Finding, And Choosing, A Buyer’s Agent In Howard County Maryland

OK, so you want to buy a home in Columbia or Ellicott City or somewhere else in Howard County Maryland. And, you’ve decided you want “someone on your side” – a “buyer’s agent”. Great.  However, you have to realize there are different types of so-called “buyer’s agents.” 

Types of “Buyer’s Agents”

The purpose of having a so-called “buyer’s agent” is to have that agent give YOU, the buyer, 100% loyalty. However, each real estate agent must work for a real estate broker, and the loyalty an agent can offer you is enhanced, or limited, by the business chosen by your agent’s broker.  Since about 1995 Maryland real estate brokers have selected one of three types of practices: Exclusive Buyer’s Agency (”EBA”); Single Agency (”SA”); or Dual Agency (”DA”).

Exclusive Buyer’s Agency (”EBA”)

In an EBA firm the brokerage only represents home buyers – never sellers.  The advantage to a buyer is that the broker and your agent can give you 100% loyalty, with 0% chance of a conflict of interest of also representing the seller. 

Today there are no firms offering Exclusive Buyer’s Agent service in Howard County.  (If you contact the National Association of Exclusive Buyer’s Agents for a buyer’s agent in Howard County, they’ll tell you there are no exclusive buyer’s agents here – and they’ll recommend that you contact John Toner of Providence Real Estate).

In the early 1990’s there were four Exclusive Buyer’s Agent brokers, but since then one went out of business, one moved out of state, and two (including our firm) converted to Single Agency practices.  (The website Buyers-Agents.com traces some of the history of buyer’s agents in Howard County Maryland).

Single Agency (”SA”)

A Single Agency firm represents both buyers (as buyer’s agents) and sellers (as seller’s agents) but never both at the same time (so-called “dual agents”).   Single Agency firms by definition tend to be smaller brokerages with a handful of agents and no more than, say, a half dozen buyer or seller clients at any given time.  Think “craftsman” vs mass-production.

A Single Agency brokerage can’t offer the 100% loyalty of an EBA but, because Single Agencies are small, the odds of an actual conflict of interest are low. Suppose the broker represents four sellers at the moment amidst 1200 homes currently for sale.  The odds that you, as buyer, want to buy one of these homes is just 0.3% (4 divided by 1200). 

Most Single Agency firms use a “first in time” rule for representing clients. Say you come to our office today and want to buy a home in the $550,000 – $700,000 range, and of our current five listings one fits that description. We’d show you the home first. If you don’t like it, we’d sign a buyer’s agent agreement with you promising to give you 100% loyalty on all other homes on the market in your price range.  However, if you did like the home we have listed, we would have to represent the seller (he was our client “first”). At that point you could choose to work through us to buy the home, knowing we represent the seller, or you could hire a completely different buyer’s agent from another firm to represent your interests.

(Wow – that was weird, huh? A Realtor® actually honest enough to say that, on occasion, you might actually want to work with someone else!?)

Currently there are three Single Agency firms offering buyer’s agent service in Howard County Maryland that we are aware of: the John & Angela Team at Providence Real Estate, and two other small firms in Howard County.

Dual Agency (”DA”)

Dual Agency is what the overwhelming majority of all Maryland firms practice.  They work with buyers and sellers, but get all their clients to sign a “dual agency consent” form, which allows the brokerage and the agent to represent both the buyer and the seller in the same transaction.  The purpose for this is so that the company, and agent, can secure your loyalty to them 100% while they only “maybe” give you 100% loyalty back.

If you think you have a buyer’s agent in Howard County, but are working with an agent with one of the big firms, you probably have merely a dual agent.

If it is a firm that has a huge local market share, for example Long & Foster in our local market, it is difficult for them to offer true 100% loyalty to either buyers or sellers.  If Long & Foster has, say, a 25% market share of homes for sale in Ellicott City, then there is a 25% chance your agent can’t serve as truly your buyer’s agent in Ellicott City.  If Coldwell Banker has a 32% market share of homes for sale in Columbia Maryland, then there is a 32% chance your agent can’t be your buyer’s agent in Columbia Maryland.  In both cases, the agent would be a “dual agent” at best.

