Welcome to Monika's Blog! Check here frequently to read current real estate articles, homeowner tips and general observations about national and local real estate issues that may directly affect you!
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Do you need fire and hazard insurance on your home and can you afford it at current rates?
For as long as I can remember mortgage lenders have required the purchase of a fire and hazard insurance policy as a requirement before issuing final approval for a mortgage. Just as they do with property tax payments, they escrow payments out of the monthly mortgage payment to keep it in place throughout the term of the mortgage. However, just like the increases in the cost of cars, homes, groceries and most everything else, fire and hazard insurance has risen steadily and, in some places, astronomically. With climate change causing unprecedented damage to homes throughout the nation, insurance, when even available, has become such a huge expense that some homeowners are foregoing it and self-insuring or simply not having insurance at all. Read on and do so at your own peril.....
Unexpected expenses of home ownership...
The home buying process, especially for first time buyers, is both a wonderful and scary adventure. It's wonderful because you're looking for a home that is yours and not someone else's to meet needs perhaps not met in your rental home. It's scary because, after the down-payment and closing costs, there may not be a lot of money left in that savings account that made buying the home possible. I always tell my buyer clients not to stretch so far on the price of the home they are buying that there isn't any "movie" (travel, recreation, medical, education or lifestyle) money left over. And, most importantly, leave some money for those unexpected items that are now no longer going to be your landlord's responsibility. Homes require maintenance, replacement of items, and improvements from time to time. Be aware and buy accordingly!
Interested in learning more about HOAs?
In the DC Metro area many neighborhoods have Homeowners Associations that create and enforce rules affecting the residents of the neighborhood. Like many things in life there are pluses and minuses to such neighborhoods....learn more about HOAs and how they work here...
Getting a home ready for sale can be daunting for many prospective sellers...
It's not often that a home is in perfect condition for selling. Many prospective sellers have those little projects we've always meant to take care of and some have the big projects that are critical/essential to a successful sale. Despite high interest rates there are buyers looking for a new home but getting the attention of picky buyers means viewing your home through their eyes. Here are a few improvements--small and larger--that can make your listing a must-view and buy...
Down payments and buying a home...
Unless you are a veteran it's extremely difficult, if not impossible, to buy a home without a down payment. However, there are many misconceptions about how large a down payment is required to secure a loan, especially for first time homebuyers. The benefit of a larger down payment is that the loan amount is less and the payments smaller, but there are many loan options that do not require a 20% down payment. Important factors in the down payment conundrum are (1) a plan to save enough money from monthly living expenses to generate a down payment of some size and (2) the effect a larger down payment will have on the total amount a buyer can be approved for given the lenders' specific loan program criteria. And, keep in mind, that using a gift from a third party must be consistent with the specific loan criteria and disclosed to the lender at the beginning of the qualification process.
Lastly, if you are a first time homebuyer with a smaller income, be sure to check out state and local buyer assistance criteria before you are ready to buy to see if you qualify for any form of assistance, including down payment assistance.
https://www.cnbc.com/2023/09/08/what-size-down-payment-you-need-to-buy-a-home.html
I'm thinking of selling and wondering how much my upgrades are worth...
Some owners of homes have spent significant amounts of money for improvements to their home during the time of their ownership. They may have kept track of all the money spent on their home and expect/hope they will get it all back at time of sale. Several factors will affect the return on their investment:
1. How long ago were the improvements made? If an owner has lived in the home for many years the improvements may have been costly but are now out of date or beyond their useful life. Current buyers may see the improvement as dated or outdated and therefore are not factoring the improvement into their valuation of the home;
2. Is the amount of the improvement way beyond the norm for "typical" homes in the neighborhood? This may be more significant in townhome or condo communities where homes are more alike and more easily compared. If an owner made highly personal choices that cost much more than the usual kitchen or bathroom renovation in the neighborhood a buyer may not be willing to pay more than the sales price of the most recent comparable homes with kitchen or bathroom renovations.
It should also be noted that an appraiser will likely not value the renovations higher than the "usual" value in setting the appraisal value.
For a current assessment of retained value of some improvements, take a look here.
Are you thinking of buying new construction in the next year or so?
