Washington Luxury Properties

GREAT NEWS - HIGHER FHA LOAN LIMITS

2011-11-18T12:57:00.001-05:00

Dear Friends,

The U.S. housing industry has scored a victory with House and Senate votes to raise the size of mortgages backed by the Federal Housing Administration to $729,750.

The measure split Republicans, many of whom supported retaining the lower limit of $625,500. As a result, efforts to restore the higher limit fell short until the Senate attached an increase to a package of spending bills that were passed yesterday by both the House and Senate.

The higher FHA limit is expected to become law after the president signs the spending measures, which he must do by the end of today to avoid a government shutdown.

Lawmakers who backed higher limits said withdrawing federal support could further undermine a housing market still struggling to recover from the 2008 credit crisis.

The final compromise, which dropped a similar increase to loans backed by mortgage firms Fannie Mae and Freddie Mac, represents a mixed victory for the housing industry.

While the increase to $729,750 is expected to spur some additional homebuying, it’s not clear by how much. FHA loans make up a smaller share of the market than those purchased by Fannie Mae and Freddie Mac.

5.3 Million Homes

Still, the measure was fully embraced by trade groups for homebuilders and realtors. The National Association of Homebuilders has estimated that 5.3 million homes lost their eligibility for conforming loans when the higher limits expired on Oct. 1. Nearly 670 counties saw their loan limits decline, according to the National Association of Realtors.

On the other side were a number of interest groups that push for free-market policies and against government support to the housing market. Those groups, which include the Club for Growth and Heritage Action for America, play a large role in the House Republican conference and can influence campaign funding for the next election.

Republicans backed by the groups thought efforts to increase the loan limits had been defeated earlier this year, particularly when the White House announced support for allowing them to go back down to pre-crisis levels.

House Republicans who opposed the provision seized on the FHA’s annual actuarial report released earlier this week, which said the agency has a 50 percent chance of needing to seek taxpayer aid to bolster its insurance fund.

The FHA, which provides liquidity by protecting lenders against borrower defaults, has increased its share of the mortgage market in the wake of the credit crisis. The agency, created in 1934 during the Great Depression, now guarantees a third of U.S. mortgages, according to the report.

The House-passed legislation, approved in a 298-121 vote, was opposed by 101 members of the House’s Republican majority, some of whom said they opposed the measure primarily because of the loan-limit increase.

The Senate followed the House’s lead a few hours later, voting 70-30 to clear the measure for Obama’s signature. The provision was once again cited by several Republicans as a reason for their opposition.

___________________
WLP Executive Team
www.WashingtonLuxuryProperties.com

5 Great Reasons for HOMEOWNERSHIP!

2011-11-09T11:13:00.000-05:00

Dear Friends,

If you've been on the fence about homeownership, now is the time to take a leap! Don't let the negative press deter you from one of life's greatest joys.

Take a look at five short and sweet reasons that homeownership is great!

1. Equity. When you pay rent, you never see that money again. It is lining the landlord's pocket. Yes, buying a home may come with some hefty initial costs (downpayment, closing costs, inspections), but you will make that money back over time in equity built in the home. Historically, homes appreciate by about 4 to 6 percent a year. Some areas are still experiencing normal appreciation rates. For the areas that have seen harder times since the recession, experts feel that the housing market will recover. Homeownership is about building long-term wealth. A home bought for $10,000 in 1960 is most likely worth 10 times that in today's market.

2. Relationships: Renters tend to see their neighbors come and go quickly. Some people sign year leases while others are in the community for much shorter terms. Apartment complexes also tend to have less common shared space for people to meet, greet, and socialize. Homeowners, however, have yards, walking trails, or community pools and clubhouses where they can get to know each other. Neighbors stay put much longer (at least three to five years if they hope to recoup their closing costs). This means more time to develop relationships. Research has shown that people with healthy relationships have more happiness and less stress.

3. Predictability: Well, as long as you have a fixed-rate term on your mortgage it's predictable. Most people buying homes today know that a fixed-rate is the way to go. This means your payment amount is fixed for the life of the term. If your mortgage payment is $500 today, then it will still be $500 a month in 10 years. This allows for people to budget and make solid financial plans. The sub-prime crisis meant many homeowners with adjustable rate mortgages saw their monthly payments rise and then rise some more. Homeownership, though, generally comes with a predictable table of expenditures. Even the big purchases are predictable. You know most roofs last just 15 years (or so). You know that each year you'll need to pay for the gutters to be cleaned, and so on.

4. Ownership: Okay, this is a given. Homeownership means you "own" your home. That comes with some incredible perks, though! You can renovate, update, paint, and decorate to your heart's desire. You can plant trees, install a pool, expand the patio, or do holiday decorating that would rival the Kranks (if the HOA allows!). The bottom line is this is your home and you can personalize it to your taste. Most renters are stuck with the same beige walls and beige carpet that has been standard apartment decor for 20 years. Now is your chance to let your home speak!

5. Great Deals: It's a great time to buy. Interest rates are at historic lows. We're talking 4.0 percent instead of 6.0 or higher. This means big savings for today's buyers. Home prices have also taken a dip since the recession, which means homes are more affordable than ever. If you have steady income and cash for a downpayment, then be sure to talk to your local real estate agent about what homes in your area could be a fit for you.

Homeownership can be a real joy. It's time to get off the fence and into a home that is right for you!

WLP Executive Team
www.WashingtonLuxuryProperties.com
Licensed in Maryland, Virginia and District of Columbia since 2005

Is it a Seller's Market or Buyer's Market in Northern Virginia?

2011-06-15T23:47:00.002-04:00

In general, 6 months of inventory (homes for sale) represents a balanced market, less than 6 months represents a seller’s market and more than 6 months of inventory makes it a buyer’s market. The number of months of inventory is determined by the number of homes currently on the market divided by the number of homes sold during the previous month.

Arlington

Average Days on Market: 49 (up 46% vs. 1 year ago)
Median Sales Price: $427,450 (down 2% vs. 1 year ago)
Average % Yield on List Price: 98.4% (no change vs. 1 year ago)
Inventory: 3.5 months – seller’s market (up 15% vs. 1 year ago)

Alexandria

Average Days on Market: 62 (up 107% vs. 1 year ago)
Median Sales Price: $351,500 (up 7% vs. 1 year ago)
Average % Yield on List Price: 98.4% (no change vs. 1 year ago)
Inventory: 4.0 months – seller’s market (up 17% vs. 1 year ago)

Falls Church

Average Days on Market: 7 (down 78% vs. 1 year ago)
Median Sales Price: $482,500 (up 1% vs. 1 year ago)
Average % Yield on List Price: 99.1% (no change vs. 1 year ago)
Inventory: 5.1 months seller’s market (up 113% vs. 1 year ago)

Fairfax County

Average Days on Market: 32 (up 10% vs. 1 year ago)
Median Sales Price: $428,000 (up 3% vs. 1 year ago)
Average % Yield on List Price: 98.8% (now change vs. 1 year ago)
Inventory: 3.7 months – seller’s market (up 9% vs. 1 year ago)

Any questions, call us at 703.473.7100 or 703.889.0199
WLP Executive Team
www.WashingtonLuxuryProperties.com

Foreclosure Scams

2011-04-13T12:53:00.000-04:00

Dear Friends,

Few things are scarier than the prospect of losing your home to foreclosure. Scam artists know that and will test your vulnerability by offering “phantom help” as part of a foreclosure scam. Knowing the difference between legitimate help and a foreclosure scam can prevent you from losing your home.

How do they hook you?
Phantom helpers may blanket a hard-hit town or neighborhood with a direct mail campaign promising relief for those threatened by foreclosure. When you’re feeling desperate—and when panic sets in—good judgment goes out the door.

What do phantom scammers do to you?
Of course, just because they seek you out when you’re feeling vulnerable doesn’t mean you have to yield. A cool head and education are your best protection when foreclosure scam artists show up with reassuring words. They’ll start by telling you they can negotiate a deal with your lender—but they have no intention of doing so.

Instead, phantom help scammers may:

*Isolate you, telling you not to contact your lender, lawyer, or a credit counselor.

*Demand upfront fees.

*Tell you to make all the mortgage payments to them instead of your mortgage firm—before they disappear.

*Trick you into signing over the deed to your house and, when it’s too late to save the home, sell it for whatever they can get.

*Use the government’s name to dupe you into making payments to them, by using official-sounding acronyms like “TARP” or official-looking website addresses.

*Try to charge you for access to free government assistance.

*Extract enough personal information to commit identity theft.

Educate yourself to protect yourself
Tip off: You never need to pay to find out about legitimate government programs. A housing counselor approved by the U.S. Department of Housing and Urban Development can point you in the right direction—for free.

Other options:

For federal refinancing and loan modification help, check out the Making Home Affordable program.

Stay away from any firms that guarantee to stop your foreclosure, claim to have special relationships with banks, or offer money-back guarantees.
Watch out for unsolicited offers to refinance, especially from companies claiming government affiliations—these may well be foreclosure scam artists.

WLP Executive Team
www.WashingtonLuxuryProperties.com

REAL ESTATE PROFESSIONALS

2011-04-08T22:18:00.000-04:00

New FTC Rule Requires Short Sale Disclosures:

The Federal Trade Commission (“FTC”) has issued a final rule that may impact real estate professionals who represent clients involved
in a short sale transaction. Depending on certain factors, the rules may require real estate professionals to make certain disclosures to
consumers if they negotiate a short sale with a lender, advertise short sales experience, or take upfront fees from short sale sellers. The MARS rules took full effect on January 31, 2011.

Background:

In November 2010, the FTC published the final Mortgage Assistance Relief Services final rule (“MARS rule”). The MARS rule is primarily directed at companies that offer loan modification services to consumers. When a company is marketing these types of services to consumers, the MARS rule requires that the MARS provider make certain disclosures to consumers. In addition, the MARS rule bars advance fees paid to a MARS provider, prohibit certain representations, and imposes record keeping requirements (must retain for 2 years all MARS advertisements, sales records for covered transactions, customer communications, and customer contracts). MARS providers can only receive payment if the consumer’s loan is modified by the lender.

The FTC and state attorney generals have actively prosecuted foreclosure rescue companies, based on evidence that consumers received very little benefit for these services. The prosecutions took place under unfair trade practices laws, although some states did enact laws specifically regulating this business model. The FTC itself has brought 40 cases and FTC staff told NAR that none of these cases involved real estate professionals acting in their licensed capacity.

The FTC began its rulemaking process in 2009. NAR submitted comments and testimony during the rulemaking seeking an exemption for real estate licensees (click here to read NAR’s first and second comment letters). The FTC addressed NAR’s comments in the following footnote:

The Commission concludes that an exemption for real estate agents is not necessary. Real estate agents customarily assist consumers in selling or buying homes and perform functions such as listing homes for sale, showing homes, and finding desirable homes for consumers. The Commission is aware that real estate agents may perform these functions when properties are bought or sold through a short sale transaction, but does not consider these services to be MARS.

Final MARS Rule:

The MARS rule covers short sale negotiations, and so this is the area where real estate professionals acting in their licensed capacity
may need to comply with these rules. FTC staff has determined that “negotiate” will include communications with a lender about the
possibility of a short sale transaction involving a consumer’s loan. A short sale is a transaction where the title to the property changes,
the sales price is insufficient to pay all the liens, the seller does not provide funds to clear the liens on the property, and the lender
agrees to allow the sale to occur by releasing the liens on the property. In some cases, the lender may hold the seller liable for the
shortfall, which is called a “deficiency”.

The MARS rule contains the following definitions:

“Mortgage Assistance Relief Service” is defined as a “service, plan, or program offered or provided to the consumer in exchange for consideration” that provides services in relation to a consumer’s mortgage, including negotiating a possible loan modification, directing a consumer to stop or otherwise alter the amount of his/her mortgage payment, modifying the consumer’s payment arrangements, or negotiating a short sale of a dwelling on behalf of a consumer.

“Mortgage Assistance Relief Service Provider” is someone who “provides, offers to provide, or arranges to provide, any mortgage assistance relief service.”

Based on those definitions, the MARS rule can have an impact on a real estate professional that represents clients involved in a short sale transaction or markets himself/herself as a MARS provider (i.e. short sale specialist). The focus of this article is for real estate professionals who, while acting in their licensed capacity as a real estate professional, provide services that may fall within the MARS rule. If someone is operating a full-time MARS business and not acting as a real estate licensee, they should further review these rules and consult with counsel to assure their business practices comply with MARS.

Disclosures Required by the Rules:

There are three types of disclosures that a real estate professional may need to make consumers. The rules have specific requirements on how the disclosures must be presented to consumers, depending on the communication medium. In all cases, the disclosure must be clear and prominent. For printed materials, the written disclosure must be the larger of 12-point type or one-half the size of the largest letter used to list the name of the firm providing the disclosures. Below are models that could be used in written materials; the requirements vary slightly for oral communications made to consumers.

General Commercial Communications Disclosures:

A real estate professional that advertises MARS services which is not directed at a specific consumer will need to include in all advertisements a clear and prominent disclosure with the following:

IMPORTANT NOTICE (in two point-type larger than the font size of the disclosure): (Name of company) is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit rating.

Consumer-Specific Commercial Communications:

The second disclosure is required in all communications that the MARS provider directs to specific “prospective” clients, and so these
disclosures may need to be made by a real estate professional that represents a seller in a short sale transaction. These communications must be provided by the MARS provider before the provider begins mortgage-assistance services on behalf of the consumer. As discussed in this article, the time when the real estate professional needs to provide this disclosure will vary, as a listing broker may not be aware that the transaction will need to be a short sale until far into the listing process.

In order to comply with this disclosure requirement, a listing broker should provide this disclosure to the client in a letter or memo once
he/she is aware the transaction may be a short sale, highlighting this fact in the document and prominently displaying the below disclosure statement. The real estate professional should work with their attorney in drafting this document. NAR has also provided a model disclosure form- click here to view. The disclosure must provide the following:

IMPORTANT NOTICE (in two point-type larger than the font size of the disclosure): You may stop doing business with us at any time.
You may accept or reject the offer of mortgage assistance we obtain from your lender [or servicer]. If you reject the offer, you do not have to pay us. If you accept the offer, you will have to pay us (insert amount or method for calculating the amount) for our services. (Name of company) is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan. If you stop paying your mortgage, you could lose your home and damage your credit rating.

Disclosure When Providing an Offer of Mortgage Relief:

The third disclosure needs to be provided, in a clear and prominent manner, at the time the real estate professional presents its client
with the lender’s short sale approval letter. The disclosure must be provided on a separate page and state: IMPORTANT NOTICE: Before buying this service, consider the following information (in two point-type larger than the font size of the disclosure): This is an offer of mortgage assistance we obtained from your lender [or servicer].You may accept or reject the offer. If you reject the offer, you do not have to pay us. If you accept the offer, you will have to pay us [same amount as disclosed previously] for our services. If you stop paying your mortgage, you could lose your home and damage your credit rating.

The real estate professional must also provide a notice from the lender or servicer that describes all material differences between the seller’s current loan and the lender’s proposal to modify the loan if the seller accepts the short sale offer, which may include the lender holding the seller liable for the deficiency amount. This information will likely be contained in the lenders short sale approval letter.

MARS Scenarios:

Real Estate Professionals with Possible Short Sale Listings:
Negotiating a short sale with a lender will cause the real estate professional to fall within the definition of a MARS provider and so would be subject to the MARS rule. As stated above, negotiation will include communications with a lender about a short sale transaction on behalf of a client. How the broker will need to comply with MARS will depend on the facts and circumstances of the broker’s business and how the broker has conducted the negotiations. A brokerage which promotes itself as a MARS provider will need to fully comply with MARS.

A broker that becomes involved in a short sale transaction listing during the normal course of his/her real estate brokerage operations and doesn’t otherwise promote himself/herself as a MARS provider will need to comply with the MARS rule for the specific transactions involving a short sale if the broker will negotiate the loan with the lender or otherwise arranges for such negotiations. The broker will provide the Consumer-Specific Commercial Communications disclosure to consumers as soon as he/she is aware of the need for a short sale transaction.

The time when these disclosures need to be made will depend on the facts of each transaction. If the broker learns that a short sale will be required during its initial meeting with the seller, the broker will need to make the required disclosures at that time. A broker who doesn’t learn that a short sale is required until the first offer is received will not need to make disclosures until that time.

The time for disclosure is similar to the requirement that many MLSs impose upon participants. Under those rules, a participant has a duty to let other MLS participants know about the possibility for a short sale when it is “reasonably known” by the listing broker. Real estate professionals should follow a similar process in making MARS disclosures to their clients.

Example #1: Real estate broker A has a residential real estate brokerage business and is paid by commission. He does not advertise as a MARS provider. A takes a listing from a seller, but the property does not sell during the first six months and prices in the local market have dropped during that time. A then receives an offer that is substantially below the listing price, but consistent with the recent sales in the market. The seller informs A that his mortgage exceeds the offer price but the seller will accept the offer if the lender would be willing to accept the offered price. If A decides to continue working with his client during the short sale and will negotiate with the lender or will arrange for a MARS provider to negotiate with the lender, A should now make the Consumer-Specific Commercial Communications disclosure and may also need to update the listing in his local MLS.

Example #2: Real estate salesperson B has a prospect walk into her office, inquiring about possibly selling his home. The prospect tells B that he has lost his job and so needs to sell his home because he cannot afford to continue making mortgage payments. Based on the amount remaining on his loan and current market conditions, B may need a short sale in order to sell his home. B will need to provide the client with the Consumer-Specific Commercial Communications if she decides to pursue this listing.

MARS & Marketing Materials:
The MARS rule require an entity who specifically markets MARS to consumers to make certain general disclosures in all advertisements promoting MARS services. So, any brokerage that specifically solicits business from short sale sellers will need to include these disclosures in all of its advertisements, including telephone solicitations.

A real estate brokerage that isn’t specifically seeking to be a MARS provider yet wants to mention its short sale experience/qualifications in its marketing materials may or may not need to provide the general MARS disclosures. The FTC’s practice is to review ads on a case-by-case basis, and determine the impression that a particular ad would make upon a “reasonable” consumer.

So, an advertisement listing the accomplishments of a licensee and the types of services that the licensee provides to his/her clients which mentions experience with short sale transactions, among other services, may not need to comply with the MARS advertising rules. Similarly, an advertisement identifying a licensee as having the SFR designation, without more, is also likely outside of the MARS advertising rules. However, an advertisement promoting a real estate professional’s short sales brokerage business will likely need to comply with the rules, since the average consumer would have the impression that these advertisements are from a MARS provider.

Licensees Accepting Upfront Fees:
As stated above, the MARS rule bar the receipt of upfront fees. Therefore, brokers whose business model involves upfront fees need to
be aware that if they take an upfront fee from a client and then later help the client negotiate a short sale, they will be in violation of
MARS.

Buyer's Representatives:

Buyer's representatives may need to make the Consumer-Specific Commercial Communication to sellers if they negotiate a modification of the seller’s loan with a lender while representing a potential buyer. Despite the fact that the buyer’s representative does not otherwise represent the seller in the transaction, the buyer’s representative will be seen as a MARS provider once he/she begins negotiating the terms of the short sale with the lender(s). Additionally, the buyer’s representative cannot charge a separate fee to the seller for this service, unless the buyer’s representative has entered into a separate agreement with the seller and this agreement meets the other conditions of the MARS rule (no upfront fee, can only receive payment if the loan is modified, and the other relevant provisions of the regulation).

Referrals:

The MARS rule also includes in the definition of MARS provider “any person that…arranges for others to provide any mortgage assistance relief service.” Therefore, any licensee referring a client to MARS provider in exchange for a referral fee will need to be careful that it is not “arranging” the mortgage relief services for its client; otherwise, it will need to comply with the MARS disclosure requirements.

If a real estate professional does have clients in need of short sales but the real estate professional would rather refer the short sale
negotiations with the lender(s) to a MARS provider, a possible solution is to offer the client a list of providers and allow the client to
choose the MARS provider. Whether the real estate professional is seen as arranging the transaction will again be a factual determination, but allowing the client to choose the provider and making it clear that the client is not required to use the MARS providers offered by the real estate professional should remove the real estate professional from the need to comply with the MARS rule. The real estate professional should also disclose upfront any referral fee arrangements with the MARS provider to the client.

The real estate professional also needs to take steps to assure that any MARS provider to whom it refers customers is complying with the MARS rule, as it is a violation if “substantial assistance” is provided to someone that you know or should have known is not complying with the MARS rule.

Conclusion:
If a real estate professional represents clients in short sales, takes an upfront fee for his/her services, or promotes himself/herself to
potential short sale sellers, the real estate professional needs to be aware of the MARS rule and the disclosure requirements.

WLP Executive Team

Any further questions, call us!
www.WashingtonLuxuryProperties.com

Mortgages Today and Tomorrow

2011-04-06T22:07:00.000-04:00

Dear Friends,

In the heyday of the housing boom in 2004 and 2005, lenders used to joke that "all you need to get a mortgage is be breathing." Times have changed. Between the real estate market debacle and the banking crisis, standards for loan approval have tightened far beyond breathing.

Economic Indicators To Know:
While it may be harder to qualify for a mortgage today, the process in many ways is simply a return to the pre-housing boom days when consumers were required to prove their income and assets, demonstrate their ability to repay the loan and have sufficient savings for a down payment and cash reserves.

Down Payment Requirements:
The days of widely available, no-down-payment loans are gone for most buyers. In the midst of the housing boom, no-down-payment loans were readily available, but these days conventional loans require a down payment of 5 to 15%. Government-insured FHA loans require a down payment of 3.5% for qualified buyers, but those with a credit score below 580 must make a down payment of 10%. VA loans, available to members of the military and veterans, are available without a down payment. The USDA loan program, available to residents in designated rural areas, also offers no down payment loans.

