Arlington Real Estate News

Interests: buying or selling real estate, Northern Virginia and/or DC
Appearance: looks nice (gosh, I hope that picture isn’t from 10 years ago)
Looking for: People who want to learn and/or find help through a real estate transaction
Preferred Method of Communication: fast track – email/text/call

This might be a match made in heaven!!!! When can we schedule our first date?

Ok, gut check. Before you jump into the car with a realtor you met online, you should take it slow. Wouldn’t want to give the wrong first impression…gosh, I digress.

I encourage people who contact me online to meet me for a cup of coffee or at my office to talk about their goals. I like to do a buyer counseling session to assess your needs/wants and educate you on the process, so that you’re always aware of the next steps in the process. If you’re thinking of selling, I like to meet in person at your property to have a look  at the condition, any staging tips I can pass along, or repairs. Only after I have seen the property can we talk about price.

But what if you’re not calling me for a first date? (I understand, we all make mistakes, but maybe you don’t like brunettes?)

Anyway…what should you expect from a first meeting with someone you met online? Here are some of my tips:

1. Do they actually sound like their writing? Do they appear to know what they wrote about…there’s probably something you saw that gave you a reason to call that particular real estate agent. If they don’t remember that post, they probably didn’t write it themselves.

2. Do they live in the area they blog about? This can be hard for people who write generically about a market, but if someone is blogging about Arlington County, you’re going to want to ask them if they actually LIVE in Arlington County.

3. Ask specific questions about real estate. There are plenty of resources online that will generate a slew of questions. Ask them! The agent is supposed to be the expert – can they answer questions in a way that you understand or feel comfortable? They should be able to communicate with you in a way that makes you less nervous and anxious.

Get a general sense for the person’s style. You can generally tell if you’ll get along in the first half hour to hour of a meeting. If there’s some chemistry, give it a shot.

The FHA is a tease. Yes, I said it. You’re a tease. You tempt buyers by flashing a mere 3.5% down payment and interest rates below 5% (at the time of this writing), but then you go and pull the rug out from under everyone!

The FHA has now decided to tighten lending on condo buildings (not one area specifically, but all condos in general). The guidelines apply to buildings that never went through the full approval process before. There’s a site both real estate agents and lenders can check to see if a building has been previously approved, but this too is a tease as it’s only available from 8am – 9pm M-F (did you know websites needed beauty sleep?). But it’s important if you’re looking at condos and only have 3.5% down to keep this new policy in mind. There are some buildings that we know have previously been approved for “spot approvals,” where the lender at the time got the unit approved, but never went through the motions of approving the entire building. Much easier than now!

So what you need to know:
-The process will take at least 2-3 weeks just to get an approval on the building. That means you still have to wait for an appraisal to be done after that point, and you’ll risk paying for a home inspection in the process.
-A 30 day close is highly unlikely.
-The paperwork collection and process can be quite pricey, several thousands. There are some lenders who will absorb this cost for you during the process.
-If the investor ratio is too high (the building must be at least 51% owner occupied), the project is toast!

Before you get nervous that this will kill your goal of buying a condo, call me. I’m half-way through the process of getting a building in Clarendon approved thanks to Dominic Turano and Laura Pede at Wells Fargo. Wells Fargo is able to turn these around in 5-6 business days from the time they get all of the paperwork they need – they’ve been fantastic!!! If all else fails, they can sometimes do a 5% down payment, so we can try to find a way to work around it!

If you’re interested in finding out if your building is FHA approved – call or email me! We’ll figure out a way to work around the problem without getting your hopes up.

So you wanna buy a foreclosure, huh? Let’s go through the process of how a home becomes a bank-owned property and then we’ll go over tactics.

First, if a homeowner decides to try and short sell a house it’s placed on the market, subject to 3rd party approval. If that home doesn’t sell as a short sale, the bank will auction the house on the courthouse steps at a Foreclosure Auction. The bank opens up the bid at whatever is owned on the loan (depending on who the foreclosing bank is, either 1st or 2nd lien holder, etc.) A trustee announces opening bids, and if no 3rd party person buys the property (say you or me also bidding at above the banks opening offer), the bank buys it for their opening/initial bid. It is now a bank-owned property (commonly mistaken as a foreclosure). It’s also referred to as “real estate owned” or REO property. It’s then assigned to a Realtor who handles bank-owned properties to place on the market at fair market value.

When the bank and the real estate agent representing that bank determine the market price, they’ve done extensive research into the market and where the pricing is. They then take that number and adjust it based on a few factors: if repairs need to be done and the bank doesn’t want to pay for them, they may get an estimate and slash the price accordingly. Another tactic would be a “fast sale” or a sale that’s 2-3 times faster than a normal property – they adjust the price accordingly, usually about 10-15% below market value for the property. So while the bank may be across the country from the actual house, they have many, many, MANY points of reference for the market and the value.