Is dual agency legal?  Yes, sort of.  Is dual agency right or fair?  Well, we don’t think so.   Maryland, like most states, passed laws in the 1990’s “legalizing” dual agency.  But the practice is prone to legal problems – for agents, brokers, buyers and sellers – that there is a network of real estate attorney who specialize in protecting the victims of dual agency after the fact – see Real Estate Lawyers.Com.

In essence dual agency is designed to protect the agent (making sure that you remain loyal to them) while allowing your so-called “buyer’s agent” to give you compromised loyalty if you happen to buy one of her firm’s listings.

Here is a simple test: Ask a prospective Howard County buyer’s agent to specify how their broker’s agency policy will allow them to provide you with the Six Fiduciary Duties of a Buyer’s Agent.   (My next blog will outline the Six Fiduciary Duties of a Buyer’s Agent).

If the agent squirms – or worse – looks confused, as if they’ve never even heard of the Six Fiduciary Duties, you might want to look for a different Howard County Buyer’s Agent.  Contact us by email for more information about homes for sale in Howard County and/or how our buyer’s agent services can help you get a great deal on a Howard County home.

Buyer’s Agents: Giving Howard County Home Buyers A Fair Deal And Honest Advice

I confess I’ve been asleep at the wheel on my own blog.  Over the past few months I’ve written about topics I thought Howard county home buyers were most interested in these days – foreclosures in Ellicott City, short sales in Columbia, Maryland, and current home price trends in Howard County.  (See prior blog entries, or click here for a list of current foreclosures and short sales in Howard County). But I’ve forgotten to speak about using a “buyer’s agent” despite the fact that for over 20 years I’ve been a pioneer of buyer’s agency in Howard County. 

Forgive me.  I’ll do my best to succinctly address key issues concerning buyer’s agents in Howard County and in Maryland in general in this and the next few posts.

Definitions: Buyer’s Agents, Seller’s Agents, And Dual Agents

Traditionally all real estate agents worked for the seller’s best interests, either as “listing agent” (with a written listing agreement between agent and seller) or as a “sub-agent” (working with buyers but as a “sub-agent” of the listing agent of the home the buyer purchased and thus a seller’s agent).  Crazy, huh? Your agent emotionally bonds with you as home buyer, shows you tons of homes owned by sellers she’s never met, yet she owes 100% loyalty to them, 0% to you.  Wikipedia.org partly explains this system here.

It’s unclear exactly how this agents-always-work-for-sellers system came about. At least, no one has offered an explanation which I find fully satisfying. But it must have been due in part to the fact that, generally, the agent’s best interests are more naturally aligned  with sellers than with buyers.  Both seller and agent want the highest price – the seller to receive more money, and the agent to receive a higher commission.  Both seller and agent want few, if any, “escape clauses” in a purchase contract – because, once a deal has been agreed to, they both want it to go through despite any buyer concerns.

Regardless of how it came about, the fact remains that the basic legal framework in U.S. real estate for nearly a century has been that all agents worked for the seller.  This was certainly true for Howard County Maryland real estate sales.

Then in the late 1970’s and 1980’s some upstart real estate brokers introduced the concept of “buyer’s agency”, where the agent would actually commit in writing to break with the traditional, sellers-only, system and work for the buyer’s best interests. 

This was risky at the time, because “dual agency” – the act of representing both buyer and seller on the same transaction – was completely illegal in all 50 states. If Agent-A with ACME Realty represented the buyer and Agent-B of ACME Realty represented the seller in the same deal this was considered dual agency – representing conflicting interests in the same transaction – and was completely illegal in all 50 states.  Both agents and the broker could lose their licenses for committing just one act of dual agency.

