Real Estate Education, Experience, Intelligence

May 15, 2018

Rent or Buy!! Who is Right?

 

Rent vs Buy

 

This is a discussion that has and will continue to be a debate in households across the country. Depending on who you talk to you should wait and save your 20% down payment. Most mortgage companies will offer approx 3.5% as a down payment, but you will have to pay PMI monthly. Which in simple terms is an insurance policy for the bank in case things go wrong?

 

So here is the only thing that should really matter when making the decision to rent longer and save more or buy now…. Simple Math! That’s right, it’s just numbers at the end of the day. As a Real Estate Agent I help people with renting homes, selling homes and buying homes so I have seen and heard all the various reason people make these decisions. Just remember I gave you the answer to the question already. “Simple Math!”

 

Let’s just say you don’t like renting and your goal is to buy a home. Now let’s use the average median price according to the (NAR) $217,900.00. At 20% down that's $43,580.00. Bureau of Labor Statistics (BLS), the median wage for workers in the United States in the fourth quarter of 2017 was $857 per week or $44,564 per year for a 40-hour work week. So let’s start with how long it will take to save $43,580.00 Again let’s do the math. Say you start with nothing and you save $300.00 per month and your bank gives you 1.5%..... Are you ready? 11 years! The flip side is you put down 3.5% which is $7626.50 and using everything the same it will take 26 months.

 

Now I’m not going to explain how to calculate PMI and how that changes your payment. But here’s a website that breaks it down for you if you truly want to know. ((Calculate house payment)  But roughly it is going to cost you another $50 - $75 per month. So paying that silly PMI every month you will save over the 9 years (because it only took 26 months not 11 years) $24,300.00.

 

Here’s the other part of the Simple Math! Most Landlords will require 1st months rent and usually the same as a security deposit. If the average 3 bedroom rental cost $1500,00 per month that’s $3000.00. To come up with the rest of the money will only take 16 months. And we haven’t even covered the change in the interest rates. Every time interest rates go up it changes all the math.

 

I’m not just writing this to convince people to buy. But if your goal is to buy instead of listening to all the debating sit down and do the Simple Math! Waiting more often than not is going to cost you way more than you could ever save! And by the way. Listening to the evening news talking every night about the doom and gloom. Or how wonderful everything it means nothing. If you buy what you can afford and you are not trying to buy to impress other people. You are going to pay someone money to live in a home. Don’t lose sight of the Simple Math!  

 

April 3, 2018

Your Data Stolen via Real Estate Transaction!

Your Data Stolen via Real Estate Transaction!

When completing a real estate transaction your personal data is vulnerable due to the number of information exchanges via electronic mediums. Now with everything being done via the internet to save time it's super important to protect yourself. 

Protecting your real estate transaction and personal information involved in your real estate transaction starts with making sure the Brokerage you decide to use has systems in place to guard your data. In Maryland, real estate transactions keep in mind when using agents that send information via personal emails your information is at risk. There is a real cost to doing business in Real Estate and brokers must use the most secure platforms that are monitored on a daily basis with end to end encryption. These services are expensive and most Brokerages/ Agents usually don't have the funds for these types of services. Even the largest brokerage firms in Maryland do not have protocols in place to protect your data when buying or selling your home. This is very scary because the largest firms are the first to be attacked because of the transaction volume is so large that your transaction is just a number.

The most important way to ensure your data is protected when working on a real estate transaction is to confirm prior to sending or receiving any critical information is to verify with the real estate Broker / Agent what they are sending and when. If a system has been hacked you might get a random email you think is from your Agent and it just might be a ruse. So again, always confirm who and what is being sent. 

Number One, beware of companies using the lessor websites platforms or off name services. As the saying goes you get what you pay for, and even if the services providers used are the best in the market you should always ask your real estate broker, what is their protocol if one of their systems are compromised. 

Number Two. It sounds very simple but is one of the best ways to protect your information is make sure you are changing any passwords at least once a month and ask your broker how many times they change their service provider passwords. The most concerned real estate brokers should be changing their firm's passwords on a weekly/ bi-weekly basis. By doing this it makes it harder for hackers to zero in on your data and theirs. 

Here are some passwords to avoid:

1. 123456

2.password

3.qwerty

4.iLoveyou

5.admin

6.welcome

7.abc123

You should have passwords that you keep in a log that is not related to you or anyone in your immediate family. As a Real Estate professional, it cost money to do business. And if you want to make sure you are dealing with the best real estate brokers they will understand servicing their clients it starts with protecting their client's valuable data.