Loan Types:
Borrowers used to be able to apply for a variety of mortgage products such as interest-only loans and option-ARMs. While interest-only loans are rarely available today, the option-ARMs have disappeared completely. Plain vanilla fixed-rate loans are the most popular for the majority of borrowers today, followed by hybrid ARMs with a fixed-rate of one-to-ten years, followed by a rate that adjusts yearly.

Credit Scores:
Lenders today rely more heavily than in the past on your credit score to determine not only whether you qualify for a mortgage but also to set your interest rate. While lenders vary, most say a credit score of 680 is required to be approved for a conventional loan. FHA loan requirements are a little looser, and some lenders (but not all) will approve an FHA loan for a consumer with a credit score of 620 or under. Many require a score of 640 for an FHA loan. Borrowers with a credit score of 720 or 740 and above are likely to be approved, depending on other financial circumstances. Interest rates are set on a tiered basis, with the best interest rates going to borrowers with the highest credit scores.

Verification:
At the height of the housing boom, many lenders were approving "no-income verification/no-documentation loans," but those are pretty much impossible to find today. Borrowers need to prove their income with two years of tax returns and will need bank statements to prove that they have assets and cash reserves. Money that is being used for a down payment and closing costs must have a paper trail that shows where it came from, since there are rules concerning the ability to use gift funds.

Employment:
A few years ago, lenders were approving "stated income" loans, but now lenders take the time to verify employment and are looking carefully at job stability as part of the approval process. Mortgage approvals are much more difficult for self-employed applicants who must prove a steady stream of income and the viability of the business.

Ratios:
Another more restrictive move for borrowers today is the debt-to-income ratio. In the days of looser guidelines, lenders were more willing to stretch debt-to-income ratios to as much as 50% if the borrowers seemed to have the ability to repay the loan. Most lenders now limit borrowers to a housing payment of 31 to 33% of gross monthly income and an overall debt of 43 to 45%. Sometimes a high credit score or significant cash reserves or a high down payment will allow borrowers to exceed these guidelines, but lenders are much less willing to expand these ratios than in the past.

Extra Credit Checks:
As part of their new stricter guidelines, lenders sometimes recheck your credit after a loan approval but before the loan settlement date as an added protection for their investment. Borrowers need to be very careful to avoid using their credit cards, applying for additional credit or switching jobs during the crucial period between a loan approval and the settlement.

The Bottom Line:
All of these new rules and changes to the mortgage process mean that one more thing has changed since the banking crisis: Loan approvals take longer. Lenders now have to carefully check every detail on the loan application along with having an appraisal done, so borrowers need to be prepared for an application-to-settlement period of at least 30 days, but often 45 to even 60 days. While this may be frustrating, it is all part of a renewed effort among lenders to carefully screen loan applicants.

WLP Executive Team
www.WashingtonLuxuryProperties.com

Fairfax County Sales Trends

2011-04-03T18:32:00.002-04:00

Dear Friends,

The charts below clearly show seasonal home sales trends in Fairfax County.

In our area, it is widely thought that Spring and Summer have the highest months of sales.. but have you ever seen statistical data to back that up? You asked, and now you receive.

The chart below (green) shows the number of sales by month in Fairfax County:

June is pretty consistently one of the months with the highest number of sales, and usually May and July are also pretty strong. But, sellers sometimes fail to recognize that means they must have been on the market for 30-45 days before then... THAT is when the contracts come in. Our chart below shows the trends for new contracts by month over the last 5 years:

According to this chart, the highest number of new contracts in Fairfax County are recorded in the spring.

2006: March-April-May
2007: January-March-May
2008: April-May-June
2009: April-May
2010: March-April
2011:.... yet to be seen,
but could you be missing the market already?

If you own a home in Fairfax County and are considering selling, we can help... and now is a great time.

WLP Executive Team
www.WashingtonLuxuryProperties.com

HAFA Short Sale Program implemented on April 5, 2010 sunsets December 31, 2012

2011-03-29T22:06:00.002-04:00

Dear Friends,

Join us on our newly formed "SHORT SALE STATION" fan page exclusively on Facebook and be on the "fast track to loan resolutions. If you know of anyone having hardship making mortgage payments and needs consultation, do not hesitate to call us.

As part of the HAMP (The Home Affordable Modification Program) program there will be an important Short Sale alternative called the HAFA. This program compliments HAMP and is detailed in the National Association Government Affairs division pamphlet. The text of the pamphlet is below. It will be important to understand this program and the timelines associated with it to assist homeowners who do not qualify for the modifications they set out to achieve in the HAMP program.

INTRO:

In early 2009, the National Association of REALTORS® (NAR) urged the U.S. Treasury Department, the Federal Housing Finance Agency, Fannie Mae and Freddie Mac to improve the short sales process. NARs concerns were first addressed on May 14, 2009, when the Obama Administration announced the outline of a program to provide incentives and uniform procedures for short sales and deeds-in-lieu (DIL) of foreclosure under the Making Home Affordable Program. NAR kept in contact with the various agencies and departments during 2009 to keep them apprised of the problems REALTORS® were having with short sales and urged them to implement the program as quickly as possible. Finally, on November 30, 2009, the Obama Administration released guidelines and uniform forms for its Home Affordable Foreclosure Alternatives Program (HAFA). Modified HAFA rules for loans owned or guaranteed by Fannie Mae or Freddie Mac will be issued in coming weeks. HAFA does not apply to FHA or VA loans.

About HAFA

HAFA, which will help homeowners who are unable to retain their home under the Home Affordable Modification Program (HAMP), provides incentives in connection with short sales and deeds-in-lieu of foreclosure.

The program:

•Complements HAMP by providing a viable alternative for borrowers (the current homeowners) who are HAMP eligible but nevertheless unable to keep their home.
•Uses borrower financial and hardship information already collected under HAMP.
•Allows borrowers to receive pre-approved short sales terms before listing the property (including the minimum acceptable net proceeds).
•Prohibits the servicers from requiring a reduction in the real estate commission agreed upon in the listing agreement (up to 6%).
•Requires borrowers to be fully released from future liability for the first mortgage debt and, if the subordinate lien holder receives an incentive under HAFA, that debt as well (no cash contribution, promissory note, or deficiency judgment is allowed).
•Uses a standard process, uniform documents, and timeframes/deadlines.
•Provides financial incentives: $1,500 for borrower relocation assistance; $1,000 for servicers to cover administrative and processing costs; and up to a $1,000 match for investors for allowing a total of up to $3,000 in short sale proceeds to be distributed to subordinate lien holders.
•Requires all servicers participating in HAMP to implement HAFA in accordance with their own written policy, consistent with investor guidelines. The policy may include factors such as the severity of the potential loss, local markets, timing of pending foreclosure actions, and borrower motivation and cooperation.
•Does not take effect until April 5, 2010, but servicers may implement it before then if they meet certain requirements. The program sunsets on December 31, 2012.

TIMELINE

Notification If a servicer has not already discussed a short sale or DIL with the borrower, it must notify the borrower in writing of these options and give the borrower 14 calendar days to respond, orally or in writing. If the borrower does not respond, that ends the servicers duty to give a HAFA offer.

Servicers must consider HAMP-eligible borrowers for HAFA within 30 days after the borrower does at least one of the following:

•Does not qualify for a HAMP trial period plan
•Does not successfully complete a HAMP trial period plan
•Is delinquent on a HAMP modification (misses at least 2 consecutive payments)
•Requests a short sale or DIL

Short Sale Agreement

The borrower has 14 calendar days from the date of the Short Sale Agreement (SSA) to sign and return it to the servicer. The SSA must give the borrower an initial period of 120 days to sell the house (extensions permitted up to a total of 12 months).

Purchase Offer

Within 3 business days of receiving an executed purchase offer, the borrower (or agent) must submit a completed Request for Approval of Short Sale (RASS) to the servicer, including

* a copy of the sale contract and all addenda

* buyer documentation of funds or pre-approval/commitment letter from a lender

* all information on the status of subordinate liens and/or negotiations with subordinate lien holders.

Within 10 business days after the servicer receives the RASS and all required attachments, the servicer must approve or deny the request and advise the borrower.

Closing

The servicer may require the closing to take place within a reasonable period after it approves the RASS, but not sooner than 45 days from the date of the sales contract unless the borrower agrees.

The servicer must release its first mortgage lien within 10 business days (or earlier if required by state or local law) after receipt of sales proceed from a short sale or delivery of the deed in the case of a DIL. Investor must waive rights to seek deficiency judgments and may not require a promissory note for any deficiency.

FAQs

HAFA is a complex program with 43 pages of guidelines and forms. To help you better understand the process, NAR has prepared some frequently asked questions that address the basics. For more information on HAFA and more detailed FAQs, please visit http://www.realtor.org/shortsales

Who is eligible for HAFA?

The borrower must meet the basic eligibility criteria for HAMP:

•Principal residence
•First lien originated before 2009
•Mortgage delinquent or default is reasonably foreseeable
•Unpaid principal balance no more than $729,750 (higher limits for two- to four-unit dwellings)
•Borrowers total monthly payment exceeds 31% of gross income

How is the program being implemented?

Supplemental Directive 09-09 (November 30, 2009) gives servicers guidance for carrying out the program. A short sale agreement (SSA) will be sent by the servicer to the borrower after determining the borrower is interested in a short sale and the property qualifies. It informs the borrower how the program works and the conditions that apply.

After the borrower contracts to sell the property, the borrower submits a "request for approval of short sale" (RASS) to the servicer within 3 business days for approval. If the borrower already has an executed sales contract and asks the servicer to approve it before an SSA is executed, the Alternative RASS is used instead. The servicer must still consider the borrower for a loan modification.

What are the steps for evaluating a loan to see if it is a candidate for HAFA?z

1. Borrower solicitation and response

2. Assess expected recovery through foreclosure and disposition compared to a HAFA short sale or deed in lieu of foreclosure (DIL)

3. Use of borrower financial information from HAMP

4. Property valuation

5. Review of title

6. Borrower notice if short sale or DIL not available (to borrowers that have expressed interest in HAFA).

What are the HAFA rules regarding real estate commissions?

The guidance states that a servicer may not require a reduction in the real estate commission below the amount stated in the SSA, up to 6%. However, if the servicer has retained a vendor to assist the listing broker, the vendor must be paid a specified amount from the commission.

What else should I know?

•The deal must be "arms length." Borrowers cant list the property or sell it to a relative or anyone else with whom they have a close personal or business relationship.
•The amount of debt forgiven might be treated as income for tax purposes. Under a law expiring at the end of 2012, however, forgiven debt will not be taxed if the amount does not exceed the debt that was used for acquisition, construction, or rehabilitation of a principal residence. Check with a tax advisor.
•The servicer will report to the credit reporting agencies that the mortgage was settled for less than full payment, which may hurt credit scores.
•Buyers may not reconvey the property for 90 days. HAFA Short Sale Program will take effect April 5, 2010, Some servicers may implement it sooner.

WLP Executive Team
www.WashingtonLuxuryProperties.com

Cantor: Mortgage interest deduction appears safe ((News Update))

2011-03-25T23:16:00.000-04:00

Dear Friends,

The latest news regarding rumors about "Ending the tax deductions on mortgage interest".

With the housing market still struggling to get back on its feet, House Majority Leader Eric Cantor says there's little appetite in Congress for ending tax deductions on mortgage interest.

The Virginia Republican said in remarks to real estate agents in his hometown of Richmond Thursday that such a move could snuff out what appears to be improvement in home sales after a 4-year plunge.

He said the rebound could have begun sooner had government not overreacted to the 2008 collapse in some mortgage-backed securities.

Cantor said regulations placed on banking after the market collapse and banks failures in recent years have made it more difficult for banks to make home loans. Easing the restrictions, he said, would accelerate the housing market recovery.

WLP Executive Team
www.WashingtonLuxuryProperties.com

Qualities Buyers Value Most From Real Estate Agents

2011-03-11T10:11:00.000-05:00

Dear Friends,

A survey concluded the following most valued from buyers:
■Home buyers value their real estate agent to help them find the right home to purchase, but when given a list of qualities honesty and integrity is rated as the most important quality.
■98 percent of home buyers rated honesty and integrity as a very important quality.
■Knowledge of the purchase process, responsiveness, and knowledge of the real estate market were all rated as very important by more than 9 in 10 home buyers.
■The least important to recent home buyers was skills with technology—just 40 percent of recent buyers found this was very important.

Let us help you and your family achieve your goals. Call us today.

WLP Executive Team
www.WashingtonLuxuryProperties.com

WASHINGTON, DC METRO AREA "Housing Market and 4 Impact Trends"

2011-03-08T17:44:00.002-05:00

After a roller coaster ride in home sales caused by the federal homebuyers tax credit, the Washington, DC metro area housing market ended the year with about the same number of sales for 2010 as occurred in 2009.

Despite improved affordability from record low mortgage rates and housing prices below the peak levels of a few years ago, conservative mortgage underwriting, as evidenced by the 35 percent year-over-year increase in cash purchases, continues to keep the housing market improvement in check.

The key characteristics of Washington, DC metro area housing market. The four impact trends are:

•Cash purchases jumped 35 percent as mortgage underwriting remains tight. Evidence of the difficulty in obtaining mortgage financing was the surge in cash purchases. There were 7,258 cash sales comprising 16.4 percent of all purchases in 2010, up from 5,376 cash sales comprising 12.1 percent of all purchases in 2009. Conventional and FHA financing comprised 43.3 percent and 31.5 percent respectively, which led the way in 2010 but both categories lost market share from 2009.

•Despite federal stimulus directed towards the housing market, unit sales were unchanged in 2010. There were 44,362 units sold in the Washington, DC metro housing market, essentially unchanged from the 2009 total of 44,264. Tight mortgage underwriting for home purchasers was the primary reason home sales saw nominal year over year improvement despite the federal homebuyers tax credit and mortgage rates reaching historic lows. Unit sales in 2010 were 41.1 percent below the recent peak of 75,298 units set in 2004. However, the record levels set in the middle of the decade are best characterized as an anomaly caused by the global credit boom.

•Detached housing continued to gain market share. Since housing prices peaked in 2007 and the credit crunch began the market share for detached houses in the region has continued to rise. Market share for detached housing reached a decade low of 42.5 percent of all sales in 2007, then rising each year, reaching 48.6 percent in 2010. Unit sales for detached housing increased 1.9 percent to 21,564 in 2010 compared to the prior year as attached homes fell 1.3 percent over the same period. Housing prices for both categories edged higher over the same period.

•Homes sold three weeks faster than the prior year due to less competition. With a decline in active listings at year end compared to the prior year, there were fewer homes for active listings to compete with. The average days on market—the number of days from original list date to contract date—was 65 days in 2010, more than 3 weeks faster than the 88 day average of 2009 but still slower than the 48 day annual average of the past decade. The decline in active inventory reduced the listing discount—the percent difference between the original list price and the sold price— from 7.6 percent in 2009 to 5.8 percent in 2010.

More questions, contact us at 703.889.0199 VA; 301.335.4920 MD; 202.445.0037 DC
WLP Executive Team
www.WashingtonLuxuryProperties.com

NAHB Study: New Homes in 2015 will be Smaller, Greener and More Casual

2011-03-08T16:18:00.000-05:00

Dear Friends,

A recent study by the National Association of Home Builders (NAHB) shows that while consumer hesitation on home buying is waning, the recent housing downturn has changed what Americans are looking for in their next home.

The survey research on consumer preferences which is presented annually at the NAHB International Builders’ Show suggests that the severity of the recession has left an indelible mark on prospective home buyers who have shifted their perspective on the housing they want and need.

Builders surveyed expect homes to average 2,152 square feet in 2015, 10 percent smaller than the average size of single-family homes started in the first three quarters of 2010.

To save on square footage, the living room is high on the endangered list– 52 percent of builders expect it to be merged with other spaces in the home by 2015 and 30 percent said it will vanish entirely.

“As an overall share of total floor space, 54 percent of builders said the family room is likely to increase,” said Rose Quint, NAHB’s assistant vice president for survey research. “That makes it the only area of the home likely to get bigger.”

In addition, the relative size of the entry foyer and dining room are likely to be diminished by 2015. However, opinions were fairly evenly divided on the fate of the Kitchen, Master Bedroom, Bath and Mudroom.

The average new home of 2015 is likely to feature a Great Room comprised of the Kitchen, Foyer and Living Room; a Walk-In Closet in the Master Bedroom; a Laundry Room; Ceiling Fans; a Master Bedroom on the first floor in homes with two stories and a two-car garage.

In addition to floor plan changes, 68 percent of builders surveyed say that homes in 2015 will also include more green features and technology, including low-E windows; engineered wood beams, joists or tresses; water-efficient features such as dual-flush toilets or low-flow faucets; and an Energy Star rating for the whole house.

The full study and survey methodology can be found online at www.housingeconomics.com.

WLP Executive Team
www.WashingtonLuxuryProperties.com

Taxes lowest for DC residents "study"

2011-02-23T15:47:00.000-05:00

Dear Friends,

Tax debates often involve arguments about how taxes compare in DC, Maryland, or Virginia. A new report from the DC Fiscal Policy Institute found DC's to be the lowest in most cases. Virginia residents without cars would also pay low levels of tax.

The study looked at a variety of hypothetical families in three income levels: renters earning $50,000 in annual income, and homeowners earning $100,000 or $200,000. For each case, it totals the likely income, property, and car taxes being paid for singles or married couples without children or with 2 children.

In almost all scenarios, DC's tax burden is the lowest. The major exception is single households making $200,000 without or with children, where taxes are lower in Virginia. For married couples, Virginia's taxes rise above DC's mostly due to the car tax.

A separate DC CFO analysis also studied homeowners earning $50,000, and also found lower taxes in DC than in Maryland and Virginia.

The report assumes each single person owns one car, as do the couples earning $50,000, while the couples of higher incomes own two cars. The car tax ranges from about $550 (in Fairfax) and $600 (in Arlington) for the households making $50,000, up to $1,960 (Fairfax) and $2,150 (Arlington) for the two-car families making $200,000.

That means car-free households would save around $500-2,000, making Virginia cheaper for several of the categories. However, anyone who moves to Virginia for the lower taxes only possible for car-free residents would have to move to the relatively few places in the state where it is feasible to live entirely without any car, even for occasional errands or weekend trips, or where Zipcar is very close by. Owning cheaper cars would also allow Virginia families to save money on taxes.

Naturally, this just compares average households of these sizes. Each individual's tax burden will vary. Living in a less expensive home means lower property taxes, for example. However, that assumes someone can find a less expensive house they are willing to live in.

Property taxes are highest in Prince George's County, even though average home values are lower there. This analysis assumes lower house prices for its hypothetical families in Prince George's County, with the most expensive homes belonging to DC and Arlington residents.

Nevertheless, DC residents pay lower property taxes due to a far lower tax rate and the homestead deduction for those who live in their property. Prince George's, on the other hand, has the highest property tax rate in the region, and with home prices having declined more than elsewhere, many owners are paying taxes on valuations above their actual home price.

The report didn't consider sales taxes, because those vary greatly based on what people buy and where. The Virginia sales tax is one percent lower, but Virginia taxes groceries, while the others don't. Also, many DC residents shop in the suburbs for certain items and many Maryland and Virginia residents buy things in DC.

In tax debates, opponents of raising taxes often claim that wealthy residents will move to Maryland or Virginia to save money.

In moderate to upper-income households, moving to Maryland would not save money; moving to Virginia might if the households are willing to live without cars or with very cheap ones.

WLP Executive Team
www.WashingtonLuxuryProperties.com

Uncertainty in Economy vs. Opportunity in Real Estate

2011-02-09T16:32:00.007-05:00

Dear Friends,

There are many people sitting on the sidelines right now afraid to pull the trigger on a real estate purchase. Some are first time buyers; some are thinking of moving up to the home of their dreams; others are looking to purchase a vacation home or perhaps a future retirement home. Fear has prevented them from moving forward. Though their concern is understandable, we must never allow fear to ultimately determine who we are nor what we do. We must live our lifes.

The fear causing so many to hesitate comes from three areas:
1). The lackluster economy
2). The unemployment numbers
3). Real estate’s performance in the recent past

Should they stop us from moving forward with our dreams and aspirations.

The Economy
Actually, the economy is doing much better. The news is more positive every day. Consumer Affairs said this:

The U.S. Federal Reserve, which has administered life support to the economy over the last two years, says it’s seeing some promising signs of life.

In its “Beige Book,” containing reports from the twelve Federal Reserve Districts, the central bank finds “moderate expansion” of economic activity at the end of the year.

It said conditions were improving in the Boston, New York, Philadelphia, and Richmond Districts. Activity increased modestly to moderately in the Cleveland, Atlanta, Chicago, St. Louis, Kansas City, and Dallas Districts.

The economy of the Minneapolis District “continued its moderate recovery,” while that of the San Francisco District “firmed further”.

This is most easily seen in the increase in the Dow which has shown a 20.9% in increase in the last twelve months.

Unemployment
Though still too high, the unemployment numbers are getting better. The recent drop from 9.8% to 9% is proof that things are, if nothing else, at least stabilizing. Though the job losses have been deep, they have leveled off. We can see this in the graph below from Calculated Risk:

The greatest fear was created by the uncertainty by many that their job could be in jeopardy; that they could be next to join the ranks of the unemployed. As the economy grows, any increase in unemployment seems unlikely. That should remove most of this fear.

Real Estate’s Performance

There is no question that real estate has had a difficult last five years. However, real estate was never meant to be a great ‘short term’ investment. It has, on the other hand, always been a good ‘long term’ investment. Let’s compare real estate to the returns in the stock market since January 1, 2000.

