Real Estate Education, Experience, Intelligence

Oct. 25, 2019

Mortgage Interest Rates

Todays Mortgage Interest Rates

When Should You Buy or Sell?

Seems that social media, friends at work, and even family members all are experts in real estate and well the country’s economy. Interest rates are low it’s time to buy or sell! Interest rates are high now’s not a good time to buy or sell! 

Look at the Facts

Starting in 1971 the low-interest rate was 7.26% and the hight was 7.54%.  In 1980 the interest rates reach as high as 16.35%.  This is when Ronald Regan was the president and the United States in those years the best EPI (economic performance index) our country has ever seen. As a matter of fact, Barack Obama 

Posted the second-highest (EPI) and Bill Clinton was third-highest. After 2009 our countries interest rates dropped to below 6% but during the best times in our history… They were averaging between 7% and 10%!

Macro Real Estate Economics Conclusion

The point I wanted to make is the reason to purchase or not purchase should not be based on interest rates but on the overall goals you are trying to reach. The economy is always changing and the news media’s job to sensationalize every story so people will watch. We can show our clients how to maximize the purchase or sale of their real estate assets to ensure they make sound decisions. 

Real Estate Questions

If you have any questions about this article, your real estate market, or selling/buying a property/s.

Let us show you why choosing the right real estate agent is so important! 

What is your property's value? Click Here to find out!

Danny Bowling

db@reshilow.com

443.900.7055

 

April 8, 2019

Top 5 Ways You Can Prepare Your Home For Sale

How to Prepare Your Home For Sale

Every seller wants their house to sell quickly and for as much money as they can sell it for, but it takes more than hoping your house sells to make it happen. Sprucing up your home and careful planning are important things to get buyers attention and to make high offers on your home.

Step 1 - Disassociate, Declutter, Depersonalize

Living at a home then having to sell it can be hard, all the memories and time you have spent there can be a difficult thing to let go of, but you have to disassociate yourself from your home. You have to tell yourself "This is not my home, it is a product I am selling now". The quicker you can disassociate from your home, the easier it will be to hand over the keys and say goodbye when it is time to leave, which after building a life there can be an emotional thing to do.

Pack up family photos, family heirlooms, and any junk you haven't used in the last few months. You want buyers to walk into the house and imagine themselves living there, with their photos on the walls. Most buyers won't be able to look past personal touches and may be distracted by them. This goes as far as taking all books/knickknacks off shelves and clearing everything off kitchen counters. In the end, it's giving you a head start on packing. Make sure cabinets and closest are as empty as they can be and the things that need to stay, are organized. Buyers love to look around in every door and cabinet, so make sure dishes and boxes are as neat as possible.

Step 2 - Make It Shine

Your home needs to be cleaned better than it's ever been cleaned before, make it shine! It needs to be a deep clean, better than the normal daily cleaning jobs. Scrub the walls, mop the floors, make windows sparkle inside and out. This could take all day so hiring professional cleaners could be a huge help, and will get your house looking fresh. Make sure you focus heavily on the bathroom and kitchen. The kitchen is a huge selling point for buyers. Remember buyers love to open things, so make sure ovens and fridges are not only clean on the outside but on the inside as well. Odors are bad, make sure you do not cook anything that will leave a lingering smell even if you think it smells good others may not. Any other bad odors in the house you want to make sure are gone. Pleasantly scented candles could be a good thing but try not to have any exotic smelling candles, keep it simple. Make sure the exterior is clean also, hiring a landscaper to perfect your yard would be a great investment. If the outside of your house is a mess people may not even look at the inside and move to the next house on their list.

Step 3 - Stage Your Home

You don't need to go buy new furniture to do this, but if you can it will be a good investment. All you need to do is go into every room and try to create space and try not to make things feel cramped. Move furniture around to different spots to have the best visual appeal you can get. If you are investing in furniture have the colors match and make a theme. You don't want to invest in a bunch of furniture just for it to not go together and be meaningless. Don't overbuy, sometimes sellers will buy too much, remember you aren't living there anymore, so keep it simple but elegant. Don't spend a lot of money on unnecessary things.

