Archive for April, 2008
Today’s Housing Numbers, Then There’s the Good News
April 29th, 2008 categories: Market Trends, Real Estate News
In a survey released today by Standard & Poor’s, home prices have posted another record decline. The S&P Case Shiller Home Price Index, which tracks 20 of the nation’s largest housing markets, showed prices falling by 12.7% in the 12 months ending February. According to the Indices, 17 of those 20 markets posted their largest year-over-year declines ever. The good news for those of us from the Washington D.C. metropolitan area is that Las Vegas was the hardest hit with a drop of 22.8 percent. Ours, on the other had, was a decline of 13 percent. If historical home prices are something you’d like to look at, visit the S&P homeprice history which they’ve been tracking for more than 21 years. 
For anyone paying attention to the market, this price drop should not come as a complete surprise. With an increasing amount of foreclosed and short sale properties on the market, downward pressure on home prices are par for the course. According to RealtyTrac, the leading online marketplace for foreclosed properties, March figures show a 60% increase of foreclosure properties compared to last year. While this market information isn’t what sellers want to hear, the good news is, their focus shouldn’t change when marketing their home.
SELLERS
The keys to success at selling a home don’t change with the market. While there are a number of key components to properly market your home, three critical keys are:
- Understanding Your Market
- Remember – Prices and market conditions vary depending on time, location and the condition of your home.
- Have Your Home in SHOW Condition
- Especially in today’s buyer’s market, make sure your home shows like new, if possible. Hiring a staging professional may well be worth the expense. Remember the old saying, “you never get a second chance to make a first impression.” So, make the most of it!
- Price It Right
- While the first two keys are vital, pricing it right may be the most important decision you make. One of difficulties in today’s market, is an appreciation by sellers of current market conditions. That is why it is extremely important to depend upon the pro, your Realtor, for advice on the price. It is their domain – let them do their job, and listen. Any good agent will give you the support data used to support their recommendation. Trust them. Hopefully, their price justification will reinforce why you chose them in the first place to market your home.
For buyers, things don’t get much better….
BUYERS
As mentioned in an earlier blog entry, today’s market is about as good as it gets for the prospective home buyer. Inventories are at record levels, and interest rates are extremely low. Outside of a complete market collapse (in that case, we’ll have bigger worries than the diminishing value of our home), buyers and investors can almost pick and choose their next home.
If you do decide to make a trip to your local county Courthouse for the auctioning of homes, make sure your Realtor has clearly explained what’s involved. While there are great deals to be had at the Courthouse steps, make sure you show up with money in hand. Yes, a Cashier’s check will work. Again, if it’s your first auction, make sure and do your home work.
However, if you’re buying your next home the old fashioned way, give your Realtor a call. For the home buyer, refer to these 10 Critical Steps as you begin your journey. And, remember, in this market, the numbers are your friend.
| Discussion: 1 Comment »
The Home Warranty – Is It Really Worth It?
April 27th, 2008 categories: Repairs
While new home buyers have the convenience of a builder’s home warranty, for many home buyers, purchasing existing homes, the last thing running through their mind as they finalize paperwork at the settlement table are possible repairs to the home they’re about to purchase. But, as many of us have learned the hard way, we could have avoided some of that post purchase discomfort, and the large repair bill, by making sure we were covered with an effective Home Warranty plan before the fact. While home warranties aren’t insurance policies, and aren’t regulated in many states, many of the warranties offered are worthwhile and cover a home’s major operational systems.
Warranty policies normally cover the home’s electrical systems, plumbing, heating and A/C, and most appliances. But, the key to any warranty, as with many contracts, is in the fine print. After reading the policy over carefully, make sure you get any questions you may have answered, by the company, before initiating the policy. While there are many similarities between the policies from Home Warranty companies, there are differences as well. Other than the major systems covered, generally, these similarities include:
- You will pay a “service” (deductible) fee when you call for a repair. Normally these run anywhere between $50-$100. (You gotta love those fees!)
- Call the warranty company when something breaks, NOT your local repairman – that’s the warranty company’s job.