Number three and in conclusion, you should ask your real estate agent/broker personal information about themselves and their education and the easiest way to do this is to ask for their resume and quiz them on the information they provide. There is almost a no better way to make sure you're dealing with a true professional then knowing where they came from and legitimate certifications/degrees they have achieved. You would not want a surgeon operating on you that does not have a degree in medicine. Why would it be any different with your finances and real estate?

 

Ryan E. Shilow

A Johns Hopkins Master of Real Estate and MD/PA Broker of Record

March 12, 2018

Know This Before You Rent Your Home

Top Questions to Ask Yourself

 

Have you thought about renting your home or purchasing a rental property? When you are thinking about turning your home into a rental you have to ask yourself a couple questions. These questions are essential to ask and answer yourself before turning your home into a rental investment.

 

  1. What rate of return will I be making?
  2. Do I really want to be a landlord?
  3. How will I be able to finance my next home with a mortgage in my name?
  4. What is my exit strategy?

Rule Numero Uno

Whenever making any decision involving real estate investing, the first thing you need to do is calculate the net return you expect on your investment after deducting all expenses.

This can be done several ways, but the most well-known calculation for a real estate investment is the capitalization rate. This is done by dividing the yearly net income you expect to produce (without considering the mortgage) by the amount you paid for the property.

Example:

Real Estate Purchase Price- $100,000

Net Yearly Rental Income- $12,000

12000/100000= .12 or 12%

Now you are probably asking yourself, "but I have a monthly mortgage on my house, how does that work?" If you have a mortgage it is simple. You look at how much personal money you have placed into the property (closing costs when you bought the home, down payment, and any construction, not paid mortgage payments). Then take the yearly mortgage amount and subtract from  Net Yearly Income (Cash Flow After Mortgage Payments, known in the real estate investment world as Cash Flow After Debt Service CFADS).

Example:

Real Estate Closing Costs: $7,000

Down Payment: $3,500

Maintnence and Small Renovations: $2,000

Total: $12500

 

Net Yearly Rental Income- $12,000

Total Yearly Mortgage Payments: $7,200

Cash Flow After Mortgage Payments: $4,800

 

$4,800/$12,500=.38 or 38%

The above 38% return is the "cash-on-cash" return. This means the return on the actual out of pocket money you spent to acquire and maintain the property. Some in real estate view this as the most important return to calculate, but an exemplary real estate consultant would tell you to view both the capitalization rate of return and the Cash-on-Cash rate of return before making your decision. 

I will be writing a blog for each one of the questions you should ask yourself before renting your real estate. If you have any questions or comments, please contact me directly at res@reshilow.com.

 

Kindly,

 

Ryan E. Shilow

A Johns Hopkins Master of Real Estate

Maryland Broker of Record

 

March 1, 2018

Featured Builder, Viking Builders

Build Your Dream Home with Viking

One of the most renowned builders in the State, Viking Homes introduces another stunning home in Western Howard County. If you are interested in style, functional building quality, and all around home efficiency, there is no question you need to stop by this property. 

If you want to change any details, simple, just speak with a consultant and they will have the work order complete as soon as the material is in!

We will call you to schedule a showing and new build consultation. 

Feb. 28, 2018

Stand Out at Your Next Commercial or Residential Listing Appointment

Simple Steps to Stand Out To Every Client

Sometimes it takes months or years to get a listing appointment with some clients, others it only takes one conversation and the deal gets done before it hits the market. No Matter what, there are always basic ways to easily stand out in the eyes of your client. 

Resume 

I have never been the type of business person that enjoyed interviewing for a job. This is why I work for myself, so when I give a listing presentation I am in the mind frame of "simply state the facts."

However, for other real estate agents, they are interviewing for a job. Either way, you look at the situation, the first piece of information you hand a client should be your Resume of experience and accolades. And don't be afraid to give it some pop with a picture of a premier property you sold, picture, or logo.

 

Take notes 

 

Be sure to have a notebook/legal pad, tell the clients you will be taking notes, and ask if that is ok.

The most important part of the real estate profession, no matter if you are investing yourself or selling a property for a client, there are many details that need to be remembered and understood. 

Taking notes while engaging with the client will show them you are not missing the details. 

At the end of the conversation review your notes with your clients.

Ask Their Situation and Goals

Being able to broker, invest, and put real estate deals together means you understand the wants and needs of the clients/people involved.

You have to be very forward and find out what it is your clients want to accomplish. I literally start off every real estate conversation with the direct statement below:

"Tell me about your current situation and why you are interested in selling the property."

You can not help anyone if they do not tell you how to help them, and sometimes they do not know how to tell you unless you ask!