Step 4 Pictures, Video, Virtual Tour

Talk to your agent about getting a virtual tour of your home. A virtual tour is like having an open house on your property 24/7 days a week. Having high-quality pictures and video to present your house in the best light is critical to receiving a high offer. It is really important that the pictures show how much space is in the room you are taking the picture in, that the pictures are clear, and that there are a lot of pictures. The more pictures the better, but they need to be clear. 

Step 5 - Most Important, Price

Above all else, make sure that your home is priced correctly, you don't want to go through all of these steps and your house be overpriced. The price of your house is the first thing buyers look at to consider if they want to find out any more information if the price within the market then they will come to see your house. With information at everyone's fingertips, consumers are more informed than ever. Some consumers are more informed about the real estate market in the area they are interested than the top agents in that area. If you are overpriced they will glance at your listing and nothing more. Being priced correctly is the first form of catching the attention of the consumer.

 

 

April 5, 2019

US Economic Report and Soaring Home Prices

US Economic Report

Median Home Prices

Median list prices are at a high for the first time in March at $300,000 according to a realtor.com report. According to Realtor, there are 1,349,597 active listings currently on the market with a 4% increase year over year.  Some parts of the country annual price growth have been down, nationally list prices have raised 7.2% year after year in March.

Jobless Claims

Wall Street economist expected to add 175,000 non-farm payrolls in March but exceeded that expectation with 196,000 jobs in March. Jobless claims have been at an all-time low since 1969. The last week of March Jobless claims reached 202,000, which was 10,000 lower than the expected 216,000 analysts were expecting.  

What this Means for You

So what does this mean for you? If you are a real estate purchaser this is not the best information. Why? The US economy is doing great and looking better every day and this economic information coupled with currently lower interest rates are pushing the prices of homes higher. These factors will likely create a tornado effect in the market that will quickly drop property inventories, which will, in turn, further push home prices higher.

On the other hand, sellers, your property values are moving higher and are poised to sell faster than we have seen in the past 20 years. As always, no one knows how long a market will be pushing higher, but we expect the conditions to continue for the next 12 to 24 months. If you have a property that you have been holding through the great recession, this might finally be the time to cash out your equity and find that next home in your life. 

April 1, 2019

What is a short sale and how is it better than foreclosure?

Short Sale Overview

What is a Short Sale?

Let's say you're selling your home but the offer you get is super low, it won't cover the total amount you owe on your mortgage, but you need to sell it, so you just take it. This is a short sale, you don't get the amount you need to pay back your lender, and your lender agrees to accept less than what is owed on the loan.

Most of the time homeowners are pushed into a short sale because they cannot pay their monthly mortgage to their lender, and at the same time, it's hard to find a selling price that would allow them to pay the amount of their entire loan-especially if market trends lowered their home value.

The Short Sale Process

In order to get a bank to consider a short sale, you have to be late on your mortgage and show financial hardship. Then you have to sign a real estate broker listing/marketing agreement (must be turned in to the bank) and get the house on the market with a real estate broker and attempts to sell the property at the balance owed. After these steps, your real estate broker will market the property at the current real estate market value to receive a market value offer that he or she will submit to the bank for approval.

What is the benefit in doing a short sale vs. foreclosure?

A foreclosure is when the homeowner falls so behind on the mortgage and the lender repossesses the house, often against the homeowner's will, then tries to sell it. Unlike short sales, a foreclosure negatively affects a persons credit score and credit report. As a result, people that undergo foreclosures normally have to wait 5 years or more before they can qualify to purchase a new home. It benefits the homeowner if they can talk to their lender to do a short sale instead of going down the road of a foreclosure.

  • A short sale gives a homeowner more time to stay in the home until the sale is finished. Foreclosures force homeowners to vacate.
  • In a short sale, the seller won't pay the real estate agents commissions and closing costs, the lender or bank pays the bill

 

 

March 19, 2019

Real Estate and The New Tax Change

What matters most, higher interest rates or property deductions?