In the long term, real estate has always been a safe investment.

Bottom Line
We should make sure that the financial uncertainty of the present does not prevent us from taking advantage of the opportunities available in the real estate market currently.

Donald Trump probably put it best last week when he said:

“I’m pretty sure this is a great time to go out and buy a house. And if you do, in 10 years you’re going to look back and say, ‘You know, I‘m glad I listened to Donald Trump’.”

WLP Executive Team
www.WashingtonLuxuryProperties.com

Obama Administration Poised to Propose Mortgage Changes

2011-02-04T17:40:00.000-05:00

The Obama administration could recommend reducing the size of mortgages eligible to receive government aid being reported.

Currently, mortgages up to $729,750 are able to receive backing from the federal government, and these loans usually have lower interest rates than those that are not government-backed. Long-term (30-year) loans under $417,000 are eligible to receive the lowest rates, and as the size of the mortgage increases, the rates also go up.

The loan limit for mortgages receiving government support will likely be lowered to $625,500 as of September. The proposal will be part of a report expected next week that will also look into the fate of Fannie Mae and Freddie Mac.

Borrowers who will most be affected by this change are those taking out loans between what could be the new limit ($625,500) and the old limit ($729,750).

WLP Executive Team
www.WashingtonLuxuryProperties.com

Change to real estate fees could cost Fairfax County MILLIONS!!-- NEWS UPDATE

2011-02-03T19:02:00.000-05:00

Dear Friends,

Fairfax County legislative staff are fighting proposed changes to Virginia tax law that could cost Fairfax County as much as $8 million to $10 million.

Del. Jackson Miller (R-Dist. 50) of Manassas has introduced a bill that would change the way deed recordation and grantor taxes are calculated starting July 1, 2013.

Those real estate fees, paid at the time a property changes hands, provide tax revenue to local governments, state government and the state's transportation trust fund.

Currently, the tax is based on either the sale price paid for the property or the actual market value, whichever is higher. The proposed changes would base the taxes solely on the sale price for the next three years.

Sen. W. Roscoe Reynolds (D-Dist. 20) of Martinsville also has introduced a bill that could affect recordation and grantor tax revenues for a three-year period.

Current law provides a tax exemption for people who are refinancing a mortgage with the same lender for the principal amount remaining on the original debt. Reynolds' bill would expand the exemption to any refinancing, regardless of the lender, for the next three years. A similar provision is included in Miller's bill as well.

The two bills would cost the county an estimated $8 million to $10 million, according to Susan Mittereder, the county's legislative director. The county's legislative team is lobbying against the bills in Richmond.

The Virginia Department of Taxation's fiscal impact statement for Miller's bill puts the cost to local governments around the state at a lower rate, at a minimum of $2.5 million to $2.8 million per year. The minimum losses to the state's general fund are in excess of $5 million per year, according to the impact statement, plus $520,000 to $600,000 each year in lost revenue to the transportation trust fund.

The potential fiscal impact of Reynolds' bill is unknown, according to the Department of Taxation, but the impact statement for that bill does indicate it could decrease state and local revenues.

Miller and Reynolds were in legislative meetings Monday and did not respond to calls seeking comment before the Times' print deadline.

The Northern Virginia Association of Realtors is supporting both bills as part of its legislative package.

WLP Executive Team
www.WashingtonLuxuryProperties.com

Obama Administration released its January Housing Scorecard

2011-02-02T11:56:00.000-05:00

Dear Friends,

Here is the recent update from OBAMA Odministration

"OBAMA ADMINISTRATION RELEASES JANUARY HOUSING SCORECARD"

New Making Home Affordable data reveals mortgage help reaching struggling middle class, underwater and minority homeowners.

Washington- The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury today released the January edition of the Obama Administration's Housing Scorecard. The latest housing figures show increased new and existing home sales as home affordability remains high, but officials caution that the market remains fragile, as prices are unsettled. Foreclosure starts and completions remained low at the year’s end, as lenders continue to review internal servicing procedures. The Obama Administration’s complete housing scorecard on the nation's housing market is available online at www.hud.gov/scorecard.

"Over the last 20 months, the Obama Administration has confronted the nation’s housing crisis with an unprecedented effort to promote stability in the market – keeping millions of families in their homes and helping millions more to save money by refinancing. But the data clearly show that the market remains extremely fragile," said HUD Assistant Secretary Raphael Bostic. "We know that many responsible homeowners are still fighting to make ends meet. That’s why we’re committed to continuing to provide help to homeowners by implementing the broad range of programs the Obama Administration has put in place."

"Before the launch of the Administration’s programs, little was done to offer meaningful assistance to homeowners struggling to deal with the worst housing crisis in generations. The data released today demonstrates that the Administration’s programs are reaching middle income homeowners and providing them with real payment relief," said acting Treasury Assistant Secretary for Financial Stability Tim Massad. "While we cannot prevent every foreclosure, it is important to remember that these programs have helped to create more options for affordable and sustainable assistance than have ever been available before."

Each month, the Housing Scorecard incorporates key housing market indicators and highlights the impact of the Administration's housing recovery efforts, including assistance to homeowners through the Federal Housing Administration (FHA) and Home Affordable Modification Program (HAMP). The January Housing Scorecard features key data on the health of the housing market including:

•New and existing home sales increased in December, but remained below levels seen in the first half of 2010. Record low mortgage rates continue to keep home affordability at record high levels. However, home prices remain unsettled at this fragile stage of the recovery.

•As lenders review internal procedures related to foreclosure processing, many foreclosure actions have been delayed leading to a lower level of foreclosure activity in December than in prior months. The decline is likely to be temporary as lenders eventually revise and resubmit foreclosure paperwork in the coming months.

•More than 4.1 million modification arrangements were started between April 2009 and the end of December 2010 - more than double the number of foreclosure completions during that time. These actions included more than 1.4 million HAMP trial modification starts, more than 650,000 FHA loss mitigation and early delinquency interventions, and nearly 2 million proprietary modifications under HOPE Now. While some homeowners may have received help from more than one program, the number of agreements offered was more than double the number of foreclosure completions for the same period (1.7 million). View the December HAMP Servicer Performance Report.

•Homeowners in HAMP permanent modifications continue to perform well over time, with re-default rates lower than industry norms. December data for the Making Home Affordable Program (MHA) shows that after 12 months, nearly 85 percent of homeowners remain in a permanent modification. Homeowners in HAMP permanent modifications have already reduced their mortgage obligation by more than $4.5 billion to date.
In a continued commitment to enhanced reporting and transparency, today the Administration also released the Making Home Affordable Data File which includes characteristics of program participants to date, including financial information, mortgage loan information before and after entering HAMP, performance in a HAMP modification, and race/ethnicity data. The MHA Data File offers mortgage loan-level data and is intended to allow for better understanding of the impact of the program.

Key findings that emerged from a preliminary analysis of the MHA Data File include:

•To date, most program participants are moderate and middle income, financially-distressed homeowners who are "underwater" on their mortgages. Borrowers in active permanent HAMP modifications have a median annual income of approximately $46,000; a median credit score of 570 upon entering the trial period; a post-modification loan balance of just over $232,000 and a median mark-to-market loan-to-value (LTV) of 118 percent.

•Of borrowers reporting race and ethnicity, African-Americans account for 18 percent of active permanent modifications and Hispanics account for 26 percent.

•Homeowners in active permanent modifications have seen their monthly mortgage payment cut by a median of approximately 40 percent. Eighteen percent of homeowners in active permanent modifications have reduced their monthly mortgage payment by more than $1,000 each month.
In preparing the MHA Data File, Treasury applied the recommendations of an independent non-profit, non-partisan policy institute to ensure the privacy of participating homeowners. The release of today’s data file fulfills a requirement within the Dodd-Frank Wall Street Reform Act to make available loan-level data about the program. Treasury will update the file monthly and will expand reporting to include newer initiatives that are part of Making Home Affordable.

Researchers interested in using the MHA Data File can access the file and user guide at: http://www.treasury.gov/initiatives/financial-stability/results/Pages/mha_publicfile.aspx.

WLP Executive Team
www.WashingtonLuxuryProperties.com

Housing Prices remain strong in D.C. Area

2011-01-31T11:48:00.000-05:00

Housing prices remain strong in D.C. area

All real estate is local, and the D.C. real estate market remains the strongest in the nation, according to the latest S&P/Case Shiller Home Price Index.

The news is not so good for most of the nation's largest cities.
Its monthly housing price index shows home prices fell in 19 of the 20 largest cities from October to November, including Washington where median prices decreased 0.1 percent.

But on a year-over-year basis, Washington was one of only four major markets to show price appreciation, and the 3.5 percent gain from November 2009 was the biggest yearly gain reported.

Los Angeles, San Diego and San Francisco also showed yearly price gains.

"With annual growth rate of 3.5 percent in November, Washington, DC was the strongest market, but still well below the 7.7 percent annual rate of growth seen in May 2010," said David Blitzer, chairman of the Index Committee at Standard & Poor's.

While Washington remains a strong market for housing, the trends aren't great nationwide. Median prices remain above lows set in the spring of 2009, but eight markets - Atlanta, Charlotte, Detroit, Las Vegas,
Miami, Portland, Seattle and Tampa - hit their lowest levels since home prices peaked in 2006 and 2007.

WLP Executive Team
www.WashingtonLuxuryProperties.com

How to make the most of your Open House Vist!!

2011-01-29T00:30:00.001-05:00

Dear Friends,

If you are planning on having an Open House or attending one, please read the following informative tip and call us with questions.

Open House: How to make the most of the visit Open house is a great opportunity for both the buyer and the seller. It gives the seller the chance to showcase their home and the buyer can view the home in all its glory. Buyers love to scope out potential homes and many offers are made at open houses. After all, open houses are really sales presentations. In order to have a successful open house, there are some tasks that should be completed by the seller beforehand.

The most obvious task is cleaning. The house should be spotless, including appliances. If you work full time and don’t have the time to get the house cleaned, hire a house cleaning service. The money spent is well worth it if you are able to sell quickly. It might be hard to keep it clean if you are still living there, but you must make a concentrated effort to try. Your home presentation must be impeccable.

Keep foul and mysterious odors away. The first thing a potential buyer will notice is an offensive odor and you will probably never see them again. Regularly inspect your home for potential odor sources and keep a steady supply of candles and air fresheners on hand. If you have an indoor cat, keep the litter box out of sight and scooped out daily.

Clutter is a major turnoff to potential buyers. It just isn’t comforting to see piles of clutter everywhere. Keep small appliances stored instead of out on the countertops. Remove photographs and knick-knacks. You want people to envision their belongings in the house. Clean out and organize the closets. If there is no reason for something to be displayed, get rid of it.

If you can, remove non-essential furniture to make the rooms appear larger. Spacious rooms are more appealing to the eyes. Keep your boxes of junk stored out of sight. It is a good idea to start figuring out what you need and what you can live without. It would be a good idea to have a garage sale before you put the house on the market. If you can’t bear to part with anything, rent a temporary storage unit.

You cannot ignore the outside of the house either. The outside presentation has a major impact on the buyer. Clean the leaves out of the drain gutter, don’t let garden hoses or other tools pile up outside. Pick them up and store them elsewhere. Make the effort to beautify the front entry. If the door handle is rusty or the whole door looks junky, get a new one. Keep the flower beds neat and free from weeds.

Look at the walls and try to put yourself in the buyers’ shoes. How would you look at the walls in someone else’s house? Is the paint chipping or is the color outdated? It would be well worth your time to give the walls a fresh coat of paint. Nothing makes a room come alive more than a fresh coat of paint. Give the rooms a little bit of a makeover with new décor that compliments the wall colors. If you have a garden, bring in some fresh flowers and put them in attractive vases.

Establish a pleasant atmosphere by baking bread or cookies. Candles add a nice touch along with background music. Classical or jazz music are both good choices. You want to convey style and elegance to your audience. First impressions go a long way.

When trying to sell your house, you should be prepared for a showing at any time. Last minute requests are very common and can turn into offers. You have the option to request 24 hours notice before a showing, but in doing so you limit your home’s exposure. Try to be as flexible as possible. Accommodating the hectic schedules of a potential buyer will make you and your home look that much better.

It is a good idea to not be present for the showing. Buyers might not feel comfortable in your presence or they might be afraid to ask a particular question for fear of offending you. If they can’t view the house fully, they will probably just move on to the next one. You don’t want that. They are supposed to fall in love with your house.

More by contacting us in MARYLAND- 301-335-4920; VIRGINIA- 703-473-7100/703-889-0199; DISTRICT OF COLUMBIA- 202-445-0037

WLP Executive Team
www.WashingtonLuxuryProperties.com

Nearly Eight in 10 Americans Still Believe Buying a Home Makes Good Financial Sense

2011-01-11T11:29:00.001-05:00

Nearly eight out of 10 respondents believe buying a home is a good financial decision, despite ongoing challenges with the economy and housing market. That’s according to the 2010 National Housing Pulse Survey, an annual report released by the National Association of Realtors.

The survey, which measures how affordable housing issues affect consumers, also found job security concerns to be the highest in eight years of sampling, with 70% of Americans saying that job layoffs and unemployment are a big problem in their area; eight in 10 cite these issues as a barrier to homeownership.

“The real issue facing the nation’s economy right now is that many Americans can’t find meaningful work to support their families,” said NAR President Vicki Cox Golder, owner of a real estate company in Tucson, Ariz. “While a job recovery is what’s needed right now to get the economy and housing market back on the right track, owning a home continues to be part of the American Dream and one of the best long-term investments in your future.”

Despite economic uncertainty, 68% of those surveyed still believe now is a good time to buy a home; while that number is down from last year (75%), it’s up from 2008 (66%) and 2007 (59%). Lower home prices and record-low mortgage interest rates may be attracting buyers to the housing market—more than one-fourth of renters said they are thinking more about buying a home than they were a year ago. Sixty-three percent of renter respondents said that owning a home is a priority in their future, and nearly 40% said it was one of their highest priorities.

Lower home prices have improved affordability. In fact, the percentage of renters who are worried that the cost of housing is getting so unaffordable that they will never be able to buy a home has decreased steadily since 2007, from 63% to 57%.

Despite improved affordability, 79% of respondents still consider having enough money for down payment and closing costs to be among the biggest obstacles to buying a home. Another obstacle is a lack of confidence in their ability to be approved for a loan, reported by 73% of respondents.

The good news is that Americans are seeing more stability in the real estate market. Nearly seven out of 10 believe that home values have stabilized in their area; the same number expects home sales to remain about the same through the end of the year.

While more than half (51%) say foreclosures are a problem in their area, the rate of foreclosures is also seen as stabilizing; 51% say the rate is about the same as last year. Thirty-six percent of respondents cite the recession, loss of jobs and the poor economy as the main reason for the ongoing foreclosure problem. This has also led to a slight increase in the number of people who believe the federal government should take a more active role overseeing loans and mortgages (44%, up from 43% last year).

While nearly seven out of 10 say it’s harder to sell a home in their area today than it was a year ago, it’s less of a concern from last year when the number was 10 percentage points higher. This is most likely the result of lower home inventories.

The 2010 National Housing Pulse Survey is conducted by American Strategies and Myers Research & Strategic Services for NAR’s Housing Opportunity Program. The telephone survey was among 1,209 adults living in the 25 most populous metropolitan statistical areas. The study has a margin of error of plus or minus 3.1 percentage points.

If 2011 is your year to buy, visit www.WashingtonLuxuryProperties.com for local home searches, community information and other relevant information to make a sound decision.

WLP Executive Team

Military and Foreign Service Tax Credit

2011-01-05T00:21:00.002-05:00

Dear Friends,

There is still time for members of the U.S. Armed Forces to receive a tax credit* when they buy a home!

The Worker, Homeownership, and Business Assistance Act of 2009 authorizes an extension of the tax credit for first-time home buyers† and existing homeowners‡ who are qualifying1 members of the U.S. armed forces. This is great news for our dedicated servicemen and women—there’s still time to buy a home and benefit from low interest rates, a wide selection of homes and potential tax savings*!

Participating in the tax credit program is easy:
• You claim the tax credit on your federal income tax return.
• The tax credit is a straight dollar-for-dollar reduction of your income tax bill.
• The tax credit is equal to 10% of the purchase price of a principal residence, not to exceed:
— $8,000 for a first-time home buyer† who makes a purchase after November 30, 2009 and before May 1, 2011

— $6,500 for an existing homeowner‡ who makes a purchase after November 6, 2009 and before May 1, 2011

• The tax credit is allowed if the purchase price of the home does not exceed $800,000.
• The credit begins to phase out for taxpayers with adjusted gross income in excess of $125,000, or $225,000 in the case of a joint return.

• Within the first three years of the purchase date, if you sell the home or it ceases to be your principal residence, the tax credit must be repaid to the Internal Revenue Service. However, if you are a member of the U.S. armed forces, Foreign Service of the United States, or an employee of the intelligence community and are required to leave your home due to government orders for qualified official extended duty service, you may not have to repay the tax credit.*

• *Consult your tax advisor for more information on how the tax credit will impact you. Tax laws are complex, and we want you to be well informed before you the make decision to purchase a home.

1Eligibility is extended to members of the U.S. armed forces, the Foreign Service and employees of the intelligence community who have served on qualified official extended duty service outside of the United States for at least 90 days during the period beginning after December 31, 2008 and ending before May 1, 2010.

†First-time home buyer means any individual if such individual (and if married, such individual’s spouse) had no present ownership interest in a principal residence during the 3-year period ending on the date of the purchase of the principal residence to which the first-time home buyer credit applies. Tax credit may not be available for an individual who is under the age of 18 as of the date of purchase.

‡Existing homeowner is a “Long-Time Resident of Same Principal Residence,” which means an individual (and, if married, such individual’s spouse) who has owned and used the same residence as a principal residence for any 5-consecutive-year period during the 8-year period ending on the date of the purchase of a subsequent principal residence. Tax credit may not be available for an individual who is under the age of 18 as of the date of purchase.

More details on the program, please contact our Preferred lenders on www.WashingtonLuxuryProperties.com

WLP Executive Team

Community Development Mortgage Program (CDMP)

2011-01-02T21:26:00.000-05:00

Dear Friends,

This program may be a good fit for first-time homebuyers. If you know of a friend or family member that wants to buy a property for the first time, please consult with us and we will set you up with our Preferred In-House Lender.

Key Program Features
• Only 2% down required in Stable Markets.
• No Mortgage Insurance means a lower payment
• Non-Traditional Credit profiles allowed
• Gifts and approved Grants allowed
• Buyer can own other home if sold prior to closing
Income Advantages
• Minimum 1 year employment required
• Self Employed for 1 year OK with Tax Returns
• Seasonal income & public assistance allowed
Credit Advantages
• Minimum credit score of 620 or Acceptable Non-Traditional Credit
• Clean Mortgage / Rental history for 12 months from one borrower
• Can qualify with only one borrower having credit history
• Collections up to $500 can be paid at closing
• Single Debt to Income ratio of 42% will help buyers with minimal debt

Often, an FHA loan can offer similar advantages with fewer restrictions--FHA loans have a much lower interest rate, have the same "minimum credit score" requirement, will allow gift funds for down payment, have much more lenient debt-to-income guidelines, can be assumed by a buyer down the road, etc. However, for clients short on down-payment cash--who fit the requirement list for this program--it can be a home run!

More information by contacting us at www.WashingtonLuxuryProperties.com

WLP Executive Team

5 Steps to Owning Again After Foreclosure

2010-12-18T21:26:00.000-05:00

Dear Friends,

It won’t be easy to obtain a mortgage after foreclosure. But with enough time, discipline, and desire, you can own your own home again. Here’s what you need to do:

1. Stick with a job after foreclosure
Did you fall into foreclosure because of the lack of a steady job? If you did, the first step toward homeownership after foreclosure is finding and holding one. And if you already have one—stick with it, unless you can move to a better one. Note that potential lenders will require stable employment before they’ll give you a new mortgage loan after a foreclosure. Even if it means taking a lower-paying job, it’s worth it.

2. Rebuild your nest egg after foreclosure
Establish a safety net. Financial planners generally recommend three to six months of living expenses in a liquid account, but since you’re coming out of foreclosure, six is a minimum to show stability and that you’re able to pay your bills—including your mortgage—for an extended period if you lose your job.

3. Raise your credit score after foreclosure
This is the hardest and most time-consuming part. After foreclosure, your credit score, according to myFICO, probably dropped by about 150 points. You’ll need to raise it back up with perseverance.

Pay bills on time and keep your credit card balances below maximum levels. The foreclosure will stay on your credit report for seven years, but if you prove your money management skills have matured, it will become less of a red mark as years go by.

Tip: Consult a housing counselor. The U.S. Department of Housing and Urban Development offers free housing counseling for distressed homeowners with a foreclosure in their past. A counselor can help you with money management and budgeting. Counseling works—an evaluation of a program in Indianapolis discovered that credit scores greatly improved because of education and counseling, and increased average borrowing power by $4,500 per family.

4. Reduce your waiting time for a mortgage after foreclosure
Normally, you would have to wait seven years after foreclosure before you can apply for a new mortgage under Fannie Mae rules. (Fannie Mae changes rules frequently. You can check the latest rules at Fannie Mae’s site.)

