I got an email from a woman from HGTV Headquarters about their show, My First Sale, about homeowners who go through the sale process for the first time.
If you’re thinking of selling in Arlington or Washington, D.C. please call me! Let’s apply to be on the show together as we get your home ready to be on the market to be sold!
Email me at Laura@TheLJRGroup.com or call me 703.283.6120
So i’m not a huge fan of April Fool’s…so this is not a joke!
The FHA is increasing the upfront mortgage insurance premium from 1.75% to 2.25% of the loan amount for all loans that are not assigned a case number by Sunday night. A case number is assigned to a person AND a specific property, which means getting under contract THIS WEEKEND. The banks are closed tomorrow for Good Friday, and the revision actually takes place as of April 5th, so today is the last REAL day to save yourself some $ and get your loan application in!
Here’s an example:
Sales price of $450,000 with 3.5% down-payment (current FHA minimum)
Down Payment = $15,750
Loan Amount = $434,250
Upfront MIP today at 1.75% = $7,599.38
Upfront MIP after Sunday at 2.25% = $9,770.63
Total Increased Cost To You = $2,171.25
What’s next for the FHA?
Speculations say we’ll see increased down-payment requirements. Currently, 3.5% of the sales price is the minimum down payment for an FHA loan, however, we don’t expect this to stay this low for much longer. They also plan to reduce the maximum amount contributed by the seller from 6% to 3%, and currently, the buyer must have a minimum of 3.5% into the transaction (that would be paying $0 for closing costs).
They’ve also changed the FICO requirement to 580; anyone with a FICO score below that will have to make a minimum down-payment of 10% (not 3.5%).
I notice that there is often confusion when it comes to the process of buying a house. When do you do a home inspection? When do you get an appraisal done? Who orders them? All very common questions! Here’s a quick ‘n dirty version of the process:
Once you pick a property you want to write an offer on, we write the contract to include certain “contingencies.” Contingencies come with deadlines based on the date your offer is accepted by the seller (in the DC, Virginia, and Maryland, we call this the Date of Ratification). You don’t perform any of these inspections prior to contract acceptance (unless we’re in a very particular situation where you may be competing against a pile of other offers). Once all of these contingencies are met and released, you’ll proceed to settlement, where you’ll receive the keys and be official new homeowner!
Maybe this will make it easier:
Now keep in mind, this overview ONLY includes the steps you do with ME as an agent. On the side you’ll have to complete a loan application once you select your lender, comply with all of their requests for paperwork, credit check, underwriting, etc. Also during this process, once you select a title company or real estate attorney to represent you, I will send them a copy of the contract to get started on the title work to make sure there are no problems with the title report of the property. But as far as YOUR responsibilities as the buyer, the overview above is what you need to focus on!
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
With the end of November 2009, came the end of the first round of the first-time home buyer credit, which was set to expire on November 30, 2009. Look at the difference a year makes: in November 2008, there were 142 sales, in November 2009, we had 240. How’s that for a year? Check out the numbers:
Detached Properties (Houses)
North Arlington
Average Net Sales Price: $708,376 after 53 days
Range: $438,000 – $1,295,000
South Arlington
Average Net Sales Price: $555,216 after 75 days
Range: $260,000 – $950,000
Townhouses
North Arlington
Average Net Sales Price: $730,475 after 51 days
Range: $514,300 – $1,150,000
South Arlington
Average Net Sales Price: $375,361 after 32 days
Range: $143,100 – $622,990
1 Bedroom Condo
North Arlington
Average Net Sales Price: $294,487 after 20 days
Range: $140,500 – $380,000
South Arlington
Average Net Sales Price: $233,811 after 28 days
Range: $69,000 – $342,900
2 Bedroom Condo
North Arlington
Average Net Sales Price: $502,587 after 50 days
Range: $375,000 – $814,200
South Arlington
Average Net Sales Price: $391,044 after 32 days
Range: $205,155 – $525,000
Of the 240 sales in November, 17 were short sales and 20 were bank-owned properties…which makes 15% of the market a “distressed property.”
As a county, Arlington average prices are down less than 1% from this time last year.
I was at Whole Foods in Arlington on Monday…you can see some items have been picked over, left on the shelves waiting for the desperate and willing to come pick up the leftovers…I can say that this immediately rung as a metaphor for the Arlington, VA real estate market the past few months.
Just like these shelves will soon be restocked, so will our real estate market…
Search current properties for sale in Arlington VA
The stats for October in Falls Church, VA includes both the city of Falls Church and the part of Falls Church within Fairfax County.
Detached Houses
Average Net Sale Price: $492,878 after 59 DOM
Range: $210,000 – $1,321,650
Avg Sold Price was 96.33% of Original List Price
Townhouses
Average Net Sale Price: $382,943 after 88 DOM
Range: $120,000 – $555,000
Avg. Sold Price was 90.57% of Original List Price
1 Bedroom Condos
Average Net Sale Price: $184,527 after 36 DOM
Range: $85,500 – $260,000
Avg. Sold Price was 95.66% of Original List Price
2 Bedroom Condos
Average Net Sale Price: $314,677 after 44 DOM (median was 4)
Range: $160,000 – $600,400
Avg. Sold Price was 95.81% of Original List
Of the total 120 sales in Fall Church – 16 were short sales, and 13 were bank owned properties.
Falls Church has stayed pretty steady from month to month. Volume is still up, number of sales is almost double October 2008, and days on the market is down.
Search Falls Church Condos and Townhomes for Sale
Search Falls Church Homes For Sale
Search Falls Church Foreclosures (REOs and Bank Owned)
McLean VA is home to many businesses and personal residential pieces of real estate. The zip of 22101 is heavily populated with Businesses, so I’ve broken out the October statistics by zip code:
22101
Detached Houses
Average Net Sale Price: $1,496,948 after 176 DOM
Range: $513,500 – $3,500,000
Average % of List Price: 89.89%
Townhouses
Average Net Sale Price; $641,458 after 242 DOM (median was 34 days)
Range: $460,000 – $775,000
Average % of List Price: 95.77%
22102
Detached Houses
Average Net Sale Price: $2,004,667 after 426 DOM (median was 351 days)
Range: $1,025,000 – $3,668,000
Average % of List Price: 85.25%
1 Bedroom Condos
Average Net Sale Price: $213,500 after 47 DOM
Average % of List Price: 95.87%
2 Bedroom Condos
Average Net Sale Price: $321,590 after 14 DOM
Average % of List Price: 96.75%
Townhouse
Average Net Sale Price: $622,533 after 18 DOM
Range: $562,100 – $740,000
Average % of List Price: 98.41%
Interestingly enough, average sales price is up for October, compared to 2008 in 22101, but down in 22102. Volume and days on the market are up for both zip codes.
Of the 59 properties that sold in October, 2 were short sales, and 6 were bank-owned.
Search the current Homes For Sale in McLean VA
