In a post written back in July "Condo Special Assessments-A New Twist in Today's Market"  my warning to buyers who were considering buying a condo in Northern Virginia was to pay careful attention to the association budget.   In our current market and with the changing lending environment it seemed like good advice.  Sure enough one of my buyers just found out what lenders think of underfunded association budgets.

In a condo developments completed in the last three years in Northern Virginia it isn't unusual to find a high investor to owner ratio.  Contracts written in 2003 with high hopes of a flip in 2005 were smashed when the housing market started its downward slide.  As a result flippers found themselves as landlords losing hundreds of dollars a month and with adjustable rate mortgages resetting in 2008 and 2009.   As a result the perfect storm was brewing on the horizon for condo budgets to take a beating. 

The first thing most lenders in Northern Virginia do is look to see if the condo you are buying is on the "approved" list for funding.  If not they will request the completion of a condo questionnaire by the association management to determine whether the building should be approved for your loan.  The first red flag the lender looks for is the investor to owner occupied ratio.  If the number of investor owned units is high they may flat out reject the loan application or for my buyers they took it one step further.

In this case the next step was to ask to see the actual condo association budget to determine if they had the reserves required in order to cover expenditures.   What the examination of the budget uncovered was a significant number of owners behind on their association dues, an underfunded budget for normal maintenance and a budget that would leave a majority of the owners in the hot seat should a major expense occur.   Foreclosures were on the rise in the building, evident by the number of liens on units and as a result the buyers heard the dreaded words.......

Recently a potential home buyer posted a question on Trulia.com about whether the offer a builder had agreed to home on a home in a Prince William County neighborhood was a "good deal."   My question back was had they looked at everything that was available in the neighborhood to determine if the builder was competitive with foreclosures or even resale properties?

It is easy for buyers, especially those who aren't represented by a buyer's agent, to develop tunnel vision when they are looking for a home.  Some buyers focus on foreclosures thinking that those might be the best value.  Others focus on new construction and think a builder might be willing to make the best deal.  Without knowing everything that is going on in a neighborhood it is impossible to know which property is going to be the "best deal."

New construction can easily impress a buyer.  Depending on the development you visit you will see granite counters, hardwood floors and soaring ceilings.  What you don't know until you sit down with the builder's representative is how much will all of those WOW items cost you?

When you look at a resale property you might see some of the same upgrades but you might become distracted by the current owner's possessions and not picture what the home would look like with your furniture and belongings.  Did you notice that the deck was already built, that window coverings are installed and the yard is landscaped?  All items that the builder doesn't include in the price they quoted you.

The final house you might see in the neighborhood is a bank owned home.  It also has the same upgrades that are in the builder's model.  The landscaping is a bit overgrown, it needs a good cleaning and the bright orange paint in the living room isn't your style.  But while you were commenting on the previous owners problems did you notice the fully finished walkout basement, the upgraded appliances in the kitchen or the flagstone patio?

Buyers with tunnel vision may discover after closing that they might have been able to either negotiate further with the builder or walk down the street and pay $100,000 less for a home that needs a little TLC.   So don't let tunnel vision keep you from checking out all of the possibilities in a neighborhood.  If you don't have an agent representing you call one today.  They could save you thousands and even in some cases a hundred thousand dollars over new construction.

A few years ago a new landowner in the Shenandoah Valley approached my neighbor and I to suggest that the property where our houses were located was actually part of his land and he intended to "take back" the property.  My neighbor who had owned his house since the original land had been subdivided knew that neither of our homes or land were on any part of the new landowner's property.  The new landowner was insistent and let us know his plans to run a road right through our property.

If the thought of this happening to you sends chills up your spine then you have just learned the value of buying title insurance.  Without it this scenario could end up costing you thousands of dollars and countless hours to sort out.  Instead with a quick phone call to our title insurance carrier the issue was resolved.  All of the land transfer records were checked, all the signatures confirmed and his claim was not valid.  In fact the new landowner had bought his property without a survey and relied on old county records to determine his land boundaries.  He didn't have title insurance and ended up not only with less land than he thought but with a few thousand dollars in legal fees to pay as well.

The cost to us was ZERO!

Fast forward to our current Northern Virginia market and it isn't unusual to discover issues with the titles on foreclosure properties.  Incorrect filings, deeds improperly signed and missing signatures are just a start of the concerns.  Without title insurance the lender who "owns" the property wouldn't be able to pass clear and marketable title to the new buyer which could either delay the closing or derail the transaction all together.

Unlike homeowners insurance that you pay every year for as long as you own your home, title insurance is only paid once and protects you even after you have sold the home.  Your lender will require that you buy title insurance to protect their interest at the same value as the loan you have acquired called a lenders title policy.  You will be offered a owner's title insurance policy as an option.  This is the policy that protects you up to the actually sales price of the home and most enhanced policies, which cost just a few dollars more, offer you protection for the increased future value of your home.

As you look at the total cost of homeownership a title insurance policy is one of the least expensive items you will purchase to protect your investment.  Be sure to ask your agent about how you might be able to save money at settlement on a "re-issue" title insurance policy.  Let's face it every dollar does count when you are buying your new home.

