Neighbor: Pay Thy Bill!

You already knew your neighbors could impact your sale.  How their home looks, how they act when they see someone coming to look at your home… it all matters because it impacts the buyer’s view of the neighborhood and of the home.  But neighbors can impact your ability to sell in other ways, too, like if they don’t pay their bills.

Delinquency: It’s long been a standard on FHA loans for condo purchases. The number of households who are delinquent in their condo association dues can not exceed 15% of the total homes in the association.  Today we’re seeing lenders for other types of loan looking at the delinquency rate of condo associations and, even home owner associations, before they will make a loan.  It’s a sign of the times.  More and more home owners and condo owners associations are being impacted by a growing number of households who are unable to pay the fees.  And, when that delinquency exceeds 15% it can be a big issue… It can mean difficulty finding a buyer for ANY HOME in the association.

I have a transaction I am working on right now… We ratified the contract rather easily.  The listing agent is available, cooperative, even pleasant to deal with.  The home inspection and appraisal went through without a hitch.  The lender is assuring me the buyers qualifications look good. Things are rolling along.  AND THEN… Then came the call from the lender.  The condo questionnaire came back and the delinquency is over 15%… Just barely over, but it’s over, and that means no loan.

In this case, we only need 3 people to pay their bill to reduce the delinquency to below the threshold and the loan can go through – THREE PEOPLE.

Neighbor, PAY THY BILL!

I am not sure how this will work out – I will keep you posted, but it’s a terrible situation to be in, because none of the parties to the transaction are responsible for this issue… and yet, we’re all being held accountable for the late payments of a few.  So, I will keep you posted.  I won’t let this kill the deal for my clients, although I do not know what the resolution will be – yet.

What I do know is that homeowners everywhere should take note.  When you’re interviewing management companies ask about their collection procedures, and hold them accountable.  Their ability to collect association dues can impact your ability to sell your home.

Stay tuned for the resolution – there will be one.  In the meantime, call your association and get a copy of your delinquency report.

And, Psst... If you're only reading this blog, you're not keeping up with the latest greatest updates from the real estate whisperer.  Check out the new blog at "The Real Estate Whisperer" and join me on Facebook at www.Facebook.com/TheRealEstateWhisperer.

Should You Hire The Inspector Your Agent Suggests?

This post is inspired by a conversation I had with a client and local business man. He is a well established, experienced home improvement contractor. Recently, he had a past customer call him and say that a potential buyer for her home had a home inspection done and that inspector reported that the bathroom fan this contractor had installed was not vented to the outside. Of course, the contractor had installed the fan and he showed the customer where the vent was. This tainted his opinion of home inspectors. I understand.

When he told me the situation, I rolled my eyes. As a listing agent I have seen many poor inspections come back to me... Most are accurate. Most are fair. Some are not. Some are just wrong. Sometimes the home inspector will think he's earning his fee by scaring the potential buyer. Sometimes the home inspector will think he won't get another referral from an agent if he points out all the flaws.

So, what kind of home inspector do you want? I say my buyers want a fair home inspector... one who will not provide a "good" or "bad" opinion, but will report the facts, objectively... In my view a home inspector has multiple roles:

• Inspect the property and discover significant flaws. They will also discover relatively insignificant flaws, too, but let's be honest... there are a bazillion parts to a home and no one person, in a matter of two hours, can discover every flaw. You want to make sure they catch the big stuff... it's probably OK if they didn't catch something small.
• Report the property flaws objectively - without scaring the potential buyer or glossing over facts.
• Provide an accounting of systems... most buyers do not know from walking through the property and reviewing the marketing materials what kinds of systems are in the home. I want a home inspector to tell my buyers what's inside this particular "People House", how old it is, and how it works.
• Provide usage and maintenance information... Even if you've owned homes before, that doesn't mean you've owned this kind of system. A good home inspector will not know everything, but they will definitely know the most common types of systems. They should be able to tell you how to operate the system and what their maintenance requirements are, as well as their average life expectancy. Proper use and maintenance of systems increases the life expectancy dramatically. That's why some homes have 30 year old water heaters that still work. But, let's face it, that one won't last long, so you need to know that it's going to need replacement soon. And you need to budget for it.
• Provide insights on repair items - How difficult is it to repair? What might it cost? Is it something Harry Homeowner can do, or should this be left to a contractor?

What if an inspector stumbles across something that he doesn't know much about? Well, he should be able to record certain information, and give you resources. For smaller systems, like a security system for example, the owner may have a manual and be able to provide information on how to use it. And that might be all you need. For other situations where the owner can't help you fill in the blanks, you should get enough information from the home inspector that you know what questions to ask and of whom to ask them.

The inspector's role is NOT to provide advise on contract issues to the buyer. An inspector should not say "you can tell the sellers they have to fix this" because your inspector is not your REALTOR... and he probably doesn't know what your contract says nor does he know the dynamics of the transaction like your agent does. Trust your agent here.

