Maryland and Virginia Real Estate and Homes Blog

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AVOIDING CONTRACT FAILURES is important for home buyers.  If you have a contract of sale on a home in Maryland or Northern Virginia, make sure that the financing is in place and that your loan officer is doing their job. 

DON’T LOSE YOUR DREAM HOME because of poor financing letters.

We regularly read about contracts that “fall apart” because the buyer cannot get financing.  Homefinders agents will make sure that you, our home buyer, are aware of the critical dates in your contract. 

Make sure that your loan officer understands that they need to get the mortgage financing process completed sooner rather than later.

Experienced buyer’s agents in MD and VA know that a missed deadline in the contract can cause a home buyer to lose a home. 

Use a Financial Statement!   Agents need to learn to read the numbers!!

Homefinders.com agents know how to read a financial statement.  We will alert you early on if there are matters in your financial profile that need to be addressed BEFORE you submit a contract offer.

We use a simple Financial Statement.  We use a simple calculator.  We look at our buyers assets and liabilities and “qualify” our buyers or buyers who write contracts on our listings. 

We do not rely on loan officers to qualify.  Qualifying a prospective home buyer  isn’t rocket science.  This is a simple calculation.  We’re not qualifying buyers for credit and we rely on trusted loan officers to do that.  We use qualifying ratios to determine price range.  However, the agent needs to do two calculations.  One for the ratio of mortgage payment/income and one for all debt/income. 

FRONT RATIO/BACK RATIO.  We use ratios of 30% for an estimated PITI/gross monthly income and All Debt/monthly gross income.   30% of your income is an average for home buyers to spend on housing.  Many buyers prefer to pay less.  Some are willing to spend more. 

30/40%.  The concept was learned in real estate school.  It is further perfected in our CE classes for Real estate finance.  It’s important and separates the agents who consistantly have successful closings from the agents who simply write a lot of contracts. 

Step 1.  Provide the buyer with a Financial Statement Form.

Step 2.  Run a qualifying loan amount based on 30% of Gross Monthly Income.

Step 3.  Add the down payment, if any, for the estimated price range.

Step 4.  Run a qualifying 40% of gross monthly income for all debt.

HOMEFINDERS.COM agents and brokers know how to qualify and back it up with help from qualified loan officers, if there are any questions about credit. 

When writing an offer, the first document is the Financial Statement handed to the buyer to complete while the agent runs an Estimated Closing Cost.  Those two documents alone will determine whether or not the offer should even be made.  The Financial Statement is going to give the agent information to qualify a buyer and the Estimated Buyer’s Closing Costs is going to put in writing the cost to close.  Often buyers are surprised by these numbers.  Sure, if the buyer’s have made loan application they should have received a Good Faith Estimate from the loan officer.  Yet, every week we read of buyers who are “disqualified” at the last minute. 

This is just good business practice.  The cost of a failed contract is enourmous to the buyer and seller, not to mention the agents and brokers.  Failed contracts are almost completely avoidable. 

FORECLOSED BANK OWNED HOMES IN MARYLAND ARE A GOOD BUY. 

We often hear agents say that they don’t sell foreclosures (bank owned properties).  We sell foreclosures and our home buyer clients are glad we do.  On each home tour our experienced Buyers’ Agentsinclude foreclosures, REO, bank owned, short sales are included in our home tours. 

Bank owned and short sale listings may not be the best selection for home owners who need quick occupancy.  However, when a buyer realizes that they will probably be saving many $Thousands of Dollars through the purchase of a foreclosed property, even renting for a short while can often make the foreclosure or short sale property a good selection. 

We have had buyers wait patiently as long as 7 months to close a short sale.  We have had buyers wait patiently for up to 4 months to close on a bank owned property.  Each one believed that it was worth the wait.  The key is to prepare the buyer with the necessity of being prepared to wait with housing available while the transaction is making it’s way through the process.  It also helps to show buyers the market information that lets them know that they will be rewarded for waiting. 

MARYLAND FORECLOSURES OFFER GOOD VALUE FOR REAL ESTATEin MARYLAND FOR OUR HOME BUYERS.  

The table below represents closed sales for October, November and December to date. 

Buyers Agents work hard to make sure our buyer get the very best home for their money in the location of their choice.  That’s our job.

Experienced Buyers Agents help home buyers with financing alternatives, home inspections, contract management, and a lot more. 

Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988, E-Mail.

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FAX THE OFFER TO 222-555-8888.  YOU WILL BE NOTIFIED OF ANY DECISIONS IN 2-8 WEEKS.

Over the past year, we’ve read many posts by real estate agents and brokers detailing their frustration trying to SELL foreclosure or short sale listings. 

LET’S SET THE STAGE.

• Buyer is fully approved for more than the list price.
• Buyer is non-contingent and ready to take possession.
• House has been on the market for more than 6 months.
• House has been reduced in price from $379,900 to $299,000.

Buyer’s Agent has a few questions about the existence of other offers and tries to contact the listing agent.  Buyer’s Agent gets Listing Agent’s voice mail with the instruction:  “Fax offers to 222-555-8888.  You will be notified in 2-8 weeks of any decisions. 

BUYER’S AGENT WRITES AN OFFER FOR THE BUYER AND FAXES IT TO THE LISTING AGENT FOLLOWING THE INSTRUCTIONS IN THE MLS LISTING. 