I doubt that either of these two terrific people ever had to kiss a frog in their lives but they certainly learned that when it comes to looking for a new home that you do have to look at a few frogs before you find your prince.

In this case we found a few homes that frogs would definitely love.  A little bit of water in the basement, overgrown yards and a few bugs for sustenance.  However as with any house hunt you just have to keep on looking.  We named a few of the houses along the way "granite house", "squishy basement house" and "overgrown yard house."  In the end we found just the right house and yesterday it became theirs.


With a little bit of paint (who doesn't love a camouflage basement), carpet cleaning and a new refrigerator this home will be a gem.   The home even got the parents approval, an important piece of the puzzle.  Thanks to a VA loan, a cooperative bank (foreclosure) and an listing agent who stayed on top of their side of the transaction, we went from contract to closing in 3 weeks.

So another foreclosure in Prince William County is off the market and in good hands.  Congratulations you two and may you have many happy years in your new home!

Yesterday's blog on Stupid Pet Tricks & Real Estate Showings ended with the mention of a naked guy in a shower.  Of course he was naked, he was in the shower for heavens sake but as Paul Harvey would say....now for the rest of the story. 

Another agent and decided to take a little time to preview a few homes in a "nicer" neighborhood in Northern Virginia.   Both of us were intrigued by a listing in Fairfax Station and when we ran the MLS information found the property listed as vacant. 

Vacant properties are terrific when you don't want to be on a time schedule and you can say what you want and figure no one will be following you around asking you a million questions.  Nothing seemed amiss when we pull up to the property.  No cars or anything that would indicate that someone was around.  The lockbox was on the door and the key was securely inside.  Figuring the coast was clear, especially since the MLS listing said VACANT we opened the door.





Now the layout of this home was a bit odd because as soon as we came through the foyer we could see him straight ahead.   Naked guy in the shower!  There wasn't a shower curtain so he was in plain view.  We shrieked, he shrieked, think Drew Barrymore encountering ET and we headed for the door.

Being the good agent that I am I stopped to lock the door and put the key back in the lockbox.  As we got into our car he comes running out the front door, thankful with a towel around his waist trying to get us to stop.  We hop in the car and lock the doors as he is trying to explain to us why he was there.  I didn't really care at that point and just put the car in reverse and haul out of there.  As we are driving away my associate is on the phone to the listing agent to let them know about naked guy.

The next day a rather contrite and apologetic call arrives from the owner of the property.  He had hired someone to do some repair work in the property and they had apparently decided to clean up after they were done.  After it was all over and we realized that there wasn't a pervert just randomly using showers in the neighborhood we were able to have a great laugh over the entire incident.

Once again it just goes to show that in real estate there are no ordinary days.  Now about the couple........

It seemed as if it would be an easy showing.  The instructions said to call the owner first so they could crate the dog.   We had a pleasant conversation, gave them a timeframe and they said they would vacate the house so we could have it to ourselves.  You have to love sellers who understand the process. 

We arrive at our appointed time and just to make sure the owners are gone I knock on the door.  From deep inside the house I hear the dog bark followed by a "shut up".  Figuring that the owners hadn't left yet I wait a bit and then knock again.  The dog barks and the same voice responsds "shut up."  Okay this is annoying why aren't they answering the door?

So cautiously I open the door and say "hello".  A voice from the back of the house says "hello" but no one appears.  Alright I guess they aren't leaving and we are going to head on in.  As we pass through the foyer keeping an eye out for the owners the dog barks again and when we hear the little voice say "shut up" we realize that it sounds more like a child than an adult.  Now I'm worried that the parents have gone and left a child behind.

As we round the corner to the dining room we find our little voice.  It is a PARROT!  Sure enough the dog barks again and looking us right in the eye the parrot says "shut up."  Go figure.  I guess it is a good thing the owners don't swear like sailors! 

Just proves you never know what you will find when you head out to show a house. 

Now about that naked guy in the shower of a vacant house?????

Remember the days of calling from the backseat of the car, "are we there yet?"  Our parents usually gave us the "soon" or "in a little while" response to try and keep us happy for another 50 miles or so. 

The question now coming from the buyers as we drive around looking at houses is "has the market reached the bottom yet?"  Fear of making the wrong decision in a declining market is understandable but trying to figure out the definition of the bottom is tough. 

In the past week I have made offers for three buyers on three properties.  One was a seller owned property, one was a short-sale and one was a foreclosure.  All three properties had multiple offers! Other agents I talk to are encountering the same situation and one has 12 offers on a foreclosure listing. 

Does this mean we have reached the bottom?  I'm not sure but it does mean that buyers are spotting the good listings and making offers.  It also means that buyers who have been driving in circles for awhile have finally gotten into the buying mood.  As an agent I can't say for sure that we "are there yet" but certainly the current signs are starting to show that perhaps "soon" is coming in some areas. 

The good news is at least one of my buyers has reached their destination.  A ratified contract!