However, you might wait only three years if you can show extenuating circumstances for your foreclosure, which are defined as “events that are beyond the borrower’s control that result in a sudden, significant, and prolonged reduction in income or a catastrophic increase in financial obligations.” These include:

•Losing a job
•Getting divorced
•Having unexpected medical expenses

There’s one last alternative if waiting isn’t your thing—you can obtain seller financing, essentially bypassing the traditional mortgage. If both parties are amenable, you can enter into a lease with an option to buy, or take a mortgage directly from the seller. You’ll most likely have to show some hefty reserve funds, but if you’ve turned around your financial situation quickly after your foreclosure, it’s worth a shot to deal directly with the seller.

Keep in mind that sellers may be motivated to agree to this if they need to sell and the potential buyers they’ve met with can’t obtain a conventional mortgage—perhaps because they’ve been through foreclosures, too.

5. Be honest about your foreclosure
When you’re ready to apply for your new mortgage, don’t try to hide your foreclosure. On the contrary, be proactive and reveal the steps you’ve taken to remedy the problems that led to your foreclosure.

Tip: Try a mortgage broker, who can work with a variety of lenders to find you a loan. When you work directly with a retail lender, like a bank, they have a limited pool of loans to offer you. But a good mortgage broker—one with a vast network of lendersóhas many options, and may be able to find a mortgage solution if the foreclosure in your past is creating challenges in obtaining one.

If you stay disciplined and positive, the American dream—obtaining a mortgage and owning a home of your own—can, indeed, be yours again. Even after foreclosure.

WLP Executive Team
www.WashingtonLuxuryProperties.com

FHA Approved Specific Condo Projects

2010-12-14T19:17:00.000-05:00

Dear Friends & Clients,

MANY CONDO PROJECTS IN OUR AREA that are currently FHA approved are getting ready to expire (mostly on Dec 7th).

If an FHA case number is assigned to the property prior to the FHA project approval expiring, you have 6 months from the expiration date to fund the transaction without a need for a re - cert.

You can search for FHA approved specific condo projects using this link to check a projects expiration date:

https://entp.hud.gov/idapp/html/condlook.cfm

If a condo's FHA project approval has expired before a FHA case number is assigned, the condo project will need to be re-certified. Re-certification requires:

1. HOA CERTIFICATION FORM
2. ACTUAL HOA BUDGET & MOST RECENT FINANCIAL STATEMENTS
3. COPY OF INSURANCE POLICY
4. PRELIMINARY TITLE REPORT FOR SUBJECT PROPERTY
5. RECORDED CONDO/PLAT MAP
6. RECORDED DECLARATIONS
7. EXECUTED AND ADOPTED BYLAWS
8. ARTICLES OF INCORPORATION
9. HOA TAX ID NUMBER
10. MANAGEMENT AGREEMENT, if applicable.
11. FEMA FLOOD CERTIFICATION FORM
12. OUTSTANDING OR PENDING LITIGATION ANALYSIS, if applicable.
13. HOA MEETING MINUTES
14. NUMBER OF BANK OWNED REO UNITS _________

More questions regarding this subject, contact our Preferred Lenders at
www.WashingtonLuxuryProperties.com

FHA CONDO PROJECT APPROVAL EXPIRATION DATE EXTENSIONS

2010-12-08T17:37:00.000-05:00

DEAR FRIENDS & CLIENTS,

FHA has extended condo project expiration dates that were set to expire on December 7th. Please see below and pass along to all agents.

from the National Project Review and Eligibility Services:

********FHA announces extension of condominium project approvals with an expiration date of December 7, 2010. Provided below are the extension dates based on five-year time frames with the exception of those condominium projects with original approval dates from 1972 -1985.********** Please check project approval expiration dates which have been updated in FHA connection to confirm the expiration date.

Initial Project Approval Dates

1972 – 1980
Current Exp Date: 12/07/10 New: 12/31/10
1981 – 1985
Current Exp Date: 12/07/10 New: 12/31/10
1986 – 1990
Current Exp Date: 12/07/10 New: 05/31/11
1991 – 1995
Current Exp Date: 12/07/10 New: 07/31/11
1996 – 2000
Current Exp Date: 12/07/10 New: 08/31/11
2001 – 2005
Current Exp Date: 12/07/10 New: 09/30/11
2006 – 2008 (SEPT)
Current Exp Date: 12/07/10 New: 03/31/11

The extensions were granted to reduce the impact of processing and reviewing the number of project approvals expiring at the same time while recognizing current housing market conditions. Lenders and/or other interested parties are encouraged to begin the re-approval or recertification process as early as possible as it is not anticipated that any further extensions of project approvals will be issued.

The Condominium look-up page and the FHA Connection databases were updated on December 7, 2010 and now reflect the extended expiration dates. The links to the sites are:

Condominium look-up page: https://entp.hud.gov/idapp/html/condlook.cfm
FHA Connection: https://entp.hud.gov/clas/index.cfm

For more information, contact our Preferred Lenders on our site or just call us directly: DC 202.445.0037; VA 703.473.7100/703.889.0199; MD 301.335.4920

WLP Executive Team
www.WashingtonLuxuryProperties.com

5 Tips to Improving Your Credit Score

2010-12-01T01:06:00.001-05:00

Dear Friends & Clients,

1). Get copies of your credit report--then make sure information is correct.
Go to www.annualcreditreport.com . This is the only authorized online source for a free credit report. Under federal law, you can get a free report from each of the three national credit reporting companies every twelve months.

You can also call 877-322-8228 or complete the Annual Credit Report Request Form and mail it to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

2). Pay your bills on time.
One of the most important things you can do to improve your credit score is pay your bills by the due date. You can set up automatic payments from your bank account to help you pay on time, but be sure you have enough money in your account to avoid overdraft fees.

3). Understand how your credit score is determined.

Your credit score is usually based on the answers to these questions:

*Do you pay your bills on time? The answer to this question is very important. If you have paid bills late, have had an account referred to a collection agency, or have ever declared bankruptcy, this history will show up in your credit report.

*What is your outstanding debt? Many scoring models compare the amount of debt you have and your credit limits. If the amount you owe is close to your credit limit, it is likely to have a negative effect on your score.

*How long is your credit history? A short credit history may have a negative effect on your score, but a short history can be offset by other factors, such as timely payments and low balances.

*Have you applied for new credit recently? If you have applied for too many new accounts recently, that may negatively affect your score. However, if you request a copy of your own credit report, or if creditors are monitoring your account or looking at credit reports to make prescreened credit offers, these inquiries about your credit history are not counted as applications for credit.

*How many and what types of credit accounts do you have? Many credit-scoring models consider the number and type of credit accounts you have. A mix of installment loans and credit cards may improve your score. However, too many finance company accounts or credit cards might hurt your score.
To learn more about credit scoring, see the Federal Trade Commission's website, Facts for Consumers.

4). Learn the legal steps to take to improve your credit report.
The Federal Trade Commission's “Building a Better Credit Report” has information on correcting errors in your report, tips on dealing with debt and avoiding scams--and more.

5). Beware of credit-repair scams.
Sometimes doing it yourself is the best way to repair your credit. The Federal Trade Commission's "Credit Repair: How to Help Yourself" explains how you can improve your creditworthiness and lists legitimate resources for low-cost or no-cost help.

**** Much more information on http://www.federalreserve.gov/creditreports/****

Any further questions, please visit www.WashingtonLuxuryProperties.com
WLP Executive Team

((Mortgage Update)) From Our Lender Desk...

2010-11-29T17:07:00.000-05:00

Dear Friends & Clients,

Great news! The "High Balance" temporary Conforming and FHA loan limits has been extended through September 30th, 2011. The "High Balance" loan limits are for loan amounts from $417,000 to $729,750, which is the middle tier between regular FHA/Conforming and true Jumbo/Non-Conforming loan amounts.

Program Reminder: The majority of homebuyers only stay in a property from 5-7 years, especially first time homebuyers. That said, the FHA 5 Year ARM offers an extremely low interest rate, which will increase a buyers purchasing power, offer the possibility for a lower monthly payment, and allow for a buyer to save tons of money in interest payments- which could be used towards savings for a downpayment on a new property or other investments.

The FHA 5 Year ARM works like this:
Your initial interest rate is Fixed for the first 5 years. Then, on your loans anniversary on the 6th year, your rate will adjust to the market rate (up or down), however has safety nets of a 1% annual cap and a 5% lifetime cap. So, worse case scenario on the 6th year when your rate adjusts, the maximum it could increase OR decrease is 1% from your initial interest rate. Your interest rate will continue to adjust each year thereafter, for the remainder of the term of your loan (30 year term). Your rate can never increase or decrease more than 5% from your initial interest rate over the life of the loan. That said, you'd need to make the assumption that your interest rate increased by the full 1% annual cap each year after the initial 5 year fixed period to get to the 5% lifetime cap, which would take 10 years to do so based on this assumption.

The current "break even" comparison for interest paid using the 5 year ARM and the 30 Year Fixed is approximately 12 years based on today's FHA rates. Please find attached a P&I comparison chart for the two programs based on a $425,000 Purchase Price with a 3.5% Downpayment.

WLP Executive Team

Any further questions, please contact our Preferred Lenders at
www.WashingtonLuxuryProperties.com

Title Insurance is essential in protecting your investment

2010-11-29T17:01:00.000-05:00

Dear Friends & Clients,

The turmoil in the residential real estate industry and the recent meltdown in the foreclosure process should have every prospective home buyer reexamining the often overlooked concept of title insurance. In addition to being of critical importance these days, title insurance is one of the largest components of closing costs in a home purchase or refinance. Having a basic understanding of title insurance and knowing the right questions to ask can reduce a borrower's risk and save hundreds or even thousands of dollars in closing costs.

Title insurance underwriters recently issued strict guidelines for when - and whether - they will insure the title to property that has been the subject of a foreclosure. Their concerns relate to accusations that hundreds of thousands of foreclosures might have been conducted using defective documents, false affidavits or other procedures that do not comply with the letter of the law.

Attorneys general from several states are investigating these types of foreclosuresituations nationwide. The title underwriters' concerns stem from the fact that if a foreclosure is deemed to be defective, the party acquiring that property, either at the foreclosure auction or directly from the foreclosing bank, may not get good title, and in fact, may not obtain any title at all and so lose their entire investment. However, if home buyers were savvy enough to buy an enhanced owner's title insurance policy from a reputable title insurance company, they may file a claim under their policy to attempt to recoup their losses.

Fundamentally, title insurance is intended to protect the insured from risks associated with defects in the ownership of the property. These defects can result in total losses such as in the case of a defective foreclosure, forgery or impersonation, where no title is legally conveyed. Other defects can be partial in nature, such as where a neighbor's garage or fence encroaches on the insured person's property. In those cases, title insurance might pay for the removal or relocation of the encroachments.

Two basic levels of title insurance are available from most companies. The standard policy covers risks prior to the settlement date. The enhanced policy covers risks existing before and after settlement. The enhanced policy also covers a broader range of risks. Although they cost more, the enhanced polices are well worth the investment.

Before title insurers agree to issue a policy, they conduct an extensive search of the property's owners over the past 60 years. This is called the "chain of title." The title examiner checks to make sure that the chain of title is unbroken, meaning that each seller's ownership is evidenced by a deed or other documents showing how that seller obtained the ownership. They also consult other official records such as court judgments, bankruptcies, divorces, probate matters, tax sale foreclosures, water and sewer accounts (which are liens). They look at a current survey to review the property's boundaries, to see whether any neighboring properties encroach on the property (or if the seller's improvements encroach on someone else's property.) A survey shows where public or private easements, such as power lines, may exist. They also look at front, side and back setback requirements.

Overall, title examiners are looking for any event or circumstance that would be a lien against the property. For example, a monetary judgment recorded against a borrower becomes an automatic lien against that borrower's home. These items are often referred to as "clouds on title."

There are two types of title insurance policies: owner's title insurance, which only covers the homeowner, and lender's title insurance, which only covers the lender. Owner's title insurance is optional in all transactions; there is no law or lender requirement that you purchase coverage. Premiums for the owner's policy are based on the home's purchase price. Unlike most other types of insurance, for a title policy you pay a one-time premium at the time of your home purchase. Coverage continues as long as you own the home.

Title insurance rates vary from state to state and to a lesser extent, from company to company. The approximate cost for owner's coverage in the District is $6.84 per $1,000 of coverage; in Virginia its $4.68 per $1,000, and it is $4.75 per $1,000 in Maryland.

Virtually all lenders require a lender's title policy to protect their financial interest in the property. An owner receives no benefit from the lender's policy even though he pays for it. Lender's coverage costs approximately $5.40 per $1,000 in the District, $3.48 per $1,000 in Virginia, and $3.18 per $1,000 in Maryland.

Many homeowners mistakenly think that because the settlement lawyer did the 60-year search and is providing a lender's policy, that the title must be clear. Why waste extra money on an owner's policy? This is an extremely shortsighted view for several reasons. First, even though a prudent settlement lawyer will do an exhaustive title search, that search may not uncover the very real risks present in these days of fraudulent foreclosures and/or forged documents. Second, the lender's policy does not provide any protection for the owner in the event of a successful claim. Third, part of the benefit in a title policy is that the title insurance company assumes the legal costs to defend any claim. Without an owner's policy, the owner must bear his own legal costs to defend any claim, no matter how frivolous. Fourth, the marginal cost of buying an owner's policy, when a lender's policy is being issued (a so-called "simultaneous issue") is quite small. You do not pay full premium for owner's and lender's policies when they are being issued simultaneously. Finally, an owner's policy may entitle you to discounts off future title policies if you subsequently refinance, or for your buyer if you sell your home within seven years of obtaining your owner's policy.

Because title insurance is a significant part of total closing costs in both purchase and refinance transactions, it is useful to explore whether you may be entitled to any discounts such as "reissue" or "substitution" rates. In a purchase transaction, reissue rate discounts of as much as 40 percent off your new owner's policy premium may be available if you can deliver a prior owner's title policy, less than seven years old, to the settlement lawyer when placing your title order. In a refinance transaction, you may be entitled to a similar substitution-rate discount by delivering a prior lender's title policy, issued less than seven years ago. The actual discount will vary depending upon the age of the prior policy, the amount of the prior policy and the amount of the proposed new policy.

With all the uncertainly in today's real estate market, buying the most comprehensive owner's title policy available is sound advice. But buy it at the right price. Asking questions can save you money the next time you buy or refinance a home. When refinancing with your existing lender, ask for a copy of your original lender's title insurance policy. When purchasing a home, ask your real estate agent or the home seller for a copy of any existing owner's title insurance policy written within the previous seven years. When placing a title order, provide your settlement lawyer with a complete, legible copy of any prior title policies.

For further questions on title insurance, ask your settlement lawyer if any discounted title insurance rates are available based on your situation.

WLP Executive Team
www.WashingtonLuxuryProperties.com

7 Tips to Negotiate the Price of a Home

2010-11-18T19:59:00.000-05:00

Tips that can save you thousands off the price or at the very least, help manage your expectations going into a negotiation.

1). Have your financing in place. The seller will take you more seriously if you do. These days most sellers won’t even accept an offer without a letter from your lender saying you are approved. Plus, sellers who have pressure to sell quickly may be more inclined to accept an offer from a buyer who is ready to go from the gate.

2). Know what the true value is in the neighborhood. The internet makes it very easy to find a list of homes that recently sold in the neighborhood. Compare number of rooms, size of lot and other attributes to get a feeling for the going price. You should also consider the average DOM (days on market) to get a better understanding of the state of the seller.

3). Know how much you are willing to pay before making an offer. Keep this number in mind, set a max and don’t exceed it. You set this budget for a reason.

4). Make a reasonable offer. If you find that comparable homes in the area are selling for less, start the offer at 5-8% below comparables. Be prepared to back up your offer with verification.

5). Map out your strategy. Think about what you would do if the seller moves in one of 3 ways: doesn’t respond, doesn’t come down enough or accepts the offer.

6). Be flexible. Selling one’s home came be emotional and if you or your agent can get an insight to what motivates the seller, you may be able to negotiate more than price. For example, the seller may feel more comfortable with a contract that states the closing date is contingent on when they find a home and not when the buyer wants to move in. They may be willing to drop the price for this extra padding.

7). Know when to fold them. Know when the seller isn’t going to budge and spend your efforts on finding the next one.

WLP Executive Team
www.WashingtonLuxuryProperties.Blogspot.com

The cost of owning a home: The 5 biggest expenses you will face

2010-11-12T15:58:00.000-05:00

When buying a home the biggest cost and often the only one many prospective homeowners consider is the mortgage. But in order to get a fully accurate idea of just what you can afford you need to know all of the costs. Some costs are more obvious than others, but these 5 are the biggest that will effect most homeowners. While many lenders will includes taxes and insurance in what they call PITI(Principle, interest, taxes and insurance) calculations and even have you include that with mortgage payments, some of the others may not enter your mind until the first bill arrives.

1. Insurance: There are two types of insurance you may pay, one is PMI(Private mortgage insurance) for loans that are less than an 80% loan-to-value ratio, and home owners insurance which is completely different. One protects the mortgage company, the other the homeowner. Also, you can purchase a home warranty which is a type of insurance that will pay for more substantial maintenance costs. The costs all depend on the particular case, but on average PMI is usually 0.5% of the loan. Homeowners insurance for a 300k home can range very wildly but is often between $500-1500 per year. A home warranty usually runs from $250-600.

2. Maintenance costs: Homes need to be maintained, and things break. Eventually even a new home will have items breaking down or need carpet and paint replaced. Factoring in these costs is very important in judging the true cost of owning a home. While this also is very dependent on many factors, figure it will cost you 2% of the homes value per year.

3. Taxes: Ah, taxes. Even if you may have forgotten about these, your local government certainly didn't. Taxes depend on the jurisdiction, but in the Northern Virginia area they range from 0.5% of the homes assessed value up to 1.5%. Living in a different county can change the tax bill on a $300k home by $3000 per year.

4. HOA and Condo fees: The government isn't the only one that wants money for services they provide. If you moved into a neighborhood with an HOA or COA, the association charges fees to all homeowners. Again this changes depending on the neighborhood, but is very easy to find out. Some neighborhoods have very low fee's, below $25 per month, others can charge $400 or more per month. In some neighborhoods this fee can be almost as big of an expense as the mortgage!

5.Utilities: Lastly, don't forget Utilities. You have an electric bill, gas bill, water bill, telecom bill and any other bill for services provided to the home. These can add up. If a home is heated by gas, is very large and very leaky that bill can be astronomical. In some towns the public water bill can be very expensive. Check with the previous owners or tenants to find out exactly what the bill is for a particular home.

All of these costs can really add up for the wrong home. If you have a home on a well, in a neighborhood with no HOA, in a county with a low tax rate and have an 80% LTV ratio you can end up paying little in extra costs. However, if you end up in the wrong home with very expensive public water, leaky windows, high taxes and a large HOA fee, and an LTV above 80% you could end up shelling out an extra $10k or more per year. Most of these costs are discoverable well before the home hits the market as long as you are doing the research. Talking to your agent and the owner should reveal just what kind of taxes, HOA fees and utility costs there will be. It is much more enjoyable to live in a home you can afford than to be find you are unable to afford the home you live in!

WLP Executive Team
www.WashingtonLuxuryProperties.com

Breaking News: RATES ARE LOWEST IN DECADES!

2010-11-11T15:51:00.000-05:00

Rates on fixed mortgages dropped to their lowest levels in decades this week after the Federal Reserve unveiled a massive bond-buying program to help spur economic growth.

Mortgage buyer Freddie Mac says the average rate for 30-year fixed loans fell to 4.17 percent from 4.24 percent last week. That's the lowest on records dating back to 1971.

The average rate on 15-year fixed loans fell to 3.57 percent from 3.63 percent. That's the lowest since the survey began in 1991.

The Fed detailed plans last week to buy $600 billion in Treasury bonds. The extra demand means Treasurys will produce lower yields for investors. Mortgage rates tend to track those yields.

More information, visit our Preferred Lenders exclusively at
www.WashingtonLuxuryProperties.com

WLP Executive Team

Washington Area Home Prices are Up 4.3%

2010-11-11T15:25:00.000-05:00

Home prices in the third quarter were up in half of the nation’s cities compared to a year ago, with the Washington market posting among the strongest gains.

Median prices nationally were still down 0.2 percent.

The National Association of Realtors says despite the nationwide decline, median prices rose in 77 of the nation’s 155 largest cities and were unchanged in two others. In the third quarter of 2009, year-over-year median prices were up in only 30 cities.

In Washington, median home prices in the third quarter were up 4.3 percent from a year earlier, according to NAR. The median price of $338,600 was still down 21 percent from peak prices in 2007.

Baltimore was one of 76 cities that saw year-over-year price declines last quarter, down 1.5 percent.

While prices are showing signs of improvement, sales remain flat, according to the Realtors’ group.

“Home sales through the first three quarters of this year are virtually the same as year-to-date sales at this time last year, and therefore broadly support home values,” says NAR chief economist Lawrence Yun. “However, there are large local market differences with prices rising in job-creating regions like the Washington, D.C. area.”

Foreclosures also continue to weigh on the housing market. Distressed sales, which usually sell at a discount, accounted for 34 percent of third quarter sales, up from 30 percent a year ago.

For a competitive market analysis in your subdivision, please email us at WLP@mris.com. Thank you.

WLP Executive Team
www.WashingtonLuxuryProperties.com

New IRS Rule for Landlords

2010-11-10T17:13:00.000-05:00

New IRS Rule for Landlords

The latest requirement for IRS information reporting continues the recent wave of increased reporting enacted as part of the 2010 Health Care Bill. These changes essentially required a Form 1099 be sent to each service provider or seller of property for which a trade or business owner paid $600 or more for the year. Those requirements, however, only applied to trades or businesses. This most recent proposal is focused on real estate, whether held for investment or for trade or business.

