Archive for the 'Real Estate News' Category
Buying Your Next Home With the End Game In Mind
May 28th, 2008 categories: Market Trends, Real Estate News, Relocating, Spouse Stuff
Purchasers, any purchases for that matter, are often done with one thing in mind. Specifically, possession of the object being bought. In simple terms, we found something we like, something we want to possess, and “having it” is a MUST. But, what about the cost, or the long term value of what is probably our most expensive asset, our home? Is it important to consider what its value might be, three, five, or ten years down the road? Similar to Wall Street’s most successful investors, is buying for the long term, or at least taking a value based approach, a recipe for success when it comes time to sell?
In one of the 1990’s best selling books on leadership, The Seven Habits of Highly Effective People, Steven Covey outlines key principals of personal development that lead to success in our personal and professional lives. One of his Seven Habits, the second, emphasizes the importance of “beginning with the end in mind” when making choices in life. Simply put, this means working backward from where you want to end up and making choices that will get you there. So, as a home buyer, what does that mean? How can you benefit from Covey’s advice?
For many home buyers, especially those in Northern Virginia, relocation is a way of life. Many are Department of Defense (DoD) employees, or employed with contractors doing work with the federal government. Moving and selling homes are something that oftentimes comes much too soon. But, even in a buyer’s market, forethought and considering an exit strategy or end game when making the purchase, can make the goodbye a few years later much easier to handle financially, and more importantly, emotionally.
One of the most important questions to consider when purchasing a home is, “What would prevent buyers from wanting to live in this home?” While that consideration may seem to be apparent, believe it or not, it is often more of afterthought. Instead, we concentrate on the positives, and minimize the drawbacks of the property. But that’s purely part of human nature, don’t you think? Clearly, the attractive features are important and shouldn’t be minimized. But, it’s wise to consider the drawbacks, especially those that might be deal breakers.
What sort of drawbacks are we talking about? What might prevent prospective buyers from choosing other homes instead of yours?
- Location - there’s lots to consider here. The obvious is proximity from schools, shopping, and other area attractions. Is the property hard to get to? How about traffic patterns? Is it located on a street where there’s a high traffic volume? Does the traffic make it difficult to get in and out of the driveway?
- What about the particular lot. Is it level? And, if not, does it matter. How steep is the driveway? As one blogger mentioned on their site about the a driveway concern, “Basically the only thing that is keeping us from signing the purchase and sale (which we have to do some time today) is our ambivalence about the driveway - the one thing we really can’t fix.” Where does the water concentrate or run off to when it rains? Does it drain away from the house or towards the house causing excessive wetness next to the house? These are questions that need to be considered before purchasing any property.
- What about the basement. Is it a walk-up, or preferably, a walk-out? You can bet that most buyers prefer an outside entrance/exit to the basement. With walk-outs, the additional outside light these provide are another attraction.
- Room sizes. While we don’t expect the normal home to provide us the extravagance of a luxury home, the homebuilding trend has been one of a bit more room in both the kitchen and the bathrooms, especially the Master bathroom . Remember, you can always upgrade what’s there, but it’s much more difficult to make rooms larger once the home is already built. That goes for the bedrooms as well.
- Subdivision amenities/fees. While all homes aren’t necessarily in a subdivision, or part of a Home Owners Association (HOA), when they are, they can be an important attraction, or, at times the reason for hesitation by the buyer. Some of the attractive features include swimming pool, bike/walking trails, sidewalks, and a community clubhouse, among others. For some, this package of community features is enough to tip the balance when two homes are competing for a buyer. On the other hand, HOA fees and restrictions can be the deciding factor between two competing properties. If fees are too high, and restictions too onerous, buyers can turn to many other appealing choices. Most of us just don’t need the expense and headaches.
There are many important issues home buyers consider in their search for a place to call home. While each of us tends to focus on the attractive home features, we need to consider the flip side of the equation as well. What are the drawbacks? Home buyers, at some point, become home sellers. The last thing you want to thinking when it comes time to sell is, “shoulda, woulda, coulda.” As a buyer, use some forsight and ask the critical, discriminating questions before you buy. While a home’s ”bells and whistles” can be awfully attractive, make sure you notice the blemishes as well. It’ll sure help when it gets to the end game and its time to pack up for another assignment.