The biggest brokerages, then, never offered buyer’s agency. If the firm had, say, a 25% share of the home listings in an area, there would be a 25% chance of dual agency if that firm represented buyers also.  Since dual agency was blatantly illegal, big firms never offered it to buyers.

This meant that, initially, buyer’s agency was only offered through small, innovative brokerages. Some were “Exclusive Buyer’s Agents”, or EBA’s, where the firm only represented home buyers with a 0% chance of dual agency.  Other small firms practiced “Single Agency”, where they would represent a handful of buyers and sellers, but never both on the same deal. If such a Single Agency firm represented, say, three home sellers out of 1,500 homes for sale in the area, there’d be a 0.2% chance of dual agency.

(If you can’t tell already, yes, I was one of those “innovative”, upity brokers that practiced buyer’s agency in Howard County Maryland as far back as 1989).

However, these small firms offering buyer’s agency apparently posed a threat to the big firms. Over a matter of a few years, from 1991 to 1997, all 50 states made major changes to their dual agency laws and most repealed them. Why? Well, it wasn’t because consumers demanded the “right” to work with “dual agents.”  Rather, it was because the big firms felt threatened by “buyer’s agency” and they wanted to be able to offer something they called buyer’s agency, even if it was simply a repackaged version of the old dual agency that had been illegal for a century.

Locally us ‘little guys’ lobbied against such big boys as Long & Foster, ReMax and O’Conner, Piper & Flynn (now Coldwell Banker). We didn’t want dual agency legalized, as it seemed a blatant ripoff of the consumer.  Alas I found it’s true: you can’t fight city hall (or, in this case, the Maryland Legislature and big brokerage houses at the Maryland Association of Realtors®).

Result Today?  Virtually every agent in Howard County claims to be a “buyer’s agent.”  But precious few will GUARANTEE in writing to give you 100% loyalty.  We do.

For 12 years we practiced Exclusive Buyer’s Agency in Howard County Maryland and for the past eight years we’ve practiced Single Agency for our Howard County home buyer and seller clients.  For reasons I’ll state in a future post, I find Single Agency more beneficial to our clients than even Exclusive Buyer’s Agency.

If you’d like copies of any of our buyer’s agency forms, including a copy of our written loyalty guarantee, click here and we’ll be glad to send it to you.

You can check my OLD website for more info on Buyer’s Agency In Howard County Maryland here (with apologies, it needs a bit of updating), or request our “Home Buyer’s Guide To Maryland Real Estate” here.

A buyer client just asked me about the options, and costs, of dealing with aluminum wiring in a home.  My response is partly just “stealing” from various sites on the web, but it is also colored heavily by my 20 years of real estate experience in Howard County Maryland.  I’m not just talking about generic issues, but how, specifically, to handle this issue either as a Howard County home buyer or Howard County home seller.  (For additional consumer tips as a home buyer or home seller in Howard County check out our blog and/or contact me directly). DDDDD

What Is The Problem With Aluminum Wiring? (How “Scared” Should I Be?)

Aluminum wire was used in the U.S. during the late 60’s and early 70’s. Homes in Howard County built between roughly 1966 and 1973 have about a 75% chance of having aluminum wire.

Aluminum wire alone is safe – every overhead power line in the U.S. is made with aluminum wire. The potential for greater fire hazard comes from a poor aluminum-to-copper connection inside the outlets and switches in the home.  And, although aluminum wire has a “relatively” greater risk of fire, the risk either way is pretty small (say a 2-in-500,000 chance with copper vs. 7-in-500,000 chance with aluminum). You can read a decent history of aluminum on Wikipedia, or on this electrician’s website here.

The “problem” comes from a poor aluminum-to-copper connection between aluminum and copper wires, allowing for oxidation which leads to either “sparking” and/or excessive heat build up.  The “solution” is to improve these “connections.”   (You can request a list of the most serious home flaws common to Howard County homes here).

What Are Possible Solutions?