So, should you take your agent's advice about what home inspector to hire? I suppose it depends on the competency and trustworthiness of your agent. I'd like to tell you that you can trust us all... but as in every profession, there are people who are trustworthy and competent, people who are trustworthy but not very experienced and therefore less competent, and people who are experienced but are really just in it for the quickest cash possible. Hopefully, you've found an agent that is trustworthy and competent... and if that is the case, then I think your agent is going to know better than the yellow pages who to hire. After all, they are helping a lot of people buy and sell homes, and that experience and guidance is why you hired them.

I will also tell you that sometimes, agents have a "go to" person, or two... but those people may get too busy sometimes to help you. In those cases, your agent may have to make calls to other agents they know and trust to get other recommendations. It happens. But you'll notice that if your agent is good, he or she does not go to the yellow pages to find you another recommendation...and if they do, watch out.

Buying a home is a pretty big deal... one not to be taken lightly. Although some buyers don't feel the need to do an inspection, I always encourage it. (Check out this post to learn why.) My husband would not allow a professional inspector when we bought our homes - and boy did I live to regret it. I am older and wiser now. If we ever buy another home, not only will I get an inspection, but I will know who to call, too. It will be the same person I recommend to you.

Remember, with me, you've got a friend in the business!

Vicky Chrisner, REALTOR

Ofc: 703.669.3142

Email: MyAgentVicky@Gmail.com

Home Prices Will NOT Return to 2005 Levels

"Home prices will NEVER return to the levels of 2005.  NEVER," said Roger Arnold, a well respected Global macro-economist, during a recent conference call with several Keller Williams Agents in the Northern Virginia area.  Of course, he meant that comment in the context of relative value when you consider affordability indexes (median home price compared to median area income), inflation, etc.

He is not discouraging buying a home today, just "calling it like he sees it" for existing homeowners, himself included (and me, too).  At this point, the artificial home price inflation peaking in 2005 or the beginning of 2006, has pretty much come and gone.  Even in areas where there is still fallout to come, prices are relatively low, and homeownership offers many advantages, financial and otherwise.

Locally, in the Washington DC metropolitan area, we're somewhat insulated from the national economic climate, but we don't go unaffected. 

Since 2006 and 2007, area homeowners thought they would "wait out the storm" by renting their homes for a year or two, rather than selling them, when life forced a move.  It's not that they couldn't sell, just that they wouldn't, because they wanted to get back that 2005 value... and they wanted it very, very much....enough that they couldn't hear what they didn't want to.

Sadly, the next couple of years saw continual price decline.  It caused additional fallout, with even more homeowners letting go of those "second homes" to foreclosure when they realized they simply didn't have the reserves to withstand the storm.  They had drained their savings, and run up credit lines.  Even if their homes were rented, being a landlord turned out to be a much harder job than they thought...and it wasn't making them any money.  The flooding of the housing market with so much similar inventory all at once caused home sales to slow to a crawl, and in some areas to a complete halt.

At this point, our inventory was mostly post foreclosed, bank owned homes (REOs)....and a few traditional sellers who had their homes on the market for about $100,000 above the neighboring REO.  The traditional sellers were being laughed at by buyers, and REALTORs were shaking their heads.  Some agents would even shy away from taking traditional listings entirely.  The REO homes had previously been owned as rental homes by investors; or starter homes by people who had already moved into their next "move up" home without selling their first house; or by people who never should have been buyers in the first place.  Essentially, our market was flooded with an inventory of homes at similar price points, and all in direct competition with one another.  So many choices, and nothing was selling. 

In 2008, desperate to move some houses, banks began holding public, well marketed, auctions.  What they, and the rest of the world, discovered was that prices weren't low enough.  But, when they were, buyers would come out of the wood work.  So, in 2008, even when many thought prices may had already "flattened", Loudoun homes saw a sudden and dramatic 10% price drop in a matter of a few months; and the buying frenzy began. 

Since then, we've seen continual competition for well priced homes.  REALTORS began to be able to predict market values again since there was some stabilization... at least within that segment of the market.  Perhaps because we could set expectations properly, the same people who did not want to sell their homes in 2006 and 2007 (because they didn't want to give up value) were now ready to sell. 

Wait!  What was that?  You got it.  A homeowner unwilling to sell in 2007 at $300,000 because they were going to wait until they could sell it for $400,000 again were suddenly willing to sell at $225,000 in 2009?  Yes.  The sellers trying to time the market lost, big time.  In fact, some where now under water, but were willing to face the fact that they could no longer hold on, and started talking about options to foreclosure (i.e. short sales).

With 2009, we've seen more traditional (non-distress, non-bank owned, non-short sale) sales re-emerging in the marketplace, which is what buyers really want.. but inventory remains low.  So, premiums are being placed on these homes, and fierce competition ensues.  Prices are going back up, for all types of sales, but most especially for well cared for homes which are not short sales.  In 2009, we've regained most of the value we lost in 2008. 

But now the greed is re-emerging and it is scaring me.  Sellers, seeing that prices have started to regain value in 2009 are saying that they have new faith that prices will continue to go up, and they seem to think by next year, or the year after, they will be back up to 2005 prices.  No, it's not likely.   I don't think so, and neither does Roger Arnold, or any other REALTOR or economist that I know.

