Monday, June 21, 2010

Enjoying Life at Deep Creek Lake

Susan and I have relocated to the mountains of Western Maryland at Deep Creek Lake. I am still a Realtor licensed in Maryland and Virginia and now working with Long and Foster's Deep Creek Resort Rental and Sales office in McHenry, Maryland. You can find my new Blog with Deep Creek happenings at Enjoying Life at Deep Creek Lake.

I look forward to seeing you there AND here at Deep Creek Lake.

Wednesday, October 28, 2009

Next Level Executives

Check out this SlideShare Presentation:

Thursday, July 30, 2009

Home Owner Selling Guide

Selling Guide

There are a number of steps to selling any house.. Experience has taught me that every home sale is unique. Yet every sale shares a common process.

For specific answers to your specific situation, I’ll be happy to assist you. After all, I want you to get the best selling price in the shortest time.

Putting Your House On The Market

The first step toward putting your house up for sale is to meet with a real estate agent at your home. What we call the "listing appointment." But beforehand, it's important to understand "who's who" and how brokers may cooperate to sell your house.

Listing Broker or Listing Agent

An individual real estate broker whom the seller hires to represent the seller through a contract called a "listing agreement". The listing agent is associated with the listing broker. The listing broker is directly paid the listing commission and then splits the commission with the listing agent. (Although the broker and agent may be two different individuals, the term "broker" is used throughout the Guide for simplicity.)

Selling Broker or Selling Agent

In a "cooperative" sale, the house is listed by one broker and a buyer is provided by another broker. The selling broker receives the selling side of the commission. If the listing broker also produces the buyer, then the listing broker receives both listing and selling sides of the commission. A selling broker may have a signed buyer representation agreement with a buyer and, therefore, represent the buyer and not the seller. If the buyer's agent is a Long & Foster agent, Long & Foster becomes a disclosed dual agent with the consent of both buyer and seller.

A Little Homework

Before the listing appointment both the home seller and the listing broker are busy While the home seller collects a list of documents requested by the broker, the listing broker studies recent neighborhood sales of homes comparable to yours, and also comparable homes currently for sale.

There's No Place Like Home

At the listing appointment, the listing broker will want to inspect the house and yard to become familiar with its special features.

You have probably enjoyed living in your home and have been pleased with its many unique features. Your listing broker will want to tell prospective buyers about the special features of your home and neighborhood. Be ready to be specific about schools, day-care, nearby Metro, and other desirable community features, as well as home features not readily apparent.

Remember, prospective buyers will be "comparison shopping" and keenly aware of subtle differences in houses for sale in the area. Be sure to tell your listing broker why yours is special--from any home remodeling to afternoon winter sunshine.

Demands Sets Price

After conferring with the listing broker on market conditions, comparable nearby sales and listings, and available financing, the home seller will set the listing or "asking" price for the house.

A common definition of market value is: "What a ready, willing and able buyer will pay, at a price a seller will accept." Metropolitan area buyers are sophisticated. They've already been shopping, and when they see your home they'll be comparing features and financing.

There's a rule of thumb that says: "A house priced more than 5% over market value discourages offers." Buyers who can afford the price can get "more house" for their money elsewhere. Buyers who cannot afford the price simply won't look. This is why we say, "A house priced right is half sold."

A fair market value will be determined by comparing the property with similar properties which have recently sold and (in some cases) with similar properties currently on the market. Experience in the industry has proven this "market analysis" approach is more accurate than the "replacement cost" or "potential rental income" methods.


Based on this sales price, the listing broker will go through a worksheet that estimates the "net cash" from the sale. Simply, this exercise subtracts anticipated charges paid by the seller from the sales price. A copy of the "net sheet" is left with the home seller. (An itemized list of typical selling costs is presented in the "Settlement" chapter, which is the stage when these charges are paid.)