1) Rewire Entire Home With Copper Wire.  This is an “approved” solution for sure, but would be ridiculously expensive (maybe $15,000 or more on a typical size home) and is almost certainly “overkill”. Remember, aluminum wire is perfectly safe – every power line in the U.S. is made with aluminum, not copper, wire.  It is only the copper-to-aluminum connections which pose the risk, and the below two solutions address this in a more cost effective manner.

2) AMP Industries “Crimp” Method.  Amp Industries developed a special tool to “crimp” together copper and aluminum wires inside a plastic sleeve that makes the connection near air-tight, thus preventing oxidation and its related fire risks from occurring.

This is not cheap, as AMP Industries doesn’t sell their crimping tool – they “license” it to authorized electricians who must pay a “royalty” fee for every single use.  (What capitalist pig geniuses!).  Electricians who are “licensed” to use the tool – only about 3-4% of all electricians – charge roughly $50-70 per outlet/switch, which ends up costing about $5,000 – $6,500 to treat the average size home with this method.

You can read about this method on this electician’s website (plus it has really cool, “scary” pictures of firemen next to a burning house!) or go directly to Amp Industries’ site Inow Tyco Electronics) – informative, but boring and now scary “firemen pictures.”

3) “Pig Tailing”.  A third method, called pig-tailing, is similar to Amp Industries’ “crimp” method, except there is no special tool for “crimping” that requires a licensing fee, making this solution more cost effective still (around $2,500 or so for the typical home).

4) [NEW] In the past few years new devices have come onto the market (CopAlum outlets and switches for example).  Some electricians say these are “the best” method to fixing aluminum wire. Based on what I hear from Howard County home inspectors, I’m not sure what to think about them as they are still a relatively “new” method of addressing the problem.

Which method is “the best”?  As a layman I find it hard to tell. Very few electricians (about 4%) are licensed (by AMP) to do the crimp method, so of course these professionals will say that the crimp method is “the best.”  Other electricians, who can’t perform the crimp method, will say that pig tailing is “the best.”  Both have a bit of bias involved in their answers.

Most home inspectors I’ve talked with will say that either method is fine, though some insist that only AMP’s crimp method is satisfactory.

What Are The Odds Of Getting The Seller To Pay For Aluminum Wire Repair?

Of course this will vary depending on market conditions, relative negotiating power of the parties, and what type of “deal” has already been “cut”. (If you killed the seller on price already the odds are reduced he’ll kick in $6k for aluminum wire too).

Overall it seems to me that the following odds represent “normal” in Howard County:

a) 50% or more of the time the seller pays ZERO. (Including times when buyer doesn’t even request any “fix”).

b) 30% of the time: 50/50 split between buyer and seller.

c) 20% of the time: seller pays 100% of “fix” (though the type of “fix” may be debated).

What If The Home Has Never Actually Had A “Problem”?

Finally, some sellers will argue “it’s never been a problem before”, meaning that they have never observed any “problems” like sparking or scorching or fires.

That means nothing on this issue. Apart from the issue of exactly “how serious” a problem aluminum wire is, the risk it poses does not get better with time. In fact, the opposite would be true as more time gives more opportunity for latent oxidation to occur.

True, if during the home inspection the inspector actually discovers an outlet that shows “scorch marks” that can certainly help your cause in negotiating for repairs (and it highlights the value of a good vs. cheap home inspector).  However, the absence of such evidence does not mean the wiring is somehow thereby “safe”.   (Request a list of top-ranked home inspectors in Howard County here).

Does Aluminum Wire Violate “Code?”

Buyers and sellers can argue “code” compliance both ways.  Does aluminum wire meet electrical “code” requirements for the county? Well, yes and no.

No, in the sense that new installations from about 1974 on must be copper wire, new aluminum wire inside homes is not permitted.

But, yes, aluminum wire does meet code requirements if it is already installed – as neither Howard County nor any jurisdiction in the union to my knowledge requires anything to be done to “fix” existing aluminum wire installations.

The “code” argument, then, is circuitous – and beside the point.  A leaky toilet doesn’t “violate code” but you can still ask a seller to fix it.

