Thursday, December 31, 2009

We've Moved Our Blog!

We've moved! Visit our blog at All of our old posts are there, and soon our quicklinks and other information will be there as well.

Monday, November 16, 2009

Why is the $6500 Repeat Buyer Credit Important?

By this time, most people are aware of the extension and expansion of the $8000 first time buyer tax credit, and many even know about the new "category" of "first time buyers" who are eligible for a $6500 credit. You can read more details here.

Income limits were raised (previously $75,000 AGI for a single up to $125,000), and the new deadline is April 30 (under contract). These changes obviously made a lot of buyers very mad; those who purchased in 2009 but didn't meet the income eligibility now look like suckers (but take least you had low prices, fantastic interest rates, and likely a lot more choice in inventory than today's buyers have.) And what about those souls that purchased back in 2008 when the "credit" was just a $7500 loan? (Again, take heart...low rates, low prices, and you really did have the pick of the litter on inventory. Just look at the inventory lines on this graph of Northern Virginia Homes for Sale and compare the 2008 line to today. What good is a big credit if everything available to buy is not worth buying?)

With inventory so tight, why do we need an extension and expansion, and on top of that a new category (the so called "move up" buyer, though in reality it could just as easily be a "move down" buyer, or even just someone who wants to convert their current residence into an investment property)?

Continue reading the post here.

Thursday, November 12, 2009

Buying and Selling Simultaneously

Read the first two posts in the series here (Home of Choice contingency) and here (Home Sale Contingency).

Our next tool is a two-for-one: Occupancy Agreements. There are Pre-Settlement Occupancy Agreements and Post-Settlement Occupancy Agreements (aka Rent-Backs).

Read the rest of the post here.

Friday, November 6, 2009

$8000 First Time Buyer Extension and New $6500 Tax Credit

It's officially passed the House and Senate, and is now awaiting the President's signature. Along with the extension of the $8000 First Time Buyer credit (now applies to any buyer under contract by April 30, 2010 and settling by June 30, 2010), there is now a new credit category: long-time residents of the same principal residence which has been given the shorthand name of "move up buyers"--though in reality it could just as easily apply to "move down buyers."

If a homeowner has owned and used the same residence as their principal residence for any five consecutive years in the last eight (as of the date of purchase of a subsequent residence), then they are treated as a "first time home buyer" eligible for a $6500 tax credit when they file their next return.

Click here to continue reading more about the $8000 and $6500 home buyer credits.

Sunday, November 1, 2009

Up and Coming in Petworth: Mayor Fenty Visits

I happened to stop by a client’s new house today–a fantastic renovation of a rowhome in Petworth–and whom should I see walking down the street but Mayor Fenty himself! He was checking out the neighborhood, shaking hands, etc.–no doubt checking up on all the recent development in the area! He was very interested in the recent sales in the neighborhood, which obviously has been undergoing a lot of changes lately, so we chatted for a few minutes.

Read the rest of the post here.

Simultaneously Buying & Selling a Home

Now that the first time buyer rush is nearing its end (unless it’s extended…stay tuned…), and there’s a lack of inventory for entry-level price points (below $450k-ish) in much of our area, this might be the ideal time for owners to start thinking about putting their homes on the market in our area. Yes, despite the holidays coming up…especially if the credit gets extended.

But many sellers worry:

  • What happens if I can’t sell my home and I’m already under contract on another?
  • What if I have a contract on my home but it falls through?
  • What if I can’t even find a home that I want to buy and someone has already bought mine?
  • How do I coordinate the closings so that I’m not homeless?
Click here to continue reading the post.

Saturday, September 26, 2009

Northern Virginia & Washington, DC, Real Estate Market Update - September 2009

This is the monthly market update I provide to my clients. To be added to the mailing list so that you receive these updates as soon as they are available, please sign up using the box on the right hand side of the blog page.

The market doesn't seem to have slowed down very much this Fall.

There are plenty of buyers playing beat-the-clock, but the big news continues to be the lack of inventory in the greater NoVA area. The lack of homes for sale, primarily spurred by lower prices that are driving sales, is compounded by increasing new construction sales. KB Home has announced it intends to resume building in the DC area after curtailing operations in late 2007, as described in this article. The article notes that Toll Brothers has also started snapping up properties, now that listings for sale have reached their lowest level since January 2006.