Financing Strategy

No sale can be completed without financing. That is why it is generally to the home seller's advantage to appeal to the greatest number of home buyers by accepting the greatest range of financing plans. The listing broker will explain the basic differences between VA (Veterans Administration), FHA (Federal Housing Administration) and conventional financing, as well as explain "discount points."

What is a Point?

A point is one percent of the amount of the buyer's mortgage loan. For example, if a loan is $100,000, one point is $1,000. Lenders charge points to increase the yield on their loans. On all loans, home buyer and home seller may share the charges by mutual agreement.

Property Profile Folder

To enable the listing broker to prepare a folder of information on the property, the home seller needs to provide a number of documents and information specific to the location and jurisdiction. (This Property Profile is often left in the home for the convenience of prospective selling brokers.) Because the list is long, you can understand why it's best to collect the papers before the listing appointment. These materials may include:

Pay-Off Notice

A letter signed by the home seller and mailed to the lender by the listing broker to notify the lender of the intention to pay off the mortgage in order to minimize prepayment of interest penalties to the seller (Home seller should provide the broker with the lender's address, loan balance, assumability, years remaining on present mortgage, P.I.T.I. and the interest rate, if possible.)

Well and Septic Inspection

If property is on septic/well, current inspections by local health authorities are required while home is occupied. Listing broker will usually arrange after contract is ratified.

Order Lender Appraisal
Lenders usually require an appraisal to assure that the property is adequate collateral for a loan. Appraisal may be ordered before (paid by seller), but is more often done after an "offer to purchase" is accepted (paid by buyer).


Listing broker will ask home seller if any tax assessments or easements exist on property that must be paid or included in purchase contract and passed with the land when sold.

Property Taxes/Condominium Fees

Home seller provides record of property tax or condominium fee payments which buyer will reimburse a pro-rata share to home seller at settlement.


VA/FHA and most lenders of new mortgages require a termite inspection certificate that shows house is free of infestation. If home seller does not have a current certificate, then listing or selling broker (depending on area) will arrange inspection at home seller's expense. Sometimes a home inspection and radon testing will be ordered. Home seller should also provide all information as to the physical condition of the property, such as the presence of fire retardant plywood.


Home seller should provide record of past 12 months utility bills, including gas, electric, sewer, water, and trash where applicable. Most buyers will want to know history of utility costs.

Helpful Documents

If possible, home seller should provide listing broker with deed, house location survey, condominium bylaws or home owners association documents, subdivision plat map, house floor plan, previous title search abstracts, legal description of property (subdivision, section and lot), home warranties on major systems, if still in effect, and copy of home owners insurance policy for endorsement in purchase contract.

What Conveys?

In anticipation of a buyer's offer, the home seller must be ready to supply listing broker with a specific list of the personal property that is included in the real estate property for sale. Examples of items to "convey" may include: draperies, drapery rods, remaining heating oil, firewood, washer, dryer, refrigerator, stove, microwave, disposal, swimming pool chemicals, awnings, storm doors and windows, screens, Venetian blinds, shutters, window air conditioner, etc. Home seller should tag or remove items which do not convey.

Listing Agreement

When the home seller is ready to put the house on the market, the listing agreement is filled out indicating a specific period of time the agreement is in effect ("listing period"), and signed by the seller You've now hired a listing broker and listing agent.

Questions and Answers

What is a "Lockbox"?

A lockbox is a universal metal container for your house key that is hung on the front door and can only be opened by a special key carried by licensed sales agents. It provides access when the owner is away, thus assuring full exposure to prospective buyers.

Do certain geographical areas have unique home selling requirements?

Yes. Home selling requirements vary from county to county. Investigate special taxes or other requirements applicable to the area in which you live.

Saturday, June 13, 2009

Why mortgage rates are rising

It’s pretty simple –

The Federal Government is selling more Treasury Securities to finance the economic recovery packages, the bank bailouts, the GM situation, the war, and the buying up of all these mortgages. In addition, as the debt grows, WE have to pay interest to all of these bond holders so even more debt is issued to cover the interest payments.