If I’m A Seller, How Should I “Handle” Aluminum Wire?

As a listing agent I will have seller clients ask me whether or not they should “fix” aluminum wire (by whatever preferred means) before putting their home on the market. My answer is a clear no.

First, there is a chance the home inspector and/or buyer won’t make a big deal about the aluminum wire.  If that is the case, you will have “wasted” your money on the fix.

My advice to sellers is this: if you know your home has aluminum wire, disclose this in writing to the buyer in the Maryland disclosure/disclaimer form.  Question 8 on this form asks if there are “any problems” with the home’s electrical system.  I advise sellers to write something like the following:

“Home has aluminum wiring, as do most of the homes built during this time frame. We have not observed any specific problems with this wiring.”

I like such a disclosure for a lot of reasons.

First, if you have a problem the best place to “hide” it is right out in the open. By being open and upfront about the aluminum wire, you’ll tend to diffuse it as an issue.  Buyers will think – hey, if they are willing to tell us about it, it must not be a problem.”

Second, I think it gives you the chance to posture a bit during repair negotiations.  If the buyer asks you to “fix” the aluminum wire you can respond, “Hey, we disclosed that to you before you wrote the offer. If you were worried about aluminum wire, why did you write the offer?”  (Legally this has no effect at all – a buyer can, obviously, ask you to “fix” something that was previously “disclosed”.  However, there is a bit of emotional/social “pressure” to such an argument).

Third, by telling the buyer the home has aluminum wire “as do most of the homes built during this time frame” you are letting the buyer know that, depending on the neighborhoods and/or types of homes they are looking at, they may well run into this problem on pretty much every home, again making it seem less of a “problem.”

(Request The Top Six Negotiating Strategies For Howard County Home Sellers And Howard County Home Buyers here).

Where Can I Get More Information?

For general info about aluminum wire, it’s risks and “fixes”, you can check websites earlier mentioned (history of aluminum on Wikipedia, or on this electrician’s website here) and/or Google the terms yourself.

For more information about local customs and practices in Howard County real estate, including how to negotiate for its repair (as a buyer) or avoid paying to repair it (as a seller), contact the John & Angela Team.

4BR Columbia colonial under $250,000!

In the course of earning a living selling real estate in Howard County I come across homes for sale that strike me as being better-than-average bargains, even considering that the current market has lots of homes priced pretty low. (Clear her to receive my current the complete list of “Top Ten Howard County Home Bargains” … I’m willing to share!).

One such seemingly under-priced bargain is the home pictured below.  Although it has a county tax assessment value of $379,900 the asking price is only $249,900 – a whopping $130,000 below tax assessment value!  For a 4 bedroom colonial in a quiet Columbia neighborhood, it seems like a steal.

True, it likely is a bit dinged-up on the inside – but for $130,000 off, what would you expect?  If, as I suspect, it could be easily spruced up for around $20k or so, it’s still a raving bargain.

What are the “best deals” in Howard County real estate today? Are they foreclosures? Short sales? Or perhaps “regular” sales where the owner has a lot of equity and wants it priced to sell quickly?

The answer is: yes… any and all of the above may represent the “best home bargain” in the county.

In my experience real estate “bargains” come in lots of places, and if you focus on just one, you’re probably missing out.  Buying foreclosures at the actual auction is both highly risky and typically more expensive than you’d think.  Buying short sales involves certain time delays and contract risks, and buying bank-owned (or “R.E.O.”) homes also involves risk.  However, in their proper place, each can be a source of excellent value when buying real estate.

For a complete list of my current “Top Ten Howard County Home Buys” click here.  And/or, if you wish, you can shedule our famous “No Hassle, No Obligation Home Tour” of any home on the list.

(And if you’re really in a goll-busted hurry, call my cell phone at 301-922-2007).

Thanks!

If you are a Howard County home buyer, some of the most emotionally loaded words out there are “foreclosure”, “short sale” and “for sale by owner.” How do I know this? Because, in my 20 years of helping folks buy and sell homes here in Howard County, I have never seen buyers focus so much on these terms.