Rumors abound about a potential extension of the $8000 tax credit currently scheduled to expire November 30, but no official word yet. Stay tuned. Given our lack of inventory, if the credit gets extended then we better hope that entry-level owners decide to sell or we will have even more frustrated buyers in our area.

On the lending front, FHA may be heading for problems. The agency, which is responsible for many purchase money loans given the current environment, recently announced its cash reserves will drop below its Congressionally mandated level. This sparked a number of program changes, including special appraisal rules, similar to the HVCC that was instituted for conventional loans a few months ago--so buyers and sellers should be prepared for even more appraisal headaches to come!

In other news, here are some good articles I came across this month: 7 New Rules for the First Time Buyer and Credit Scores: What You Need to Know.

As always, please let me know if I can do anything to help you or your friends with your real estate needs.

Tuesday, September 1, 2009

First Time Home Buyer Class - Scheduled in Arlington

Are you one of the estimated 53% of buyers in 2009 who will be buying for the first time?

Then register for a free first time home buyer seminar at Arlington Central Library to be held Wednesday, September 16 at 7:15 pm. As with our other classes, there is absolutely no cost or obligation to attend this one hour educational session where we will recap the current market conditions, discuss the future outlook, and provide an overview of the home purchase process. We'll also discuss the impact of the banking system collapse and bailout, the home purchase process and common pitfalls, financing basics and a how to get started checklist.

Details and registration information can be found here.

Search the MLS

See more Buyer Resources

Contact Katie to start your home search

Sunday, August 23, 2009

How are my property taxes calculated?

There are two components to real estate property taxes: the assessed value and the assigned rate. Both are set by the County and change every year. So assessed value * tax rate = property tax bill. So even if your assessed values go down, your tax bill could go up if the tax rate changes enough! After all, the government still needs their money to keep things running.

You can see easily look up assessed values by property address:
Fairfax County
Arlington County
Alexandria City
District of Columbia

Tax rates vary by jurisdiction, of course. Rates for 2009:
Fairfax County $1.05 (per $1000 in assessed value)
Arlington $0.865
Alexandria City $0.903
DC $0.85 but beware of vacant properties -- it jumps to $10!

You should note that a tax assessment is very different than an appraisal, and both of those values may be different than the price you paid for the home even this year! Assessments are generally adjusted every year (depending on the jurisdiction), and looks at all sales in a 12 month period. Most assessments do take into account the market value, but do not mirror it exactly. Fairfax County's website, for example, says "
Given the size, complexity and diversity of properties within Fairfax County, fair market value is deemed to be reasonably estimated if assessments at the neighborhood level generally average in the low 90's percent range when compared to sales prices." So in other words, if the tax assessed value is approximately 90-95% of the estimated sales price, it's considered to be the fair market value for tax purposes.

Here is a helpful faq on Fairfax Co property taxes,

and here is one for Arlington County.

You always have the right to appeal your property tax assessed values, but the timing and process vary by jurisdiction.

Tax bills can also be affected by deductions or exemptions. The District, for example, has the Homestead Deduction for owner-occupied properties, which reduces your tax bill by deducting $67,500 from your assessed value. There are several other programs, so home buyers do your research -- and most importantly, do NOT assume that the prior owner's tax bill will be your own total due. One of the most important exemptions is the Assessment Cap Credit, which provides that an owner can not be taxed on more than a 10% increase in the assessed value. What this means in practice is this: If you are buying a property from a long-term owner, chances are their tax bill is significantly lower than the one you will have as a new buyer not subject to that cap. Budget carefully!

Because assessed values are only updated every 1-3 years, often the assessed value might be HIGHER than the current market value. Here's a good article in the Washington Post describing how to appeal your assessment.

Tuesday, August 18, 2009

Short Sale Statistics for Northern Virginia

I got to wondering today whether more short sales are closing and thought I would share some interesting data I found. All data is per MRIS as of today.