On the other side, buyers are scarce. China is less affluent and weary of US debt – there is even talk of downgrading US debt by Moody’s (England downgrade possible too). Last week Standard & Poor's raised worries that the United States could lose its "AAA" rating after it warned Britain was at risk for a downgrade. Both the British government and the U.S. government have had their central banks inject billions of dollars into their economies by buying bank assets.

The warning sent the dollar and Treasury prices tumbling last week, because a downgrade would increase borrowing costs and hurt the government's economic stimulus efforts. Moody's on Wednesday did not completely rule out a downgrade.

"Steven Hess, vice president and senior credit officer at Moody's, said that while the U.S. government's debt rating is stable, a reassessment of the economy and the government's debt could put 'negative pressure on the rating in the future.' He added that risks related to Social Security and Medicare could also affect the rating."
The Associated Press - ‎May 27, 2009‎

In order to sell more debt and attract skittish buyers, the prices of treasuries have fallen in recent auctions – price/yield is adverse in relationship so when the price drops (in order to attract buyers) it means the yields rise. As a result, the 10 year treasure yield has risen from 2.533% on March 18th to 3.695% on May 27th. That is over 100 Basis Points (1%) in yield.

The inverse relationship is easy to see with this simple illustration.

A bond is issued for $10,000 for five years with a 5% coupon or interest rate, paid every six months. Then interest rates rise to 6%.

If you want to sell this bond, who would buy it when it is paying 1% below market rates (5% vs. 6%)? You have to sweeten the deal so the buyer gets a market rate for the bond. You can’t change the interest rate on the bond. That’s fixed at 5%. You can, however change the price you will take for the bond.

The annual payment of $500 ($10,000 x 5%) must equal a 6% payment. Doing the math, you discover that the face value of the bond must be discounted to $8,333 so that the $500 fixed payment equals a 6% yield on the buyer’s investment ($8,333 x 6% = $500).

If interest rates went down instead of up, you could then sell your bond at a premium over face value because the fixed interest rate would be higher than the market rate.

Rates have not risen as much as the Treasury yield because the Federal Government is still buying mortgages out of the market, so the spreads over Treasuries are narrowing despite rising rates. At present we remain in a very abnormal market.

This is why federal debt is actually inflationary …
“Massive quantitative easing by the Fed is pouring trillions of U.S. dollars into the money supply, essentially conjured out of thin air. This is being done without transparency, the rationale being that frozen credit markets require a vast expansion of the money supply in an attempt to get the arteries of commerce flowing again. Similarly, the U.S. government is spending vast amounts of money it does not have, with the Treasury Department selling unprecedented levels of government debt in a frantic effort to fund the wildly expanding U.S. deficit. These two forces, quantitative easing and multi-trillion dollar deficits, are the core ingredients of an explosive fiscal cocktail that I believe will ultimately lead to hyperinflation.

What exactly is hyperinflation? Economists disagree on a common definition, so I will offer one myself. Double-digit inflation extending over a period of at least two years would arguably be a hyperinflationary period.
… What is most frightening about the policy moves being enacted by the Fed and Treasury is that their actions may not be a reckless gamble after all. They may have come to the conclusion that only hyperinflation will enable the United Sates to avoid national insolvency … If that is their prescription for the dire economic crisis confronting the U.S., then one must conclude that Ben Bernanke, Timothy Geithner and Larry Summers have learned nothing from history.”
Sheldon Filger
Founder of
Posted: May 25, 2009 12:36 PM

David Stevens, President Obama’s choice to head the Federal Housing Administration (FHA) said in a recent email: “ …but if they weren’t doing what they are doing in the short run, mortgage rates would be in the 6.5% range.
…I do believe rates will rise ultimately here – and this trend will continue unless the international market becomes more supportive of US debt.”

Quick answer – buy now – don’t wait for lower rates.