- Pre-existing conditions typically aren’t covered.
- Additional systems may be added to the coverage, for a fee. Some of these optional items may include a well pump, swimming pool or spa, septic system, and roof repair. These add-ons normally cost $75 – $175.
Local repair companies are contracted through the warranty companies. When something malfunctions, the homewoner makes the call to the warranty company, who, in turn, calls its’ local contractor to arrange for the service call. In turn, the local contractor will call you to arrange for the service call. The warranty provides you coverage, and coordinates the repair work with a trusted, reputable local company. For many homeowners, this is exactly what they are paying for. The convenience of not having to decide who to call, or simply not wanting to try and play phone tag with a repair company, makes the policy choice an easy one. But, are there any problems with home warranties? Certainly, problems may and do arise.
Possible Drawbacks
Many of these can be avoided, if, as mentioned before, you read the fine print.
First, know what is covered and what isn’t. The policy paperwork details what the policy covers.
Secondly, you may be dissatisfied with the local contractor that does the work. While its been suggested that you don’t get to choose the local contractor doing the repair work, if you aren’t satisfied with the repair, you can request the warranty company send out a different local contractor next time a repair is needed on a particular system.
Thirdly, the contract may require that aging systems be upgraded to current building code before any repairs are done. In addition to the pre-existing condition exclusion, repairs needed due to improper installation or poor maintenance may also be denied under the warranty.
Lastly, the contrarians may argue that warranties are a waste of money. Instead, you’d be better off establishing an emergency fund for necessary repairs. If that’s the case, make it a budget item, and plan for it. Because, for many of us, if it isn’t in the budget, it’s not going to happen!
For many home buyers, a home warranty provides peace of mind, knowing that if something breaks, you’re covered when it comes to repairs. While the devil’s in the details, in most cases, these warranties will take care of the major operational home systems, and appliances. And, for many, an ounce of prevention is, as they say, worth a pound of cure. And, peace of mind, is normally well worth the price of admission.
| Discussion: 1 Comment »
A Must Do in Military Relocation – Check in with the Base Housing Office
April 24th, 2008 categories: Military Installations, Relocating
Like any good military family, we try to take care of as much as we can, as soon as we can, right? Well, our intentions are good anyway. Well, no orders yet, but it it looks like you’re overdue for Northern Virginia and your first, or another tour, at Quantico.
While known by many outside of the military for being the home of the FBI Academy, Quantico is better known by those in uniform as the “Crossroads of the Marine Corps”. The Marine presence on Quantico began in 1917, with the establishment of its Marine Barracks. Since that time, Marine operations in and around this location “by the large stream” have grown tremendously. Quantico’s unique place goes further than its’ central role in the USMC’s mission. 
The town of Quantico is the only town in the country completely surrounded by a military base. Yes, there is a “town” of Quantico, actually within the confines of the military base called Quantico. The base’s rapid growth, to include the personnel to carry out its missions has made finding a home on post almost an impossible task, according to Ms. Kate Publicover, from Quantico’s Housing Referral Office. Incoming personnel can track Quantico’s housing availability either through a call to the Referral Office, or looking online at the Referral Office’s website, or through the Navy Housing website.
The current base housing availabilty is:
Wait times 17 APR 2008
BELOW IS AN ESTIMATED WAIT TIME FOR ASSIGNMENT TO BASE HOUSING
RANK BEDS APPROX WAIT TIME
E1-5 3 Within 9 Months
4 Immediate-60 Days
E6-8 3,4 1-4 Months
E-9 3,4 Within 6 Months
Company & Field Grade Currently Indefinite
While these wait times probably aren’t too surprising, they may be longer that expected. So, as you plan for that move to the Quantico area, give the Housing Office a call begin your planning for where you might want to live. 
