Well it’s finally arrived! Episode #100… hard to believe we’ve been at this for 100 tries at video excellence. It’s my hope you’ve been helped by this show in understanding real estate. I do appreciate all the well wishes and encouraging words received in my first 100 episodes… and I appreciat each of you.

So, my topic for the day is how real estate agents are continually perceived as “car salesmen” (nothing against car salesmen, BTW). I just recently had yet another consumer interaction with a potential Lancaster County home buyer who did not understand that buyer agents exist to serve as their SOLE representative in the marketplace. They had scheduled multiple showings with the respective listing agents, and was leery (suspicious?) of me when I explained that this was unwise and the proper & effective method is to hire a competent buyer agent to show, negotiate and close on a property.

First, professional real estate agents appreciate an upfront relationship with a customer. They do NOT appreciate a customer who plays them against other agents, especially if it’s on purpose (happens).

Second, it’s legally and practically unwise to not retain a buyer agent if you’re looking to buy. There are significant legal issues – for example, any agent you “use” to see a home is under legal obligation NOT to disclose any information beyond the listing fact sheet without express permission of the SELLER. A smart agent in that scenario will just keep quiet if they have not been hired by you.

Third, you cannot expect to recieve top-notch service (aka “client service”) from an agent if you are unwilling to reciprocally commit to them vis a vis a buyer agency contract, if even for a few days or a few homes they show you.

I am convinced that most of this can be alleviated if a home buyer changes their fundamental viewpoint of agents. If you’re a home buyer, all the listing (seller side) agents out there exist to CO-OPERATE with YOUR agent. They do not exist solely to show you the homes they have listed (like a car lot salesperson does). This viewpoint necessitates & assumes that you will select and hire a buyer agent of your own… a wise choice.

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(c) 2011 Jeff Geoghan

On the Pennsylanvia Agreement of sale associations are identified as either a “Condominium” or a “Planned Community (Homeowner Association)”. Either way, there will be a set of rules laid out for varying issues such as maintenance, services, community conduct, limitations on activities or alterations and other topics. These rules are updated and promulgated by both a sitting elected board and/or a hired manager or management firm. As a buyer, you would do well to read them when they are supplied to you by the real estate agents involved in the transaction. Per the PA agreement of sale, you have 5 days to decide to void the sale in writing should you find issues in the association documents that you can’t agree to live with.

In practice, most buyers either don’t read the document or have no trouble with the rules. However, there’s always those who wanted to “do something” with the property that ends up being forbidden – it’s always best to get this stuff out on the table VERY early in the transaction and think it through. If you’re interested in buying a Lancaster PA townhome or condomimium unit, it’s important to stay on top of your buyer’s agent about getting the docs right away.

If you have questions about homeowner and condo associations in Lancaster County, feel free to reach out to me at jeff@yourlancasterhome.com. As always, I’d appreciate your subscription to my channel!

If you have any questions I’d love to hear them at jeff@yourlancsterhome.com. As always, channel subscriptions at YouTube are most appreciated.
(c) 2011 Jeff Geoghan Visit our homepage for Lancaster PA Real Estate

As the first quarter of 2011 gets rolling, it’s a mixed bag of results in the Lancaster PA real estate market.  While sales numbers seem to be holding their own versus prior years, and the spring market outlook continues to look good, home prices are depressed and need a shot in the arm.

Looking at home sales figures, we can see that a decent new year’s traffic caused home closings to be up fully 20% over 2010.  Since there were no mitigating factors during this time frame last year, we can say that this rebound is almost surely the result of pent-up demand for housing being released after the holidays and as 2011 dawned.  New listings were down, I believe because everyone who needs to be listed was listed as of the end of 2010.  We should see this number rebound in March as the spring market pops.  One not-so-hot number was pending sales, which dropped 11% from last February.  All I can surmise is that buyer activity took a bit of a dip during February, although by all accounts word on the street is that activity is up right now in mid-March.  Overall, the inventory of homes on the market in Lancaster County is up 5% over 2010 but well down from its peak in December.  Declining inventory is key to a strong spring home market.