Basic CMA 

Our job is to understand basic real estate market conditions and values. A basic CMA should be clear for the clients to understand with basic powerful market statistics such as DOM, Sold Properties in the area, and market averages.

Always have a basic CMA prepared that outlines the following information to your clients:

  1. All Sold Properties within a mile of the subject property (this may differ in markets)
  2. Average or median Days On Market
  3. Short explanation of current market conditions (with reference to data source)

If you go into every listing presentation or conversation armed with these basics. You will always have a leg up on the competition.

 

R.E. Shilow

A Johns Hopkins MSRE

 

 

 

Feb. 27, 2018

Metro Real Estate, Lowest Inventory Since 2005

The Baltimore Metro at a Glance

Our local real estate market has shown some wonderful numbers and it does not look like it will be slowing down anytime soon. This Baltimore Metro real estate market is proof our economy is really turning around. Take a look at the below great statistics!

  • Median sales prices of $239,000  up 1.7% or $4,050 from last year 
  • Sales Volume up approximately $606 million, up 0.5% from last year.
  • Closed sales up 0.7% compared to last year
  • There were 3,433 new listings, down 5.1% from last year
  • Active listings declined by 14.2%, the 20th consecutive month of declining year-over-year inventory levels.
  • The median days-on-market for the Entire Baltimore Metro was 38 days to contract.

Full PDF Bright MLS report DC and Baltimore Metro Markets

If you have any questions about the real estate, capital markets, and/or investing in real estate, please feel free to call me directly. 

 

Kindly,

 

Ryan E. Shilow

Maryland Broker of Record

A Johns Hopkins

Master of Real Estate

410.227.0321

SELL YOUR HOUSE NOW!

Oct. 30, 2017

Hiring GREAT People, Money Is Not Enough!

Top Real Estate Brokerage, Top Real Estate Agents

Any real estate brokerage, or firm in general, can speak to the hardships of finding good/motivated employees. Our job as a brokerage is to enlist as many motivated and talented agents as possible to help us grow. As human resource (HR) professionals will say, it’s not about how to find the people as much as it is how to keep the people. Our team has been slowly growing with individuals that we believe stand out from our competition. They range in experience from newly licensed to 25+ yrs in the real estate industry.

Our most recent efforts to hire have lead me to write this blog. Any brokerage can hang a license on their wall, but we’re more interested in fully engaging our agents and clients to get the most they can from all of their hard work. So how do we find the people that fully commit to our client’s needs? More so, how do convince them that R.E Shilow is the best home for them?

Below are some HR practices that we continuously invest time, money, and energy into. We know that we’re nothing without our people! 

 

1. Truly invest in your agents

Competitive commission splits and thorough training are not enough. They are certainly the cornerstone of any great agent/broker relationship though. A manager of mine once said, “I’ll pay you fairly and what you’re worth so that we don’t waste any time talking about money.” That enlightened me about how many annual reviews I spent negotiating raises and quantifying my worth before we ever spoke about how we can develop more skills or make the company better together.

At R.E Shilow, we invest not only financially (agents that accept leads don’t pay us cent for anything), but we invest our time and resources as well. Our broker and seasoned agents have an uncanny ability to step in at the right time and assist with closing deals, marketing, the purchasing/selling process, etc. I mentioned before that any broker can hang someone’s license…we do not. We don’t do that because we want to fully invest in every agent. We want them to join our RE Shilow family and allow them to make as much money as possible. Our success relies on the agents’ success. We commit to always be ahead of the agents in real estate knowledge, that’s a broker’s job. Always be available to assist on the phone or in person for any agent that may need you at any time. 

2. Network continuously for new people and pay for your agents to do the same 

We know that the best people out there are being held closely by their current employer. It’s important to not assume that job-seekers are a waste of time, that’s naive. BUT – often times the best of the best are being aggressively held by their employer already. This is where networking and relationship building comes in. This isn’t just for an HR function of course, but what better way to find great talent then by learning about them while they learn about your firm over the course of a mutual/non-binding relationship? Some of our highest earning agents never applied to our firm. They simply met someone affiliated and decided to come in for a chat. 

At R.E Shilow, we implore our agents to attend as many of our free networking events as possible to grow their client base and skill sets, and to develop lasting professional relationships. We’re well aware of the powers of networking and marketing, but so many people lose sight of good relationships because they don’t see the instant result. We encourage our agents to nurture their relationships and continue to grow new ones. Somehow we always end up with more great agents to boot!