As with resale homes, buyer demand is greater than seller availability. New home builders face a difficult few years ahead as they try to meet a deficit of more than 5 million new homes. With supply chain issues becoming more pronounced across many building products the challenge of building on time and at lower prices has become greater and greater even for experienced national home building companies. So, if you are thinking of buying new construction, start looking now and keep an ear and eye out for new developments as they begin to advertise future sales. With a long lead time from contract to closing, you will have lots of time to save your money, get any existing homes sold and make plans for your move. And, of course, enlist the help of a real estate agent to help you look and write the contract most advantageous for you!
Do you expect to have capital gains on the sale of your home this year or in the near future?
In any market, sellers love to make as much money as they can on the sale of their home! Unfortunately, the IRS would like its share of profit that triggers capital gains taxes. Here is some information on capital tax rules on the sale of homes. Just remember, what may be true today may not be true next week or the month or year after if there are changes to the U.S. tax code so always consult with a tax professional on your particular situation and tax consequences.
Are you a senior or know a senior looking for a forever home?
The conventional wisdom is that seniors downsize their home and sometimes the price of their home. As we know, though, no group behaves identically, so the statistics in this article may not reflect your experience. The key though is that, whatever you are thinking of doing, whatever home you are thinking of purchasing and wherever that home is located, why do all the research yourself when there is a great Realtor who can make the job easy. Looking at homes online may be fun but arranging tours, home inspections and contracts is best done with the help of an expert!
Do you ever worry about burglars and your home?
Here are some tips to lessen the chances of burglars targeting your home.....
Using family gift funds to help with home buying...
With housing in the DC Metro area super pricey, younger buyers often have a problem saving for the down payment needed to buy a home. One possible solution is a gift from family members and, for many types of mortgage loans, this is not a problem.
However, the lending process is best dealt with by discussing financing plans/options with a lender BEFORE making an offer so that everyone is clear on what is and what isn't permitted with each type of potential loan.
https://www.nar.realtor/blogs/economists-outlook/bank-of-mom-and-dad#.Xj1nr8YQMcY.email
What makes appraisals important to both the buyer and seller?
In today’s DC Metro real estate market where inventory is low and prices are rising, a low appraisal can place a sale in jeopardy. The seller wants to sell at the contract price (which in this year’s market is often higher than recent sales), but a low appraisal can make a buyer question whether they are overpaying for their home. And, if the low appraisal changes the amount of the buyer’s down payment, a renegotiation of price is often the outcome. The good news is that most appraisals are keeping pace with rising prices but it’s best to be educated about the importance of appraisals in making the deal work.
What--no brushed nickel??
It seems like only yesterday when buyers would
actually take a house off their list because it had
brass lighting, door knobs or bathroom fixtures!
Who knew that just a few years later golden color
metals would be coming back to nice homes and being mixed
with the silvers that had been installed in every home remodeled
during those years! Why is this important? Because trends are
exactly that--trends--not indications of value or even preference
as preferences change regularly and as often as companies will
advertise new products to create a market for new sales! As a
homeowner, keep in mind that the trend that you buy into today
may be the very trend that new buyers reject several years
from now and anticipate that you may have to make some
changes to highly personalized palettes or décor when the
time comes to sell. Preparing a home for sale is as
important as pricing it right and a consultation with a
savvy Realtor as early as a year before your intended sale
date can be your best investment of time before you make
the investment of money without good advice.
Did you think the days of refinancing a home were over?
Apparently not. While we saw hundreds of thousands of
refinances during 2016 and part of 2017, demand for
refinances took a big dive over the last year and half.
It seemed everyone who wanted to refinance from the
high interest rates of just a few years had done so and
what was once a frequent topic of conversation rarely
came up. For a while, lots of my friends and clients just
loved to share their success at greatly reducing their
monthly mortgage! With steady low interest rates
now expected through 2019, refinancing has again become
an attractive option for saving money on the monthly
mortgage. Like all financial decisions, make a decision
only after knowing all the costs and considering the pros
and cons (there are always both!) but a good lender can
help you determine whether this is a good option for you.
https://www.cnbc.com/2019/04/03/mortgage-refinances-spike-39-percent-after-huge-rate-drop.html
Depending on when you read this blog entry, now may be
a good time to buy a home.....