I wrote in a previous blog that “foreclosure” is often a misunderstood term. I also wrote that “foreclosures” may or may not, in fact, be the “best deal” on the market.  Sometimes they are, at other times they are not and can often be priced insanely high – higher than other, “normal” home sales.  (Search Howard County home bargains here).

In fact, it just occured to me that terms like “foreclosure” or “short sale” or “for sale by owner” are adjectives, yes, but they modify the type of seller that is involved, not the type of home. A non-foreclosure home in Howard County may well be a “better deal” than a foreclosure home. Then again, sometimes foreclosure homes are the better deals in Howard County.

So… without regard to the type of seller involved, I am again “in the hunt” for the “top bargains” currently for sale in Howard County.  Sometimes these will be homes that we, as Realtors®, are listing for our seller clients, but just as often they won’t be “our” listings but rather simply homes we’ve found on the Realtor® MRIS system.  (Totally Free MRIS Home Search Here).

Today’s “top bargain” is a single family home in Columbia for just $227,500 – which is $89,000 below its tax assessment value.  This split level home has three bedrooms, one full and one half bath.  This would appear to us to be one of the “better buys” in Howard County real estate at this time.

3br Columbia single family just $227,500!

Home prices today in Howard County are absolutely stunning in terms of the “reality gap.”  Roughly 40% of Howard County homes for sale are priced at least 15-25% above where they belong.  At the other extreme, about 2-3% of Howard County homes for sale are significantly under priced, some by as much as $50,000 to $200,000 under priced. 

Often as I scan the Realtor® MRIS system I come across some amazing bargain homes for sale in Howard County. Yeah, they can be ‘beat up’ a bit in terms of cosmetics – but wouldn’t you be willing to paint and carpet a $300,000 home for, say, an $85,000 discount?!

So, I’ve decided to launch a “Top 10 Howard County Home Bargains” section to my blog.  Roughly once a week I will scan the MRIS system for the most amazing, under-priced bargains I can find.  Some will be homes in top condition, where the seller just wants to “get out fast.” More often they will be Howard County foreclosures, or bank-owned, or short sales, which typically need “some work.” 

But, hey, if you can paint some bedrooms and get new carpet installed… and save $85,000 off the price in the process… why the heck not?!

One bargain I recently found (pic  below) is a 3 bedroom, 2 full bath townhome in Columbia!  This home sold in June 2006 for $285,00. At today’s values I’d expect to see a discounted price tag around $235,000, so you can imagine my shock when I saw an asking price of just $159,900!  Prices may be down about 19% from their peak, but this is a 44% discount.

I’ll post other homes soon, but if you can’t wait just visit JohnAndAngela.com and request by email our list of “Top 10 Howard County Home Bargains.”

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Metropolitan Regional Information Services (“MRIS”) just released home sale statistics for Howard County in December 2008. What did we learn?

First and foremost, the “death knell” to home sales we saw in October and November was, indeed, short lived. The stock market crash in late September and October, and a nightly new barrage of terms like “economic meltdown” hammered car sales, Starbucks® sales and – yes, Virginia – home sales.

For most of 2008 we saw a monthly sales rate of 1-out-of-9: of 9 homes for sale each month, one sold and 8 didn’t. It would vary a bit (low of 7.2, high of 10.9), but in November the sales rate sank to 1-out-of-14.2!

In December, the rate of sales returned to a “normal” range (for 2008). Of the 1,622 homes for sale in the county 171 actually sold. While not a record setting pace, it yields a rate of 1-out-of-9.5 – pretty darned close to the yearly average. [For complete details of December's sales and/or a pdf file of prior months' Howard County home sales click here].

Where to next?

I am still awaiting the year-end results for 2008, which MRIS has yet to release (as of 1/26/2009). Figures will likely show that prices county-wide fell by about 9.4% and that, on average, each month only one home sold for every 9.2 “for sale” that month. I’ll publish those as soon as MRIS releases them, or click here to have these stats automatically emailed to you when they are released.