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Shrinking Revenue and Bigger Roads
May 22nd, 2008 categories: Real Estate News, Relocating
One of the many tasks our government (elected and otherwise) employees are responsible for is maintaining the roads. As I’ve routinely warned incoming clients, when it comes to day to day living in Northern Virginia, the “long pole in the tent” is transportation. With the area’s increasing population, and more and more cars on the road, traffic congestion seems to get worse every day. For commuters, getting to and from work can be a daily exercise in patience, patience, and more….yes, patience. In its attempt to bring in greater revenues to fund road expansion and improvement, agencies and politicians have had their sights set on increasing the homeowner’s grantor’s tax, which owners have to pay when selling their home in Virginia. 
In order to fund transporation improvements, not only are we going to see increases in our automobile related costs (motor vehicle rental tax, sales tax on auto repairs, vehicle safety inspections, etc.), but also place part of that revenue burden on the home seller. While we understand the need to improve/expand the roads (do we ever!), asking home owners to help foot that bill is questionable. But, as one of the Arlington County Board member said, “No one ever wants new taxes, but more people are recognizing that location is only valuable if you can get there.” The public has resisted efforts to increase the grantor’s tax. Voters rejected an increase in sales tax to pay for transportation in a 2002 referendum. Similary, following last year’s Northern Virginia Trasnportation Authority (NVTA) tax increase to pay for transportation improvements, the constitutionality of the measure was successfully challenged and overturned. Specifically, the Virginia Supreme Court ruled the General Assembly “did not have a constitutional basis to delegate taxation authority to NVTA.”
But, these efforts to squeeze the homeowner seems to know no end. In his call for a special June 23rd session of the Commonwealth’s General Assembly, to specifically address transportation challenges, one of the governor’s revenue proposals is an increase in the grantor’s tax by 25 cents. Opposed to this proposal is the Virginia Association of Realtors (VAR), specifically disagreeing with the statewide tax increase, which VAR fears unfairly taxes homeowners who won’t benefit from revenue generated. And, somehow, even if the increase in the grantor’s tax doesn’t survive this session, I’m sure we’ll be seeing it again real soon.
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What’s Does “MilitarybyOwner” Have To Do With Military Homes?
May 15th, 2008 categories: Military Installations, Real Estate News, Relocating
Earlier this year, the National Association of Realtors (NAR), adopted a new Standard Operating Procedure (SOP), 12-12. It stipulates that Realtors shall not:
Use URLs or domain names that present less than a true picture, or register URLs or domain names which, if used, would present less than a true picture.
In a recent case involving the use of a Realtor’s website name, or URL, NAR already exercised its enforcement of the new restrictions. In this partciular case, a Realtor was using the URL northwoodsandlakesmls.com for his website. While the website did contain information about the area, the use of “mls” in the URL was deemed to be in violation of the intent of the new SOP. Why? The letters “MLS”, in real estate jargon, are understood to stand for Multiple Listing Service. The Multiple Listing Service, or MLS, is the information sharing and cooperative marketing network or platform used by realtors for the buying and selling of homes. The northwoodsandlakesmls.com was a Realtor’s website that did feature homes for sale, but not those of the entire MLS. In other words, it was not in any way, operated by or with a Multiple Listing Service (MLS). Obviously, this Realtor was attempting to take advantage of the of the letters “MLS”. An acronym, or initials that the realtor world, and those familiar with its use, recognized as relating to home sales. In his defense, the Realtor explained, “If I used MLS in the name of my firm, I could see how that might be perceived as something less than a true picture,” he argued, “but by simply using MLS in my URL I am telling consumers that they can get MLS-provided information about properties in the north woods from me. What could be truer than that?” Unfortunately, the Board, and NAR didn’t see it that way. So, what is in a name, or URL, and what does “presenting less than a true picture mean”?
For may military personnel, one of the first places they go to on the web to look for homes is militarybyowner.com, or MBO.
According to the owner and author, its Mission is:
“MilitaryByOwner.com will provide a comprehensive low cost means for military members and their families to advertise on the world wide web. The service will be provided throughout the entire year and will encompass all locations where military members may be stationed to include overseas assignments. MilitaryByOwner.com will aggressively advertise in base newspapers and other military periodicals as well as leverage web based search engine postings in order to attract military personnel and the general public to this site to ensure success”.