On March 20, 2019, The National Association of Realtors said 53% of
consumers polled thought the economy was improving and 37%
thought it was a good time to buy a home. While this is interesting
to read, like all data, it's a conclusion valid only for the day the poll was
conducted and wholly dependent on how the questions were posed
to the target audience.
A phrase as amorphous as "the economy" has a different meaning
for each person and depends on whether they live in an area
benefitting from a "good" economy or live in an area where that
"good" economy never quite seems to reach. Because of this, the
important decision to sell or buy should always be made using
current, local, data and based on personal circumstances, interests
and needs. These days we are inundated with so much information
that it is easy to get caught up in headlines and try to time our
decisions based on those data when they may not really affect
us at all. We often hear that one's home is the biggest financial
asset people have and represents the largest financial decision
they may ever make. If you use a financial advisor to advise and guide
you through the process of investing your money in the stock
market, it just makes good sense to use a Realtor to do the same
in deciding when to buy and sell a home.
Do national market trends affect or reflect the DC Metro market?
Not necessarily! Just as newscasters use the terms "inside the beltway"
and "outside of the beltway" to discuss politics and public opinion, our real
estate market is pretty much figuratively all "inside the beltway" when compared
to the "outside the beltway" market in much of the United States.
Today's CNBC headline says that the housing market is slow and that buyers may
have an easier time buying a home in the 2019 Spring market. The article,
unfortunately, is based on a national picture that has little to do with local
markets here or anywhere else. When you aggregate data across as broadly
as any national statistics require, you effectively have data
that doesn't really give much insight into any one local market. As of
this March, the DC market still has limited inventory of properties,
especially at the lower price points. This creates a competitive environment and
forces some buyers to buy at higher than their initial budget or to settle for homes
that may not have all the priority features they had in their initial wish list. When you
get ready to buy or sell a home, deal with a Realtor who has access to and
truly understands the local market to make your buying or selling decisions.
What is the Amazon Effect on DC Metro Housing?
With the selection of Northern Virginia as one of two Amazon headquarters locations,
the positive and negative effects of that selection have been the topic of many articles,
local government policy debates and cocktail conversations. Like most things in life,
there are both good features (up to 25,000 high-paying jobs over the course of a decade)
and bad features (potentially higher housing prices in an area where
already high prices make it hard for many to enter the housing market and more traffic),
so it’s hard to know what the Amazon effect will be on an individual seller in 2019.
Despite the initial euphoria over this selection, details about the individual jobs and
when they will be filled is not yet public knowledge. We’ve been told that these jobs
will be well paying and we have heard that average annual salaries may be as high
as $150,000.
Setting aside the 25,000 new jobs number often quoted, more detailed information
has indicated that the number of jobs to be added in 2019 is projected at under 1000.
Some of the workers to be hired by Amazon already live here, so the number of new
buyers or renters will be fewer than 1000. The profile of the “typical” Amazon worker
also indicates many will choose to rent rather than buy but the split among buyers and
renters is also as yet unknown.
Based on the few things we that we do know, we think it is safe to say that owners of
property in Crystal City, where the headquarters will be located, will find their property
worth more in 2019 than it was before the Amazon announcement. We have been told
that the “typical” Amazon worker will prefer to walk to work or at least be able to walk to
a Metro and lots of Crystal City properties meet this preference. Having said that, this is
an area where buyers are demanding, so even a Crystal City property needs to be in good
condition and “reasonably” increased over pre-Amazon prices. Owners of rental
properties in this area may also be able to raise the rent.
Sellers and landlords in other areas close to Crystal City and with walkability to Metro,
especially other parts of Arlington, are expecting an increase in the value of their
homes or rent prices. Sellers and landlords in the City of Alexandria properties
neighboring Crystal City expect to benefit as well.
The real effects of “the Amazon effect” are now being revealed and some sellers
are placing their homes on the market in 2019 just because of the Amazon arrival.
Others are holding out for what they assume will be annual increases in sales prices.
As I always tell my sellers, the best time to sell is when it meets your financial or life goals
and when real data are at hand. Timing the Amazon effect is a bit like timing the stock
market—sometimes you get it right and sometimes you get it wrong-- but you are likely
to come out best when you have a financial goal or plan and stick to it without paying
attention to the noise of an individual event.