They’ll provide you the low down on what is or isn’t available on base, but they also have local listings for rentals and homes for sale in the local area. And, lastly, they can give you some friendly advice on attractive areas you might consider living in, and maybe more importantly, places to avoid.
| Discussion: No Comments »
More Open Source Help for Home Buyers
April 22nd, 2008 categories: Real Estate News
From vacations, to soup to nuts, the world wide web has become, in many ways, the buyer’s pot of gold as it has refined itself and changed the way we buy and sell. And, for the home buyer, the information keeps getting better and better. But, that doesn’t necessarily mean that more is better. It simply means that there is more. The “better’ takes a bit of sorting. What information is value added, or meaningful, and what isn’t? 
While the online resources for home buyers could fill books (and do), there’s much to be gained by the potential home buyer by spending a few minutes searching the web as they consider where and what to buy. Not only is it one of the best ways to get a quick lesson in Home Buying 101, but many new and novel resources are available as well. One of those that just launced is FranklyMLS.com, which the author calls an “MLS wiki”. While a “wiki” is defined as a platform or online resource that allows users to edit or add content collectively, the real value is found in its’ callaborative effort. Like a team whose synergism in working together results in a sum that is greater than the individual parts, the beauty of the wiki is its’ value in sharing information.
What FranklyMLS is attempting to do, is to provide the consumer with more information than might be found on the Multiple Listing Service (MLS), or other sites like Realtor.com, Zillow, or others. FranklyMLS is a buyer’s resource that includes photos and comments about properties from agents other than the listing agent. Its’ intent is to provide buyers with property information not available from normal home sites and sources. This information might include how far a property is from the highway, or the train station. While there are limitations on what photos, other than the listing agent, can be taken, additional photos might be taken by a buyer’s agent showing how features otherwise unknown to a prospective buyer. This includes items like water damage in the bathroom, foundation cracks, or, on the postive side, the great view from the back porch or the oversized back deck.
This wiki MLS is meant to inform. It is simply another source, but a novel and a much needed one from a buyer’s perspective, on what a property has to offer. FranklyMLS.com presents a new way of assisting the home buyer. Like many other groundbreaking offerings, there’s sure to be some growing pains to be worked through. In the meantime, let’s take advantage of a tool we can all benefit from.
| Discussion: No Comments »
10 Critical Steps to Home Buying from Long Distance – Part II
April 20th, 2008 categories: Relocating
This is the “meat and potatoes” of buying a new home, and when you begin, the fun part! On a daily basis, as you head out to look, make sure you begin with a good game plan of what type of home you want to look at and where you prefer to live. While this makes sense, there are times when the anticipation of looking gets in the way of developing a good plan for the home search. It is important to limit the number of homes you’re looking at in a day. If you look at too many homes, they begin to run together, and you can’t remember one from another. It’s a good idea to use a checklist form to help you track the properties you have seen. It is also helpful to actually begin to narrow down the properties after each visit. For example, if house #3 was better than house #2, immediately eliminate house #2. Remember, communication with your agent is crucial. It’s important to let your agent know which houses you like and why, as well as which houses you don’t like and why. Sometimes it takes going out and looking one time before you and your agent really have a good grip on exactly what you’re looking for. Call your agent, and have him/her do the research on any advertised properties that look interesting to you. That’s what agents get paid for.
5. Select a home
Once you’ve narrowed your search down to one or two homes that you really like, your agent will do whatever research necessary to help you make your decision, but the decision will ultimately be yours. And surprisingly enough, it’s going to be a pretty easy decision to make. While buyers are welcome to call the local chambers of commerce for any statistics in which they might be interested, or the local zoning and planning offices for future road plans, etc., in todays market, and, even in a slower maket, the best homes are the first to be sold. So, once you’ve located a home(s), work closely with your Realtor to determine the timing for a possible offer. Additionally, once you’ve selected one home to focus on, your agents will do a comparative market analysis on that property. This involves determining “fair market value” by looking at what other buyers were willing to pay for properties similar to yours in the same neighborhood or area.
