Montgomery County Homes- Detached, Town-Home, or Condo?

Are you one of the many first time home buyers who are just getting started? Has the tax credit lit a fire underneath you and sparked an interest in buying? Does the high inventory and low prices have you curious as to what you might be able to buy? You're not alone! I have spoken to an unheard of amount of potential buyers who are really just getting started and don't really know what style of home they want or can afford.

In Montgomery County you have many different options. From the standard detached(Single family) home/town home to condo style TH's, condo's, duplex style homes, and more. What can you afford? Well, if you yearn for the yard and some privacy you may be able to get a detached home in certain areas for under $250k. If you want to go as far north as Germantown you may get a detached home with some age(15+ years old) and will definitely need some cosmetic repairs at the least. There are also a large number of smaller detached homes built in the 1950's and 60's in Rockville, Wheaton, Takoma Park, and Silver Spring that may fall into that price range.

Town Homes vary so much in age, style, and size that you could get one for around $150,000 or one for upwards of 1 million depending upon the location. Some of the upper end TH's have elevators and 2 or 3 car garages. The most notorious TH's are located in the new "Park Potomac" subdivision. You may have seen this development driving on I-270 near the Montrose Road exit. On the other end, you can find tons of smaller TH's varying in price all throughout the county.

If you're the buyer who wants no exterior maintenance, doesn't need or want a lot of space, and may have a limited budget than a condo is a great option. Even if you don't have a limited budget but want a nice condo, Montgomery County can accommodate thoroughly. From brand new high end condos in Bethesda, Rockville, & Silver Spring to affordable older condos all over the place. Much like TH's. However, when buying a condo you must always keep the condo fee in mind. You do pay a premium to have all the exterior areas, common areas, and amenities maintained. Some may include a few utilities, but it is always a case by case basis.

So, if you're just getting started and considering your options contact a loan officer and real estate agent first. The loan officer will be able to show you want you are approved for and are comfortable paying. The agent can help you weigh the pros and cons of all of your options. of course, the loan officer and agent will do much more than that, but that will be the first step in your process. Good Luck to all!

Ben White, Rockville Agent

Buying a Home? Is cash better than a loan?

Ever since the real estate market took a turn for the worst(or better depending upon who you are), we have seen a huge influx in cash buyers/investors. While cash can be enticing for many reasons, it is not as powerful a negotiating point as some buyers believe.

True, the mortgage market is less guaranteed and there is a chance a loan could fall apart. Adversely, there are no concerns about that with a cash offer. However, if the list agent and/or seller do their due diligence, you can often times be 99% sure that a potential buyer obtaining a loan will make it to closing and obtain the financing. So, if the seller is confident in the financing of a buyer, why would they want to take significantly less just because another buyer has cash?

I speak with a lot of of investors who would like to offer sometimes six figures less than the actual list price and market value just because they are making a cash offer. Low cash offers still must be reasonable because the seller will get the money one way or the other. The only time an extremely low cash offer is even relevant is if the property is in a total state of dis-repair and would not be approved for financing. Still, due to the large number of distressed properties, the "renovation loan" has become very popular again. A renovation loan is when a distressed property has an estimate done by a contractor for repairs needed and the scope of that work is included in the actual loan. Thus, allowing a non-cash buyer to purchase a property that would typically not be approved for a standard loan. This has made the low cash offers even less respectable or considerable.

In conclusion, if you're an investor with cash or a buyer with a loan, you need to understand the actual bottom line for the seller. This is usually when can settlement occur and how much money will they net from the sale? A cash buyer may try to entice the seller with a fast settlement, but most sellers already need or want 30-45 days to settle. Which is the same amount of time a loan will take to close. If a seller and their agent review a buyers financial information and speaks to the loan officer for the buyer than you should be able to determine whether or not the loan application/pre-approval is strong or not. This is especially true if the property is in decent shape and would not have any inspection and/or appraisal issues. If you're considering a cash offer keep all of this in mind and have a Realtor investigate the situation on the property and if there are competing offers. Cash is not as enticing as some see to think.

Ben White Montgomery County Realtor

Down Payment When Buying a Home

As a Realtor® who receives many inquiries from potential buyers, I often speak with people who have no knowledge of the home buying process or what it takes to buy a home. This is not a bad thing at all, for we all must be taught and educated on the process at some point.

If you are somebody who has never bought a home or obtained a home loan then you may not know how much money you might need to obtain a loan. You probably know that you need a "good" credit score and have to make a certain amount of money. Both are true, even if you don't know the specifics. However, most people who are just getting started don't know the down payment that will be required. Some still think a 100% loan or zero down payment is attainable. Due to the sub-prime mess and tighter oversight of the mortgage market that is now near impossible. There are some programs that may offer a zero down situation, but they have strict requirements. The most common zero down loan is a VA loan which is only attainable by past or present military personnel.

