My Contact Information

You can reach me at any of the following:

Cell Phone: 240-483-7556
Office: 301-384-8700
Email:
Coni@ConiOtto.com
Website:
http://www.talk2coni.com/
Facebook:
www.facebook.com/ConiSells


Tuesday, August 11, 2020

Buying a house for the first time? Credit Matters!!

 


Buying a house??  Make sure your credit doesn't change so you can close on your house, check out this video for all the details



Three Reasons to Refinance



Three reasons to refinance a home include lowering the cost of housing, shortening the term of the mortgage to pay it off sooner or to using the equity to accomplish another purpose.

Replacing the mortgage at a lower interest rate, which is entirely possible in today's market, would reduce the payment.  On the other hand, shortening the term of the mortgage could make the payments increase but would allow the home to be paid for sooner.  In either case, the equity would not be reduced unless the refinancing costs were rolled into the new mortgage.

Refinancing the home to take money out would increase the mortgage on the property and lower an owner's equity; careful consideration should be made before doing so.

Mortgage rates are considerably lower than credit card rates and usually lower than short term borrowing like student loans or car loans.  For that reason, homeowners will sometimes refinance to payoff higher cost debt.

Some people refinance for more than their current balance to improve their cash position, possibly, to have funds available in case they need it.  Other reasons could be to use it for an investment such as rental property or other things.  Still others may use it to make capital improvements on their home like remodeling or a pool.

Another legitimate reason to refinance may be to combine a first and second lien on the home that might result in lower payments and a savings in interest. 

One more situation that causes a person to refinance a home is to remove a former spouse or co-borrower from the existing mortgage.  In the case of a divorce, a couple may no longer be married and one of the former spouses may have no financial interest in the home any longer but because they signed the note originally, they are still liable along with the other spouse.  This could be an untenable position.

There can be a lot of reasons that cause a homeowner to refinance the home.  The equity is a valuable asset that has powerful borrowing power combined with the good credit and income of the homeowner.  A Refinance Analysis can help you to determine the new payments and how long it will recapture the cost of refinancing.

For the recommendation of a trust lender, give me a call at (301) 384-8700.

Tuesday, August 4, 2020

Things Have Changed



The soothsayer in Shakespeare's Julius Caesar issued his famous warning "Beware the Ides of March."  Who knew that in 2020, around the middle of March, the world, as we knew it, would force such dramatic changes on us from the Coronavirus.

In America, it has brought our economy to its knees as we sheltered in place for over four months.  During this time, changes have affected our lives and many of those changes could be permanent.

Previously, smaller homes were becoming the trend for not only efficiency but upkeep so owners would have more time to do things including travel.  Now, travel is minimal and our world, in some respects, is reduced to our home.

For families with children, their home has become a school.  With so many people working from home, it has become our office or store or studio.  If there is more than one working adult in a home, it needs to have space for each party to work.  The home fitness industry is experiencing record sales in exercise equipment so the home can become a gym.

Since we're all spending more time at home, it is also the place to recreate.  We're cooking more; a larger kitchen and dining area would be nice.  We want to enjoy the yard, garden, pool or balcony and our current home may not even have them or we'd like to upgrade. 

People are wanting and needing more space to do all of these things at home.  Many experts are anticipating that these changes we thought were temporary may be part of the new normal even after a vaccine and cure have been discovered.

If you have had any of these thoughts and would like to know more about how to buy or sell a home in our current market, we would love to tell you about the many options available while being responsible to stay safe.  Whether it is buying for the first time, moving up or moving on, I would like to help.  Call me at (301) 384-8700.

Tuesday, July 28, 2020

Do you like to negotiate?



Whether you like to or not, buying and selling a home involves negotiation at all stages of the process.  It is not like the retail world where once you decide to purchase, you pay the price.  It is easily the most expensive purchase or sale that most people experience and emotions get involved that could affect the negotiations adversely.