After December 31, 2010, landlords receiving rental income from real estate must provide a Form 1099 to the IRS and to all service providers for all payments of $600 or more made to service providers (plumbers, electricians, accountants, etc.) for rental property services provided to the landlord. To ensure compliance, the IRS can levy penalties of $50 for each failed-to-file Form 1099, up to a maximum of $100,000 or $250,000, depending on the type of delinquency.

These requirements are designed to close the “Tax Gap” by ensuring that income paid to contractors gets reported accurately, and that deductions for work on and improvements to rental properties can be verified by the 1099 form. The new reporting requirements do not apply to rental properties held out as a trade or business (owning multiple properties and a full-time business) because they are already covered. The law will, however, affect smaller landlords, who typically do not engage accountants to track contractors, verify deductions and report taxes. Obviously, this will create a new burden for small real estate operations.

If you own real estate, start planning ahead to track purchases made for goods or payments made for services of more than $600 and record all rental payments made by tenants. This will mean getting a tax identification number from tenants and service providers, procuring the Form 1099 – MISC from the IRS, filling out the form(s), sending a copy to each payee, keeping a copy of the Form 1099 for your records, and then taking your rental deduction or reporting the rental income on your individual income tax return.

Exceptions apply to individuals temporarily renting their principal residences, to taxpayers whose rental income does not exceed an IRS-determined minimal amount, and to those for whom the reporting requirement would create a hardship. The IRS has not issued guidance on what is the “minimal amount” or what constitutes a “hardship,” and, if past is prologue, these exceptions may be narrowly interpreted.

Both the new Form 1099 reporting, along with the expansion of the IRS information reporting regime, have caused controversy and opposition which have generated legislative proposals to repeal or modify them. However, there are concerns about raising other taxes to repeal the provisions and this would be a substantial hurdle for a total legislative repeal.

More questions on this, please contact a Certified Public Accountant

WLP Executive Team
www.WashingtonLuxuryProperties.com

HSBC- Required Conditions for International Buyers

2010-11-04T21:17:00.000-04:00

HSBC offers its Premier* clients unparalleled financing options

Premier Deluxe Portfolio LIBOR ARM and Fixed Rate Products**

3/1, 5/1, 7/1 and 10/1 ARM’s, 15 year fixed and 30 year fixed rate loans
Interest only available for the first 10 years of the loan term on ARM products
Excellent portfolio rates and all lender fees paid by HSBC for its Premier clients
75% LTV to $2 million; 65% LTV to $5 million for primary residences with a 720 credit score. Higher loan amounts are available on an exception basis.
70% LTV to $2 million; 65% LTV to $4 million for a second home with a 720 credit score and 60%
LTV to $5 million with a 760 credit score. Higher loan amounts are available on an exception basis.
Financing available for single family residences, PUD’s, condominiums in the entire US except Alaska
and coops in DC, MD and the NY area only.

Foreign National Premier Deluxe Portfolio LIBOR ARM and Fixed Rate Products**

Eligible borrowers include Non-Permanent Resident Aliens (Acceptable visas are G-1 though G-5, E-1, E-2, H-1 (including those suffixes such as H-1B1), L-1, O-1, O-2, P-1, P-2, P-3 and TN. Foreign National Borrowers that do not originate from either a country that participates in the Visa Waiver Program, or cross border country require a valid visa.
Foreign National Borrowers holding the following visas are eligible: B-1 and B-2, H-3, I, J-1, J-2 and R-1 to purchase second homes at a maximum LTV of 60% to $1.5 million for existing Premier clients and $1 million for New to Bank Premier clients.
Borrowers can be qualified using foreign income, foreign denominated assets and foreign credit. Traditional and non-traditional credit permitted

Foreign National Conforming Fixed Rate and LIBOR ARM’s**
Maximum loan amount 417,000
70% LTV maximum
15 and 30 year fixed rates
3/1, 5/1, 7/1 and 10/1 ARM’s available
Financing available for single family residences, PUD’s, condominiums in the entire US except Alaska
and coops in DC, MD and the NY area only.
Eligible borrowers include US citizens, Permanent Resident Aliens, Non-Permanent Resident Aliens (Acceptable visas are G-1 though G-5, E-1, E-2, H-1 (including those suffixes such as H-1B1), L-1, O-1, O-2, P-1, P-2, P-3 and TN. Foreign National Borrowers that do not originate from either a country that participates in the Visa Waiver Program, or cross border country require a valid visa.
Foreign National Borrowers holding the following visas are eligible: B-1 and B-2, H-3, I, J-1, J-2 and R-1 to purchase second homes
Borrowers can be qualified using foreign income, foreign denominated assets and foreign credit. Traditional and non-traditional credit permitted.

Note: ** The product guidelines are subject to change without notice and the Loan to Values are based on the Washington, DC market area as of 6/30/2010

Premier Deluxe Reduced Condo Warranty Program

HSBC now provides its Premier clients the ability to purchase a condominium that has 51% of its units sold or under contact
Maximum 70% LTV in the Washington, DC area
Fully amortizing ARM’s only
The project must be completed or completed prior to closing
Units must be owned fee simple
No single entity may own more than 10% of the units (not including the developer)
Minimum credit score is 700
HSBC maximum concentration 20%
The project is ineligible if more than 10% of the HOA fees are past due
The HSBC Premier Relationship

* HSBC’s Premier products require the establishment of a Premier Banking Relationship with HSBC. To qualify for a Premier relationship, you need to open a Premier account and maintain $100,000 in combined checking, savings, CD’s, investment or retirement accounts. Commercial account balances can be used for qualifying purposes in specific circumstances. The Premier account may be opened at any HSBC branch
globally and the client will be Premier globally. The Premier Relationship provides you with: Global View and Global Transfers – With a Premier account you have the ability to maintain accounts globally in multiple currencies and have the ability to transfer funds between accounts; The HSBC World Mastercard does not charge foreign exchange fees when travelling internationally as well as world class rewards; Preferred rates for
investments, money market and credit accounts; Immediate emergency financial assistance 24/7; emergency encashment services at HSBC branches and Premier Centers worldwide; and the same international benefits for your immediate family should your children study abroad.

_____________________________________________________________________
Checklist for International Buyers
Buyers Name_________________________________
Phone Number____________________ Email Address__________________________
SS#:______________________________NO SS#_____
Co Buyers Name:_____________________________
Phone Number____________________ Email Address__________________________
SS#:______________________________NO SS#_____
Citizenship/Visa Type (A1, B1, L1, etc.):
Buyer Country: _____________________Visa Type_____________
Co Buyer Country: __________________Visa Type_____________
US Credit Score? Yes_______No_______Estimated Score:________
If no score, can 4 credit references be provided? Yes_______No_______
Buyers Income: Salaried (Y/N)________Self Employed (Y/N)______
Company/Employer Name___________________________
Approximate Annual Income (US$ equivalent)___________
Co Buyers Income: Salaried (Y/N)________Self Employed (Y/N)______
Company/Employer Name___________________________
Approximate Annual Income (US$ equivalent)___________
Funds Available for Down Payment (US$ equivalent):__________________
Occupancy Type: Owner Occupied _____Second/Holiday Home ______
Price Range Desired: US$________________
Referred by:_____________________Phone:_______________Email:_______________
HSBC Account Rep:_____________________
Date Prepared (mm/dd/yyyy):______________
Basic Documents Needed:
Copy of passport and visa
Last 2 months bank account statements (all pages)
Salaried Employee – Letter from employer with start date, position title, current
salary and 2 year salary history
Self Employed Borrower – Letter from accountant with company name, start date,
ownership percentage, 2 year salary history
Credit reference letters (if no US credit) – 4 with satisfactory 2 year payment history

Any questions, please contact our Preferred Lender: THOMAS J. SCHULTZ
Send checklist + documents to: Thomas Schultz, CPA/MBA Phone
703.966.0669 Fax 866.775.5550 email Thomas.j.schultz@us.hsbc.com

WLP Executive Team
www.WashingtonLuxuryProperties.com

Foreclosures as a Last Resort

2010-10-21T19:23:00.003-04:00

As all 50 state Attorneys General investigate widespread allegations that loan companies use fraudulent documents to push through foreclosures, Center for Responsible Lending’s new report, “Foreclosure as a Last Resort,” highlights other strategies that states are using to stabilize their housing markets and prevent unnecessary foreclosures.

After describing limitations in how loan servicers and the federal government have responded to the foreclosure crisis, the report concludes that the best tool available for state-led foreclosure prevention is mandatory loss mitigation. This requires mortgage servicers to do a cost-benefit analysis before pushing foreclosures through; that is, they must weigh the investor’s cost of foreclosing against the benefits of modifying a loan to prevent foreclosure. This simple determination goes a long way in ensuring that foreclosures proceed only when they are unavoidable.

Advantages of Mandatory Loss Mitigation

A low-cost, high impact approach

Requires loan servicers to modify loans when it makes financial sense

Flexible in how it can be adapted locally

Allows for greater accountability and transparency.

Some states are already finding creative ways to incorporate mandatory loss mitigation in their foreclosure prevention efforts. To find out which states are using this tool and how it can be implemented, download the report attached.

WLP Executive Team

www.WashingtonLuxuryProperties.com

Foreclosure Hault....what it means?

2010-10-19T13:38:00.000-04:00

Recently the term "Foreclosure Freeze" has caught out attention as banks scramble to document what they call is a legitimate foreclosure process. When banks sell mortgages to each other and eventually package them into investment securities, they use something called MERS (Mortgage Electronic Registration System). MERS is an electronic repository that keeps track who owns the mortgage. The issue with MERS is that while acting as a national, historical database for 64 million loans, homeowners' attorneys are noticing mistakes in how these loans were transferred. Flaws in the transfer from owner to owner (this is when your loan gets sold) means a continuous chain of title may not exist. Remember those ridiculous fees you paid for Title Insurance? Homeowners may finally get some benefit from the title insurance they purchased. Without a continuous chain of title, the mortgage owner (bank) trying to foreclose may no longer have the legal rights they thought they had. Forgeries, backdating and postdating documents have been found in MERS. Lawyers contend the mortgage industry never received legislative authority to replace the traditional paper trail of local property records with this MERS electronic data base. If the bank can't prove they are the legal owner with proper legal chain of title, they can't foreclose (legally). As significant as this may sound, it was only 1 year ago the term "Heloc Freeze" was impacting our market. Banks chose to close homeowners' equity lines due to declining property values. Many homeowners became livid as they relied on these helocs as a cash flow management tool/reserve account. Some homeowners did not receive proper notification and had their heloc checks returned nsf.........

Questions, contact
WLP Executive Team
www.WashingtonLuxuryProperties.com

Fairfax Market Records Nearly $5 Billion in Home Sales in First 9 Months

2010-10-15T14:22:00.001-04:00

Home sales across Fairfax County during the first nine months of the year totaled $4.73 billion in overall volume, up 3.8 percent from the same period a year before, but the market has shown softness during the past few months.

So far during the year, sales volume has been up, compared to a year before, in five of the nine months, according to figures reported by Metropolitan Regional Information Systems.

But that growth was concentrated in the first half of the year: With the exception of February, sales were higher each month from January to June than a year before. They have not posted a year-over-year increase since then, in part because the rush by purchasers to find homes and get to closing by the June 30 expiration of the federal home-buyer tax credit.

In the five months that showed year-over-year increases, the biggest change was posted in April, which showed an increase of 29.9 percent. Other increases were 12.1 percent in January, 14.3 percent in March, 14.4 percent in May and 4.3 percent in June.

Declines included 6.8 percent in February, 7.4 percent in July, 3.4 percent in August and 14.2 percent in September.

In terms of total sales volume, June represented the largest month across Fairfax, with nearly $762 million in sales. June traditionally is a big real estate month anyway, but buyers had the added pressure of getting to closing before the tax credit expired.

The higher sales volume has been due largely to average prices, which during the first nine months of the year rose 10.4 percent to $458,482.

The number of total sales during the period actually was down 6 percent, from 10,696 to 10,308. The Fairfax market posted year-over-year sales declines in January, February, June, July, August and September, with the September market showing the steepest drop, at 21.3 percent. (That decline is due at least in part to the 2009 federal tax credit for first-time home-buyers, which boosted sales last fall.)

June proved to be the largest month for sales so far this year, with 1,567. The local area’s home-buying season tends to peak in early summer most years, then decline for the rest of the year.

Sales figures represent most, but not all, homes on the market.

WLP Executive Team
www.WashingtonLuxuryProperties.com

Social Benefits of Homeownership

2010-10-15T11:27:00.003-04:00

Recently, homeownership has been under attack. Media reports and pundits have questioned the wisdom of social policies – such as the mortgage interest deduction or the recent homebuyer tax credit -- that encourage and support homeownership. Given one “popular” view that housing caused the great recession of 2007-2009, such attacks are not surprising.

But, what those critics don't take into account is that over the years, research has consistently shown the importance of the housing sector to the economy as well as the long-term social and financial benefits of homeownership to individual homeowners.

The economic benefits of the housing market and homeownership are immense and well documented. The housing sector directly accounted for approximately 14 percent of total economic activity in 2009. Less than half of Americans owned their homes at the beginning of the 20th century. Homeownership remained fairly stable until the onset of the Great Depression. In the subsequent two decades, the homeownership rate rose dramatically, easily topping 60 percent by 1960. Modest gains were made during the 1960s, 1970s and 1980s. However, during the early 1990s, the homeownership rate once again trended upward as mortgage rates steadily declined and the economy expanded at rates not experienced in many years. By 2004, 69 percent of Americans owned their homes – a record high. The homeownership rate has since declined to 66.9 percent as of the second quarter 2010. Still, that figure indicates that two thirds of U.S. households own their own home. (For more information, visit www.census.gov.)

Homeownership and Stable Housing

Homeownership and stable housing go hand-in-hand. Homeowners move far less frequently than renters, and hence are embedded into the same neighborhood and community for a longer period. According to the the Current Population Survey's report, Geographical Mobility 2008-2009, while 5.2 percent of owner-occupied residents moved from 2008 to 2009, nearly 30 percent of renters changed residential location.

The key reason for the higher “mover rate” among renters is the fact that renters are younger – that is, changing and searching for ideal jobs, not yet married, and hence, literally, less committed. The mover rate or percentage of people changing residence, among 20-to-24 year-olds was 27 percent, and for 25-to-29 year-olds it was 26 percent. The mover rate then declines rapidly from 14 percent for those in their early 30s to less than 5 percent for those 65 years or older.

As to why people move, the predominant reason given by Current Population Survey respondents in 2009 was housing-related. Almost one-third said they moved to a better home, a better neighborhood, or into cheaper housing. The second most popular reason cited was family-related at 26.3 percent. Work-related reasons (new job, lost job, easier commute, retired, etc.) were reported by only 17.9 percent of respondents. Very few indicated change of climate and health reasons for moving.

Census Bureau research found that homeownership does have a statistically significant impact of lowering the mover rate. That is, among people of the same age, same income, and same marital status, a person was significantly more likely to change residence in a given year if he or she was a renter rather than a homeowner. Homeowners bring stability to neighborhoods.

Homeownership and Civic Participation

Homeowners have a much greater financial stake in their neighborhoods than do renters. Because owners tend to remain in their homes longer, they add a degree of stability to their neighborhood. Homeowners also reap the financial gains of any appreciation in the value of their home, so they also tend to spend more time and money maintaining their residence, which also contributes to the overall quality of the surrounding community. Renters, with less wealth tied to a specific locality, have less incentive to protect the value of their property via the political process. The right to pass property to an heir or to another person also provides motivation to properly maintain the property.

The extent of community involvement and the benefits that accrue to society are hard to measure, but several researchers have found that homeowners tend to be more involved in their communities than renters. For example, homeowners were found to be more politically active than renters. Homeowners participate in elections much more frequently than renters. More than three quarters of homeowners have, at some point voted in local elections compared with 52 percent of renters. Research has also found a greater awareness of the political process among homeowners. About 38 percent of homeowners knew the name of their local school board representative, compared with only 20 percent of renters.

In general, research supports the view that homeownership brings substantial social benefits. Because of these extensive social benefits - what economists call positive externalities - policies that support sustainable homeownership are well justified.

WLP Executive Team
www.WashingtonLuxuryProperties.com

Foreclosurers in the News

2010-10-12T17:39:00.000-04:00

You may have heard over the last week that three of the largest lenders, (Bank of America, Chase and GMAC), have put a short moratorium on foreclosures due to recent revelations of faulty documentation and processes. Everyone agrees that this could delay, but not prevent, a wave of property seizures as lenders review their procedures.

Lenders with loans being serviced by GSEs, which own or guarantee over half of all U.S. home loans, have made changes to rules and are trying to decrease the foreclosure time line on homeowners who are not paying their mortgages. These changes are making it much more difficult to get extensions on short sale approvals and postpone multiple foreclosures during the short sale process. In fact, Wells Fargo announced this week that they have stopped granting extensions for certain distressed homeowners to complete short sales.

Early last month FNMA told its servicers to stop unnecessarily delaying foreclosures. Wells has stated that they will no longer postpone foreclosure sales for those who do not close by the date in their approval letter from the company. They did however say they would consider them on their portfolio loans on a case by case basis. Other Lenders are expected to follow suit which makes closing a short sale within the original approval period even more critical. Most often the closing is delayed due to the Buyer’s financing issues.

More information, contact the WLP Executive Team
www.WashingtonLuxuryProperties.com

10 First Time Buyer Mistakes

2010-10-06T18:23:00.001-04:00

10 first-time-homebuyer mistakes
A house is probably the biggest purchase you'll ever make. And, if you can avoid these missteps, chances are you'll be happy with the home you choose.

Are you gearing up to buy your first place? Shopping for a home is exciting, exhausting and a little scary. In the end, your aim is to end up with a home you love at a price you can afford. Sounds simple enough, right? Unfortunately, many people make mistakes that prevent them from achieving that simple dream. Arm yourself with these tips to get the most out of your purchase and avoid making 10 of the most costly mistakes that could put a hold on that sold sign.

1. Not knowing what you can afford.

As we've all learned from the subprime mortgage mess, what the bank says you can afford and what you know you can afford or are comfortable with paying are not necessarily the same. If you don't already have a budget, make a list of all your monthly expenses (excluding rent), including vehicle costs, student loan payments, credit card payments, groceries, health insurance, retirement savings and so on. Don't forget major expenses that occur only once a year, like any insurance premiums you pay annually or annual vacations. Subtract this total from your take-home pay and you'll know how much you can spend on your new home each month.

If you end up looking at homes that are outside your price range, you'll end up lusting after something you can't afford, which can put you in the dangerous position of trying to stretch beyond your means financially or cause you to feel unsatisfied with what you actually can afford. You may even learn that you can't afford the type or size of home that you desire and that you need to work on reducing your monthly expenses and/or increasing your income before you even start looking.

2. Skipping mortgage qualification.

What you think you can afford and what the bank is willing to lend you may not match up, especially if you have poor credit or unstable income, so make sure to get preapproved for a loan before placing an offer on a home. If you don't, you'll be wasting the seller's time, the seller's agent's time and your agent's time if you sign a contract and discover later that the bank won't lend you what you need or that it won't give you a mortgage you find acceptable.

Be aware that even if you have been preapproved for a mortgage, your loan can fall through if you do something to alter your credit score, like finance a car purchase. If you cause the deal to fall through, you may have to forfeit the money that you put up when you went under contract.

3. Failing to consider additional expenses.

Once you're a homeowner, you'll have additional expenses on top of your monthly payment. Unlike when you were a renter, you'll be responsible for paying property taxes, insuring your home against disasters and making any repairs the house needs (which will occasionally include expensive items like replacing the roof or furnace).

If you're interested in purchasing a condo, you'll have to pay maintenance costs monthly regardless of whether anything needs fixing because you'll be part of a homeowners' association, which collects monthly fees from the owners of each unit in the form of condominium fees.

4. Being too picky.

Go ahead and put everything you can think of on your new home wish list, but don't be so inflexible that you end up continuing to rent for significantly longer than you really want to. First-time homebuyers often have to compromise on something because their funds are limited. You may have to live on a busy street, accept outdated decor, make some repairs to the home or forgo that extra bedroom. Of course, you can always choose to continue renting until you can afford everything on your list -- you'll just have to decide how important it is for you to become a homeowner now rather than in a couple of years.

5. Lacking vision.

Even if you can't afford to replace the hideous wallpaper in the bathroom now, it might be worth it to live with the ugliness for a while in exchange for getting into a house you can afford. If the home meets your needs in terms of the big things that are difficult to change, such as location and size, don't let physical imperfections turn you away. Besides, doing home upgrades yourself, even if you have to hire a contractor, is often cheaper than paying the increased home value to a seller who has already done the work for you.

6. Being swept away.

Minor upgrades and cosmetic fixes are inexpensive tricks that play on your emotions and elicit a much higher price. Sellers may pay $2,000 for minimal upgrades or staging that you'll end up paying $40,000 for. If you're on a budget, look for homes whose full potential has yet to be realized. Also, first-time homebuyers should always look for a house they can add value to, as this ensures a bump in equity to help you up the property ladder.

7. Compromising on the important things.

Don't get a two-bedroom home when you know you're planning to have kids and will want at least three bedrooms. By the same token, don't buy a condo just because it's cheaper when one of the main reasons you're over apartment life is because you hate sharing walls with neighbors. It's true that you'll probably have to make some compromises to be able to afford your first home, but don't make a compromise that will be a major strain.

8. Neglecting to inspect.

It's tempting to think that you're a homeowner the moment you go into escrow, but not so fast -- before you close on the sale, you need to know what kind of shape the house is in. You don't want to get stuck with a money pit or with the headache of performing a lot of unexpected repairs. Keeping your feelings in check until you have a full picture of the house's physical condition and the soundness of your potential investment will help you avoid making a serious financial mistake.