And here's another series of examples of how big companies in a local area can affect real estate....
It's always important to remember, though, that no two local areas are the same so a past effect
may not be mirrored in a new location.....
What does 2019 hold for the National and Washington Metro real estate market?
Just like using past years' weather to predict future weather, there is
no one real estate information model that guarantees an accurate forecast
of future trends. Many factors affect the Washington Metro market.
Some are the same as those affecting real estate nationally and some are
very different because each local market varies from another.
Even within states, markets often vary significantly depending on the
availability of jobs, community amenities, education, taxes
and availability or scarcity of housing. Within the DC Metro area, there
are significant variations between neighborhoods, states, and local jurisdictions.
To get a general idea of what some forecasters are projecting read on and
remember they may or may not be applicable to your sale or purchase....
Understanding some of the titles of persons engaged in the field of real estate
When buying or selling a home you will likely be approached by all kinds of people who offer to
help you. You will also likely be signing paperwork that uses the terms salesperson, broker, managing
broker and more. Here is a primer on the meaning of some of these terms.....
Things NOT to do when selling your home...
If you have ever sold a home, you have likely (hopefully) received timely advice from a good Realtor about the
things you SHOULD DO to make your home sell at a higher price and more quickly . However, in
addition to all those pieces of advice there is one that sums up the rest...there are also things you SHOULD NOT
do that will make selling your home easier and less stressful for you.
1. Detach from the memories of your home and view the sale of your home as a business transaction.
2. Look objectively at the pluses and minuses of your home. If a minus cannot be changed (busy road
nearby, power lines, small back yard among big back yards) add a plus by highlighting its best features
by painting, fixing, de-cluttering, or re-arranging furniture to showcase a potential new use of a room.
3. Make your home easy to show. Listen to your Realtor and plan your schedule in a way that gives showing
agents easy opportunities to bring a client to see the home.
4. Be gone when agents show your home. Agents and buyers want to have candid discussions about the
features of your home and what they see as meeting or not meeting their needs. The same is true of
visitors at Open Houses and during home inspections and appraisals. If the buyer or inspector or appraiser asks
questions about specific features of your home, your agent will obtain that information from you and
provide it as necessary.
Is there such a thing as "the best time to sell a home?"
Yes, there is. The best time to sell a home is when it meets your personal and financial
goals to do so. There are great opportunities to sell in any market and on almost any day
of the year but some economic conditions create a bigger pool of potential buyers or a
greater level of interest in pursuing ownership than during other periods. Conventional
wisdom says that Spring is the best time to sell a home, but it is also the time when
sellers usually have more competition because more listings are on the market during
that "best" time. The end of year holiday season is conventionally seen as a "bad"
time to sell a home, however, in every market there are people who need a place to live
or investors who like the fact that there are fewer competitors to build their portfolio.
The key to any market is to really understanding the local real market and behaving accordingly.
This is the best reason to deal with a real estate professional whose job depends on understanding
that market and who can advise on how to sell a home at its highest price and in the least amount
of time no matter the market conditions.
Thinking of downsizing your home?
I work with clients at every stage of home ownership, from first time homebuyers to owners of many homes
considering downsizing because of lifestyle or career changes. It sounds so simple--make the house smaller
and have less cost and fewer maintenance obligations--but it isn't and there is no one-fits-all solution for everyone.
The traditional triggers of such a decision have included retirement or the
children moving out of the home, but we can now add to that a desire to be in more walkable communities
as well as a desire to pursue new career or volunteerism opportunities found in new areas.
The old pattern of selling the large suburban home and moving to the further suburbs or second
home has changed significantly as owners decide that inner cities or closer suburbs are better suited
to the lifestyle they wish to pursue in their next phase of their lives. To those acquainted with someone
considering downsizing, it seems a simple process of sell or give away things, pick out a new
home and move in with fewer possessions. Unfortunately, the physical and mental aspects
of such a move are hard and often involve emotional attachments to furnishings and
possessions as well as the neighborhood, neighbors, or broader community which represents a
significant part of their life history. As with all buying and selling decisions, those considering
downsizing will benefit significantly from using a process to evaluate the options, make hard decisions
and move forward. A key factor in the success of such a process will be the involvement of a great Realtor,
financial advisor, lender and family and friends who can advise without trying to unduly influence the final
decision.
http://rismedia.com/2016/09/24/the-go-to-guide-for-downsizing-your-home/
It's always time for some home maintenance...