The coming year may be a transition year for local real estate. On the negative side, many of the factors that have driven prices down will still be in play this year. But on the positive side, the Housing Affordability Index is now close to an all-time high.(See National Housing Affordability Index and/or Maryland Housing Affordability Index).

This is due in part to recently falling prices and also to historically low interest rates (some as low as

4.875% fixed). (Check mortgage rates on WellsFargo.com here).

My predictions aren’t always accurate – though they were for November and December. I think this coming year may see prices decline a bit more for the first half, with a “bottom” in the second half and/or a possible slight rise in prices late in the year. For more info on Howard County homes for sale, including a list of the top 10 best priced homes currently, go to JohnAndAngela.com.

Where are home prices headed in 2009 for Howard County Maryland?  Will Columbia Maryland home prices fall even more?  Will Ellicott City town home prices finally begin a recovery?

This past week I’ve reviewed close to 40 different articles online making “predictions” on where the real estate market is heading for 2009.  I’ll summarize what they say, but first a quick review of the past.

During the home price run up of 2001 – 2006 there were precious few voices of sanity.  As with the tech stock boom of the 1990’s, most “experts” were declaring a “new era” in home values and that “old rules” no longer applied.  Nearly everyone predicted a continual rise in home prices as far as the eye could see.  In other words, from ’01 thru ’06 nearly every prediction was for a continuation of the recent past. 

Fast forward to January 2009.

Today you see the same thing in reverse.  Whether you read BuilderOnline.com or HousingPredictor.com, CNNMoney.com or MSNBC-Real-Estate, they all are making basically the same prediction – that the coming year will be a continuation of the recent past.  Last time “everyone” predicted a continued rise in home prices; this time “everyone” is predicting a continued decline in home prices. 

My point: if “everyone” was wrong before (that home prices will keep rising), they just may be wrong again (that home prices will keep falling). 

I can make two predictions about Howard County home prices that are almost certain. First, no one can accurately predict the exact date of a market bottom in advance.  Second, 90% of buyers and investors who are waiting for a market bottom will miss the opportunity.  [Request your free monthly update on Howard County home price trends by email here].

Again, only a fool would predict a market bottom in advance, but here are some national and local factors that will influence home prices in the near future:

• Housing is one of the 3 “basic” human needs (food, clothing, shelter) – there will always be demand.
• Huge federal spending is likely to drive inflation up – which tends to drive stocks down in value but housing up in value.
• The feds have focused like a laser on the economy and specifically housing.  Mortgage rates have fallen a full one percent over the past 90 days.
• The new administration is likely to do even more to protect real estate values.
• Locally, Howard County Maryland is sandwiched between two major metro areas and our pet industry is the federal government and ancillary private industries.  Whether “liberal” or “conservative”, you must agree that the odds of the federal government payroll shrinking is almost nonexistent.

My prediction for Howard County home prices in 2009?  I don’t have one – other than to say that, if “everyone” is saying home prices will continue their fall through out 2009, that alone may be a sign that prices are about to recover.  Click here to get a free list of the top ten best priced homes in your price range.

A quick search of the the Metropolitan Regional Information Systems (“MRIS”) Realtor database of homes on December 15 2008 reveals that 37% of homes currently listed are openly declared to “distressed properties”, either in foreclosure or REO or short sales.  (Click Here to get a copy of this report and/or a list of foreclosure properties in your exact price range).

Finding Foreclosures in Howard County

If you are a Howard County home buyer, where do you go to find foreclosures, REO’s or other “distressed properties”?

Lots of websites claim to have “the best” source of foreclosure listings online. In fact, some even charge a fee just for access. (See Foreclosurepoint.com’s $79/month search fee).  As a consumer, what is the “real deal”?  Should you pay such a “foreclosure search fee”?  Where can you really find the single best source for foreclosure listings online?