So now let’s talk tactics for making an offer:

1. The bank is not an emotional seller. They won’t be “offended” like other sellers if the offer is “too low.” However, with that in mind, making a realistic offer is more likely to get you a better deal. You’ll know when a property is priced well or even below market, and so will everyone else. Realize you won’t be the only one interested so you’re going to have to make your offer more attractive than others.

2. If you offer a low price, expect the bank to counter. (I had a client who offered $50k below list price, and the bank countered only $2k below list.) Keep in mind their negotiations are completely driven by their bottom line.  Their counter will be based on that, not by your offer.

3. Bank owned properties are sold “as-is.” You can write in a period for a home inspection (and I always recommend buyers get one.) I would recommend you do it with the right to void (give yourself an out, but still get the information you need.)

4. Banks have an addendum usually about 16-20 pages of total legal mumbo jumbo about how the bank makes no representations about the condition of the property, you assume risk, etc. etc. It’s their protection – just in case. It’s important to have someone else read this addendum (a Realtor, an attorney, etc.) who knows what to look for….for example, is their a “per diem” fee if the deal closes late? is there a stipulation the buyer pays both the recordation AND transfer tax? These are questions you may not know you need to ask, but to us, it’s stuff that jumps out as a negotiable item. Also, keep in mind some of the things those addendums describe are not legally enforceable in some of our states. They’re general documents sent to anywhere they have assets.

Have more questions about the process? I’m happy to answer any questions….703.283.6120 or Contact Me.

Search Current Bank Owned Properties for Sale in Arlington

I normally don’t do things like this, but these stats are too incredible to keep to myself:

Time on the Market for Homes For Sale in Arlington

Of the properties currently under contract:

15% sold in 4 days or less

20% sold in 7 days or less

45% sold in 30 days or less

59% sold in 60 days or less

Why is this too good not to share? Because for people who think the market is slow, or prices are too high, they need to see that things are SELLING. And selling fast! The 40% sitting for more than 60 days – 34% are short sales, 10% are foreclosures, and I would take a guess that the remainder were overpriced for the first 1-2 months they were on the market.

Falls Church continues to see high numbers of short sales and bank-owned properties, in fact there were 30 in December, of the total 106 properties that sold (28.3%). So it’s no wonder prices are still lower than 2008.

Detached Homes

Average Net Sale Price: $484,960 after 66 Days on the Market
Range: $215,000 – $1,810,000

Townhouse

Average Net Sale Price: $501,028 after 42 Days on the Market
Range: $115,000 – $875,000

Condos

1 Bedroom Average Net Sale Price: $168,561 after 46 Days on the Market

1 Bedroom with Den Average Net Sale Price: $180,112 after 91 Days on the Market

2 Bedroom Average Net Sale Price: $254,606 after 29 Days on the Market

The IRS has released the form (IRS Form-5405) that will be used when you file your 2009 tax return in order to claim the $8,000 tax credit. Due to the new instructions, you’ll have to do a paper return in order to claim the credit. In addition, you’ll have to attach a copy of your settlement statement (the HUD-1) as proof of your purchase (sounds like a sales receipt, doesn’t it?!) Your CPA should be able to do all of this for you if you use one! Just make sure you bring them a copy of your HUD-1.

To download the form, you can find it here.

For instructions and details (both in English and Spanish), visit the IRS website.

If you’re thinking of buying in 2010 in order to qualify, read my
step-by-step guide of what you’ll need to do in order to qualify!

So i’m sure everyone knows by now there’s an $8,000 check waiting to be claimed if you haven’t owned a home in the past 3 years…but how the heck do you go about getting it? Well, let me walk you through the process:

Step 1: You haven’t owned a house in the past 3 years? Move on to step 2.

Step 2: If you’re single, do you make $125,000 or less? If you’re married, do you make $225,000 or less? If yes, move on to step 3. (*Note: for those of you just on the cusp of these income restrictions, there are tax-credits that phase-out up to $20,000 above these limits, so you may not qualify for the whole $8k, but you may be able to get at least something from Uncle Sam.)

Step 3: Decide you want to buy a home!! Congratulations – this is a big decision, but a VERY exciting one! Move on to step 4.

Step 4: Find a Realtor(R)..oh look, you’re here, why not just knock this step out now by emailing me? Finding a good real estate agent will help all of the following steps become much easier…if you’re not in the D.C. area (D.C., Arlington, Alexandria, Fairfax) feel free to email me for some recommendations of great agents in your area. Once you’ve found someone you’re comfortable working with, move on to step 5.