6. Making an offer & negotiation
When making an offer on a property, it is important to decide ahead of time how much you are willing to pay at what terms for the house. You already know what fair market value is. Now you have to decide what price you will offer; how much deposit you will offer; what personal property you wish to have convey (everything is negotiable); when you plan to close; and what inspections you plan to have conducted. When negotiating with any seller, it’s best to remember not to take anything personally. Also, try to put yourself in the seller’s shoes. Figure out what’s not negotiable to you, and be willing to give a little on the things that are negotiable. A good agent should be able to give you very good advice about how to structure your offer. Once your offer has been presented, the seller will either accept your offer outright, reject your offer outright, or counter your offer. The counter process can go back and forth many times. It’s important for all parties to keep their cool and focus on the goal. Remember to trust your agent’s judgment, they have been through this before. 
7. Get inspections & remove conditions
If, as part of your offer, you asked for time to be allowed to have inspections conducted on the property, you should have written what is called a conditional offer. Offers can be conditional upon financing, inspections, the receipt of acceptable condo estoppels certificates, the sale of property, and many other conditions. It is important that all deadlines be met and that all conditions are removed exactly the way the contract describes. Your agents are responsible for making sure this is done correctly. However, in a busy market, these conditions may also be used by the seller as reasons to deny your offer. So, keep this in mind as you consider the conditions you use.
8. Walk-through
Most sales agreements will give the buyer the right to one pre-closing inspection. This is your last chance to find any problems and have the seller correct them. Read the contract carefully, but most contracts read that all electrical systems, plumbing, appliances, heating, and air conditioning need to be in working order at the time of closing. These are the items you checking for at walk-through. You are also checking for any other items the seller previously agreed to fix or replace. If anything is found to be defective or missing, you have several options: The seller can remedy the problem prior to closing; the seller can credit you the amount of money it would take to hire someone to remedy the problem; or the seller can promise to correct the problem and place into escrow with the attorney or settlement agent the amount of money you will need to pay someone else if the seller does not perform as promised.On new-home purchases, the process is a little different. The builder will generally do a walk-through with you approximately one to two weeks prior to closing, resulting in a “punch-out list.” Hopefully, they will get everything on the punch-out list completed prior to settlement. If not, most new-home contracts allow the builder to complete whatever minor items have been noted in a “reasonable” period of time.
9. Closing on your home – settlement
This is the day you “sign your life away,” as most clients say. Not really. You will be signing all of the mortgage documentation, which can seem never-ending. The lawyer or settlement agent conducting the settlement should be able to explain every document to you in a satisfactory manner. Also, your agent should be able to clarify any questions you may have. Do not ever feel intimidated? If you don’t understand something, then don’t sign. Your lawyer/settlement agent will help you understand everything. If you like, you can request blank copies of the documents you will be signing in advance so that you can carefully review them. You will have to present whatever down payment and closing-cost funds you were expected to pay. This check must be certified; personal checks usually are not accepted.
10. Moving day
This is the last and probably the hardest step in the home-buying process. A little bit of planning and forethought, though, will make for a much smoother move. You will want to make arrangements with a moving company as soon as you can. Of course, for those in the DoD or military family, there’s always the hepful Transportation Management Office (TMO) to assist us in coordinating with the moving company and procedures. For those making arrangements with the moving compnay wthout the assistance of DoD, then your Realtor can be a good source for a recommendation. They may know who can best do the job. They will usually ask to come to your home to get an idea of how much they will be moving and the distance they will need to travel. Be sure to change your address with the post office, your banks, and any creditors at least 30 days in advance. To avoid late payments, it’s a good idea to actually call and verify receipt of the address change whenever possible. Call to order your utility hook-ups approximately 10 days prior to your move. Just make sure you do the planning and calling well in advance.
Finally, remember that whether it’s questions at the settlement table, what lender to choose, or how much to offer on a home, your Real Estate agent can provide you with the best advice available. They have the experience and knowledge to make home buying enjoyable, and relatively, pain free!
| Discussion: 2 Comments »
10 Critical Steps to Home Buying from Long Distance – Part 1
April 16th, 2008 categories: Relocating, Spouse Stuff
Do we like to do anything sight unseen? How about that first blind date – was it what you expected?
