so desirable. With-in a half mile of the edge of Parkwood is a newly renovated SAFEWAY grocery store, Shell Gas Station, Drycleaner, Convenience Store, Farmers Market and Hardware Store. Similarly to other neighborhoods of Kensington, Parkwood residents always are able to visit the historic town of Kensington which offers shopping and restaurants. Kensington offers the charm and conveniences of a small town with the access and accommodations of the big city.

Situated in the middle of the community is Kensington Parkwood Elementary School. With around 550 students, the school offers the quaintness that is uncommon to the county. The facility was completely renovated in 2005.

Next to location buyers typically focus on price and size.

Lets Talk PRICE and SIZE

Another key factor in narrowing down the focus amongst the vast inventory of housing is price. Homes in this neighborhood much like other communities in the area range from $450,000 all the way up to $1,300,000. The variation is price is representative of the large range in size and condition. The average original home in Parkwood was built in the 1950s to 1960s. In the last several years a few builders have torn down existing homes and built new larger ones on the existing lots. Following the trends of the lower Montgomery County many of them are Arts-n-Crafts homes. I live in one of the original cape cods of the neighborhood and love it!

To see the active listings and recent sales in the community, please click here:

http://mrislistings.mris.com/Matrix/Public/Portal.aspx?k=577669XOBHS&p=DE-89734667-789

The community does have an active Listserv and community website www.parkwoodresidents.org where neighbors can communicate about the latest happenings in the area. There is an optional association that Parkwood Residents can belong to with annual dues of $10. This is to cover the “beautification” of the common areas in the community. There are meetings almost every other month to discuss current events with in the community as well as issues from outside that will affect the neighborhood like the Base Realignment And Closure (BRAC) which is the reason for expansion at the Naval Hospital. The pet friendly community also hosts a Saturday Morning Dog Park at Kensington Parkwood Elementary.

ARE YOU A RESIDENT OF PARKWOOD? IF SO TELL ME WHAT YOU LIKE ABOUT LIVING HERE!

Market Update: It’s a Great Market to Sell!

If you are contemplating selling, NOW is the time. I have buyers who are actively looking but there is very little well- priced inventory on the market right now. I have clients who are interested in one particular location, and no listings have come on the market there in the last 60 days. (In fact, the number of new listings in Montgomery County for the month of August is down 10.5% from last year, according to MRIS statistics.)

I am taking a pro-active role in meeting my buyer’s demands, and have been calling owners and sending out notes to see if they are considering selling their home. It is an unusual position to be in, (a buyer’s agent soliciting listings for my client to buy) but that’s where we are in this market.

Though there is no real way to track the number of active buyers in the market, I can say based on my personal experience as well as my colleagues’ experiences that there are more buyers looking for homes right now than there are good homes. We attribute this to several factors, including the low interest rates and the $8,000 first-time homebuyer federal tax credit. Some highly qualified buyers are still trying to take advantage of this credit, but time is running out. The legislation expires on November 30, and at this writing we have no indication that Congress will extend it.

The moral of the story is, if you have been contemplating selling, now is a great time. Buyers are looking to move in before the holidays and before the tax incentive expires. A good agent will show you how to price your home well and how to stage the property so that its best features are maximized. If you don’t have a good agent but are interested in pursuing your selling options, please don’t hesitate to contact me. In today’s market your home will sell faster than you think!