Step 5: Talk to a lender to get pre-approved.  This step is critical – because you’re on a time deadline (we’ll get to this in a minute), you don’t want to waste your time looking at properties that are either out of your price range or won’t qualify for your type of financing? For example, if you’re going to be doing an FHA loan, some of the properties that require a lot of work, won’t qualify for this type of loan, and you’ll need to keep that in mind. Your Realtor(R) should be able to recommend a couple of lenders they trust – it’s one of the most critical steps in the process. On to step 6.

Step 6: Once you’ve established a price range you’re comfortable with, we’ll assess what kind of properties you’re looking for – a condo, a townhouse, a detached house – and the location you’re interested in. This is the fun part – you get to start looking at houses! To be eligible for the $8,000 tax credit, you’ll need to find the property you want to buy and have a ratified contract by April 30, 2010. A ratified contract is one that is signed, in writing, by ALL parties and is now legally binding. On to step 7.

Step 7: Due diligence. This is the period where you’ll conduct your inspections – home inspection, termite, appraisal, radon, etc. You’ll also be providing paperwork to your lender so they can complete your loan application and get your loan approved. Almost done….step 8.

Step 8: Close on or before June 30, 2010. That means having the keys in your hot little hand before this date. Congratulations!!

That’s the overview of the process. Doesn’t seem too bad does it? If you have questions about the credit, the process, or if you’re thinking about buying, feel free to call me 703.283.6120 or email me: Laura@TheLJRGroup.com

Photo Courtesy of SirMart

First off – Happy New Year! I don’t know about you, but i’m SO happy to see a new year AND a new decade! As such, i’m doing a 2010 Real Estate Market Prediction for the upcoming year…these are MY opinions of what will happen, they’re based on what i’ve seen, heard, experienced, and can foresee happening. So here goes!

1. Inventory Will Increase. We’ve had exceptionally low levels of inventory from August 2009 to now. I know December active listings were about 2/3 of the level in 2008. I think many people were scared out of the market last year with prices hitting bottom and the floods of foreclosures. Now that prices are starting to rebound (this will be prediction #2) I think we’ll see more properties on the market for sale.

2. Prices Will Continue to Increase. In hindsight, I think the market in Arlington hit bottom in the beginning of 2009 (Jan-Feb). We’re not quite back to where we were, some pockets are better than others, but overall we’re stabilizing. Right now the lack of inventory is driving prices back up – good news for sellers who have been waiting to put their houses on the market. *It is STILL a buyers market; prices are still far lower in some areas than they were at the peak.

3. Tax Credit Extension Will Drive a Busy Spring Market. Real estate has “seasons.” The market tends to get busy in the Spring (April-early June) and in the Fall (September – October). With the First-Time Home Buyer and “Move-Up” Buyer tax credits extended to April 30, 2010, I think it’ll help stimulate more movement in sales.

4. Interest Rates Will Continue To Rise. For many lucky buyers in 2009, they locked in at an interest rate below 5% – phenomenal! We’ve already seen interest rates begin to rise since December, and I think they will continue to do so throughout 2010. I suspect the Government will make efforts to keep the rates under 6% for the duration of the year, but I don’t think they’ll stay around 5% for very long. Many local economists expect to be around 7%+ by 2011.

5. Foreclosures in Arlington, VA to Decrease. From the numbers i’ve been running, about 20% of the sales each month were either short sales or foreclosures. I think there will be shadow inventory of more properties in distress in neighboring counties – Prince William, Loudoun, parts of Washington, D.C., some parts of Fairfax – but I think Arlington will see that 20% begin to decline.

These are my top 5 predictions for the year. As the year plays out, we’ll see how I did As always, i’m here for any questions!

As we get closer to the official welcome to 2010, this will be my last post for 2009, and I wanted to take this opportunity to say Happy Holidays to all of my wonderful readers, clients, friends, and family.

Time for the Arlington, VA 22201 (Courthouse, Clarendon, Lyon Park, Lyon Village) update for November 2009.

As a whole, the sales volume YTD is up 116%, number of units sold is up by 167%, and the days on the market are down 48%. I think much of this was attributed to the tax-credit and initial November 30th close date (especially in the lower price properties). Due to the high number of units sold, we’re at a VERY low level of inventory.

Detached Properties (Houses)

Average Net Sale Price: $840,469 after 64 days on the market
Range: $595,000 – $1,288,000

1 Bedroom Condo

Average Net Sales Price: $301,932 after 15 days on the market
Range: $203,000 – $363,750

1 Bedroom with Den Condo

Average Net Sales Price: $404,625 after 4 days on the market
Range: $335,000 – $500,500

2 Bedroom Condo

Average Net Sale Price: $523,268 after 35 days on the market
Range: $375,000 – $637,500

Townhouse

Average Net Sales Price: $668,575 after 18 days on the market
Range: $514,300 – $785,000