My message here:  Please, don't try to time the market.  If life is suggesting to you it is time to move up, move out, or move on... do it. Sell for what it's worth and make the best of it.  I am talking here, mostly, about principal residences... and telling you that if you didn't mean to be a landlord, you shouldn't be.  And, you need to seriously calculate the cost of a vacant home before you allow it to stay that way.

Besides, if you are moving out of that "starter" home as a move up buyer, or to relocate, then you are likely going to get the best end of both markets - seller's market conditions when selling, buyer's market conditions when buying.  What more could you ask for?  You would not have gotten that benefit in 2005. 

Looking at value rather than prices, it may very well be prudent for you to consider making your move now, while interest rates are lower and buyers have buying power, while inventory is low and buyers have little choice and are paying premiums and competiting not just on price but on terms.

Remember, most homeowners who thought, in 2007, thought their 2005 values would have returned by now.  It hasn't, and it's cost them money - a lot of money - over the past two years.  They have seen their dreams shattered and finances ruined by trying to time the market.  Don't make the same mistake. 

Here's an example of someone who's in denial over market conditions - it's a bit humorous, but after reading this blog and watching the video, look in the mirror.  You're not doing the same thing, are you?
http://therealestatewhisperer.blogspot.com/2009/08/in-economies-like-ours-its-hard-to-know.html

============

My advice here is NOT one size fits all. 

For a personal consultation in the Northern Virginia/Dulles area, please contact me at:

http://www.vickychrisner.com/

703-669-3142

VChrisner@KW.com

And, stay tuned to http://www.therealestatewhisperer.blogspot.com/

for more news from the front lines of real estate!

Short Sales ARE Selling!

Some homeowners being forced to sell today are faced with a challenge because their value may be lower than the mortgage they owe. In these cases, agents, attorneys and other professionals are stepping in to assist homeowners in negotiating with their banks to permit the sale. For months, banks failed to realize the advantage to working with these homeowners and their agents. But, finally, the tides are slowly turning and short sales are being approved! This is reducing the number of home loans in default and offering options to foreclosures.

In cases where there has been a hardship (forced relocation, death or disability of a family member, divorce, job loss, etc.) and where the homeowners are truly indigent and unable to pay, lenders are forgiving the remaining debt. In other cases they are permitting the mortgage deficit to be paid in installments after the sale. But, for every successful short sale, banks are controlling their losses.

Buyers are getting good deals in return for the added patience these sales require. Sellers are able to sell and get out from under a mortgage they would not have been able to continue to pay. Neighbors and communities are avoiding another foreclosed home which may sit vacant for months, racking up unpaid taxes and HOA fees, and becoming a liability to the community as a whole.

Successful short sales ARE a win for everyone. For more information about how you can be a winner, whether buying or selling, please contact me.

The Kind of Neighbors You Want

On Halloween night, I lost my keys. I was in the Leesburg Parade, and was convinced I had lost them somewhere along the parade route. After days of trying to find them, I finally resolved myself to the thought that they were gone forever. I was thinking of the hassle and money it would cost to replace those silly fobs and tokens, car remotes, changing the locks on my house...ugh.

This morning, my husband came back from taking my daughter to the bus stop, and he had a notice in his hand. It was a posting about a set of keys that had been found. Even though I was convinced that the keys had not been lost in my own neighborhood, I called. Sure enough, a neighbor had my keys! Coincidentally, it was the neighbor that moved into a house on the other end of my street, one I sold just a few months ago. In talking to her, she said she had newspaper ads coming out this week... she was so worried about returning those keys to the rightful owner (who she assumed was a stranger). Knowing what is involved with losing a set of keys like that, she was determined to find the rightful owner. Wow, these are the kinds of neighbors you want.

I was really touched... you simply don't see people taking that much time to worry about a stranger. Yet again today, I had another reason to be thankful for the people that touch my life.

It reminded me of our first weekend in this neighborhood, 8 years ago. We didn't have cable hooked up yet, so we had rented movies from Blockbuster. Apparently, while getting the kids in the car to run errands, my husband placed the movies on the top of the SUV, and forgot them. When he drove away, they fell into the street behind him. After getting to Blockbusters, and realizing he didn't have the movies, he was confused. He returned to the house to search high and low for the now missing movies(and, remember, we'd just moved, so the house was total chaos). He found them nowhere. Retracing his steps, we realized he must have left them on the top of the SUV, but they were gone now. On Monday, my husband went to Blockbuster with his tail between his legs to beg forgiveness and pay the fine. Imagine our surprise when he was told someone had returned them, and on time! (This was amazing because in those days, the movies had to be returned by noon to be "on time" and we didn't leave the house until 11 that morning.) A random person, a stranger to us then (years later we found out who it was), had gone out of their way to return the movies on our behalf.

In the 8 years we've lived here, many such episodes have occurred. And, yet, when I am selling homes in my very own neighborhood, I've yet to figure out how to truly convey to people that, somehow, we here in Ashton Downs live in a sort of oasis. Everyone - and I mean EVERYONE here is just good. They're the kind of neighbors you want. How can you put that into a property brochure or explain it to a buyer? I still haven't found the right approach, but I am trying.