With regard to Lancaster home prices, it seems as though by any measurement the county is experiencing record lows, both in listed and sold prices.  February’s median prices represent record lows at $175,900 list and $158,000 sold.  In my opinion the middle price ranges ($300,000 to $500,000) are taking the numbers down, while homes in the mid $100,000’s are holding their own.  Of course, this is the cyclical down season so sellers are more willing to take offers, keeping prices depressed.   The average Days On Market seems to confirm this, as it stands almost 20% higher than 2010 at 94 days – that’s just over 3 months!  No wonder sellers are more anxious to take what’s offered.

Looking to Spring 2011, we can see that sales are poised to move upward – the question is how much of an upswing we will see.  Prices have nowhere to go but up.  Remember, if you want to sell your Lancaster home for the best price in the shortest period of time, choose a listing agent who has strong internet marketing and professional photos to make your home pop online!  Call us to arrange an evaluation of your home, and we’ll give you a great presentation of how we can help make your sale a reality in 2011.

Visit our homepage for Lancaster PA Real Estate

(c) 2011 Jeff Geoghan

One of the things that may bite you as a homebuyer is missing a deadline set in the contract, and one of the most troublesome deadlines is the inspection contingency deadline. Most buyers don’t realize the urgency of getting everything done in time to meet that deadline, and the loss of rights that results when it’s missed.

In Pennsylvania, real estate contracts stipulate a time period for the buyer to do their “due diligence” and inform the seller of any issues that need to be addressed arising from those inspections. Just about every type of inspection is provided for in this contract clause, and the default deadline is 10 days (although the buyer can change that to any time frame – typically changed to 15 or maybe 20 days). Many times the settlement period is too short to allow many more days than 10 to be inserted here. Keep in mind that the addendum may ask for a combination of:

1) Actual repairs made to the property
2) Seller credit to the buyer at settlement ($)
3) Reduction in the purchase price

If monetary concessions are asked for, then the estimates by contractors become very important as the basis for the money in question.

Now, the buyer has to get EVERYTHING done within that 10 days – choose inspectors, schedule the visits, get the write-ups, synthesize the findings into an addendum to the contract, get that addendum into the hands of the seller. Believe me, this can make for some hectic days (especially if the contingency period covers a couple of weekends, when contractors like to take off).

My advice is to know the inspectors/contractors upfront, start thinking about what things you want looked at very early on, and plan for time to meet at the house and with your buyer agent a couple of times during the first 10 days.

Now, once the buyer has marshalled their addendum they submit it to the seller, hopefully within the 10 (or 15, etc) days. According to the contract for real estate in PA, the seller has until 5 days from the end of the time period to respond. So if for example (in a 10 day contingency) the buyer submits his estimate on day 8, the seller still has until the 15th day to respond. But, once the seller responds to the addendum the buyer has 2 DAYS only to accept or counter the terms. Basically, things wrap up real quick and the buyer needs to know what they will and won’t accept at the end of the day…

So, inspection contingency periods are very, very important and the home buyer and agent need to be on top of it as much as possible, and plan ahead. And whatever you do, don’t blow your inspection contingency period!

If you have any questions about inspections or Lancaster PA real estate I’d be happy to answer them at jeff@yourlancasterhome.com.

Visit our homepage for Lancaster PA Real Estate
(c) 2011 Jeff Geoghan

Over in Manheim Borough is Baron Insurance Group and Christopher Vogt. Chris is a homeowners insurance expert and I wanted him to share some common pitfalls that home buyers in Lancaster County and beyond face when it comes to getting an effective insurance policy. Chris identified 3 tips for home buyers (and especially first time buyers) to get the best insurance for their money.

1) Look and the insurers’s track record. Some prospective homeowners will research the broker (as Baron Insurance is) but few research the actually insurer such as State Farm, Erie, etc. Chris recommended www.JDpower.com as a great resource to see how well the insurer does with claims and customer service.

2) Make sure the policy your broker is writing for you will cover the needs of your property. Not all $400 policies are alike! Ask about deductibles, dollar coverage, other hidden costs to you should an “event” happen. Pick the best mix for your property type & location (condo vs. farm, for example).

3) Don’t wait until the week before settlement to start the insurance process. Especially today, there can be conditions attached to the approval that may need time to take care of, such as verifying something on the property via a contractor. Try to start the ball rolling soon after your offer is accepted.