True to their word, MilitaryByOwner has done a respectable job of advertising in publications targeting military families, and has taken advantage of similar advertising online. As a matter of fact, it is one of the first places military members turn when it is time to sell or buy a home. During its first few years of existence, MBO’s popularity mimicked its counterpart, “For Sale By Owner”, which, in a hot market was an easy way for home sellers or buyers, to go it on their own, and try to save a few dollars. Additionally, the military community is one built on trust, among other things, and that, too was an attraction of the site for military members, and an intent of the marketing effort. Seemingly, buyers and sellers were dealing with other military members. It was almost like family.
But, as far as their efforts to ”encompass all locations where military members may be stationed to include overseas assignments”. Is that really true? And what about that name “MilitaryByOwner”? As we look a little deeper into what MBO has to offer, we see that many of their listings aren’t military at all. After a careful examination, one finds many of the listings are Realtor listings, regardless of the client’s profession. As far as the listings ecompassing locations where military members may be stationed, we’ll, let’s just say that that depends on one’s perspective. Don’t all online Homes for Sale sites do the same? Simply put, with MBO, one listing criteria they include is the distance the property is from a military base/installation. For home listings, the proximity to military base choices are:
<10miles
<20 miles
<30 miles
<40 miles
<50 miles
>50 miles
As you can see, just about anywhere in the U.S is more than 50 miles from a selected military installation, or anywhere else for that matter. Unless, of course, it is less than 50 miles. In other words, are the homes advertised necessarily close to a military base? No. Some are, and some aren’t, just like other sites. Secondly, does MilitarybyOwner mean owned by military? Of course not. And, perhaps it was never meant to be.
It needs to be pointed out that MilitaryByOwner.com, unlike northwoodsandlakesmls.com, is not bound by the restrictions of the National Association of Realtors (NAR). The latter is owned by a Realtor, and in NAR’s estimation, his website was a bit misleading. MilitarybyOwner.com may not mean exactly what it says either, but its owner is not a Realtor. However, the owner’s spouse is. Does that count?
Don’t get me wrong, MilitarybyOwner is another resource for military home buyers and sellers. Does it provide something more than Zillow.com, Trulia.com, the local MLS, or similar sites? While each of these provide various helpful tools for those active in the housing market, a look at some of their additional features may provide military members with a more comprehensive marketing package for sellers, and much more capability for buyers. With state of the art mapping tools, finding available homes near military bases has become much easier for those being reassigned.
Buying and selling homes for Department of Defense (DoD) personnel, whether civilian or military, can be challenging. Due to the brief duty assignments, most sellers are simply happy to “break even” with the transaction. Buyers, on the other hand, are looking to get the most out of their transaction, realizing they’ll probably be turning around and selling two or three years down the road. In today’s tough home market, making the most of the tools the internet has to offer is vital in maximizing the value of your transaction. Especially for military members, take the time to ensure the platform or service you use is one you get the most out of. And, sometimes, believe it or not, less ISN’T more.
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Finally - The Housing Crisis is Over!
May 6th, 2008 categories: Finance, Market Trends, Real Estate News
Yes, folks, that’s right. According to today’s Wall Street Journal (WSJ) the housing crisis that’s been upon us since 2005, is at an end. Kind of, anyway. The article’s author, Cyril Moulle-Berteaux, is a managing partner of Traxis Partners LP, a hedge fund or investment advisory firm based in New York city. He cites a number of indications that the worst of the housing “crunch” is behind us, and that current trends indicate we’ve bottomed out, or, as he puts it, “is bottoming out.”
Moulle-Berteaux mentions the market indicators include:
- Homes sales peaked in 2005. New home sales are down 63% from peak levels of 1.4 million.
- Housing starts have fallen more than 50%, and adjusted for population growth, are back to 1982 levels
- Many that were priced out of the market during the downturn can now afford to get back in. Three primary factors have contributed to this:
- Home values have fallen
- Mortgage rates have decreased
- Personal income has increased
Home construction deline is another indicator cited by the author. New home inventories peaked in July of 2006 at 598,000 homes. That figure had declined to 482,000 by the end of March. This decline is due to a drop-off in home completions which have resulted in an increase in the rate of undershooting new home sales. This “under supply” will reduce the inventory. He expects a seven month inventory supply by the end of this calendar year. Once we reach the five month supply mark, which Moulle-Berteaux predicts will occur in ‘09, home prices should hit bottom.
And, while the WSJ’s news is welcome, these views aren’t shared by all, as evidenced here.
Forecasting the long term direction of any market is risky at best. I don’t know about you, but, at this point, I’ll take Mr. Moulle-Berteaux at his word.
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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.
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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.
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