3. Cold Calling

Everyone hates this term, right? Well, it’s definitely not for the faint of heart, but it does pay off. We all have to do it. It doesn’t matter if you’re following up on a lead from your website or calling from a list of newly licensed professionals. Sometimes you just desperately need contact. In our case, we have so many leads that we absolutely needed to find more agents.

I signed two amazing people this week from simple cold calls. I had a list of 75 people that I called every day until they told me not to call anymore. Only two came from the list, but they have tremendous potential and we’re very happy to have them. We’re confident that their work ethic and personalities/experience will combo with our agent investments and pay dividends in the future! Welcome, Darren Marbley! We'll update the second agent shortly.

Conclusion:

Invest in your people!!! Don’t ask them for a chunk of the money they work for and not help them make any money! We provide our people leads, all forms needed, extensive training as needed, senior agents to lead and foster new agents, a hands-on broker, all fees and websites paid for, and more! If you’re a real estate professional looking for a brokerage to call home, of if you’re just looking for more information, please visit with us at any time, we’d love to hear from you!

 

Oct. 30, 2017

Managing Rehabs and Contractors

Managing Real Estate Investment Renovations

Investing in real estate projects is one of the best ways to spend your money if you have the right Construction Management Team. Investors (except silent ones) should be able to have a good idea of renovation costs before purchasing a property. Once purchased, you must manage your budget as much as possible in order to guarantee a good return on investments (ROIs). Below are some tips on how to manage construction and save money. 

 

1. Repair and clean first

Try to get the place clean first and repair things that need repairing, rather than diving in to replace everything. Often times you can paint cabinets and save money. It depends on your intentions for the property (selling or renting), but you want to consider your budget at all times. Unforeseen expenses are sure to come up, so save where you can.

2. Always paint with neutral colors

This seems obvious, but you’d be surprised how much a fresh coat of paint can change the impression of a home. Light colors are inviting and give the illusion that there is more area space. You want to invest in a good painter because a bad paint job can ruin a beautifully renovated home.

3. Invest in a ‘main crew’

Outside of the typical contractors that need licensing such as a master plumber, electrician, or HVAC contractor, your main crew should be able to do the following: basic framing, drywall, painting, trim, cabinets, tile/flooring, fixtures, etc. You usually have to engage specific trades for things like roofing and windows, but your main crew should be able to handle the rest. These individuals are responsible for making the house look perfect and should be treated like gold if they’re good. This will save money on your budget for labor tremendously.

4. Manage your contractors intensely

The saying “what gets measured, gets improved” cannot be more true with contractors. There are millions of companies to choose from, but you’re typically looking for reasonable priced or lower priced contractors to renovate a property. Cheap is not always the best option! It’s tempting to go with the cheapest contractor, but don’t fool yourself. It could cost you a lot of money down the road. Research small companies that have great reviews or come recommended by someone who can verify their work. If it’s a new contractor, be very specific with the scope of work and do let them deviate from your plan. You must be onsite every, single day to ensure contractors are on schedule and up to par. If you start to feel uncomfortable, address your concerns with your contractor immediately. If there isn’t result, you need to move on. It never pays to keep people that aren’t looking out for your best interest.

5. Invest in a project manager, rather than a general contractor (GC)

Project Managers (PM) work directly for you and no one else. The benefit of a good PM is that there isn’t somewhere more important for them to be except managing your projects. They hire/fire contractors, maintain budget and contact paperwork, expense accounting, project schedules, etc. They are your eyes and ears on the project at all times. A good PM will naturally become your right-hand. Invest in a PM upfront, and save thousands later.

 

Aug. 10, 2017

Why Sell Your Property Now?

Sell Before 2017 is Over!!!!

Sell your house now while rates are at all-time lows. If you live in Baltimore and are thinking about selling your house now is the best time to sell. Interest rates are at the lowest since one can remember making mortgage payments for prospective buyers very attractive. Also, the inventory in Baltimore for great deals is very low. The supply of multiple great houses for sale in many neighborhoods doesn’t exist. If you have a home with great amenities on a nice block you should be able to receive multiple offers and probably 95% of asking price if the home is priced right. Baltimore is gaining many home buyers coming from all over due to many factors with inventory on the low side sellers are in the driver’s seat.

Numbers Don't Lie

Here are the official numbers for the Baltimore metro area:

2017                              2016                  Year-Over-Year

Sold Dollar Volume   $5,940,184,874             $5,423,541,116         9.53%

Avg Sold Price             $295,693                       $284,193              4.05%

Median Sold Price      $255,210                        $248,940               2.52%

Avg Days on Market               68                                79               -13.92%

In Conclusion 

Based on the numbers above one can see that the housing prices have risen while the days on market has gone down. This is great news for sellers. Time is money and the sooner one can sell their home the sooner they can make decisions about the next steps they need to take. For a complete valuation on your property, click here.