If you have any questions for Chris you can find him at http://www.baroninsurancegroup.com. Baron covers all of Lancaster County by the way… You can always find me at jeff@yourlancasterhome.com. (c) Jeff Geoghan 2011

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One of the things Lancaster PA first time home buyers experience is a bit of “stage fright” as they are presented with a seeming myriad of decision points. Even as they are looking at homes (which is supposed to be the fun part) they can get stressed quite easily. In fact, most of us homeowners probably can remember a time this happened to us…

Today I give some advice to handling stress in the first time home purchase process, based on my extensive experience with buyers in Lancaster County, PA:

1) The process of buying a home is relatively straightforward and has been repeated many times before, so don’t feel that things are out of control. Make sure you have professionals helping you that you are confident in.

2) For the most part, you as a buyer have only to make a few decisions to actually get into a home. Be sure to get those key decisions clear in your head, including when they should be made. If you figure on a 45 day closing cycle from the date of contract, that may help to make things concrete to you.

3) Be comfortable with your budget. Be comfortable with your budget. Oh, did I repeat myself?

4) Look for the adventure and learning in the process. We as real estate pros think this stuff is fun because we’ve been through it many times and really enjoy seeing you “grab the vision”. Remember, all homeowners before you have gone through it, so it’s great conversation starters.

5) Lastly…relax! By knowing your lifestyle plan (which is fun and forward-looking) and how the home will fit into it (the dreaming part – also fun) you will be more at ease tackling the decisions needed to make your first home a reality.

If you have questions about buying your first home in Lancaster County, feel free to email me at jeff@yourlancasterhome.com any time.  Visit Yourlancasterhome.com for Lancaster PA Real Estate listings and more.
(c) Jeff Geoghan

In Pennsylvania there are specific types of property inspections detailed on the standard Agreement of Sale – but you may not be implementing any or all of them when looking to buy a home for sale in Lancaster PA.  Here’s a brief synopsis of the property inspections you may want to use.

General Home Inspection (“Whole Home” Inspection) – This is a big catch-all inspection clause in the contract, allowing you to check most everything within the home.  Most often, home buyers utilize a “Home Inspector” to perform the inspection with them.  See my episode a couple of weeks back with Herb Ingram from Amerispec where we talk about what Home Inspectors do & why.  These folks are going to be certified through a national organization for best results.  Beyond this, a home buyer can bring in any sort of contractor to inspect components of the house, including moisture and mold issues.

Home Infestation inspections – this clause on the contract allows a buyer to bring in a certified pest inspector to verify the home is free of critters, most commonly termites or other wood-boring insects.  Ants, bees and powder post beetles are fairly common home issues in Lancaster County.  While the Home Inspector generally has certification to do this inspection, I usually recommend a local pest company since they are also able to provide an immediate estimate to mitigate the bugs and offer a warranty against future infestations.

Radon – this odorless, colorless gas is found in the lower extremities of homes (usually basements or crawl spaces) in quantities that concern the state of Pennsylvania as a potential health hazard.  The magic number, in fact, is 4 PCl (picocuries per liter).  This test is a canister(s) placed by the Home Inspector to register any presence of the gas over a couple of days.  The canister is sent of to a lab and if the number comes back over 4 PCl, mitigation is recommended.  Whether you choose to elect this check is up to you, of course, and your personal concerns about Radon.  For more on Radon see the PA website.

Water Service and Sewage Service – These inspections seek to verify the quality of potable water at the tap.  Generally water tests are performed at the well, and results once again are sent to the lab.  Home Inspectors are usually able to offer this service.  If the home has an on-lot sewage system, a test can be performed to verify that it is fully functional and the approximate life left of the system.  These tests are performed by sewage experts.

Property Insurance – this inspection is meant to give a buyer the option to verify that a property can be insured – not whether it would be expensive however.  This becomes particularly important if the property is in a potential flood area or has characteristics that might cause insurance problems (knob and tube wiring or a cliffside location for example).

Property Boundary and Deed Issues – Pennsylvania is not a “survey state” so you don’t get a survey of the lot with your home purchase.  To have one done will cost at least $1,500 and just about nobody does them, unless there are serious likely boundary disputes with the home sale.  Of course, you can elect this inspection and pay to have one done if that is viewed as critical to the sale.  Also, you can elect to have the deed restrictions checked to ensure you have the use of the property you were hoping for (some property associations or neighborhoods have restrictions).  Lastly, you can verify that the property is indeed residential zoning (or commercial, etc) to ensure you will have municipal permission to conduct your preferred activities there once you buy.