Great outlook on interest rates, the federal reserve is widely predicted to raise rates 0-1 time this year. Last year the federal reserve raised rates 4 times. At one moment in the market last year 30 yr. mortgages were as high as 5.25%. With recent predictions, the market for 30 yr. mortgages have cooled back down to the low 4 percents. 

Soft National Housing Market

One reason the federal reserve has decided not to raise rates is because national sales have not kept up with job gains and population growth. Home inventories have started to rise.

Inflation Fear Declining

 According to Lawrence Yun, NAR Cheif Economist, current inflation is at a 2 year high at 2.4%, but the federal reserve is assuming a drop in inflation under 2%. As a result of this assumption, we see approved home sales in the future outlook. For every 1/2% drop in the 30 yr. mortgage market we can expect an extra 200,000 homes sold based on historical performance. 

New Limit On Mortgage and Property Tax Deductions

With the new tax reform, there will be a limit on mortgage and property tax deductions. Fortunately, most Americans, approximately 95% will still be able to deduct there mortgage interest and property taxes under the new tax reform. The 5% of Americans that can no longer deduct these items makes home ownership more costly. For these homeowners, lower interest rates are much more important because this is the only area to make up the loss of mortgage interest and property tax deductions.

Great News Real Estate Investors and The Savvy 5%

All mortgage interest and property taxes are fully deductible as bona fide business expenses. Hint: For those of you who are amongst the 5% who loses their deductions. Think about turning your home into a rental! You have to be a little savvy and make sure your home rental is set up correctly, but there is no reason you should be missing out on your deductions!

Ryan E. Shilow

A Master of Real Estate 

Johns Hopkins Carey Business School

Email| res@reshilow.com

Office| 443.602.9900

Mobile| 410.227.0321

"For more information or to request a consultation, please contact me directly any time."

 

 

 

 

 

 

 

 

Jan. 14, 2019

2018 Official Real Estate Statistics

Impressive Real Estate Statistics

 

Over the last year Real Estate in the Baltimore County region has been increasing on a positive slope. Out of the 1088 homes that have been listed 831 of them have been sold. This is a whopping 76% success rate in the market for buying, selling, or renting a home. This means that if you were to put your home on the market right now, it is almost guaranteed your home would be sold in the next 90 days. In the real estate market the monthly supply of inventory is important. This is the number  of homes being sold monthly and if there is a 5.6 MSI this means that roughly 10.5 homes are being sold each month. here in 2019 so far there is a 4.7 MSI which is still very impressive for the beginning of the year. 

 

Why Price Matters

 

The price at which people sell their home is very important. The volume listed in dollar amount for R.E. Shilow Realty really puts that pricing in perspective. The value of homes listed in the total year was 447 million. Keeping in mind 831 of 1088 homes sold, our sold volume was 317 million. This means that your house when put on the market will sell at its listed value. No need to go up or down on offers, because prices are at their peak performance. Volume listed is very important in terms of homes being sold and as these numbers show it is a main priority here at R.E. Shilow. 

 

Everyone Wants a Home

 

Real Estate is one of the most important commodities anyone on planet earth can purchase. Everyone wants somewhere to live and everyone wants a home. It is with the utmost importance that you as a buyer, seller, or investor understand the market. With the above information you can get a grip on the standard of success here at R.E. Shilow Realty. 

Posted in Real Estate News
Sept. 24, 2018

What a Property, What a Price, What an Area

Paradise In Ellicott City

 

This is Perfect!

4340 Doncaster Drive is a wonderful property in one of the most sought-after neighborhoods in Ellicott City, MD. Take a quick walk through the property in the virtual reality world above (seriously, if you have a VR headset). After you walk through the house. Make sure you check out the hardscaped backyard and beautifully landscaped backyard. This is the perfect getaway in the perfect neighborhood! 

For more information on this listing or for general questions please, contact us @ 443.602.9900. 

 

Selling Your Home?

If you are interested in selling your home or property please call our Broker and Johns Hopkins MSREI, Ryan Shilow @ res@reshilow.com.

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