 

July 26, 2017

Baltimore Real Estate Market on Fire!

Real Estate Market at Record Highs

The Baltimore Metropolitan area median sales price is $279,400, which went up 1.6% or $4,400 from last years, and up 2.1% compared to last month. This was the highest price level since July 2007. Now is the best time to buy or sell your home, the market is operating at one of the highest rates in a decade. The Baltimore Metropolitan area has seen increases in almost every aspect, almost all jurisdictions ( Baltimore county, Carroll county, etc...) have seen increases in market activity.

Baltimore Market Overview 

  • Sales volume across the Baltimore Metropolitan area was $1.4 billion, which increased 6.6% from last year.
  • Closed sales total of 4,509 went up 4.8% compared to last year and set an all-time high for the decade.
  • New contract activity of 4,313 was 1.2% above last year’s June record of 4,260.
  • There were 5,851 new listings in June, up 0.7% from last year but down 1.6% from last month.
  • Active listings declined by 12.6% year-over-year to 11,097, the 21st consecutive month of declining year-over-year inventory levels and the lowest June levels in a decade.
  • The average percentage of original list price received at sale in June was 96.6%, up from last year’s 96.1% but down from last month’s 96.8%.  This is the highest June level of the decade.
  • The median days on market were 19 days, down from 22 days last year, and remains at the lowest monthly level in a decade.

June Average Sales Price

  • The overall regional median sale for June is $279,400, which is a 1.6% or $4,400 increase from last year, and up 2.1% or $5,775 from last month.  This is the 16th consecutive month of year-over-year price increases and is the highest June price level of the past decade.
  • Compared to last June, town home prices were up 6.1% to $219,000 and single-family detached prices were up 2.8% to $350,000.  Condo prices were down 2.5% to $204,750.
  • Prices are above the 5-year average of $269,010 and the 10-year average of $260,055.
  • June prices are 18.6% above the 2011 low of $235,500.
  • Howard County continues to be the most expensive area in the region, with a June median sales price of $437,500, a 4.2% increase compared to last year. 
  • Baltimore City remains the most affordable area in the region, with a June median sales price of $164,000, a 5.8% increase compared to last year.
  • The highest level of year-over-year price appreciation was in Carroll County, where prices rose 7.0% to $319,900.  Only Harford County saw a decrease in prices compared to last year, where they dropped 3.0% to $252,000. 
  • For the year-to-date, all jurisdictions show price increases, and the overall regional median sales price has increased 2.5% to $255,210.

 June Closed Sales for Baltimore Metro area

  • There were 4,509 closed sales in June, up 4.8% compared to last year, and up 13.7% compared to last month.  This is the highest overall monthly level of the decade.
  • Town home sales were up 9.4% to 1,547, single-family detached sales were up 2.6% to 2,508 and condo sales were up 2.0% to 454, Compared to last year. 
  • June sales were well above the 5-year average of 3,781 and the 10-year average of 3,166.
  • Sales were 90.4% above the 2011 low of 2,368.
  • Sales activity across the region was up in all jurisdictions except Howard County, where sales declined 2.1% to 524.  Carroll County had the highest percentage increase in number of sales (+8.2% to 302) while Harford County saw the smallest level of increase of 2.9% to 427.

June Median Days on Market 

The average days on market (DOM), which the average days listings have been on the market, in June in the Baltimore Metro region was 19 days, down three days from last year and the same as last month. This is the lowest DOM of the last decade.

  • Condos had an average DOM of 24 days, while townhouse have a median DOM of 22 days and single-family detached have a median DOM of 17 days.
  • June’s average DOM of 19 days is well below both the 5-year average of 24 days and the 10-year average of 39 days.
  • June’s average DOM of 19 days was 45 days less than the peak DOM of 64 days in June 2008 and June 2009, and was the lowest June level in a decade.
  • Baltimore City had the highest average DOM of 30 days, up from 27 days last year.
  • Howard County had the lowest average DOM of 12 days, down from 14 days last year.
  • For the year-to-date, the regional average DOM is 29 days, down from 39 days for the same period

Baltimore Real Estate Market Conclusion 

The overall regional median sale for June is $279,400, which is a 1.6% or $4,400 increase from last year, and up 2.1% or $5,775 from last month.  This is the 16th consecutive month of year-over-year price increases and is the highest June price level of the past decade. Now is the best time to buy or sell your home, the real estate market is operating at close to record highs