Number of active listings designated "potential" short sales in NoVA* = 607 (# in Arlington = 57)

Number of short sales that have closed in NoVA in past 30 days = 199 (# in Arlington = 7)

Close Price to Last List Price Ratio for Short Sales that Closed = $302,258/$306,505 = 98.6%

Average Days on Market (Property) of Short Sales that Closed = 83 (Highest was 631 days). Note this represents the number of days until they got an offer, NOT the number of days that it took for the bank to approve the transaction. A quick look at the listings that closed in the past 30 days showed "contract dates" of as far back as November 2008, but most seemed to have been put under contract in the March-April-May 2009 timeframe, meaning about 3 month waiting period for bank approval and settlement. As a point of comparison, "regular" contracts tend to settle about 30-45 days after the contract date.

* NoVA = Arlington, Alexandria, Fairfax, Fairfax City, Falls Church City

I have to say that I was surprised that so many short sales closed in the past 30 days. I went back for a few months to spot check and the average seems to be roughly 200-250 closing each month going back to this Spring. This data leads me to believe that not only are banks approving more and more short sales, but they've gotten more efficient at that approval process.

Buyers, short sales are certainly not without their own risks, delays, and headaches, but maybe it's time to put them back on your shopping list.

Monday, August 10, 2009

State of the Washington, DC, Real Estate Market - August 2009

Summer has been surprisingly busy this year in the DC real estate world. Here's the latest:
Buyers are in a race against the clock to claim the $8000 tax credit by November 30, which has spurred activity in lower price ranges ($500k-ish and below) dramatically.
Northern Virginia inventory, in particular, is significantly lower than past years - check out this inventory graph, and the surprising uptick in average sales price just below it. There is still a lack of "good" inventory out there, resulting in a lot of very frustrated buyers who are moving quickly and at full price when they see something they like that is priced right. At least half of the offers I've written the past few months (and there were a lot) were competing against other buyers and, even with very solid terms, often losing to others with equally solid terms.

The lack of new construction in the area is also adding to the inventory drop. As this article notes, condo prices are down, driving sales up. But this little bit in the middle is particularly intriguing: "Because the number of projects set to deliver inside the Beltway will drop to near zero, Leisch said prices will rise sharply between 2010 and 2011."

Even with buyers jumping to write offers, it's important to structure the contracts to protect yourself. I was quoted in this Express article last month about creating "safety nets" for buyers.

In related news, and adding frustration to the market for both buyers and sellers, there are continuing challenges with appraisals, as noted in this WSJ article.

I'm hosting a free first time home buyer class at Arlington Central Library on Tuesday, August 18 at 7:15 pm. This month is really the latest that a buyer should start their search if they hope to make the November 30 deadline. If you or a colleague would like to attend, please email me to register so I can reserve a seat.
As always, please let me know if I can do anything to help you or your friends with your real estate needs.

Tuesday, July 28, 2009

North Arlington (Orange Line) Condo Update - July 2009

Zip Codes 22201 and 22203 (includes Ballston, Virginia Square, Clarendon)

Source: MRIS as of date of blog post. All data deemed accurate but not guaranteed. Stats exclude retirement communities.

1 BR Units

2BR Units


Average List Price


Number of Active Listings


Average Property DOM(P) – Actives


SOLD LISTINGS for June 2009

Average Sold Price for Previous Month (does not include seller subsidies)


Number of Sold Listings in Previous Month


Average Property DOM(P) - Solds


Sunday, June 14, 2009

North Arlington (Orange Line) Condo Market Update - May/June 2009

Zip Codes 22201 and 22203 (includes Ballston, Virginia Square, Clarendon)

Source: MRIS as of date of blog post. All data deemed accurate but not guaranteed. Stats exclude retirement communities.

1 BR Units

2BR Units


Average List Price


Number of Active Listings


Average Property DOM(P) – Actives


SOLD LISTINGS for May 2009

Average Sold Price for Previous Month (does not include seller subsidies)


Number of Sold Listings in Previous Month


Average Property DOM(P) - Solds


Saturday, June 13, 2009

State of the DC Area Real Estate Market: June 2009

The Spring market is hopping, but some recent changes are making it difficult to predict what's around the corner. Here's what's going on in the local real estate world:

Interest Rates Jump: Mortgage rates took a significant jump in the past few weeks. The short story is that optimism about the economy combined with fears about inflation are pushing rates up. But if you want the long story, you can read more about the relationship between the bond markets and MBS markets here.