• Buyer waits 3 days and calls his agent. 
• Buyer:  “Have you heard anything?” 
• Agent:  “No, the agent says it may take weeks to get an answer.”
• Buyer:  “Call the listing agent and tell them that if we don’t hear something in 24 hours, we’ll buy something else.”
• Agent:  “I’ll do that and get back to you.”

AGENT CALLS LISTING AGENT AND LEAVES THE MESSAGE THAT THE BUYER IS WAITING 24 HOURS FOR A RESPONSE OR THEY WILL BUY SOMETHING ELSE. 

No response from listing agent in 5 days after leaving many telephone messages.  Buyer instructs his agent to withdraw the offer and show him other properties, IF the buyer’s agent is lucky.  Often, a buyer will hold his agent responsible and move to another buyer’s agent.  This is one of the reasons so many experienced buyer’s agent decline to work with buyers who include foreclosures in their search for a home to buy. 

The above is a “worst case” scenario.  But, the result is the same in that the property has been listed for months, has lost significant value and there is a viable buyer and offer on the table that goes nowhere.

WHY DIDN’T THE LISTING AGENT RESPOND TO THE BUYER’S AGENT’S CONTACTS?  Because the listing agent:

The listing agents has no authority to negotiate for the bank.

The listing agents has no management authority to do anything other than transmit the buyers contract offer.

The listing agent has many listings from the same mortgage company and would be bogged down all day on the phone if they took a personal contact approach. 

The listing agent has given the foreclosure listings low priority because the mortgage company listings pay far less than consumer listings.

WHY DOESN’T THE MORTGAGE COMPANY THAT FORECLOSED ON THE PROPERTY ACT IN WAYS THAT WOULD MAKE THESE PROPERTIES MOVE FASTER??

BECAUSE THEY DO NOT KNOW WHAT THEY ARE DOING!!

The mortgage company employee that is in control of the portfolio of foreclosures,

• is NOT a real estate agent, real estate broker,
• has never sold real estate,
• has no understand of the real estate market,
• does not have any experience negotiating real estate sales,
• is a salaried employee and will receive a pay check no matter when the properties in their portfolio sell or for how much.
• final decisions for price, terms and conditions for ratified contracts is not in the authority of the loss mitigation clerk communicating with the listing agent.
• final decisions on contract approvals are often scheduled weekly or bi-weekly by committee.  

The primary reason these transactions are so difficult for the buyers agents, buyers and listing agnets is because the mortgage company, their representatives communicating with the listing agents have no experience selling real estate. 

• They have never been to real estate school.
• They do not have a real estate license.
• They have never showed a home to buyers.
• They have never written an offer for a buyer.
• They have never presented a contract to a seller.
• They have no understanding of the real estate market.
• They have no knowledge of real estate brokerage.
• They have no knowledge of condition or inspections.
• They have no understanding of disclosure.
• They have no understanding of presenting offers, counters timely.
• They get paid whether or not the contract closes.

The skill sets required for employees of the mortgage companies for loss mitigation representatives are not transferable to real estate sales or real estate brokerage. 

FACT:   BANKS AND MORTGAGE COMPANIES DO NOT KNOW HOW TO SELL REAL ESTATE.

Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988.

MARYLAND AND NORTHERN VIRGINIA FORECLOSURES OF LUXURY HOMES FOR SALE
FORECLOSURES IN MARYLAND AND NORTHERN VIRGINIA ARE POPULAR WITH BUYERS LOOKING FOR A GOOD BUY IN A LUXURY HOME. These homes often sell quickly and for very good prices.

If you’re in the market for a luxury home in Annapolis or Gaithersburg in Maryland OR in Annandale, Catharpin, Great Falls or Woodbridge, contact Homefinders.com for a tour of your home selections. We’ll show you homes in your location of choice and all homes in your price range. However, don’t ignore the bank owned homes. They are often a good buy.

City ListPrice Type Lot Acres BR BathsAll Fpl # Gar
Woodbridge VA $999,000 Detached 6.554 6 6 4 3
Great Falls VA $814,900 Detached 2.217 5 4 4 2
Annapolis MD $844,900 Detached 0.91 5 4 1 3
Annandale VA $977,500 Detached 0.466 4 6 1 2
Catharpin VA $977,900 Detached 10.011 4 5 1 3
Gaithersburg MD $824,900 Detached 2.02 5 5 2 2

EXAMPLE OF LUXURY HOME FOR SALE by a bank, mortgage company, Fannie Mae, Freddie Mac or other foreclosing entity. These homes are priced right and vacant.

Property Details for listing # MC6794621
Price: $824,900 City: GAITHERSBURG
Bedrooms: 5 Bathrooms: 4 full 1 half
Type of Home: Detached Style: Colonial
Year Built: 1991 Lot Acreage: 2.019995
Subdivision: GREENHILLS FARM County: MONTGOMERY, MD
State, Zip: MD, 20882 Status: ACTIVE
Listing Office: RE/MAX Pros-Germantown

TO SEE THIS LOVELY HOME, CONTACT LENN HARLEY, Broker, Homefinders.com, 800-711-7988. The Homefinders.com network of experienced agents and brokers are skilled negotiators and will guide you through the home purchase process from search to settlement.

Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988.