Now a days, the least amount of money you will need for a down payment is 3.5% of the sales price. This loan is a FHA (Federal Housing Administration) loan. That is why it is so common now when it was pretty much ignored during the housing bubble. It also explains why you might have heard how the Federal Housing Administrations funds were so low. It's not just the foreclosures, but the extremely high amount of money being borrowed by home buyers. Other than the FHA loan you can obtain a conventional loan which will require 10 or 20% down. Usually the latter.

Yes we have extremely low rates right now, but your application and buying power is more scrutinized than ever. No investors want to purchase a loan that would be considered a risky loan. Your credit scores need to be higher, your down payment needs to be higher, and you must have a good "debt-to-income ratio".

So, if you're thinking about buying a home, speak with a loan officer first to see what you will need to do to buy a home and what amount you might qualify for. Things have changed, but it the long run there is no doubt it is for the better.

Ben White -- first time Buyer's Agent
240-848-3322

Montgomery County Winter Real Estate Market

Throughout the years the winter season has been looked at as a slow time for real estate, new purchases, and refinances. The cold weather, school schedule, and holidays typically deter many home buyers. Most of the buyers and sellers decide to hold off until the spring. However, tis the season, because homes are still selling at a fast pace and low interest rates continue to influence more refinances.

On the real estate side, there are a number of factors that are helping the market stay active and strong. The largest still being the tax credit for first time home buyers which was extended from November 3oth, 2009 to April 30th, 2010. For any first timers who missed out on the opportunity the initially, they now have a second chance at free money and are taking it! The credit was also expanded to include move-up/repeat buyers. The Worker, Home ownership, and Business Assistance Act of 2009 has established a tax credit of up to $6,500 for qualified move-up/repeat home buyers (existing home owners) purchasing a principal residence after November 6, 2009 and on or before April 30, 2010 (or purchased by June 30, 2010 with a binding sales contract signed by April 30, 2010). Those two incentives alone are an extra push to influence buyers to make the move now, despite the season. Consequently, sellers know this and more homes are being listed. The number of foreclosures and short sales are still high too so many people want to get the good deal and tax credit.

On the lending side, the rates still remain incredibly low and attainable. Obviously that is another incentive to buy now, but it also keeps people refinancing their current loans in to more affordable loans where the lower rate will save them money on a monthly basis. Loan officers and lenders have not seen a winter like this since the housing bubble and the feeling is mutual from Realtors.

So, while usually many buyers and sellers would hold off until the spring, thus is not the case this year. Tis the season to buy or sell your home!
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Ben White -- search Rockville MD homes -- 240-848-3322

Buying A New Home in Montgomery County? Need an agent?

New home builders have slowed down substantially over the last few years following the housing bubble. Still, new home sales have been on the rise as of late and there will always be a market for new homes. Modern amenities, sparkling counter tops, and shiny hardwoods continue to draw buyers into their sales office. However, is it best to stroll into a new home sales office without a Realtor to assist you in your process?

Many buyers feel they can get a better deal without a buyers agent. This idea is similar to buyers attempt to avoid an agent altogether on re-sales, but is much more prevalent because it appears to be more "cut and dry" when buying a new home. True, they have a friendly and knowledgeable sales agent there to walk the buyer through every step, but you should never forget who they represent and what their motives are. To sell you the home at the highest price possible! Buyers may feel that there is no haggling and that everything they choose during the upgrade process is a flat rate, but that is often times untrue. New builders can negotiate and without your own representation they will feel less inclined and try to to the job given to them. Again, to sell the home at the highest price.

Adversely, when you use a buyers agent, you have someone reviewing all the recent accessible sales, talking to other builders, having a background of other new homes, and they may have previously worked with the particular builder. Most importantly, professionally negotiating the purchase. I suppose the argument made is that the builder saves money because they do not have to pay a buyers agent commission. Valid point, but it will surely offset in other areas where your agent would have benefited you. Not to mention all the work that is needed to be done. If your buying pre-construction than you have to pick everything out and all the terms are changing as you go. This can be very time consuming and stressful when you are already trying to juggle your everyday life.

New home builders will also try to entice you to work with their financing company in order to obtain the loan. They will offer incentives and closing cost help, but this is completely attainable without using their affiliated business relationship with a certain bank. You should always shop your rates with multiple loan officers and should always have a buyers agent to represent you when buying a new home. In the end, you will save more money and have someone who actually has YOUR BEST INTEREST in mind rather than theirs.


Ben White -- Montgomery County Realtor® -- 240-848-3322