Foreclosures and short sales continue to be a very active segment. Banks have finally figured out that the trick to selling foreclosures quickly is to price them ridiculously low and get a bidding war going. It's not uncommon to have dozens of offers in during the first few days for entry-level price points ($200-300k). Short sales continue to be a source of frustration for buyers, as noted in this good NPR story.

The area's inventory remains flat (Arlington and DC) to declining (NoVA)
--check out the significant decline in Northern Virginia inventory here.
New Appraisal Code Scuttles Deals: The new Home Valuation Code of Conduct was implemented in May, and is wreaking havoc with deals. This Code created intermediaries to manage the appraisal process, and some argue that quality has dropped. Many appraisals are coming in low, opening the door to a secondary round of price negotiations in many transactions.

Monetization of Tax Credit:
Of significant note to first time buyers is the emergence of programs that will allow a buyer to "monetize" the $8000 tax credit. VHDA has developed a program to structure a second trust of $8000 with no principal or interest payments due during the first 12 months. Details are still evolving, but it is expected that a buyer could use this $8000 second trust as part of their downpayment.

If you are a first time buyer hoping to take advantage of the $8000 tax credit - start your search NOW! The lack of "good" inventory may make it difficult to find something that fits your needs and your price range. Settlements must occur by November 30 to file for the credit, and with the current volume of lending and refinancing banks are backed up. No doubt this backlog will increase for both lenders and settlement companies as we approach November 30 - plan ahead! Contact me to start your search - I'd love to help you!

And finally, just for fun:
For all you Arlingtonians and those who want to be an Arlingtonian -- check out this rap.

As always, please let me know if I can do anything to help you or your friends with your real estate needs.

Thursday, May 14, 2009

FHA to Allow $8000 Tax Credit to be Used as Downpayment

Update 5/29: HUD reversed course today on its initial plan to allow homebuyers to use the $8000 credit towards a downpayment. Instead, the credit may be “purchased” by FHA approved lenders (and credited at closing), to pay for additional closing costs. While this decision may be helpful, it won’t have the impact originally hoped for, since buyers frequently negotiate to have sellers pay their closing costs anyway.

Original Post:
HUD announced that they are going to permit lenders to allow homebuyers to use their $8000 tax credit as part of their downpayment. This "monetization" of the tax credit is big news for first time buyers struggling to come up withe their 3.5% to 10% downpayments required in today's lending environment. The current challenge to home buyers is that there is no way to 'advance' payment on the $8000 -- buyers must wait until they file their 2009 tax returns in early 2010, creating a catch-22: buyers need the $8000 to buy a home, but can't get to the $8000 until after they do so.

With this announcement, FHA-approved non-profit organizations will supply home buyers short-term or "bridge loans" up to the amount of the $8,000 first-time home buyer tax credit. Click here to learn about some of these programs, which provide funds for little or no interest.

Looking for info on the $8000 credit and eligibility? Read this post.

Remember, you must close on a house by November 30, 2009 to take advantage of the tax credit. Get started with your search:
Search the MLS
Attend a free first time home buyer class
See more buyer resources

Friday, May 1, 2009

Northern Virginia Inventory Sees MASSIVE Drops

Update 5/9/09: Looks like I've got some investigating to do - the final MRIS numbers are published (updated graphs now available at my website here - click on the "Market Stats" in the left sidebar) and they aren't even close to the "live" data I ran on the last day of the month. Not sure what's going on -- seriously, how can hundreds of listings be not there on the last day of the month but then appear retroactively 9 days later? I'll look into it and post results here when I get them. The short story is that inventory didn't drop in most cases--just a tiny increase of about 2% over last month for NoVA, for example. Still surprising but not nearly the big story the initial data hinted at. Contracts are up about 12% over last month, so the buyers are definitely biting! Obviously with an increase in contracts disproportional to the slight increase in inventory, it still indicates a shift in the market, just perhaps not that dramatic a shift as originally indicated.