These are the major property inspections on the Standard Agreement of Sale of Real Estate in Pennsylvania – I’m sure you can see how each of these might be important to a home buyer in different situations.  If you have any sales contract or inspection questions feel free to email me at jeff@yourlancasterhome.com.
(c)Jeff Geoghan 2011

While purchasing and owning a home can be a fun, enjoyable process there’s no doubt that it can be a stressful, expensive process.  Even without going into the debate about renting vs. owning (that’s another episode…) it seems that there are three (3) obvious reasons why you probably shouldn’t be making an offer to buy a home right now:

1) Your finances are not in order (you’ve heard of a budget, right?) – even after you’ve managed to put together enough cash to pay for the nonrecurring closing costs at settlement, there will be many opportunities for your bank account to be drained by owning a home.  Repairs, maintenance, tax bills, municipal assessments, insurance of various types are financial realities that should be reckoned with up front.  Hopefully you’ll be able to budget for these items and perhaps draw on your human resources (parents, friends) for help as well.  As renter, however, most of the above-listed items are paid by the landlord.  If things are financially tough, ownership may not be the right thing
for you right now.

2) Location, location, location – if you aren’t sure about the neighborhoods you’re seeing, or aren’t sure about how your life will work with a given home location you may want to wait until you’re more at peace with owning a home.  Since houses can’t be moved from place to place (insert wisecrack here) you should be comfortable with a) the immediate neighborhood, b) the prospective commute to work, and c) the location relative to your lifestyle needs.  I tell the story about a couple whom I wrote an offer for back when things were very competitive, had it accepted over other offers, only to have the couple call me the very next day begging to be released from the contract because they had test-drove the route to their church and felt it was just too far!  Don’t let this happen to you…don’t make an offer on a house until you’ve settled the geographics in your mind.

3) Not planning to stick around – if your life involves moving often (either for work or just for kicks), or for reasons already mentioned you see yourself potentially having to sell the home quickly, you may want to not buy right now.  Nobody can foresee the future, of course, and folks are getting laid off all the time, but sometimes if you are honest with yourself you’ll admit that you would not like to be “tied down” to a home/mortgage/bills for years.  Say at least 5 years, actually.  Or if you need to leave you could always rent the place until you sell but that would entail dealing with the landlord life – your choice.  With the real estate market as tough as it is for home sellers, it’s not wise to depend on having to list  within 3-4 years hoping it’ll sell the first day & pay all your closing costs.  If you aren’t into a serious responsibility that keeps on giving for half a decade at least, you probably should consider not signing a mortgage.

So, while there are lots of good reasons to buy a home right now, it’s ultimately up to you to self-assess whether you’re truly prepared as much as possible to take on the responsibility of home ownership.  If you have any questions or comments, or if you would like to talk more about how to prepare to buy a home for sale in Lancaster PA, you can reach out at jeff@yourlancasterhome.com.

Homeownership almost seems like a dirty word in today’s society. People are blogging, tweeting and facebooking their belief that buying a home is just plain stupid. I respect their opinion on the issue though I totally disagree. Why?

This might be the best time to buy a home in American real estate history.

Some might think I’m crazy. Cynics might think that I am saying this because I still hold a real estate license (though I have not listed nor sold a home in ten years). My reason for saying it is actually quite simple. Owning a home makes more sense than not owning a home for the vast majority of families in this country. Let me give you five reasons why.

1. Real Estate is a Great Long Term Investment

Don’t take my word on this. This is what Mike Mandel, former chief economist at BusinessWeek and current Senior Fellow at Wharton’s Mack Center for Technological Innovation, had to say:

We’ve just had the biggest boom and bust in real estate in recent history. Nevertheless, real estate has still greatly outperformed the stock market over the past ten years.

Below is his chart actually showing the difference between real estate and the stock market.

2. A Home Is a Better Place to Raise a Family

Don’t take my word on this. When Fannie Mae asked current renters for the major reason to buy a house in their National Housing Survey 2010, these were the answers renters gave (they could pick multiple answers):

• 78% said it was a good place to raise children
• 75% said because they would feel safe
• 70% said because you have control of your own space

3. A Home Creates a Sense of Community

Don’t take my word on this. The Federal Reserve Bank of New York just published a paper The Homeownership Gap. The paper explained:

Because owners have a financial interest in their property, they have incentives to take measures that will maintain or increase the value of that property. Some of these measures—such as fixing a leaky roof—are closely related to the house itself. Others, such as investing resources in the betterment of the neighborhood and the community, have broader beneficial effects on the local area, creating what economists call “positive externalities.”