9. Not hiring your own agent or using the seller's agent.

Once you're seriously shopping for a home, don't walk into an open house without having an agent (or at least being prepared to throw out a name of someone you're supposedly working with). Agents are held to the ethical rule that they must act in both the seller and the buyer parties' best interests, but you can discover to your detriment how that might not work in your best interest if you start dealing with a seller's agent before contacting one of your own.

10. Not thinking about the future.

It's impossible to perfectly predict the future of your chosen neighborhood, but paying attention to the information that is available to you now can help you avoid unpleasant surprises down the road.

Some questions you should ask about your prospective property include:

What kind of development plans are in the works for your neighborhood?
Is your street likely to become a major street or a popular rush-hour shortcut?
Will a highway be built in your backyard in five years?
What are the zoning laws in your area?
If there is a lot of undeveloped land? What is likely to get built there?
If you're happy with the answers to these questions, your house's location can keep its luster.

Buying a first home can seem stressful and overwhelming, and it isn't without its share of potential pitfalls. If you're aware of those issues ahead of time, though, you can protect yourself from costly mistakes and shop with confidence.

For many people, a home is the largest purchase they will ever make, but that doesn't mean it has to be the most difficult.

WLP Executive Team
www.WashingtonLuxuryProperties.com

Time to Buy a Home?

2010-10-05T14:20:00.000-04:00

Where will you be when homes' appreciating outpaces other economic indicators. Buying the right home today conservatively nets 5% - 10% appreciation in 2 years. How hard do you have to work to save $25,000? We have had numerous recessions over the last century and we have had numerous times of economic prosperity. It comes, it goes, and repeats again.

The U.S. stock markets generally provides a good indicator of how the economy is performing. Below is a summary Bear Markets or recessions. It is very encouraging to notice that of the 24 bear markets during the last century, none of them have lasted more than 3 years with the average length being only 15 months.

Another important thing to remember is that on average, 1 year after the bear market is completed, the market (DJIA) is up 44%. In fact there was only 1 time out of 24 that a year later it wasn’t better than it was when the recession ended.

WLP Executive Management Team
www.WashingtonLuxuryProperties.com

10 Reasons to Buy a Home Today

2010-09-28T12:10:00.000-04:00

10 reasons to buy a home today:
1. You can get a good deal.
2. Mortgages are cheap.
3. You can save on taxes.
4. It will be yours.
5. You’ll get a better home.
6. It offers some inflation protection.
7. It’s risk capital.
8. It’s forced savings.
9. There is a lot to choose from.
10. Sooner or later, the market will clear

WLP Executive Team
www.WashingtonLuxuryProperties.com

10 key facts to understand about today’s market...

2010-09-25T21:31:00.000-04:00

1. The economy is growing, though slowly.

2. The private sector is finally creating some jobs.

3. Consumer confidence remains low, though clearly off bottom.

4. The 30-year mortgage rate is at generational lows.

5. The national median-home price is stabilizing.

6. Other home-price measurements also are showing price stabilization.

7. Home price-to-income ratios have returned to fundamentally justifiable levels.

8. Economists expect price increases in upcoming years

9. Delinquencies are high but recent loan originations are performing well.

10. The long-term path to self reliance may be helped from long-term housing-wealth gains.

Contact the WLP Executive Team with any questions.
www.WashingtonLuxuryProperties.com

The Mortgage Forgiveness Debt Relief Act and Debt Cancellation

2010-09-02T01:52:00.002-04:00

The Mortgage Forgiveness Debt Relief Act and Debt Cancellation

If you owe a debt to someone else and they cancel or forgive that debt, the canceled amount may be taxable.

The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion does not apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.

More information, including detailed examples can be found in Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments. Also see IRS news release IR-2008-17.

The following are the most commonly asked questions and answers about The Mortgage Forgiveness Debt Relief Act and debt cancellation:

What is Cancellation of Debt?
If you borrow money from a commercial lender and the lender later cancels or forgives the debt, you may have to include the cancelled amount in income for tax purposes, depending on the circumstances. When you borrowed the money you were not required to include the loan proceeds in income because you had an obligation to repay the lender. When that obligation is subsequently forgiven, the amount you received as loan proceeds is normally reportable as income because you no longer have an obligation to repay the lender. The lender is usually required to report the amount of the canceled debt to you and the IRS on a Form 1099-C, Cancellation of Debt.

Here’s a very simplified example. You borrow $10,000 and default on the loan after paying back $2,000. If the lender is unable to collect the remaining debt from you, there is a cancellation of debt of $8,000, which generally is taxable income to you.

Is Cancellation of Debt income always taxable?
Not always. There are some exceptions. The most common situations when cancellation of debt income is not taxable involve:
• Qualified principal residence indebtedness: This is the exception created by the Mortgage Debt Relief Act of 2007 and applies to most homeowners.
• Bankruptcy: Debts discharged through bankruptcy are not considered taxable income.
• Insolvency: If you are insolvent when the debt is cancelled, some or all of the cancelled debt may not be taxable to you. You are insolvent when your total debts are more than the fair market value of your total assets.
• Certain farm debts: If you incurred the debt directly in operation of a farm, more than half your income from the prior three years was from farming, and the loan was owed to a person or agency regularly engaged in lending, your cancelled debt is generally not considered taxable income.
• Non-recourse loans: A non-recourse loan is a loan for which the lender’s only remedy in case of default is to repossess the property being financed or used as collateral. That is, the lender cannot pursue you personally in case of default. Forgiveness of a non-recourse loan resulting from a foreclosure does not result in cancellation of debt income. However, it may result in other tax consequences.
These exceptions are discussed in detail in Publication 4681.

What is the Mortgage Forgiveness Debt Relief Act of 2007?
The Mortgage Forgiveness Debt Relief Act of 2007 was enacted on December 20, 2007 (see News Release IR-2008-17). Generally, the Act allows exclusion of income realized as a result of modification of the terms of the mortgage, or foreclosure on your principal residence.

What does exclusion of income mean?
Normally, debt that is forgiven or cancelled by a lender must be included as income on your tax return and is taxable. But the Mortgage Forgiveness Debt Relief Act allows you to exclude certain cancelled debt on your principal residence from income. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.

Does the Mortgage Forgiveness Debt Relief Act apply to all forgiven or cancelled debts?
No. The Act applies only to forgiven or cancelled debt used to buy, build or substantially improve your principal residence, or to refinance debt incurred for those purposes. In addition, the debt must be secured by the home. This is known as qualified principal residence indebtedness. The maximum amount you can treat as qualified principal residence indebtedness is $2 million or $1 million if married filing
separately.

Does the Mortgage Forgiveness Debt Relief Act apply to debt incurred to refinance a home?
Debt used to refinance your home qualifies for this exclusion, but only to the extent that the principal balance of the old mortgage, immediately before the refinancing, would have qualified. For more information, including an example, see Publication 4681.

How long is this special relief in effect?
It applies to qualified principal residence indebtedness forgiven in calendar years 2007 through 2012.

Is there a limit on the amount of forgiven qualified principal residence indebtedness that can be excluded from income?
The maximum amount you can treat as qualified principal residence indebtedness is $2 million ($1 million if married filing separately for the tax year), at the time the loan was forgiven. If the balance was greater, see the instructions to Form 982 and the detailed example in Publication 4681.

If the forgiven debt is excluded from income, do I have to report it on my tax return?
Yes. The amount of debt forgiven must be reported on Form 982 and this form must be attached to your tax return.

Do I have to complete the entire Form 982?
No. Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Adjustment), is used for other purposes in addition to reporting the exclusion of forgiveness of qualified principal residence indebtedness. If you are using the form only to report the exclusion of forgiveness of qualified principal residence indebtedness as the result of foreclosure on your principal residence, you only need to complete lines 1e and 2. If you kept ownership of your home and modification of the terms of your mortgage resulted in the forgiveness of qualified principal residence indebtedness, complete lines 1e, 2, and 10b. Attach the Form 982 to your tax return.

Where can I get this form?
If you use a computer to fill out your return, check your tax-preparation software. You can also download the form at IRS.gov, or call 1-800-829-3676. If you call to order, please allow 7-10 days for delivery.

How do I know or find out how much debt was forgiven?
Your lender should send a Form 1099-C, Cancellation of Debt, by February 2, 2009. The amount of debt forgiven or cancelled will be shown in box 2. If this debt is all qualified principal residence indebtedness, the amount shown in box 2 will generally be the amount that you enter on lines 2 and 10b, if applicable, on Form 982.

Can I exclude debt forgiven on my second home, credit card or car loans?
Not under this provision. Only cancelled debt used to buy, build or improve your principal residence or refinance debt incurred for those purposes qualifies for this exclusion. See Publication 4681 for further details.

If part of the forgiven debt doesn't qualify for exclusion from income under this provision, is it possible that it may qualify for exclusion under a different provision?
Yes. The forgiven debt may qualify under the insolvency exclusion. Normally, you are not required to include forgiven debts in income to the extent that you are insolvent. You are insolvent when your total liabilities exceed your total assets. The forgiven debt may also qualify for exclusion if the debt was discharged in a Title 11 bankruptcy proceeding or if the debt is qualified farm indebtedness or qualified real property business indebtedness. If you believe you qualify for any of these exceptions, see the instructions for Form 982. Publication 4681 discusses each of these exceptions and includes examples.

I lost money on the foreclosure of my home. Can I claim a loss on my tax return?
No. Losses from the sale or foreclosure of personal property are not deductible.

If I sold my home at a loss and the remaining loan is forgiven, does this constitute a cancellation of debt?
Yes. To the extent that a loan from a lender is not fully satisfied and a lender cancels the unsatisfied debt, you have cancellation of indebtedness income. If the amount forgiven or canceled is $600 or more, the lender must generally issue Form 1099-C, Cancellation of Debt, showing the amount of debt canceled. However, you may be able to exclude part or all of this income if the debt was qualified principal residence indebtedness, you were insolvent immediately before the discharge, or if the debt was canceled in a title 11 bankruptcy case. An exclusion is also available for the cancellation of certain nonbusiness debts of a qualified individual as a result of a disaster in a Midwestern disaster area. See Form 982 for details.

If the remaining balance owed on my mortgage loan that I was personally liable for was canceled after my foreclosure, may I still exclude the canceled debt from income under the qualified principal residence exclusion, even though I no longer own my residence?
Yes, as long as the canceled debt was qualified principal residence indebtedness. See Example 2 on page 13 of Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments.

Will I receive notification of cancellation of debt from my lender?
Yes. Lenders are required to send Form 1099-C, Cancellation of Debt, when they cancel any debt of $600 or more. The amount cancelled will be in box 2 of the form.

What if I disagree with the amount in box 2?
Contact your lender to work out any discrepancies and have the lender issue a corrected Form 1099-C.

How do I report the forgiveness of debt that is excluded from gross income?
(1) Check the appropriate box under line 1 on Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) to indicate the type of discharge of indebtedness and enter the amount of the discharged debt excluded from gross income on line 2. Any remaining canceled debt must be included as income on your tax return.

(2) File Form 982 with your tax return.

My student loan was cancelled; will this result in taxable income?
In some cases, yes. Your student loan cancellation will not result in taxable income if you agreed to a loan provision requiring you to work in a certain profession for a specified period of time, and you fulfilled this obligation.

Are there other conditions I should know about to exclude the cancellation of student debt?
Yes, your student loan must have been made by:
(a) the federal government, or a state or local government or subdivision;

(b) a tax-exempt public benefit corporation which has control of a state, county or municipal hospital where the employees are considered public employees; or

(c) a school which has a program to encourage students to work in underserved occupations or areas, and has an agreement with one of the above to fund the program, under the direction of a governmental unit or a charitable or educational organization.
Can I exclude cancellation of credit card debt?
In some cases, yes. Nonbusiness credit card debt cancellation can be excluded from income if the cancellation occurred in a title 11 bankruptcy case, or to the extent you were insolvent just before the cancellation. See the examples in Publication 4681.

How do I know if I was insolvent?
You are insolvent when your total debts exceed the total fair market value of all of your assets. Assets include everything you own, e.g., your car, house, condominium, furniture, life insurance policies, stocks, other investments, or your pension and other retirement accounts.

How should I report the information and items needed to prove insolvency?
Use Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment) to exclude canceled debt from income to the extent you were insolvent immediately before the cancellation. You were insolvent to the extent that your liabilities exceeded the fair market value of your assets immediately before the cancellation.

To claim this exclusion, you must attach Form 982 to your federal income tax return. Check box 1b on Form 982, and, on line 2, include the smaller of the amount of the debt canceled or the amount by which you were insolvent immediately prior to the cancellation. You must also reduce your tax attributes in Part II of Form 982.

My car was repossessed and I received a 1099-C; can I exclude this amount on my tax return?
Only if the cancellation happened in a title 11 bankruptcy case, or to the extent you were insolvent just before the cancellation. See Publication 4681 for examples.

Are there any publications I can read for more information?
Yes.
(1) Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments (for Individuals) is new and addresses in a single document the tax consequences of cancellation of debt issues.

(2) See the IRS news release IR-2008-17 with additional questions and answers on IRS.gov.

More questions, contact WLP Management Team
www.WashingtonLuxuryProperties.com

Newlywed Homebuyer Tips

2010-08-30T13:58:00.000-04:00

Many couples embark on the purchase of a new home soon after they are engaged or married. It’s a hectic time but these tips should help new homebuyers be proactive and make educated real estate decisions.

Location — Proximity to employment and the quality of the schools are common factors in determining whether a location is suitable; so scan community web sites (www.WashingtonLuxuryProperties.com) for more information about the area. Local Realtors® (AMAL LAFHAL & ALAN REZAIE)(have access to extensive data regarding the community and its amenities, and are a wonderful resource for this information.

Factor in maintenance costs — All homes require constant care. Many homebuyers take into consideration the cost of paying the home’s mortgage, taxes, and utilities, but fail to factor in cost and time investment of home repairs and maintenance. Estimates indicate that every home will require between 1% and 3% of the homes value in annual maintenance costs.

Be an educated consumer – Get your prospective home inspected before closing. A proper inspection can help you avoid unexpected expenses in the future. Make sure the inspector you use has been formally trained, has access to ongoing technical support and education, and will stand behind his findings in writing.

Participate — Reputable home inspectors prefer it when the prospective homeowners accompany them during the process. The home inspector will take the opportunity to educate them on home’s basic operations as well as the overall condition of the home’s major systems and components.

Any questions, contact WLP Management Team
www.WashingtonLuxuryProperties.com

2nd QTR Market Conditions Report by Long and Foster

2010-08-12T17:34:00.001-04:00

MARKET HIGHLIGHTS AT A GLANCE

A broad overview of major market statistics in Long & Foster's major markets. Including information on Washington DC, Baltimore, Richmond, Philadelphia, Virginia Beach/Newport News, Roanoke, and Eastern Shore Maryland.

WLP Management Team
www.WashingtonLuxuryProperties.com

Five Questions to Ask Before Remodeling

2010-07-31T14:08:00.000-04:00

Before making any big changes to your home you should ask yourself these big questions:

1). How long do I plan to stay in my house after the renovations?

The longer you plan to live there, the more creative you can be. But if you're planning on selling the house in the next five years, keep potential buyers in mind with your choices. In the latter case, for instance, go with neutral colors in the kitchen and bathroom, and consider maple cabinets. Some people hate oak, others hate cherry, but the majority can live with maple.

2). Am I doing just cosmetic fixes or am I ready for an all-out overhaul?

It's OK to make small changes one at a time, but think long-term about the next step. For example, if you're buying a new sink, buy one with enough holes on the deck for the faucet, sprayer and soap dispenser you might want to add on later. (Cutting more holes into stainless steel or porcelain after the sink is installed is an onerous job you don't want to get stuck with.) And if you know you're going to buy new cabinets later, don't replace the countertop with expensive granite now. The chances of reusing it are very slim -- either it breaks when you try to remove it, or it doesn't match the footprint of the new cabinets.

3). Am I prepared for the home upheaval?

Be realistic about how long these changes might take. Renovations can go on for months, so you need to be prepared to make do without that bathroom, kitchen or bedroom. When checking references before you hire your contractor, be sure to ask if the company finished the work on time. You'd be surprised how quickly a week can turn into a month. And if you're bunking up with your in-laws during renovation, that month can seem like a year.

4). Are the renovations keeping with the style of my home?

Any big changes you make to a home inside should reflect what future buyers will expect from the outside. If you live in a Victorian house, don't make it too contemporary. People who see a historical exterior will expect a historical interior, so stay true to the details. The same goes for a contemporary or modern home, where future buyers may not expect old-fashioned details like antique crown molding.

5). Are my DIY choices reasonable?

You may consider yourself handy, but many do-it-yourself jobs demand your time more than anything else. If you have a full-time job, are you capable of taking on a second one? Some makeovers that are not technically difficult can take longer than you think. For that reason, if you start any job yourself try to sample it before committing to the whole thing. For example, while refinishing cabinets with a new stain isn't rocket science, sanding down each one can take forever.

A final tip: if you do plan to follow through with a large-scale renovation, do the smallest room in the house from start to finish -- the insulating, rewiring, painting, refinishing, tiling -- so you gain a sense of accomplishment.

Any further questions, contact WLP Management Team
www.WashingtonLuxuryProperties.com

4 Tips for Finding the BEST Home Inspector

2010-07-22T17:07:00.000-04:00

Buying a home is the biggest purchase you'll likely ever make. That's why you want the best possible home inspector in your corner to tell you whether that cute Colonial is your dream home … or a lemon with a rotting foundation, termites and a shaky chimney. But first, how do you know if an inspector is rock-solid?

Tip No. 1: Don't trust an inspector simply because he or she has a state license or certification. All states that issue licenses require training. But, the training may be so minimal that it is ineffective.

Tip No. 2: Look for an inspector who is associated with a professional inspection organization. This can help weed out the truly fly-by-night inspectors but it won't catch all the bad actors.

Look for affiliation with groups such as NAHI, the National Institute of Building Inspectors and the American Society of Home Inspectors. These are some of the most reputable inspector associations and their Web sites have a "find an inspector" service to locate a member in your area.

You can also study several home inspection organizations' criteria for membership: how many homes a would-be member must have inspected; how much — if any — continuing education is required; whether an exam is required for admission, etc. Each is a little different. Inspectors who are fully certified by ASHI, the nation's oldest such group, with 5,700 members, are required to have completed at least 250 paid professional home inspections and passed two written exams, for example.

Tip No. 3: Don't just take your agent's recommendation at face value. Real-estate agents often recommend inspectors to home buyers. But that arrangement doesn't necessarily serve the home buyer well since both agent and inspector have a financial incentive for things to go well: for the agent, a commission, and for the inspector, the possibility of repeat business from the agent.

Still, experts suggest some ways to make sure your interests are served:

Don't be monogamous. Get more than one suggestion from your real-estate agent.

Ask the tough questions. "Ask the agent flat out, 'Would you hire any of these to inspect your home or your family's home?

Tip No. 4: Once you've got an inspector in your sights, start sniffing around his résumé and asking questions.

Here's what to do:

Check for complaints. If your state licenses inspectors, call the licensing board or whatever body oversees them and ask if the inspector is active and up-to-date.

Call the professional association to which the inspector belongs. The local Better Business Bureau could also be worth a call.
Interview the inspector.

A home inspection usually takes three to four hours. Unless a team is examining the home, be suspicious of anyone who tells you it will take 45 minutes. With a little inspecting of your own, you'll likely end up with a home that contains no unhappy surprises. And that's a happy ending for everyone.

For further questions, contact WLP Management Team
www.WashingtonLuxuryProperties.com

Short Sales vs REOs

2010-07-21T14:28:00.000-04:00

Short sales vs. REOs

When you look for your first or your next home, you will likely find a short sale or REO that meets your needs. From the beginning of 2007 to the end of 2008, the number of short sales doubled and, during 2009, they doubled again many homebuyers are inclined to shy away from a short sale or REO because they don't know what is involved in these transactions. You can sometimes purchase a short-sale property or REO at an attractive price however, so let's look at what a short sale is, what an REO is and how best to approach them.

The Short Sale

For the home seller in a short sale the proceeds from the sale do not, and cannot, cover all the remaining loan balances and other financial obligations secured by the home because the home's market value is less than the remaining loan balances.

For the seller, a short sale is often a more attractive alternative than a foreclosure, since a successful short sale may have less of an impact on the seller's credit report than a foreclosure. Under current Fannie Mae regulations, a short sale may enable them to qualify to buy a house again sooner, in as little as 2 years, than if they had gone through a foreclosure, which would be 7 years before they would be eligible again.

The homeowner would sell their home for less than the loan amount in a short sale and they would not receive any money at the time of the sale. Selling a home in a short sale requires the approval of their lender. In addition, if there are any other loans against the seller's home, like a home equity loan or line of credit, all lenders must agree to the sale.

There are challenges, though with buying a short sale property. The process can require a lot of time and careful negotiation because there may be many parties who may have a claim on the property. Be sure to get the best professional assistance you can find.

The Uncertain Asking Price

One of the related problems in a short sale: The asking price is, in fact, a guess at what the process of negotiations among the lenders and lien holders will require, and that cannot be known with precision until the negotiations have been completed. This means an offer tendered at the first asking price may be turned down or used as the basis to begin negotiations towards a final price.

Banks are developing a proactive approach in which the lenders, the lienholders and the provider (if any) of mortgage insurance work together to arrive at a workable asking price for the property before a homebuyer actually makes an offer. It will be very close to the current market value of the home, and will help guide the potential homebuyer in deciding what to offer for the home. Thus, it will clarify and streamline the purchase process. In any case, if a homebuyer remembers that a short sale requires a price that is as close as possible to the property's current market value, that value can generally be used as a guide when deciding what to offer.