In the meantime, here are some excellent charts detailing real estate inventory levels that illustrate my points and appear to be using the "live" data just as I had.

Original Post:
This. Is. Big. News. Typically in the Spring (from February through June) we see run ups in inventory as sellers prepare their homes for market. The final numbers aren't out just yet, but I think both buyers and sellers are going to be shocked by April's real estate statistics.

Let's take a look at the Arlington numbers I ran from today's MRIS (the consortium that owns our area's multiple listing service.) The spring run up looks like this for January through April: 875 - 925 - 986 --------and 793 for April! What?! That is the lowest number of homes available since February 2007. A 21% DROP in inventory in Arlington?! During SPRING?

And Northern Virginia as a whole: 7545 - 7811 - 8069 ------ and 5435!
the lowest number of homes for sale in NoVA since August 2005! Remember August 2005? When buyers were running around bidding things up like crazy because there weren't enough homes to go around?

What's going on?? First, buyers are getting it! Low prices, the lowest interest rates in 50 years, and the $8000 first time buyer tax credit have them out in droves. Just in the past week I had 3 of 4 buyers who submitted offers get outbid on properties in various locations.

To add insult to inventory, potential sellers are waiting to put their homes on the market because they don't want to have to take low offers. Much of the inventory, especially in the suburbs, is "distressed" (foreclosures and short sales) and many are in such poor condition that they will not sell for a very, very long time. So the level of "good" inventory (that is, will realistically sell within the next few months) is even lower than the numbers show. Homeowners who are on the fence about selling don't want to be lumped in with distressed comps, so aren't putting their homes on the market.

Finally, the 'moratorium' on foreclosures in the first quarter contributed to a lack of new distressed inventory coming on the market. But if there's another wave coming, it's not in the pipeline yet: a review of "preforeclosure" filings in Arlington listed just 73 properties, and Fairfax County showed 1000 (a big number, no doubt, but not enough to make up for the 2500 drop in inventory from March to April.)

What are the implications of this?

Unless there's a big wave in May, you're going to have a lot less to choose from, especially if you want something that is 'move in ready.' Less inventory means more competition for the 'good' listings -- expect to pay closer to list price for those, and be ready to move quickly when you see one you like. Chances other other people are circling it too. Hope for a big bump in the coming weeks - otherwise it may be a tough road if you're trying to buy before November 30 to take advantage of the tax credit. Typically inventory peaks in June, with another much smaller bump in Sept/Oct.

Get started with your search:
Sign up to attend a free first time home buyer class or search the MLS

Sellers: If you are on the fence about selling, go ahead and get it on the market asap, especially if your home is a good option for a first time buyer. Make sure you put your best foot forward with some sprucing up, staging, multiple photos taken by a professional, a home warranty, and an extensive web presence as part of a comprehensive marketing plan. And it still needs to be priced right, of course. If you're wondering what the comps are for your neighborhood, contact me or visit my sellers resource center.

Source for all data: MRIS as of 5/1/2009. Data deemed accurate but not guaranteed

North Arlington (Orange Line) Condo Market Update - May 2009

Zip Codes 22201 and 22203 (includes Ballston, Virginia Square, Clarendon)

Source: MRIS as of date of blog post. All data deemed accurate but not guaranteed. Stats exclude retirement communities.

Click here to see last month's stats.

1 BR Units

2BR Units


Average List Price



Number of Active Listings



Average Property DOM(P) – Actives



SOLD LISTINGS for Apr 2009

Average Sold Price for Previous Month (does not include seller subsidies)



Number of Sold Listings in Previous Month



Average Property DOM(P) - Solds



Thursday, April 30, 2009

Arlington Virginia Neighborhoods

I've started a series of blog posts specific to individual Arlington neighborhoods (starting with North Arlington because I live there -- sorry, South Arlington). Each neighborhood will eventually have its stats and a few links posted on this Arlington neighborhood boundary map to give buyers a bird's eye view of Arlington.

Click the links at the bottom to read more about the history and a few current real estate stats on individual neighborhoods. Remember you can always email me if you want to set up an automatic update on your neighborhood's market conditions - it's free and only takes me a few minutes.