Almost every season brings some benefits from maintaining our home. Fall maintenance
is largely getting ready for Winter, when the payoff of early maintenance becomes clear!
http://blog.rismedia.com/2016/autumn-maintenance-tips/?utm_source=newsletter&utm_medium=email
Renters find smaller units and higher prices...
Are you a renter who is thinking of buying a home? You may be finding your rental dollar buying less house
each year. As prices go up and square footage goes down, it may make sense to crunch the buying numbers.....
http://www.rentcafe.com/blog/rental-market/us-average-apartment-size-trends-downward/
Are you thinking of buying an investment property?
It's a good way to build wealth, but being a landlord requires a process for success....
Baby Boomers move back to the city!
Still doing everything differently than generations before them, baby boomers
are defying the old pattern of retiring in the suburbs or the country. Enticed by
city housing choices tailored to them and leisure and transportation options not
available in the suburbs, baby boomers are testing a new style of retirement.
Is this thinking part of your planning?
Are you a millennial thinking of buying a home?
Conventional wisdom has said that millenials do not want to buy homes but instead prefer to rent.
The assumption has been made that it is lifestyle preferences which have made renting more
attractive than buying. New information says that this is not uniformly true and, like all potential
first time homebuyers, millenials may delay buying, not because of lifestyle preferences,
but because of debt or job uncertainty. This makes millenials much like first time homebuyers
everywhere, especially in areas where housing prices are high and saving for a down payment
is challenging. If you are a millennial beginning to think about buying, it's never too
early to become thoroughly familiar with the home buying and home financing processes.
A good Realtor and a good lender are your best resource for making an informed decision and
potentially greatly expanding your options.
Do you wonder why you bought Title Insurance when you bought your home or why you
may need it if you are buying soon?
Many buyers are unhappily surprised at the high cost of Title Insurance and always ask why
they need to buy it if the previous owners have bought it as well. If everyone buys it,
how could an unforeseen or known issue arise? It is, like most insurance,
something you have to pay for and then hope you never need and when you are paying
settlement costs in addition to your down payment you may think it could be money
saved without consequence. For more information on its benefits, read on....
Are you a first time homebuyer?
This article has some valuable information but I can sum it all up in just a few words...
Before beginning your home search or visit to a lender, call a good Realtor referred to you by a friend,
family member or colleague!
The wild, wild world of the internet....
Recently a good friend, not wanting to burden me with finding a rental home for her,
decided to find one online. She was sure she found the perfect home at the perfect price,
in the perfect location and with the perfect period of time for her renting needs. The Craig's
List poster provided really nice pictures (of a model home, it turns out!), answered email
promptly and couldn't have been more charming in her responses to my friend. It was all
simply perfect and so easy. Unfortunately, the person posting the pictures of someone
else's property and requesting just a few thousand dollars up front for the deposit did not own or
have authority to rent the property and it was found to be a scam which had apparently
worked on some others who didn't ask their Realtor friend to "just look it over."
While legitimate internet sites and posters make our lives easier every day, there are many
scammers cheating unwary victims out of huge sums of money all day every day. One thing
that Realtors have that the typical consumer does not have is experience buying,
selling and renting real estate. We know that when a price is too good to be true,
it almost always is.
We also know that sending money without seeing a property or having someone
knowledgeable about property see it is a recipe for bad business. We also know that the
average person renting their small apartment isn't likely to set the table with perfect,
brand new linens, napkins, glassware and flowers just to post a picture of their 4x4 galley
kitchen. Wait--Did I say 4x4 galley kitchen? Yes, that is what all the units in a particular
condo building have and we know this. So, there is no dining table space and, by the way,
I saw that very same table scape in the model home of a national builder. If you are like me,
you work hard for your money so don't send it to just anyone who asks you for it!
What is a "Stale" real estate listing and do you have one?
