Washington DC housing market surge

http://www.housingwire.com/content/washington-housing-resurgence

Important tips for buying a home

Buying a home is an important decision and that step should not be taken without doing your research. An educated buyer is in the best position to make the right decision about this major purchase. If you are knowledgeable about the housing market and procedures your transaction will go much smoother. The best advice for prospective home buyers is to hire a real estate broker. Again, research the brokers in your area. Talk to several and go with one you feel has a grasp of what you are really looking for in a home. Three items to look for are; an understanding of the market, knowing their client’s needs and finding properties that are great investments. A good broker will take the guesswork out of purchasing a home. Value The value of a home is different for each buyer based on how they are planning to use it. Herman states that lifestyle, transportation needs and schools. This value will be different for a family with children or a family with no children. The value in their eyes will be different. Cost Herman states that many sellers believe the cost of the house is what they paid for it plus improvements and renovations made during their tenure. By improving the home they are increasing the value of the home even though the cost of the home may remain the same. Herman emphasizes, “Cost and value are not what the price of the home should be or shouldn’t be.” Price/Fair Market Value The fair market value price is what the property is worth at today’s financial level. Fair market value may be determined by looking at other properties similar sold in the last six months. She goes on to warn that Comparative Market Analysis will not tell you everything you need to know. There are a few things that CMA will not be able to help you in some areas. A house built in the same neighborhood, by the same builder and at the same time will look totally different from one another in ten years. Looks and market value will depend on the condition of the property inside and out and such things as cleanliness and general upkeep. Another item that can affect the value of the property is the view. If the view is a beautiful lake, mountain, or stunning forest people will pay a premium for the view. School districts can also determine the fair market value of a property. A buyer needs to do some online research will tell you what the schools are like, crime statistics and other important information about the location. Neighbors might also be a consideration when looking at the fair market value of the home. If the house you are looking at is immaculate and well maintained, neighbors who are not tending to their lawn and the upkeep on their home may decrease the value of the property you are looking at. Once you have all the information, ask your broker to give you all the information on the homes you have selected to look at as a possible new home. Nothing takes the place of actually looking at the property. Appraising a house is an estimate and Herman states, “there is no exact science to pricing.”

Making sure you have everything in writing in your Real Estate contract

One reason sellers prepare and stage their homes for sale is so buyers can imagine themselves living there. It can be difficult for buyers who are emotionally involved with the home to picture what the place will look like after the sellers move out. To avoid after-closing problems, make sure that your purchase contract is clear about what stays with the house and what does not. Real estate law and custom vary from one area to the next. Ask your agent for help if you have any question about what's included in the sale and what is not. The multiple listing service can provide some information. For instance, if there are washer and dryer hookups only, then the washer and dryer are not included in the sale unless otherwise specified in writing in the purchase agreement. To be enforceable, real estate contracts must be in writing. Verbal agreements to sell real estate aren't binding. The MLS is the REALTORS®' listings of homes for sale and an offer to cooperate with other agents in finding a buyer. It is not a contract between the buyers and seller. So, even if the MLS information on a listing says the washer and dryer are included, you should write this into the contract so there's not confusion when the sellers move out. HOUSE HUNTING TIP: Typically, items that are permanently attached to the property, such as built-in appliances, tacked-down floor coverings, window coverings, light fixtures and bookcases, are included in the sale unless they are specifically excluded in writing by the sellers. For example, the dining room chandelier might have been in the sellers' family for years. It has sentimental value. The best approach would be for the sellers to remove and replace the fixture before the home goes on the market. Otherwise, ask the sellers to replace the fixture before they leave so that you're not left without light if this is the only source of light in the room. Satellite dishes and wall mounts for flat-screen TVs can create ambiguity. In some contracts, they are included. If you don't want them to be included, ask the sellers in writing to remove the wall mount and satellite dish and to make necessary repairs before they leave. If the sellers are taking these items with them, be sure to require in writing that they make necessary repairs. Special attention should be paid to the roof covering where a satellite dish is removed to avoid leakage into the home. Buyers are often taken by items of personal property that belongs to the sellers. They are a perfect fit for the house, like a fountain in the front courtyard, outdoor furniture or potted plants that enhance the garden, or a table that fits the breakfast nook perfectly. These items, unless permanently attached, are usually not included in the sale. Just because the sellers haven't offered to include a piece of personal property you covet doesn't mean you can't ask for them. Again, to ensure that they are included, write it into the contract, or an addendum to the contract. When should you ask for personal property that's not included in the sale? If you're in competition, postpone the request until the sellers accept your offer. When you remove contingencies might be a good time to bring up the subject. If the sellers can't part with the item you want, ask where they bought it. Even if the sellers have specifically said they are not leaving items like the washer and dryer, they might be willing to do so if your offer is good enough.