The federal government has proposed a similar approach as part of the recently announced Home Affordable Foreclosure Alternatives Program (HAFA). [See www.realtor.org/government_affairs/short_sales_hafa.]

The Purchase of an REO

If a property fails to sell at the foreclosure sale on the courthouse steps, the lender then owns the property ("REO" means "real estate owned") and its marketing is usually turned over to a real estate professional.

In an REO transaction, the asking price is clear, and the homebuyer must simply take the steps and supply the information required by the lender. In this case, the bank may or may not have discounted the price in order to clear the property from its books. There is a chance, therefore, that the homebuyer might get a lower price with an REO, but that price may be offset by the needed repair and rehabilitation of the property if it has stood empty for some time.

For further questions, call the WLP Management Team
www.WashingtonLuxuryProperties.com

12 Ways to Find Downpayment Money to Buy a Home

2010-07-20T20:22:00.000-04:00

Here are 12 ways to find that down payment.

1) Save Your Tax Refund
If it's hard for you to save, you can change your withholding exemptions from 1 to zero. This will force your employer to pay more to the I.R.S. and reduce your paycheck by that amount. For some free-spending and undisciplined individuals, this method assures a fat income tax refund. Even a regular tax income refund, however, might be enough to help you buy a home.

2) Borrow From Parents
It's not unusual to ask your parents for money to help you buy a home. Favorable tax laws will let each parent gift a certain amount without tax consequences (check with your CPA).

If your parents won't give you the money, perhaps you could ask for an unsecured loan and pay it back at a better rate than your parents could get at the bank or in a money-market account? The rate you pay would likely be less than the prevailing rate from your own lending institution, which makes it win-win for everybody.

3) Sock Away X Amount Periodically
The secret to making a savings account grow is to make identical deposits at the same time every month. For example, if you are paid every two weeks and save $200 from every paycheck, at the end of 12 months, you will have saved more than $5,200, excluding interest.

4) Sell Stuff on eBay or Hold a Garage Sale
Everybody has too much stuff. I've never met a person who didn't. Some people spend thousands every year on storage units where this stuff is stashed. Look in your attic, your basement, under your bed and in your closets for stuff you no longer use. If you haven't used it in a year, sell it at a garage sale, put it on Craigslist or set up an eBay account and get rid of it.

I thought I was going to have pay somebody to come haul away my 10-year-old treadmill that was collecting dust in my family room. Put that baby on Craigslist and sold it (for a lot of money!) in less than week. You can, too.

5) Ask Seller to Give it to You
Hey, you never know. If you pay the seller's asking price, you'd be astonished at what some sellers will do for you. Some of them will even give you the down payment as a credit or pay your closing costs or both. Check with your lender before asking for the credit because lenders have strict requirements as to how much you can receive. The Nehemiah program, for example, allows up to 6% as a credit from the seller.

6) Settle Lawsuits Fast
From personal injury suits to civil litigation, typically delays just make the lawyers more money, apart from the fact that the time-value of money decreases as the clock ticks. We live in a litigious society where even a simple auto accident involving slight bumper damage ends up being filed in court. Settle the case quickly and use that reward to help you buy a house.

7) Check Out Government Programs
If you've served your country in the armed forces, you may qualify for a loan backed by the Veterans Administration, known as a VA loan. The government also runs a slew of down payment assistance programs for first-time home buyers. Also, check with your county to see if it offers special programs to induce home ownership in certain neighborhoods.

8) Take a Second Job
Some renters will sacrifice evenings to work part-time at a second job. If it's a short-term situation, it might not be that hard to do. It could also be seasonal work such as from Thanksgiving to Christmas or specialty work around tax time in the spring.

9) Ask for a Raise
Sit down one evening and write up a list of every thing you have done over the past year that made your company money or somehow increased its bottom line. List every accomplishment. Then take that list to your boss and ask for a raise. Ask for more than you think you will receive. You never know, you might get it.

10) Get a Better Paying Job
As long as your field of employment remains the same, taking a different job should not affect your mortgage application. Maybe it's time to look for employment elsewhere that will pay more. Check with your local employment office, network with peers and send résumés to companies where you want to work, regardless of whether it advertises a position.

11) Tap Your Retirement Funds
Certain retirement accounts will let you borrow from them to buy a home. Check with your CPA for current regulations. Some types of requirement accounts will let you take out the principal balance without a penalty.

12) Consider 100% Financing
If you have excellent credit, you may qualify for a 100% loan, providing your community offers these special first-time home buyer programs. This could be a single mortgage insured through mortgage insurance or you may qualify for a silent second mortgage, due when you sell. Talk to your mortgage broker to see which programs may be available for you.

Contact WLP Management Team with questions
www.WashingtonLuxuryProperties.com

How to Choose A Neighborhood

2010-07-20T00:15:00.001-04:00

If houses are like spouses, a neighborhood is like the extended family. But while you can have a good marriage and still dread holidays with the in-laws, you'll never love a house if you don't like your neighborhood.

How can you choose the right community? Become a neighborhood detective. Figure out what you're looking for, do research and find a neighborhood that fits your description. You don't even have to wear a trench coat -- but it probably wouldn't hurt.

STEP 1 -- Profile Your Perfect Neighborhood

Before you start scrutinizing neighborhoods, turn the magnifying glass back on yourself.

Think about what you're really looking for in a new neighborhood. Remember, you'll probably have to make compromises, so put the "must-haves" at the top and the "would- like-to-haves" at the bottom. Not sure what fits your lifestyle?

Here are some things to consider:

•Do you have children or are you planning to have children anytime soon? Parents know that the first thing to do when looking at a neighborhood is to research the school system. Even if you're single, living in an area with a much sought-after school system raises your property value. If you have kids, you'll also want to live close to parks and community centers.

•What type of home do you want? Are you interested in a single-family home or an apartment, townhouse or co-op?

•How far are you willing to commute? Do you plan to drive, walk or take mass transit to work? Do you have a car or would you be willing to get one?

•Do you want to be in a historic neighborhood or a new development? Historic neighborhoods have tons of character but often require lots of repair work and are governed by community associations with strict standards. Newer developments have more modern features but are typically far from the city center.

•What is your current community lacking? If you're currently landlocked, but have always wanted to live on the waterfront.. put that at the top of your list. If you're a coffee junkie having a Starbucks down the street may be a dream come true.

•Do you want to be able to go places on foot? Would you like to be within walking distance of shops, restaurants and bars? Or would you be willing to drive to nearby businesses?

•Think about what you don't want in a neighborhood, too. If you can't stand late-night noise, you'll probably want to steer clear of the college area or an area with a lively bar scene.

STEP 2 -- Zero In on the Area

If you're moving within the same city, you may already know the various neighborhoods. Choose the ones that best match your list of wants. If you're moving to a new city, you'll have to do more research. Start by picking a part of town to search in.

STEP 3 -- Get the Suspects

With your area of the city in mind, start digging up information. Find interesting neighborhoods online, ask local real estate agents for recommendations and compile all the background information you can, including:

•School information: Look into the local public and private elementary, junior and high schools, as well as daycare programs.

•Crime statistics: Most real estate sites have statistics that tell you how the zip code's crime rates measure up to the national average. If you want specifics, call the local police station.

•Parks and recreation: How far is it to the closest park or recreation center?

•Neighborhood associations: Does the community you're looking at have one, and, if so, are there lawn or construction restrictions? Is there a yearly fee?

•Tourist attractions: Get a guidebook or check out the convention and tourism bureau's Web site to see all the city has to offer.

STEP 4 -- Find the Clues

Once you've done the background research, visit neighborhoods that made the preliminary grade in person. There's no better way to paint a real picture of life in the neighborhood. Use your senses to get a complete picture of the prospective community.

Sights:

•Remember your first impression. What do you notice first about the neighborhood? Do the streets have curb appeal? Are the houses well-maintained? Do the shops and restaurants look hip and inviting? You'll want to feel good about where you call home and impress buyers when you're ready to move on.

•Visualize yourself in the neighborhood. Think of your daily routine. If you can't live without a morning latte, is there a coffee shop nearby? Where will you walk your dog or go jogging? You'll enjoy the neighborhood more if it's easy to do what you like.

•Observe the neighborhood at different times of the day. Driving through will help you get a snapshot of life in the community -- good and bad. Do the roads turn into a parking lot after school or during rush hour? Are people using grills or decks in the evening? Are neighbors and kids socializing or do people keep to themselves? Are the streets well-lit at night? These visual clues can help you decide if you'll fit in.

•Make sure the local schools make the grade. Even if you don't have kids, pay a visit to the nearby schools. High ratings are great, but seeing the buildings is much more telling. It will be easier to sell your house later if the schools are nice.

•Look for warning signs. Be on the lookout for signs that the neighborhood is in trouble. Do you see abandoned buildings or vandalism? Are there a lot of "For Sale" signs or rentals? If the community goes downhill, so does your house's value.

Sounds:

•Stop and listen. Bird and nature sounds are generally pleasant but what about noise from the highway, airport, hospital, train tracks or nearby clubs and bars? It's not very relaxing to listen to trains screech by during your morning coffee -- especially not every morning.

•Talk to your future neighbors. Ask how they like the area, and get the dirt on anything they don't like about the place. What do they want to change? What's their favorite place to hang out? If they're rude to you, they probably wouldn't be good neighbors anyway.

•Talk to more people. You'll get the best information from regular people who aren't trying to make a sale. Hit up your waiter for information when you're checking out the local food or ask a gas station attendant to spill what they know about your chosen neighborhood.

Smells:

•Specifically, are there any? You can't experience unpleasant smells on the Internet and they're not advertised in tourism brochures, but they can certainly affect your decision to live in an area. Take a big whiff of the air, and ask around if you smell any fishy (or just bad) odors.

Taste:

•No, I'm not asking you to lick your prospective home's mailbox. But ask yourself if the neighborhood matches your taste in a living environment -- and if it meets your criteria. Just because it's a nice neighborhood doesn't mean it's the one for you. If the neighborhood meets your list but still feels wrong, search out another area. Trust your gut feeling -- after all, you're the one who has to live there.

STEP 5 -- Close the Case

You've chosen your neighborhood. Now for the hard part: finding a house you love. Luckily, you've narrowed it down to a few streets. Now, make sure to:

•Find out how much house you can afford. The amount of money a lender offers you is often more than you can truly afford to pay. Let our Preferred Lenders use a mortgage calculator to add all your current debts and see how much you can afford. You don't want to be stuck eating ramen noodles for the next 15 to 30 years.

•Compare your loan options. Ask yourself these basic questions to find out what mortgage is right for you. Decide between fixed and adjustable rate mortgages with our Preferred Lenders. Then, try to see which loan term is best for you.

•Draw up your vision of home. It worked for your neighborhood -- now think about what you want in a home. Write your own vision of home and stick to it while you're house hunting. Don't know a Craftsman home from a contemporary one? Learn about different home styles and find the right one for you.

•Find the perfect house! Search for homes by neighborhood on www.WashingtonLuxuryProperties.com

Contact WLP Management Team for more information.

EPA Rule Increases Protection from Lead-Paint Poisoning Agency also extends deadline for required training

2010-07-18T15:05:00.000-04:00

EPA Rule Increases Protection from Lead-Paint Poisoning Agency also extends deadline for required training

Contact Information: Dale Kemery kemery.dale@epa.gov 202-564-7839 202-564-4355

WASHINGTON – Beginning July 6th, all contractors performing renovation, repair or painting work in homes built before 1978 must follow lead-safe work practice requirements. A new EPA rule removes a provision from existing regulations that allowed owner-occupants of pre-1978 homes to “opt-out” of having their contractors follow lead-safe work practices if there were no children under six years of age in the home.

At present, almost a million children have elevated blood lead levels as a result of exposure to lead hazards, which can lead to lower intelligence, learning disabilities, and behavior issues. Adults exposed to lead hazards can suffer from high blood pressure and headaches. EPA has eliminated the so-called opt-out provision because improper renovations in older homes can create lead hazards resulting in harmful health effects for residents and visitors in these homes, regardless of age. The result will better protect children and adult occupants during and after renovation, repair and painting projects.

In April 2008, EPA issued the Lead Renovation, Repair and Painting (RRP), which required the use of lead-safe work practices in pre-1978 homes but included the opt-out provision. EPA’s new rule, effective today, removes the opt-out provision and makes the RRP consistent with statutory requirements.

The RRP rule requires certification of training providers and lead-safe work practice certification for individuals involved in the construction and remodeling industry. To date, EPA has certified 254 training providers who have conducted more than 16,000 courses and trained an estimated 320,000 renovators in lead-safe work practices.

Because of concern that contractors in some areas may be having difficulty accessing training classes, EPA recently announced that it is providing renovation firms and workers additional time to obtain training and certifications to comply with the new lead rules. EPA will not take enforcement action for violations of the rule’s firm certification requirement until October 1, 2010, and will not enforce certification requirements against individual renovation workers if they apply to enroll in certified renovator classes by September 30, 2010 and complete the training by December 31, 2010.

The agency will continue to take enforcement actions against renovation firms and individuals who do not comply with the RRP work practices and associated recordkeeping requirements. The lead-safe work practices include dust control, site clean up and work area containment. It is important that contractors take proactive steps to protect children, families, and themselves while they take the training and file the appropriate paperwork.

More information on the lead RRP program: http://www.epa.gov/lead.

WLP Management Team
www.WashingtonLuxuryProperties.com

"Do you have any regrets about buying your current home?" Recent POLL

2010-07-18T14:58:00.000-04:00

Poll: Few homeowners regret purchase

Surprise! Ninety percent of homeowners say they don't regret buying their home despite a nationwide tsunami of foreclosures, short sales and loan modifications, according to a national poll commissioned by Bankrate.com. By contrast, just 9 percent of homeowners answered "yes" to the question, "Do you have any regrets about buying your current home?"

Americans' contentment with their homes is probably the biggest surprise in a June 24 to June 27 poll of 1,001 randomly selected adults, conducted by Princeton Survey Research Associates.

Here's a result that's not so startling: Homeowners have become savvier about their mortgages.

In this year's survey, only 8 percent of homeowners with mortgages didn't know whether they have a fixed-rate or adjustable-rate loan, or something more exotic. Compare that to two years ago, when a Bankrate-commissioned poll found 26 percent of borrowers couldn't identify their mortgage type.

Among homeowners who regret having bought their homes, 31 percent said they feel woeful because they are unable to sell and move on. Another 22 percent said it was because they couldn't afford the monthly mortgage payments. Some 23 percent said they have regrets for other, unspecified reasons. The rest volunteered their own reasons for wishing they hadn't bought their home.

There's one caveat to these stats. Overall, the poll of homeowners has a margin of error of plus or minus 4.2 percentage points. But the number of regretful homeowners is so small that the figures in the accompanying chart have a margin of error of plus or minus 14 percentage points.

Questions? Contact the WLP Management Team
www.WashingtonLuxuryProperties.com

4 Mistakes that Sabotage a Home Sale

2010-07-16T11:18:00.000-04:00

You love your house. You think everybody else will love your house. But, hold on. Are you sure? Here are 4 surprising things that might make prospective buyers turn away.

1. That distinctive something

You love to walk into your home and smell the scent of orchid air freshener or apple pie baking, but will other folks? -- not so much. Fragrance is a very individual thing, and most experts will tell you that no smell is better than one that might be offensive. Even strong "clean" odors can be a turnoff, so don't spray everything with Febreze or clean with harsh chemicals right before buyers visit. Don't play "welcoming" tunes, either. Your taste in music, whether it's Van Morrison or Van Halen, may not jive with buyers' and is likely to be a distraction.

2. The wallpaper you love

Anything that "dates" your house -- that makes it seem not modern, in need of a re-do, or too aggressively personal -- can make a negative impression on a stranger seeing your house for the first time. Wallpaper and artwork are both seriously subjective, but at least the buyer knows the artwork is going with you; they'll be stuck with removing the wallpaper. These three mini makeovers can make a difference: Remove wallpaper and paint walls a fresh neutral color, replace old linoleum with modern tiles, and edit accessories -- artwork, family photos, and collections -- to a few not-in-your-face pieces.

3. That squeaky door

The little things you may have overlooked (or simply think are charming) may really bother potential buyers. We're talking doors that squeak, don't close completely, or bang against the wall when you open them, or floors that creak ominously when you cross them. What are those bangs, squeaks, or creaks telling people? A) That you don't care enough about your home to do basic maintenance, or B) Your house is so old that major repairs could be around the corner. The lesson: oil your doors, install doorstops, and get a professional in to de-creak your stairs and floors. Sometimes a few well-placed nails can diminish the scariest-sounding creaks.

4. Your hidden treasure

Real estate agents and stagers are often amazed at how home sellers can't see the forest for the trees: they literally do not know the top selling points in their home. Layers of curtains will cover the beautiful lines of an arched window or obscure an amazing city or country view. A couch will be blocking sight lines to the fireplace, which can be an obvious focal point -- or there is so much clutter in the kitchen that no one can see the beautiful polished concrete countertops. Sellers who take the time and effort to look past their own personal taste and lifestyles to see their home through buyers' eyes, can edit their furnishings so that their home will really shine. If you don't, some buyers will have enough imagination to see past your decorating mistakes, but most won't -- and you'll have missed an opportunity to impress them.

WLP Management Team
www.WashingtonLuxuryProperties.com

The good times are gone for residential mortgage defaulters in the U.S.

2010-07-08T19:13:00.000-04:00

The good times are gone for residential mortgage defaulters in the U.S.

Fannie Mae has just changed the rules of the game for people who walk from their home loans better known as strategic loan defaults.

The government-owned agency that backs up loans from lenders says it will lock out borrowers from getting a new loan for seven years if they default on a mortgage they could afford to pay.

Under the new rules:

The five-year waiting period is eliminated.

* Borrowers who can't document "extenuating circumstances" or show that they made an effort with their lender to avoid foreclosure will have to wait seven years to get a new loan.

* Those who can demonstrate hardship or attempted a workout with their lender may have to wait only three years.

* Fannie plans to step up legal actions to seek deficiency judgments in states that allow lenders to go after borrowers' other assets.

* Fannie will instruct its lender partners to monitor delinquent loans owned by Fannie, and recommend cases that warrant attention.

Fannie Mae is taking the new steps after finding:

* The majority of the defaulters are in Florida, Nevada and Arizona

* Nearly one in four homeowners with a mortgage is under water, or owes more than their home is worth, according to CoreLogic.

* Around 12% of all mortgage defaults in February were 'strategic', meaning homeowners were financially able to pay on the loan but chose not to do so.

In 2008, Fannie revised to five years from four the period that borrowers with a foreclosure must wait before they are eligible for a new loan.

Even as Fannie Mae steps up penalties, the agency is preparing to reduce waiting periods for borrowers facing hardship who surrender their homes and avoid foreclosure.

Under previously announced rules that take effect next month, Fannie will reduce waiting periods to two years for borrowers who agree to transfer their homes to the company through a "deed in lieu of foreclosure," or who complete short sales, where homes are sold for less than the amount owed.

The move to lock out borrowers from getting a new loan for seven years represents the latest effort by the mortgage industry to prevent a new wave of losses that could result if more borrowers who can afford their monthly payments instead opt to "strategically" default on loans, because they owe far more than their homes are worth.

Terence Edwards, Fannie's Executive Vice President for Credit Portfolio Management says..."Walking away from a mortgage is bad for borrowers and bad for communities, and our approach is meant to deter the disturbing trend toward strategic defaulting,".

Fannie's move comes amid greater concern that it has become socially acceptable for borrowers to stop paying their loans, and that such a shift could exacerbate the housing bust. Those worries are particularly acute in Arizona, Nevada, Florida and other hard-hit housing markets where it could take years for borrowers to return to positive equity.

Fannie Mae's smaller sibling, Freddie Mac, also requires borrowers with a foreclosure to wait at least five years. Foreclosures can stay on a credit report for up to seven years.

How will this effect you, call us at the WLP Management Team for more information or simply visit www.WashingtonLuxuryProperties.com

5 Summer Real Estate Tips- Buying and Selling When It's Hot!

2010-07-05T16:36:00.001-04:00

Like the weather, real estate markets are hotter in the summer. There are typically more buyers out looking for homes, and more sellers listing their homes for sale. If you are in the market for a new home or are thinking about selling during this time of year, there are some tips and trends to keep in mind to maximize your results.

1. Sellers: Don't Forget the Outside

During summer, landscaping and outdoor space are especially important aspects of your home sale. Maximize the space by keeping the exterior clean, organized, and inviting. Pressure washing, lawn care, and other regular maintenance tasks can do wonders for your bottom line.

2. Buyers: Don't Forget the Inside

It can be easy to get swept away by a great fenced lawn, pool, deck, and other exterior features, especially when you are house hunting at the peak of summer. But don't let visions of outdoor relaxation and entertaining distract you from other essential home features or sway you into overlooking interior concerns.

3. Sellers: Know Your Competition

With more houses on the market, knowing what you are up against is key. Being aware of other homes for sale in your neighborhood can help you define your home's own weaknesses and strengths. Reviewing information on area listings can also help ensure that you price your home right.

4. Buyers: Remember Your Goals

When a surge of homes come on the market at the start of summer, it can be easy to get overwhelmed by all of the options. Don't lose sight of the features that are most important to you, and try to set reasonable expectations that suit your budget, lifestyle, and overall needs.

5. Everybody: Don't Get Squeezed by the Season

Even though summer is a prime time for buyers and sellers, don't let the seasonal time frame become an added stress during your house hunt or home sale. Both buyers and sellers can find success throughout the year!