4. It’s Cheaper to Own Than Rent in Many Parts of the Country

Don’t take my word on this. Housing Wire just reported on a Credit Suisse study:

While a segment of the renting population continues to rent, many are looking to dip their toes in the homeownership waters. Credit Suisse said the percentage of median household income needed to pay the mortgage on a median priced home is at a 30-year low… Low mortgage rates and property values makes homeownership more attractive than renting for many. In many markets — including Washington DC, California’s Inland Empire, Las Vegas and Phoenix — paying for a mortgage is less expensive than renting.

And here is a graph from the study:

5. The People Who Do Buy a Home Don’t Regret It

Don’t take my word on this. Probably the best people to ask if buying a home makes sense are the people who currently own homes. A recent national poll commissioned by Bankrate.com found:

Ninety percent of homeowners say they don’t regret buying their home despite a nationwide tsunami of foreclosures, short sales and loan modifications.

It’s a great long term investment. It’s a great place to raise a family. It gives you a greater sense of community. It’s less expensive than renting. People who currently own have no regrets. Buying a home seems like a no brainer to me.

Posted by Ray Smith, Gateway Funding

Here is a snapshot analysis on the current state of extending the first time homebuyer tax credit:

OVERALL ANALYSIS: It appears that the most powerful members of each chamber are fully backing a tax credit and that legislation is in the works.  However, it is still in committee at the present time and not ready to vote in either Chamber.  It is a good sign that the major players are attempting to push it through.

Relevant Legislation In the House:

H.R.3761 : To amend the Internal Revenue Code of 1986 to extend the first-time homebuyer tax credit, and for other purposes.
Sponsor: Rep Biggert, Judy [IL-13] (introduced 10/8/2009)      Cosponsors (12)
Committees: House Ways and Means; House Appropriations
Latest Major Action: 10/8/2009 Referred to House committee. Status: Referred to the Committee on Ways and Means, and in addition to the Committee on Appropriations, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

H.R.3773 : To amend the Internal Revenue Code of 1986 to extend the first-time homebuyer tax credit, and for other purposes.
Sponsor: Rep Edwards, Donna F. [MD-4] (introduced 10/8/2009)      Cosponsors (5)
Committees: House Ways and Means
Latest Major Action: 10/8/2009 Referred to House committee. Status: Referred to the House Committee on Ways and Means.

The house ways and means committee will also be holding a hearing on the tax credit next Thursday (http://waysandmeans.house.gov/hearings.asp?formmode=view&id=8096).  They will be discussing the success of the program thusfar, possible fraud as a result of the program and the possibility of extending it.

BOTTOM LINE: Speak Pelosi has publicly stated that she wants to see the tax credit extended but I do not see her as a co-sponsor for the legislation formulated in the house.  I will keep a close watch on the house ways and means committee meeting next week to see what the tone of the committee is.  As of right now, there is a long way to go because all bills are still being discussed in committee and have not been taken to the floor for a vote.

37. S.1678 : A bill to amend the Internal Revenue Code of 1986 to extend the first-time homebuyer tax credit, and for other purposes.
Sponsor: Sen Cardin, Benjamin L. [MD] (introduced 9/16/2009)      Cosponsors (11)
Committees: Senate Finance

Latest Major Action: 9/16/2009 Referred to Senate committee. Status: Read twice and referred to the Committee on Finance.
This article was published hours ago http://www.google.com/hostednews/ap/article/ALeqM5guZ2uxoyv-PmSFsGGANQP8oGSqmAD9BBOFUO2.  To summarize, it looks like the tax credit, which is being pushed by the Obama Administration, is being pursued much more aggressively in the Senate than it is in the house.  Speaker Harry Reid and Senator Dodd, Chairman of the Banking Committee are both backing a bill to extend the credit.  This is important as it will allow the bill to get pushed through committee faster unto the floor for a vote.

___________________________________________________________

Ray Smith

Home National Mortgage

Address: 1000 North Prince St., Lancaster, PA, 17603

Office Phone: (717) 538-0354

Cell Phone: (717) 538-0354

http://www.mortgagemanray.com