When sellers place their home on the market, they most often have a sales price
in mind that reflects what they feel their home is worth. It is not always what
their agent thinks the home will sell for but the seller sets the price and so it
goes on the market with a listing price that may be unrealistic given the condition
of the home, recent comparable sales, or other factors that make the likely sales
price lower than the initial asking price. So what's the problem with trying
for a higher price and why shouldn't a seller start high and hope for just a tiny
bit less?
The quick answer is that homes get "stale" fast and its initial
entry into the market is the time a home is likely to command its
highest market price. Notice I said "market" price, not wishful
thinking price.
Ultimately, even in a "sellers' market," buyers make the home sell or sit.
If it is priced too high, buyers assume the seller is unrealistic and
won't consider a lower offer so they move on. By the time a month
has passed, potential buyers have seen it online, maybe visited it,
considered it and decided that, even with limited inventory,
it isn't the house for them.
Strategic pricing, or what I call "right pricing" is the key to selling most quickly
while still getting the highest price. When you hire your real estate professional,
hopefully part of why you selected that agent is because he/she knows the local
market and can help you set an effective selling strategy.
A successful strategy does not include demanding more money for your home
because of a personal goal or financial need and it does not include deciding
to "let it sit until we find the right buyer."
I have never seen a home go up in value as it sits on the market--possibly it
happens but not in my experience. When you hear buyers use the phrase
"There is nothing out there" and you see ten homes in your
neighborhood on the market for months at a time, it likely means that
because there are ten, many, if not all,of these homes are seen as
overpriced from a buyer's supply and demand perspective.
If you have a stale home that has been sitting on the market
for months, it is almost always in your financial
interest take aggressive action to make your home fresh again,
including lowering the price, objectively addressing
the negatives found in feedback from buyers and agents
and realistically assessing your selling strategy.
How spending just a little money can refresh the look of your home...
We all have friends who have spent lots of money upgrading their home, either for personal enjoyment or resale.
Some times they get their money back and some times they don't. It isn't always necessary to spend big to get big
results!
http://rismedia.com/2015-04-01/5-great-home-improvements-for-500-or-less/
Do you wonder about the benefits of staging a home or know what it involves?
With the popularity of television shows about staging, more people have heard of it but not everyone knows if it
would be beneficial to their home sale or if the money spent would be a good investment. The good news is that not all
staging involves much money and small efforts can have big payoffs. A good Realtor who knows what buyers are
seeking can be extremely helpful in making your time and money go its farthest. Assisting with staging is just one
of the many services I provide clients and it is always exciting to see the outcome of this effort!
But I thought it was still Fall....
Early winter weather in the Fall has most of us thinking about the real winter ahead.
Even though we did it last year, it is time to once again winterize our homes so that
we stay warm and spend less money on utilities and repairs. Here are just a few tips to get ready!
http://www.bobvila.com/articles/10-quick-tip-winterize-your-home/?bv=relss#.VHOl04vF8pg
And the only thing better than tips on winterizing our homes is tips on winterizing our homes ON A BUDGET!
http://www.bobvila.com/articles/258-winterize-your-home-on-a-budget/?bv=relart#.VHOmaIvF8pg
What is "walkability" and what does it have to do with real estate?
These days you may see a reference to a walkability score when discussing the pros
and cons of a particular home's location. Walkability refers to the home's location and
the owner's ability to walk, bike or take public transportation to work, dining, shopping
and entertainment. This has become especially important in large urban areas as a
younger demographic places an emphasis on getting around without a car. Interestingly,
this is also becoming more and more important to seniors who need an easy way to give
up the car while still getting to the places they need and want to go. Washington, DC
rates high on the walkability factor and areas around it are touting their scores as a
means of attracting new buyers. Does walkability matter to you?
http://www.nbcnews.com/business/real-estate/citys-walkability-drives-real-estate-values-n133956
Is your family considering living multi-generational living?
If so, here are some ideas for making process work more smoothly...
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Do you watch television shows about remodeling your home and think doing it yourself could be for you? If you are a house hunter, do you think you would like to buy a fixer-upper and do the work yourself because it looks so easy on television? You may be in for a few surprises! Driving Safety: Water Safety: Are you a veteran? If so, don't overlook the Veterans Administration's
loans as a great way to buy a home! The VA recently
http://lowes.inman.com/inmaninf/lowesnewsletter/news/194117
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