The word "home" by itself conjures up emotions and selling a home you've lived in for a while could even complicate things more.  A real estate professional can separate their emotions from the process to be able to help the one they are representing.

The price of the home, the type of financing and concessions, closing costs, personal property, closing dates and possession are just a few of the many things that can be negotiated in a contract.  Since the seller wants to get the most for their house and the buyer wants to pay the least, their objectives are diametrically opposed.

Even after the contract is signed, removing the contingencies can cause considerable negotiations.  The appraisal, the inspections or the repairs could be a source of reevaluating the terms and provisions of the contract.

Negotiating the sale or purchase of a home is a competition; for one person to get something, someone has to give something up.  If you don't feel comfortable with this, it is important to work with an agent who can bring their skills to the table on your behalf.  As your advocate, they can champion your position.

I'd like to share how my skills, training and experience can benefit you in a sale or purchase.  Call me at (240) 483-7556.

Tuesday, July 21, 2020

REALTORS Thoughts on the Recovery



The National Association of REALTORS® just released the Market Recovery Survey of a random sampling to close to 100,000 members conducted June 24-26, 2020.  The following statements are the members' opinion on various aspects of the recovery to the Covid-19 pandemic as it relates to real estate.

In response to the safety of buyers, sellers and agents, REALTORS® are expecting within the next year to have increased demand for the following technologies used to market properties:

  • 67% - Zoom or other video technology to communicate with clients
  • 66% - virtual tours
  • 63% - live virtual tours conducted by agent using video
  • 60% - virtual open houses

Nine out of ten respondents indicated that some of the buyers have returned to the market or never left the market.  Agents currently working with buyers report that slightly more than half of buyer's timeline has remained the same with about the same level of urgency.  27% believe the buyers have more urgency.

The most popular reason cited by buyers with an increased timeline is that the delay during the pandemic has amplified their demand for a new home.  Others realize that new home features would make their home life more comfortable.  Some buyers are wanting to buy before a potential second peak of Covid-19 occurs. 

During the week the survey was taken, three out of four buyers saw the home in person physically while 26% did not.

Roughly 2/3 of the buyers are looking for the same features as they were prior to Covid-19 while new feature considerations include home office, space to accommodate family, larger home for more space, place to exercise and bigger kitchen.

Most buyers are looking for the same type home, however, respondents reported that 13% are moving away from multi-family properties to a single-family home and only 1% are going from SFH to multi-family.

89% of respondents stated that some of the sellers have returned to or never left the market.  Only 23% reported more urgency to sell a home due to the pandemic.

On the commercial side, 2/3 of REALTOR® respondents felt like the demand for office space would decrease and 72% felt that retail space demand would decrease.

The stats mentioned in this article pertain nationwide.  To find out specifics in your market, call your REALTOR® Coni Otto at (301) 384-8700.

Tuesday, July 14, 2020

Who Decides Value?



The seller can put a price on the home but the value is ultimately, determined by the buyer. Individually, a buyer could pay over market value because they love the location, or the elevation of the home or the proximity to something that is important to them.  The shortage of available homes resulting in increased competition among buyers could drive the value higher.

Most experts agree initially pricing it properly will generally result in the highest sales price.  If a home starts out too high, it could actually sell for a lower price after it has been on the market for a while.  It gives the impression that there must be something "wrong" with the house because it didn't sell immediately.  

So, how does a seller determine what price to put on the home?  It has nothing to do with what the seller needs to get out of it.  Nor does the price the seller paid for it make any difference now.  Even if the seller made considerable improvements, they may not affect the value of the home.

There are three common sources for a seller to determine market value: an appraisal, a broker price opinion or an automated value model found online.

AVM, automated value models, are mathematical estimates that analyze limited public record data to determine a value.  While this process can easily compare square footage, age, number of bedrooms as objective data, it is much more challenging to make adjustments for subjective data like appeal, quality of construction, floorplan and updating.  Zillow Zestimates are the most common AVMs but there are many others providing similar services.