Has the housing market hit bottom?

http://online.wsj.com/article/SB10001424052702303644004577520414196790098.html

What do you as a seller if your neighbor is scaring buyers away..

http://lowes.inman.com/newsletter/2012/07/02/news/192590

Foreclosures and short sales - 203K Loans can help

Foreclosures and short sales always look so enticing, but these kinds of deals are not for people who are expecting in live in property within 30 days of ratifying contract or those who don't have the resources. Buying a residence that is not newly built usually requires immediate rehabilitation and remodeling to be followed by regular maintenance. Taking on a foreclosure or short-sale property requires a lot of patience. One of the most overlooked FHA programs, the 203(k) loan, can help with all those problems if you want to take on the burden of the foreclosure investment. I bring all this up because I wanted to discuss the 203(k) loan program, which is an under appreciated FHA opportunity that can combine purchase price and fix-up costs into one mortgage, and, secondly, because there have been increasing discussions about the virtues of buying a new home instead of a cheaper property where the mortgage is busted. Just like the purchase of a new car instead of used one, many prefer to buy a new home because it comes with all the modern bells and whistles and since everything is brand-new; as a homeowner, one shouldn't have to deal with structural and systematic breakdowns. Recently, the National Association of Home Builders pulled some data from the 2009 (most recent) American Housing Survey, a joint production of the U.S. Census Bureau and the Department of Housing and Urban Development (HUD), to see how frequently maintenance was required in a new home (four years old or younger) versus an older property. Its conclusions: 26 percent of all homeowners spend $100 or more a month on various upkeep costs; only 11 percent of owners of newly constructed homes spend this amount. In addition, 73 percent of new homeowners spend less than $25 a month on routine maintenance costs. The same holds true for energy expenses, NAHB reported. On a median-square-foot basis, homeowners spend 78 cents per square foot per year on electricity. Owners of new homes spend 65 cents per square foot per year. For homes with piped gas, homeowners spend on average 53 cents per square foot per year; owners of new homes spend 38 cents per square foot per year. "The message is, when you compare the average new-home price to the average existing-home price, new homes are more expensive, but when you consider additional, incremental costs, you are getting additional value," said Robert Dietz, an economist at the NAHB. "Obviously, the new home is going to be in superior condition, which means less expenses in the early years." Although the numbers from the 2009 American Housing Survey are getting a little ripe, Dietz doesn't foresee a big change when the next survey appears. If anything, he said the gap should be wider because homes are much more energy and maintenance efficient; meanwhile, the cost of energy and maintenance has only increased. "When you hear someone say, 'Hey, I got a short sale and the price is good,' the economist in me would respond, 'There's no free lunch,'" Dietz said. "It is going to require some effort and dollars to bring that home up to the standard the homeowner wants. In new construction, you get that standard in day one." Still, buyers of short sales and foreclosed homes seem to know what they are doing, and really, really want to purchase existing residences at what they consider bargain prices. They know there will be some fix-up costs, and if they're smart they'll be aware of one of the better FHA programs, the 203(k) loan. "A lot of people don't know about this loan; it's really a tight-lipped kind of thing," he said. "A lot of REALTORS® when I call to them about (the) 203(k) loan, they say, 'What is that?' Everyone is selling foreclosures, but they don't know what the 203(k) loan is." That's unfortunate, because it is a great selling point. Just a few notes from the FHA 203(k) loan website: --This is the Department of Housing and Urban Development's primary program for the rehabilitation and repair of single-family properties. --The program operates through FHA-approved lending institutions, which submit applications to have the property appraised and have the buyer's credit approved. --To purchase a dwelling and the land on which the dwelling is located and rehabilitate it, and to refinance existing indebtedness and rehabilitate such a dwelling, the mortgage must be a first lien on the property. The best feature of this loan is that it can be rolled into the mortgage. Robison explains: "The reason people should use this loan is because it is a way to not have to come upfront with cash. You bring the home's value up and roll it into your mortgage. It really opens up what's available on the market because if someone is looking at homes and saying, 'I can't buy this one because it is going to take $30,000 to redo the kitchen and put in a new carpet, they can get the expense wrapped up into one loan with one closing." There is even a streamline version of this loan that can go up to $35,000. Otherwise, the FHA loan limits vary by market, which, according to one website, range from $271,050 to $729,750. The same website offers this note about qualifying: minimum down payment of 3.5 percent; credit score of 640 or higher; no other FHA loans; and you do not have to be a first-time buyer.

Gaithersburg, MD - one of the top places to live in Maryland

http://money.cnn.com/magazines/moneymag/bplive/2010/snapshots/PL2431175.html