Truth is – the single best location to find foreclosure and distressed home sales in Howard County is the MRIS Realtor® database of homes, and there is no reason why you should pay a cent to search these homes online.

When a home is in the process of being foreclosed upon, it is generally not offered “for sale” period, because buyer and lender both would have to agree to the sale, and rarely is this the case.

When a home is actually auctioned for sale at the Howard County courthouse steps you can purchase it at auction, but this process involves huge risk and is inappropriate for most home buyers.  The only reliable source of all such foreclosure auctions is the print edition of the Howard County Times, the paper of legal record.

But, once the lender has completed a foreclosure (REO homes) and/or when a lender is agreeable to a “short sale”, fully 98% of these homes can be found by you simply by searching any consumer portal to the MRIS Realtor® database of homes.  That is because lenders, wanting to get rid of these homes as quickly as possible, insist they be marketed through the MRIS.

Naturally we’d suggest you use the JohnAndAngela.com site to search for foreclosure and distressed homes in Howard County. Why? First, we use full IDX (Internet Data Exchange) data sharing.  You’ll not only see “real time” info the same as Realtors®, you also get the most complete set of info available to consumers, including street addresses for every home!

But whether you search the MRIS through our site or another Realtor®’s site please don’t waste your money paying to search foreclosures online – because you won’t get anything that you can’t already get for free from sites like JohnAndAngela.com.

Metropolitan Regional Information Services (“MRIS”) just released home sale statistics for Howard County in October 2008, and home sales took their biggest hit of 2008.

Of 1,759 homes for sale last month only 124 sold – or 1 out of 14.2 – meaning we had a 14.2 month “inventory” level (it would take 14.2 months to sell all current homes on the market at last month’s sales level assuming no new homes came on the market).

That is a significant fall from October’s figure of 9.1 months.  For the homes that did sell last month the average time-on-market was 120.  The average sales price was 9.9% below the seller’s asking price.  [For complete details of November's sales and/or a pdf file of prior months' Howard County home sales click here].

What happened?

Although real estate trends tend to be complex with a variety of factors influencing the market, I think last month’s fall is pretty easy to understand.  The evening news, with a nightly drone of “economic meltdown” and “Great Depression II”, scared the living cr*p out of people! (MSNBC.com even has a new speciality section “The Economy In Turmoil”).

In October and November consumer spending on everything fell, and the bigger the price tag (big screen TV’s, cars) the harder sales fell. So, why wouldn’t home sales – the largest investment most people ever make – fall too?  So, while I don’t believe Howard County home sales will bounce back immediately to ’05 levels, neither do I believe last month is a true measure of the market.  Rather, I believe it was an over-reaction to the media’s over-reaction to some legitimate, but limited, economic bad news.

Where to from here?

Because of the strong employment corridor between Baltimore and DC, home sales in Howard County Maryland are not influenced much by seasons of the year. Rather, our home sales are influenced mostly by “economic mood”. 

And, there is a decent chance for an up-tic in economic mood. Partly it will be in public perception – the public is already getting “media fatigue” with the economy, and the media will soon shift it’s attention to Obama’s new administration and his first 100 days in office.

Also, there are substantive changes that will improve economic mood, at least in housing.  Interest rates had been climbing for most of 2008, but over the past 60 days rates have fallen a full percent. You can get a 30 year fixed rate loan for just 5.25%, and there is new the feds may push for even lower rates.  (Check mortgage rates on WellsFargo.com here).

True, go-go days of loose credit are gone forever – today people actually have to qualify in order to get a mortgage!  But, when rates fall the cost of buying falls and, with it, (usually) comes increased demand.

The stock market seems to be stabilizing, the public is tiring of the media’s negative drone on the economy, and the fundamentals for buying real estate are improving.

I’m not predicting a return to 2005’s peak performance – but I am saying November’s huge fall in Howard County home sales is not an indicator of things to come.  The market may well level off and find “balance” in ’09 for the first time in three years. 

For more info on Howard County homes for sale, including a list of the top 10 best priced homes currently, go to JohnAndAngela.com.