Looking to buy a home in North Arlington? I live here and know the area very well. Contact me!

Search the MLS or contact me to set up a custom alert for your favorite neighborhoods!

Are you getting ready to sell your North Arlington home? As an Arlington resident, I can help you best highlight all the positives of living here! Not all agents are alike -- ask me about the services that I provide my sellers including professional photography, staging, and custom websites--after all, most buyers start their home search on the web and DEMAND high quality photos. For a free pricing analysis and comprehensive marketing plan, contact me or visit my Sellers Resource Center.

Arlington Forest

Berkshire Oakwood

Colonial Village

Lyon Park


Tara - Leeway Heights

Waycroft - Woodlawn


Tuesday, April 7, 2009

North Arlington (Orange Line) Condo Market Update - April 2009

Zip Codes 22201 and 22203 (includes Ballston, Virginia Square, Clarendon)

Source: MRIS. All data deemed accurate but not guaranteed. Stats exclude retirement communities.

Click here to see last month's stats.

1 BR Units

2BR Units


Average List Price



Number of Active Listings



Average Property DOM(P) – Actives



SOLD LISTINGS for Mar 2009

Average Sold Price for Previous Month (does not include seller subsidies)



Number of Sold Listings in Previous Month



Average Property DOM(P) - Solds



Thursday, April 2, 2009

Six Myths About Choosing a Real Estate Agent to Sell Your Property

When I meet with sellers, I often hear some variation of the same "myths"...

I need to choose my “neighborhood specialist.”
Typically buyers look in more than one neighborhood, so in fact you may have more success with an agent who understands what buyers are looking for and where else they might find it. A good agent will know more than just your neighborhood—they will know all the neighborhoods where your competition will be, and where buyers will be looking! "Neighborhood specialists" often don't even live near the area in which they claim to be 'specialists'--that's just where they choose to send their postcards. Always interview at least one agent besides your 'neighborhood specialist' to compare services being offered, and think about whether you would be more comfortable with an agent who, when a buyer comes calling, represents only YOUR home rather than yours, and the guy's down the street, and the woman's down the block - all your competition!

I should choose the agent who puts the highest value on my home.
Some agents will quote a higher listing price just to win your business, but even with the very best marketing plan, if the home is overpriced it will NOT sell. You'll end up chasing the market down via price reductions. If an agent is recommending a significantly higher list price than other agents, ask them about their history of price reductions. If you choose to work with me, I will conduct a comparative market analysis prior to recommending an asking price range for your home. I will explain how I arrived at the range, but ultimately the decision is up to you.

Open Houses are just for “looky loos” and nosy neighbors, so I've been told I shouldn't do them. Most of today’s buyers start their search on the internet, and the majority either haven’t yet selected an agent or are
planning to represent themselves. For those buyers, they have no way of seeing your home other than contacting the listing agent or going to an open house. Most people are too intimidated to call “off the sign” and so open houses are more important than ever before to get the most potential buyers through your home as possible.

I need to make sure the agent I choose advertises my home in XYZ publication.
When asked where they first learned about the home purchased, 34 percent of buyers said a real estate agent; 32 percent the Internet; 15 percent from yard signs; 7 percent from a friend, neighbor or relative; 7 percent home builders; 3 percent a print or newspaper ad; 2 percent directly from the seller; and 1 percent a home book or magazine. In today’s technology era, print advertising is not where you’re going to find the buyers.

I need to choose the agent who has sold the most homes in the past year.
Every agent is an independent contractor, and therefore the variety of services offered can fluctuate dramatically even within a single brokerage. You need an agent who has enough time to attend to the details of your transaction, without farming it out to a junior assistant. Ask about which services they actually provide their clients, and who does them. Does it include professional photographers? Dedicated web sites? Professional stagers? Agent paid home warranties? Quantity does not equal quality.

I need to choose a “broker” instead of an “agent.”
After gaining some years of experience in real estate sales, a sales person may decide to become licensed as a real estate broker in order to own, manage, or operate his/her own brokerage. Brokers typically take on management or ‘back office’ duties. Agents, on the other hand, focus exclusively on their clients. If you are dissatisfied with your agent, you always have the option of contacting their supervising broker.

