All Forum Posts by: Ruth Lyons

This housing inventory shortage is unprecedented in the real estate housing market. An agent in Maryland, I’m working with several buyers who are very frustrated trying to find a home. As seems to be the case across the country, homes that hit the market sell in a few days with multiple offers pushing the price past asking.

There seem to be a lot of contributing factor, many pandemic related:

• - Employee uncertainty of what “work from home” will look like in 6 months are reluctant to consider selling. At the same time, more buyers are coming to the market looking for homes with amenities more conducive to working from home like less open space, a home office, etc.
• - Sellers who want to move see very limited choices on the market and decide not to sell (where will they move to?).
• - Baby-boomers and the elderly hold a lot of the would-be homes for sale and many are reluctant to move or fearful of having showings during the pandemic. And the elderly are increasingly unlikely to make the move into assisted living facilities and nursing homes as long as pandemic restrictions are in force.
• - Mortgage forbearance government mandates have restricted the flow of homes to market. Foreclosures that would have been available never made it to market.
• - The cost of construction materials has been rapidly and steadily increasing since the pandemic hit constricting new homes being built and put on the market. Without new homes to move into, many would be sellers can’t find what they want on the market.

Some factors aren’t directly related to the pandemic:

• - Historically low interest rates have driven up demand --- with buyers flooding the market -- while squelching supply as many would be sellers simply refinanced and decided to stay put.
• - Available inventory of homes was already trending down before the pandemic hit. Pandemic factors contributed to the downward slide.
• - The construction industry has a shortage of workers, having never fully recovered from the 2008 housing crash which pushed construction workers into other jobs. At the same time, stricter immigration policies have led to fewer available workers who typically fill these jobs.

Jamie, I'm so sorry this happened to you. While you'll likely get a lot of good opinions and feedback on this forum, I suggest you contact a local real estate lawyer as soon as possible. You need to thoroughly understand your legal rights and obligations. 

Thanks for you and your wife's service, Kevin.

The comments provided offer a lot of food for thought. I'll add that it depends on whether your home will make a good cash-flowing rental which is dictated by the location, features and local rental market. You don't indicate where in Maryland you live, but in the Baltimore, Montgomery and Howard counties which is what I'm most familiar with as a realtor and investor, there's a shortage of affordable housing. 

Ruth Lyons, Sachs Realty, Columbia

Welcome to BiggerPockets, Dan!

Hi James, What features are you looking for in a home for your family? It costs you nothing as a buyer to work with an agent to help you find a home. If I can be of help, please reach out. 

Hi Loren, 

On foreclosures, short sales, a property that's been bought and sold several times in the last 7-10 years and in most situations, yes, title insurance is a must. Even though it's expensive, it might just save my butt. Here's my reasoning for reconsidering it on this flip deal:

-I am essentially buying it direct from the seller who's parents owned it for 25 years plus. There's no mortgage to pay off, HELOC or anything. They paid it off and own it outright.

- I'm only going to hold it for a few months and the chance of someone contesting the title during that time after my trusted title attorney does his research and delivers me clear title is pretty low. It's my understanding that I'm only buying insurance to cover those months. The new buyer's lender will insist they get a policy as soon as they close so essentially the property goes without title insurance for 2-3 months.

- The exclusions in the policy are so broad that I don't think I'm actually getting any coverage of value. In all the deals I've done, I've sort of come to the conclusion that in some cases, title insurance is just a money grab for the title companies, confirmed by the fact that when I told the wholesaler's selected title company that I may go without it, they told me they don't offer that option. It's money out of their pocket.

- The title company has E&O insurance that kicks in if there is a title issue and I didn't purchase the insurance.

That's how I'm leaning anyway...any title people want to weigh in?

Ruth

Thank you for the replies. I do typically pass on my title insurance policy to the new owner and it saves them money instead of getting a new policy. And I appreciate the importance of insurance. I was looking at a policy though and there are so many exclusions That it made me wonder what I’m really paying for? Is there any true protection anyway? I’m just posing the question because when you’re doing a lot of flips, this expense increases The cost of doing business substantially.And then I heard that 70% of the premiums go to the title company’s bottom line so they are incentivized to sell title insurance to everybody whether you really need it or not.I can feel the backlash as many of you read this, but it’s ok to question the way things “have always been done”. My broker says he never buys it on flips. Additional thoughts?

Thank you. 

Looking for input from the bigger pockets family. I am closing on a flip next Friday. It 's a wholesale deal/assignment contract. The home has been owned by the same couple for over 25 years. A title policy will cost me $1,325 and I'll only going to own the home for 8-9 weeks since it's a quick flip. Would you purchase it or take a chance?

Glen Burnie is a good stable area. Good tenant pool and reasonable acquisition numbers for long term buy and hold