Real Estate Education, Real Estate Experience, and Real Estate Intelligence

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

 

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!