Buyers today are often thrown for a loop when they look around a neighborhood and see so many FOR SALE signs.  The sign riders advertising foreclosures or short sales don't help.  However in the case of some buyers it has nothing to do with the home values in the neighborhood, they can see past the market today and know that in the Northern Virginia area prices do recover.  What throws them for a loop is whether the large utility right away, electric poles and water towers will affect the value of their home when they go to sell.

My answer is always YES.  Now some may disagree with that answer but if a buyer is asking the question today, then other buyers will ask the same question when the house comes up for sale again in the future.  Given a choice to buy a home without the power lines running through the backyard or not then I will always advise a buyer on the side of NOT.  Now if the poles can only been seen in the dead of winter perhaps there is another answer but when they are what you will look at 365 days a year.  NOPE.

Today while looking through a neighborhood with plenty of options on homes for sale I came across a home that made me stop and wonder, how will they be able sell the property in the future?  Perhaps the developer made them a deal they couldn't refuse, perhaps they thought that during the next big drought they would have a secret stash of water or perhaps they didn't have a Realtor® looking out for their best interests.  Whatever the reason their resale value has a big red question mark around it.

So buyers if you are out driving around a neighborhood and see a home that catches your attention, stop and look carefully around you.  If what you see is something you can fix then  keep the home on your must see list.  If what you see is something that you can't change like a power line or water tower then you might want to consider another property. 

If you aren't currently represented by a Realtor® and are interested in learning more about buying a home in Faifax County, Prince William County or anywhere in Northern Virginia give me a call.  I'll help educate you on the home buying process, what to consider when buying your home and protect your interests both for today and into the future. 

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As an Associate Broker with RE/MAX Allegiance in Northern Virginia and native of the area I can assist you whether you are buying, selling or renting a home anywhere in Northern Virginia. For more information about the area or my services you can check VaRealEstateTalk or my Northern Virginia website.

Search all homes available in the Northern Virginia area.

One of the nice things about living in Northern Virginia are the variety of neighborhoods, activities and historic places there are to visit.

This year my blog has traveled throughout Alexandria, Arlington, Farifax and Prince William Counties introducing you to some of what Northern Virginia has to offer. As 2007 draws to a close it seemed a good time to go back and gather some of these posts in one place for you to look through again.

Whether you are a native to the area, just learning your way around or planning on relocating to Northern Virginia next year you may find some familiar places or some that are new. Enjoy a brief look at a few of my favorite places from 2007.

Strolling the Avenue in Del Ray

People Who Live in Glass Houses-Hollin Hills

A Whistle Stop Tour of Northern Virginia

Star Trek Meets Dewey Decimal-Shirlington Library

Taking in a Breath of Fresh Air-Burke Lake Park

Building a New Community on Old Prison Ground-Lorton/Laurel Hill

Historic Clifton

Historic Churches-Fairfax Station

Getting to Know Belmont Bay-Prince William County

and finally to honor our military heros:

Moments of Silence During the Holiday Season

 
I hope you have a great end to 2007 and the New Year finds you stopping by to check out more travels along the Northern Virginia highways and byways.

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As an Associate Broker with RE/MAX Allegiance in Northern Virginia and native of the area I can assist you whether you are buying, selling or renting a home anywhere in Northern Virginia. For more information about the area or my services you can check VaRealEstateTalk or my Northern Virginia website.

Search all homes available in the Northern Virginia area.

Often misunderstood and overlooked by Northern Virginia homebuyers are the loan programs offered by the Virginia Housing Development Authority (VHDA). Why?

One reason is that for years the only way to get a VHDA loan was to deal directly with a loan counselor in Richmond. The program required certain items which normally convey with a house in Northern Virginia such as a stove and refrigerator be separated out from the sales price of the house. The paperwork was a nightmare and as a result many agents wouldn’t even suggest it is an option for a first time homebuyer.

Now those barriers have been removed and in many cases you can walk in to your bank or local mortgage company and they will be able to help you. The paperwork has been streamlined and you can even go on-line to the VHDA website and fill out the Quick Start questionnaire to determine what VHDA program might be right for you.

VHDA programs have also been expanded and now repeat buyers are eligible for financing as well as first time homebuyers. For first time home buyers there are income limits depending on the size of your family and a loan limit of $408,000. Depending on your credit score the typical fixed rate 30 year rate is often lower than what you can get through a “traditional” program. For first time home buyers with a higher income or previous homeowners VHDA also offers Flexible Alternative Programs that give another set of options including ZERO down payment options.

If you are considering buying a home in the Northern Virginia area next year and exploring your financing options then check out the options that the VHDA offers. If you need assistance give me a call at 703-346-2213 and I will be happy to refer you to a mortgage consultant who can talk through all of the options available to put a new home in your future. 

The following are some examples of homes available which meet the loan limits for first time VHDA home buyers.  

Example homes under $400,000 in Prince William County

Example homes under $400,000 in Fairfax County

To search for more homes in other areas in Northern Virignia 

For more information on buying a home in Northern Virginia 

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As an Associate Broker with RE/MAX Allegiance in Northern Virginia and native of the area I can assist you whether you are buying, selling or renting a home anywhere in Northern Virginia. For more information about the area or my services you can check VaRealEstateTalk or my Northern Virginia website.

Search all homes available in the Northern Virginia area.