If you are looking to sell your home, please contact me - I'd love to detail for you the services that I provide to my clients!

Wednesday, March 4, 2009

North Arlington Condo Market Update - March 2009

Zip Codes 22201 and 22203 (includes Ballston, Virginia Square, Clarendon)

Source: MRIS. All data deemed accurate but not guaranteed. Stats exclude retirement communities.

1 BR Units

2BR Units


Average List Price



Number of Active Listings



Average Property DOM(P) – Actives



SOLD LISTINGS for Feb 2009

Average Sold Price for Previous Month (does not include seller subsidies)



Number of Sold Listings in Previous Month



Average Property DOM(P) - Solds



Monday, February 23, 2009

Guest Post: Home Owner Asbestos Prevention & Healthy Green Options

Lots of older homes in our area have asbestos tile floors (particularly in the basement) and many have asbestos siding. In many cases, there's no risk to the owner, but it's worth reading more about in this guest post from the folks as

The path to purchasing a new home is a huge accomplishment that requires additional responsibilities. For many, it is the investment of a lifetime, insuring you and your family will have a safe and healthy home for a long foreseeable future.

Asbestos is a fibrous mineral that was a prominent building application throughout the 20th century. If your home was built before 1980, there is a chance it may contain asbestos.

Potential Virginia home owners or those seeking to remodel older homes should not be devastatingly worried because with proper precautions, exposure to asbestos will be prevented easily.

In Arlington, VA, many asbestos problems have been associated with siding and tiles. Used heavily in homes and buildings until its ban in the 1970’s, asbestos siding can become a health concern when its shingles are damaged. If they are left un-disturbed, they are not a serious problem. The risk involved with asbestos materials is the chance that they become damaged and its fibers become airborne.

If suspected asbestos materials are located in your home, most experts will recommend to leave it alone. Unless sawed, cut or disturbed, asbestos products are probably not going to release its fibers. With a growing amount of education and awareness, there are now many green health alternatives that make the use of asbestos obsolete.

Consistent and long term exposure to asbestos has been known to cause rare, but severe lung ailments such as asbestosis and pleural mesothelioma. The asbestos scandal was one of the joint corporate and industry cover-ups in the 20th century. Research has indicated it can take anywhere from 20 to 50 years for mesothelioma to develop, making mesothelioma prognosis a difficult task.

GREEN Alternatives Benefit Home Owners

Many home owners and real estate personnel are unaware to the fact that environmentally sustainable products can also reduce annual energy costs by 25 to 35 percent. Many U.S. cities have created lumberyards which re-store where you can purchase recycled building materials that are authentically strong and inexpensive. Green alternatives to asbestos include the use of cotton fiber, lcynene foam and cellulose.

These eco-friendly options will continue to see their popularity rise as many home owners are seeking ways to not only reduce their carbon footprint, but reduce their energy bills. These asbestos alternatives allow for a healthy, safe home, free of health damaging materials.

Saturday, February 14, 2009

Bad News for Condo Buyers

Good thing first time buyers are getting that $8000 tax credit, because if you're a first time buyer looking at condos there is some bad news headed your way on April 1. Fannie Mae & Freddie Mac, the government sponsored entities that help keep mortgage rates low for borrowers with loans less than $417,000 (now about to rise to $729K in our area thanks to the stimulus bill), has announced higher fees and tougher credit score requirements. These extra fees are supposed to counter the higher risks and losses associated with certain loans.

Condo borrowers, in particular, have been singled out: unless you have a whopping 25% downpayment, you'll be hit with a three-quarter point add-on penalty regardless of your credit score. Buyers with a FICO score between 700 and 720 will pay an extra three-quarters of a point, too, whether on condos or not (a point = 1% of the loan amount).
Below 700? Expect 1.5% in fees. Ouch.

All the more reason to look at FHA, which is less harsh about credit scores and requires just 3.5% down payment. But condo borrowers may still have a tough time: FHA does not mesh well with many condo buildings.