Many of today’s military and DoD personnel stationed overseas, unable to make that advanced house hunting trip back to the U.S. prior to their move, are faced with a situation not unlike the blind date. But, fortunately, with the new media and good old modern technology, the “unknowns” can be minimized, and almost eliminated when choosing their next home. I was reminded of this when answering an e-mail request last week from a client PCSing from Okinawa, Japan.
The secret to satisfaction in purchasing a home is no secret at all. Like just about anything else, it’s always best to follow a methodical or sensible plan. While much has been written about the best methods to purchase a home, like many checklists, there is no perfect method or number of steps, other than as many as it takes to achieve your objective. Having said that, we recommend a 10 step approach when home buying, whether trying it from abroad, or with your feet on the ground, and an ability to actually look at what you are purchasing.
- Selecting a Realtor
This first step is THE most important. Why? Because your Realtor is your eyes and ears, not to mention, the one directing your entire transaction. Their knowledge of the market, the neighborhoods, the agencies and personnel involved in the transaction, is something you’re betting on. It goes without saying that you need to find someone you’re comfortable with, because you’ll be sitting right next to them the entire way. More importantly, they will be acting on your behalf. Great integrity and judgement are two “must haves” for any successful Realtor. Once you’ve selected someone you feel comfortable with, make sure you’ve agreed for them to be your Buyer’s Agent. This Buyer Broker Agreement, signed by both of you, designates the agent as working strictly for the buyer. In many states, agents work for the seller, unless agreed in writing, to represent the buyer exclusively.
But, the advocacy of the agent is even more important for the buyer coming from abroad. Absent the ability to have feet on the ground, it is essential to have an advocate, and one who is area expert, when it comes to neighborhoods, schools, shopping, commuting options (for many, the long pole in the tent in Northen Virginia) - all those things that interest and concern buyers. Of course, with the luxury of the web, agents are able to provide clients with a continual e-mail feed of homes that match the buyer’s home criteria. This convenience is one that potential buyers should take full advantage of in order to familiarize themselves with more than just available homes, but also typical prices, neighborhoods, and other area specifics. While the next home buying step can be done first, buyers lose the advantage of their realtor’s input if they do. When it comes to the buyer’s choice of a lender, your agent ususally knows some of the best local lenders in the business.
2. Selecting a Lender (Getting that pre-approval letter)
This particular step has taken on new meaning since the recent, and on-going, mortagage/credit crisis. Who you use as a lender is important. Much of the blame for the mortagage/loan problems we’ve seen over the past few years is a direct result of poor lending practices. While many of us have used the same national lenders we’re familiar with like USAA, Navy Federal, Wells Fargo, Bank of America, and others, oftentimes, your best bet may be a local lender who knows the area market, who you can actually chat with face to face. Since agents are familair with many of the best professionals their region has to offer, they can also be a good source for recommendations. And, you’ll need to get than pre-approval letter from your lender. This shows you’re financially qualified to purchase the home, which, of course, is of primary concern to the seller. Securing this piece of paper is important.
3. Meeting With Your Agent for a Home Buyer’s Consultation
Although this normally takes place in the agent’s office, this is the meeting where expectations are discussed. This is when you and your agent prepare each other for what’s going to occur along the way. The following points, among others, should be covered and fully understood during the meeting:
- Exactly what the buyer’s needs are (#of bedrooms, baths, , etc.). Anything you might want in a home, to include the type or size of lot or yard should be identified. This includes what price range you’re comfortable with, and what your time line is. It generally takes about 30-45 days from purchase (this means a ratified contract) to closing or settlement.
- How often you are available to look and what you expect from your agent in terms of availability and communication. This includes what, and how often you wanted to be updated.
- Your agent should give you copies of all the paperwork you are expected to sign throughout the process and briefly explain what each form is for.
- Your agent should explain buyer brokerage vs. seller’s representattion, and you should sign a buyer broker agreement.
During Step 4, we’ll begin to look at homes…
| Discussion: 1 Comment »