Appraisals can only be made by a licensed appraiser.  Most mortgages require an appraisal as part of the underwriting process to verify that there is ample collateral to secure the mortgage in case of default by the borrower.  FHA, VA, FNMA, Freddie Mac and USDA as well as most private lenders require an appraisal especially for high loan-to-value mortgages.  In some situations where the risk is lower, some lenders may use an AVM.

An appraisal requires the appraiser to visit the property, perform a visual inspection, analyze the property considering three approaches to value and accurately report the property information that is verifiable.

Broker Price Opinion, BPO, as the name indicates, is a price opinion on a property made by a licensed real estate agent.  The determination of whether the estimate accurately reflects the market will depend on the experience of the agent with that type of property and market area.  It is possible that a BPO could be more sensitive to the actual market because it will consider homes currently for sale and recently expired properties as well as comparable sales.

While all three methods, used recent, comparable sales to arrive at a value, the appraiser and the real estate professional can make a series of adjustments for the differences in the comparables.  While the appraiser is highly trained in this technique, the real estate professional also adds credibility to this process based on their experience in how the buying public might react to specific features and the home in general including positive and negative influences.

Current condition of the property is very important for a number of reasons.  In some price ranges, a buyer may only have the necessary down payment and closing costs but is not able to make improvements like paint, floor coverings, appliances or other major items.  In this situation, a buyer would have to live with the house in its current condition until they could afford to make wanted improvements.

Investors may not be deterred by making an additional investment in the home after purchasing it but will probably be motivated to do so only if it will increase the potential profit to be made.

An AVM can be a tool that a homeowner, prospective buyer, mortgage officer, appraiser or real estate agent can use to get a quick idea of price but there are inherent limitations that can only be considered by personal examination balanced with experience in the market place.

Experience and understanding of the subject property and the marketplace are critical to having confidence that a value is accurate.  Any person could go through the same steps to arrive at a value but an experienced, well-trained professional is far more likely to assess all of the variables more accurately.  If you are curious what your home is worth, call (301) 384-8700 or email coniotto@gmail.com for a Broker Price Opinion.

Tuesday, July 7, 2020

Good Decision for a Second Opinion



You've done your homework, contacted a mortgage company and believe you are pre-approved.  That part of the process is finished and you can concentrate of finding a home and moving...or can you?

Pre-qualified and pre-approved are two different things but some people, including some in the business, use the terms interchangeably.  Pre-qualified is an opinion of likelihood that a borrower will be approved based on preliminary information about their income and credit.  Whereas, in a pre-approval, the borrower's credit report is updated and pulled, income and assets verified and involves pre-underwriting.

Even when you have a highly qualified loan officer, the real decision maker is the underwriter who can commit the lender.  Generally speaking, a person who has been pre-approved receives a written letter stating the terms and conditions of the commitment.

A second opinion from a different lender can be a comforting thing for a borrower.  It will either confirm that the first lender was correct and that the rate and terms being offered are competitive or it will reveal that there could be differences that would warrant more investigation.

Mortgage money is a commodity and while competition usually keeps lenders close to each other in the rates and terms they offer, you won't know for sure unless you shop around.  The cost for being pre-approved is usually a nominal amount and when you are considering the size of the mortgage you'll be borrowing for up to thirty years, it makes sense to get a second opinion.

Occasionally, during the process of being pre-approved, an unexpected credit problem may be discovered.  It is better to learn about it early so you'll have time to correct it before you have contracted on a home.

Your real estate professional, Coni Otto, will be able to recommend lenders who are active, experienced in the area and can share their experience with you regarding previous loans they have made.  The benefits far exceed the time and effort it takes.  You'll be looking at the right priced homes; getting the best loan, rate and terms; have increased negotiating power with the Seller and can close quicker because many of the verifications have already been made.