Stimulus Bill To Be Law: First Time Buyers Get $8000 Credit, Conforming Loan Limits Increase

The stimulus bill, having had its original House and Senate versions reconciled in Committee, is now on its way to President Obama's desk in time for his President's Day goal. I'm still wading through the Committee report text, but here is what I can see:
  • Credit is $8000 (up from the House version of $7500 but down from the Senate's $15,000)
  • Does not have to be repaid as long as you own the house for 36 months from the date of purchase and you purchased in 2009. If you sell before 3 years then you have to repay the entire thing.
  • Applies to purchases from January 1 through December 1, 2009. (Note: I've seen some other reports saying 12/31, and others saying July or August, but from what I read in the Conference report posted online, it says 12/1) If you bought in 2009 you can elect to treat it as purchased on 12/31/2008 so you can claim it on your 2008 return.
  • Is a refundable credit - so even if you don't owe $8000 in income taxes then you get the difference back (NB: This is an update from previous post)
  • DC buyers cannot claim both this credit and the $5000 DC homebuyer credit.
  • Unlike the previous $7500 credit, you can claim the credit even if your mortgage was financed by a mortgage revenue bond (like with VHDA loans) - check with your tax advisor!
  • Limitations are similar to the previous $7,500 "credit" (interest free loan) in 2008: income restrictions start at $75,000 (single) and phase out completely at $95,000 or $150,000 (married filing joint) and phase out at $170,000, and have not owned a home in previous 3 years.
See page 19 of the Conference Report pdf file here for more.

Here's a handy chart of the old law versus the new law.

Move-up (non first time) buyers -- don't worry, there's something in the Bill for you, too...

There is another important change that hasn't been getting nearly as much press: the temporary reinstatement of the increased conforming loan limits for high cost areas. You may recall that our local Washington, DC, area's conforming loan limits rose from $417,000 to $729,750 last year, giving purchasers of higher end homes an important break on interest rates for loan limits up to that amount. At the end of 2008, the temporary limit expired and it dropped to $625,500. That means any loan above that amount fell into the "jumbo" category--making it very difficult and very expensive for borrowers in that bracket. This stimulus bill reinstates that $729,750, which should make it easier for folks to get these loans which now qualify for Fannie, Freddie (and possibly FHA...unclear at this time) guidelines, which translates to lower rates and greater availability.

Read more about conforming loan limits and how they work here.

Ready to start your search and take advantage of the credit?

Attend a free first time home buyer class.
Contact me to discuss your search.
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Monday, February 9, 2009

$15,000 Home Buyer Credit - What's the Deal?

2/14/09: Credit has been reduced to $8K. See my updated post here.

The big headline is the news of the most recent stimulus package with a special home buying credit. So what's the story? In short, we don't know yet. It's still in Committee because the House version and the Senate version are different (Remember "I'm just a Bill, on Capitol Hill..." if there two versions don't match--and they never do--then it goes to a committee.)

As of right now, according to CNN:
The Senate bill would double the size of an existing temporary home buyer credit to $15,000. It would also allow all home buyers to claim it and remove the requirement under current law that the credit be paid back. The House bill also removes the repayment requirement but leaves the credit maximum at $7,500 and would offer it only to first-time buyers.
If the Senate version wins out - that is HUGE! $15,000 of free money to ANY home buyer with NO income restrictions! The current Senate version has the credit going into effect the day it is signed and lasting for one year. The Senate version is also non-refundable, meaning that if you don't owe at least $15,000 in taxes, you can't take advantage of the full credit (it does, however, let you spread it over two years.) In that way, the Senate version has been criticized as being disproportionately favoring the wealthy.

This WSJ blog has some interesting detail though -- again, this is all preliminary, so don't get too excited--or disappointed--just yet.

Stay tuned!

Update 2/12: Still in committee, but word on the street is that the latest draft contains a provision for
First-time home buyers to get a tax credit of up to $8,000. The bill is expected to hit the President's desk by Monday.

Update #2 2/12: Coming out of committee is the compromise of $8000 credit, does not need to be repaid, available through the end of November, and available only to first time buyers (those who have not owned a primary residence in the last 3 years.)

Ready to start your search for a home in the DC or Northern Virginia area? Consider attending one of my free first time home buyer classes - details are here.

Or start searching for homes in the MLS here.