More information, contact WLP Management Team
www.WashingtonLuxuryProperties.com

The Facts about FHA Loans

2010-07-02T16:31:00.002-04:00

FHA loans are mortgages issued by qualified lenders and insured by the Federal Housing Administration (FHA).

The buyer demand for FHA loans has gone from a zero interest three years ago to upwards of 87 percent today.

1. FHA Loans Are Not Only For Lower-Income Borrowers. FHA loans are available to everyone. There is no maximum income restriction associated with FHA loans. Borrowers do need to substantiate income and assets by submitting proper documentation. This requirement ensures that borrowers are well-vetted and truly able to afford their future homes.

2. FHA Loans Are Not Only For First-Time Buyers. Many people believe FHA loans are available only to first-time homebuyers. This is not the case. Whether borrowers are making their first home purchase or their fifth, they can look to FHA loans as a home financing option.

3. FHA Loans Are Not Just Small Loans; In Fact, Loan Amounts Can Be As High As Almost $800,000. The government recently raised the maximum loan amount from its original cap of $362,790 to $793,750 as a way to help stabilize the housing market. The amount a buyer can borrow varies from county to county. Later this summer, condo buyers interested in FHA loans can visit www.checkfhaapproval.com to instantly identify FHA-approved condo associations and review maximum loan amounts for a given location.

4. FHA Loans Are Not Affiliated With The Section 8 Housing Program. While both programs are administered by the U.S. Department of Housing and Urban Development (HUD), FHA loans have nothing to do with low-income subsidized housing. FHA loans are simply mortgages insured by FHA. This insurance provided by the federal government allows lenders to lend more freely by assuring them that they will be repaid in the event of default. Most traditional lenders, including Wells Fargo & Co., JP Morgan Chase and Citigroup are able to provide FHA loans to their customers.

5. FHA Loans Are Often More Affordable Than Conventional Loans. While FHA loans typically offer the same interest rates as other loans, borrowers benefit from a much lower down payment of as low as 3.5 percent.

6. FHA-Approved Condo Developments Are More Desirable To Buyers. With 87 percent of home buyers indicating that they plan to use FHA loans, condo associations that are not FHA approved are missing out on a significant pool of prospective buyers. Under rules in place since February 2010, an entire condominium development must now apply to HUD and be granted FHA approval before a buyer can purchase a unit in an association with an FHA loan or before an existing unit owner can refinance into an FHA loan.

Due to the general unwillingness of today’s lenders to extend credit with respect to conventional loans, many borrowers find that FHA is their best bet. Lenders don’t mind lending when the federal government (FHA) assures them of repayment.

Homeowners associations (HOAs) should note that although FHA-insured mortgages might be easier to obtain, they are not “risky” loans, due in large part to the strict “full documentation” requirements placed on borrowers.

Individual buyers or sellers can initiate the approval process or current owners can encourage their HOA to apply. More information about the FHA- approval process is available at www.getfhaapproval.com.

7. FHA Loans Are Assumable. In addition to lower down-payment and credit-qualifying requirements as compared to conventional loans, FHA loans are assumable. This means that when a seller with an FHA loan sells his or her property, the loan and its financing terms (interest rate) can be transferred to the new buyer. This unique feature will certainly make a property more valuable in times of rising interest rates.

Any further questions, contact our Preferred Lender at www.WashingtonLuxuryProperties.com

WLP Management Team

What are Condominium or Association fees?

2010-06-22T12:31:00.000-04:00

Condominium fees are one of the often over-looked overhead items attached with purchasing a condo. While condo fees are generally a swap for ownership expenses related to seasonal exterior maintenance and upkeep, they often exceed the amount a typical homeowner would spend. Of course, the benefit is the homeowner doesn't tend to major or minor home repair.

If you are a first-time condominium purchaser, keep in mind that all association fees are not the same. Each is based upon the specific upkeep required for the condominiums it covers. Many provide basic inclusion of garbage collection, snow plowing, mowing and care of any entrance monuments and landscape. The fees are also designed to care for the exterior of each condo and any community buildings. This includes roofing, window replacement, sidewalks and exterior structure repair.

In condominiums that offer pools, recreation/fitness areas, club house and other amenities, the fees will be substantially higher. In those instances, owners are obligated to fund the care of all of the campus provisions and opting out of the monthly fee is not an option for this common form of joint ownership.

For further questions, contact the WLP Management Team
www.WashingtonLuxuryProperties.com

Should I buy a condo?

2010-06-22T12:29:00.000-04:00

Condo living offers an ownership opportunity with the freedom from exterior maintenance and upkeep. Many first-time home buyers, single adults and retiring singles/couples are drawn to the condominium lifestyle for a variety of reasons.

First-time buyers are often fearful of the exterior responsibilities that a single-family dwelling poses. Roofs, garage doors, landscaping and other items that pose unknown cost and time commitment. Singles and retirees are ready for freedom from yard work or want to travel for extended vacations without worrying about home upkeep.

Design and size have changed dramatically since the introduction of the first condominiums years ago. Condominiums are available in all architectural designs, sizes and shapes. Some are high-rise units, while others can be duplex-style ranches. You can purchase condos with basements or slab foundation. Nearly every single-family amenity is available in a condominium.

Condominium exterior maintenance does not come without a cost. Condominium homeowner associations require all owners to become members and the monthly dues are equivalent to the annual maintenance expense plus a reserve. The fees can average from around $100 per month and up depending upon the condo,location and amenities.

For further questions, contact the WLP Management Team
www.WashingtonLuxuryProperties.com

Understanding Real Estate Closing Costs

2010-06-18T11:41:00.000-04:00

Real estate closing costs explained..

Closing costs can add thousands of dollars to the cost of a home, so it's essential to know what to expect. RESPA stands for Real Estate Settlement Procedures Act, which requires lenders to disclose information to potential customers throughout the mortgage process. Lending institutions must fully inform borrowers about all closing costs, lender servicing and escrow account practices, and business relationships between closing service providers and other parties to the transaction. For more information on RESPA, visit the U.S. Dept. of Housing and Urban Development's Web site and search on the term "RESPA."

Under RESPA, a lender must give you a good faith estimate that lists all fees to be paid before closing, such as loan origination fees, prepaid items such as mortgage interest, escrow items to be deposited, title charges, recording fees, and any miscellaneous settlement charges such as express mail charges, and any escrow costs you will encounter when purchasing a home.

Another aspect of real estate closings is the creation of a public record of the sale. Any time a piece of real estate is sold, certain records derived as a result of the real estate closing are entered into the public record. Transfer of title and deed get recorded at the county clerk's. Usually a "recording fee" is included in closing costs. This is the fee charged by the closing company to record the real estate transfer with the county clerk or registrar. This fee is charged to the closing company by the registrar. You will receive a copy of the public record at closing. Should you need additional copies of these records, you will usually need to pay the county clerk or registrar for them.

Timing on closing can vary widely. Depending on the specific circumstances of the sellers and buyers, as well as the general load on the mortgage and closing companies, it usually takes anywhere from three to eight weeks before closing on a home. In that time, you'll have a home inspection conducted, the mortgage lender will process your application, and the closing company will prepare all the closing documents, including a list of the real estate closing costs, which generally cannot be calculated until just before the actual closing. Review all documents for mistakes before signing any closing paperwork.

WLP Management Team
www.WashingtonLuxuryProperties.com

Fannie Mae Tenant-in-Place Rental Policy

2010-06-17T18:55:00.000-04:00

Renters in Fannie Mae-owned properties may be able to stay in their homes
Fannie Mae Tenant-in-Place Rental Policy

To help minimize disruption, eligible renters who want to stay in a home that has been foreclosed can sign a month-to-month lease if the property is owned by Fannie Mae. The policy, which applies to properties owned by Fannie Mae, will help bring stability to communities affected by high foreclosure rates.

Eligible renters will be offered a new month-to-month lease with Fannie Mae and Fannie Mae will manage the properties through a real estate broker or a property management company. Renters may also be eligible for financial assistance if they desire to relocate.
Program Criteria Highlights:

*To qualify, a renter must live in the property when it is acquired by Fannie Mae.

*Any single-family property is eligible including two- to four-unit properties, condos, co-ops, single-family detached homes and manufactured housing.

*The property must meet state laws and local code requirements for a rental property.

*Fannie Mae will not require security deposits.

*Under the Fannie Mae lease, the property may be marketed for sale and if sold the property would be transferred to the new owner subject to the lease.

*Rental rates under the new leases will be comparable to other rents in the same market and subject to any legal rent control restrictions.

Protecting Tenants at Foreclosure Act of 2009 (PTFA)

In addition, pursuant to the Protecting Tenants at Foreclosure Act of 2009 (“PTFA”), bona fide tenants after foreclosure sale may be entitled to remain in the premises under their existing lease or tenancy. If you are a renter in a Fannie Mae owned property and the property has been foreclosed upon, you should have received the Fannie Mae Knowing Your Options document that sets forth information regarding some of your options. Please contact the property manager or broker listed in the document to provide information about your lease or tenancy. Bona fide tenants may also choose to sign month-to-month leases with Fannie Mae pursuant to the rental policy. Contact the property listing broker or the Fannie Mae Resource Center at 1-800-732-6643 for more information.

If you have questions concerning your rights as a tenant under PTFA or other state or federal laws, please seek the advice of an attorney. Information on legal services in your area is available through the American Bar Association at www.findlegalhelp.org.

Fannie Mae Tenant-in-Place Rental Policy FAQs (attached link)

Deed-for-Lease

Fannie Mae’s Deed-for-Lease Program (D4L), allows qualified borrowers (or their tenants) to execute a lease of up to 12 months in conjunction with their deed-in-lieu of foreclosure, allowing them to remain in their home as a renter. Borrowers interested in exploring this option should discuss it with their mortgage servicer. To qualify both the property and borrower (or tenant of the borrower) must meet certain general qualifications* such as:

Occupant Eligibility:

*Income is sufficient to cover rental payments of not more than 31 percent of gross income. If the current market rent is greater than 31 percent of the occupant’s monthly gross income, a lease will not be offered.

*Inspection of the property indicates that the occupants have been keeping the property in good condition.

*The number of occupants is appropriate for the home and in compliance with local laws and homeowner association rules.
If pets are present, renter’s insurance is obtained, if required.

*The occupants signing the lease must agree to a credit review and all occupants over the age of 18 must have an acceptable background check, including receiving clearance from the Office of Foreign Assets Control (“OFAC”).
*There are no signs or reports of illegal activities conducted at the property.

*The property is to be used as a primary residence.

Property Eligibility:

*There are no zoning or homeowner’s association (HOA) rental limitations that would prohibit a lease.

*Repairs required to make the property habitable are deemed to be in an acceptable amount based on the property value.

*The property is in compliance with local rules and laws or can be brought into compliance within 30 days.

*The property is not within a target area for any corporate, government or community neighborhood stabilization plan which may need the property as part of the plan for purposes other than residential.

*The market rental income is anticipated to cover ongoing maintenance and management costs.

Further questions, contact WLP Management Team
www.WashingtonLuxuryProperties.com

Senate OKs new tax credit closing deadline

2010-06-17T11:10:00.000-04:00

The Senate has amended a bill to give homebuyers who were under contract on a home purchase by April 30 an additional three months to close the deal and claim the federal homebuyer tax credit.

Extending the deadline for closing from June 30 to Sept. 30 would allow lenders more time to clear a backlog of 180,000 homebuyers nationwide, said amendment sponsor Sen. Harry Reid, D-Nev.

The amendment to HR 4213, the "American Jobs and Closing Tax Loopholes Act of 2010" -- which primarily extends unemployment insurance benefits -- was approved in a 60-37 vote Wednesday. The vote was mostly along party lines, with only four Republicans in favor and one Democrat opposed.

"While I am disappointed that more Republicans did not support this common-sense measure to strengthen the economy and reduce the deficit, I am committed to ensuring that more Nevadans and Americans can become homeowners and that this amendment becomes law," Reid said in a statement.

The House passed an earlier version of the bill in December, and the Senate approved its own version in March. The Senate is currently working on resolving differences between the two bills.

The National Association of Realtors supports the amendment, saying Realtors have reported that as many as one-third of qualified applicants have been told by lenders that their loans will not close before June 30 because of the sheer volume of loan applications in the pipeline.

The amendment does not extend the deadline for homebuyers to qualify for the tax credit, NAR said in urging lawmakers to approve it, but simply extends the deadline for closing transactions already in contract.

"Since these applications were already in the pipeline and figured into the program's cost, the extension of the closing deadline should not incur any further government costs," NAR President Vicki Cox Golder said in a statement.

There has been some speculation that some homebuyers will attempt to submit fraudulent claims for the tax credit by backdating documents showing they were under contract by April 30, and that extending the deadline for closing would expose the government to more fraudulent claims.

Further questions, contact WLP Management Team
www.WashingtonLuxuryProperties.com

Prince George's County, Maryland MARKET REPORT

2010-06-17T08:48:00.002-04:00

Prince George's County, Maryland MARKET REPORT

Howard County, Maryland MARKET REPORT

2010-06-17T08:47:00.003-04:00

Howard County, Maryland MARKET REPORT

Montgomery County, Maryland MARKET REPORT

2010-06-17T08:47:00.000-04:00

Montgomeryc County, Maryland MARKET REPORT

Washington, DC MARKET REPORT

2010-06-17T08:46:00.002-04:00

Washington, DC MARKET REPORT

Falls Church City, Virginia MARKET REPORT

2010-06-17T08:45:00.002-04:00

Falls Church, Virginia MARKET REPORT

Alexandria City, Virginia MARKET REPORT

2010-06-17T08:44:00.003-04:00

Alexandria City, Virginia MARKET REPORT

Arlington County, Virginia MARKET REPORT

2010-06-17T08:44:00.000-04:00

Arlington County, Virginia MARKET REPORT

Fairfax County, Virginia MARKET REPORT

2010-06-17T08:42:00.002-04:00

Fairfax County, Virginia MARKET REPORT

Loudoun County, Virginia MARKET REPORT

2010-06-17T08:40:00.001-04:00

Loudoun County, Virginia MARKET REPORT

Facing Foreclosure: What to do right now

2010-06-16T18:20:00.000-04:00

Many homeowners find alternatives to foreclosure by negotiating with lenders, often with the help of foreclosure counselors. If you’re facing foreclosure, call your lender right now to determine your options which can include loan modification, forbearance, or a short sale.

Foreclosure process takes time:

The entire foreclosure process can take anywhere from two to 12 months, depending on how fast your lender acts and where you live. Some states allow a nonjudicial process that’s speedier, while others require time-consuming judicial proceedings.

Once you miss at least one mortgage payment, the steps leading up to an actual foreclosure sale can include demand letters, notices of default, a recorded notice of foreclosure, publication of the debt and the scheduling of a foreclosure auction. Even when an auction is scheduled, however, it may never occur or it may occur but a qualified buyer doesn’t materialize.

Bottom line: Foreclosure can be a long slog, which gives you enough time to come up with an alternative. Meantime, if your goal is to salvage your home, think about keeping up with payments for homeowners insurance and property taxes. Otherwise, you could compound your problems by getting hit with an uncovered casualty loss or liability suit, or tax liens.

Read the fine print:

Start by reviewing all correspondence you’ve received from your lender. The letters—and phone calls—probably began once you were 30 days past due. Also review your mortgage documents, which should outline what steps your lender can take. For instance, is there a “power of sale” clause that authorizes the sale of your home to pay off a mortgage after you miss payments?

Determine the specific foreclosure laws for your state. What’s the timeline? Do you have “right of redemption,” essentially a grace period in which you can reverse a foreclosure? Are deficiency judgments that hold you responsible for the difference between what your home sells for and your loan’s outstanding balance allowed? Get answers.

Pick up the phone:

Don’t give up because you missed a mortgage payment or two and received a notice of default. Foreclosure isn’t a foregone conclusion, but it’s heading in that direction if you don’t call your lender. Dial the number on your mortgage statement, and ask for the Loss Mitigation Department. You might stay on hold for a while, but don’t hang up. Once you do get someone on the line, take notes and record names.

The next call should be to a foreclosure avoidance counselor approved by the U.S. Department of Housing and Urban Development. One of these counselors can, free of charge, explain your state’s foreclosure laws, discuss alternatives to foreclosure, help you organize financial documents and even represent you in negotiations with your lender. Be wary of unsolicited offers of help since foreclosure rescue scams are common.

Be sure to let your lender know that you’re working with a counselor. Not only does it demonstrate your resolve, but according to NeighborWorks, homeowners who receive foreclosure counseling are 1.6 times more likely to avoid losing their homes than those who don’t. Homeowners who receive loan modifications with the help of a counselor also reduce monthly mortgage payments by $454 more than homeowners who receive a modification without the aid of a counselor.

Lender alternatives to foreclosure:

Hope Now, an alliance of mortgage companies and housing counselors, can aid homeowners facing foreclosure. A self-assessment tool will give you an idea whether you might be eligible for help from your lender, and there are direct links to HUD-approved counseling agencies and lenders’ foreclosure-prevention programs.

There are alternatives to foreclosure that your lender might accept. The most attractive option that’ll allow you to keep your home is a loan modification that reduces your monthly payment. A modification can entail lowering the interest rate, changing a loan from an adjustable rate to a fixed rate, extending the term of a loan, or eliminating past-due balances. Another option, forbearance, can temporarily suspend payments, though the amount will likely be tacked on to the end of the loan.

If you’re unable to make even reduced payments, and assuming a conventional sale isn’t possible, then it may be best to turn your home over to your lender before a foreclosure is completed. A completed foreclosure can decimate a credit score, which will make it hard not only to purchase another home someday, but also to rent a home in the immediate future.

Your lender can approve a short sale, in which the proceeds are less than what’s still owed on your mortgage. A deed-in-lieu of foreclosure, which amounts to handing over your keys to your lender, is another possibility. The earlier you begin talks with your lender, the more likelihood of success.

Explore government programs:

The federal government’s Making Home Affordable program offers two options: loan modification and refinancing. A self-assessment will indicate which option might be right for you, but you need to apply for the program through your lender. A Making Home Affordable loan modification requires a three-month trial period before it can become permanent.

Fannie Mae and Freddie Mac have their own foreclosure-prevention programs as well. Check to determine if either Fannie or Freddie owns your mortgage. Present this information to your lender and your counselor. Fannie and Freddie also have rental programs under which former owners can remain in recently foreclosed homes on a month-to-month basis.

The federal Home Affordable Foreclosure Alternatives program, which took full effect in April 2010, offers lenders financial incentives to approve short sales and deeds-in-lieu of foreclosure. It also provides $1,500 in relocation assistance to borrowers. Again, talk to your lender and counselor.

For Foreclosure Law in your State...visit www.ForeclosureLaw.org

WLP Management Team
www.WashingtonLuxuryProperties.com

50 Reasons to Use a Buyer's Agent

2010-06-15T16:07:00.000-04:00

With more resources available on the Internet, you may be considering buying a home without using the services of a professional real estate agent. After reviewing these 50 services an agent would typically perform for their clients, you may want to reconsider! Remember, agents don’t get paid until the home purchase is complete. It is their job to do the best they can to help you through a smooth experience, save you money and achieve your goal of buying a home.

1. Analysis of your real estate needs and determine housing criteria
2. Research properties
3. Send you listings that match your needs
4. Provide information pertaining to your move or relocation
and short-term stay options
5. Educate you about home buying processes
6. Provide information on market conditions, schools,
communities, employment, and more
7. Discuss your financing needs
8. Recommend qualified mortgage brokers
9. Make appointments and show properties
10. Provide timely and professional disclosure and research
11. In car review: pros & cons of each property
12. Point out “Hot Buttons” while showing
13. Help with loan application questions
14. Follow up of loan application with your selected mortgage broker
15. Help cleaning up your credit if needed
16. Analyze purchasing timeline and needs once property is located
17. Free Comparative Market Analysis (CMA) of a property in order
to make an educated offer
18. Call listing agent to get sellers disclosure
19. Draft the offer and prepare paperwork
20. Research tax records
21. Get information on utilities
22. Explain all paperwork before signing
23. Generate net sheet
24. Write offer, collect, deposit escrow and provide verification
to listing agent
25. Submit contract and follow up
26. Negotiate contract until mutually agreeable
27. Review and explain final contract
28. Send the title company the executed contract
29. Schedule and attend the home inspection
30. Schedule and attend the termite inspection
31. Recommend insurance agents to you
32. Verify loan process has begun
33. Review home inspection findings with you
34. Re-negotiate repairs if needed
35. Order survey / appraisal
36. Assist to meet finance deadline
37. Monitor contingencies – financing, home inspection, etc.
38. Check on homeowners insurance
39. Verify that the title agency has all necessary
documentations
40. Follow up with the lender on all aspects of closing
process
41. Schedule closing: time and place
42. Review HUD (closing statement)
43. Perform a final walk-through
44. Determine the funds to be brought to closing
45. Coordinate between lenders and title company to
determine amount needed
46. Release escrow to title company
47. Explain everything needed at closing
48. Attend your closing
49. Give you the keys to your new home!
50. Follow up after closing – homestead info and insuring
that everything is going fine in your new home.

Contact WLP Management Team with questions and we look forward to working with you. Visit www.WashingtonLuxuryProperties.com

Word of the Day "Bankruptcy"

2010-06-15T14:21:00.000-04:00

A condition of financial insolvency in which a person’s liabilities exceed assets and the person is unable to pay current debts. Bankruptcy may be voluntary, as when the debtor petitions the court on his or her own accord; or it may be involuntary, as when a creditor forces payment of a debt of $1,000 or more, which the debtor cannot pay.

When a person enters into federal bankruptcy proceedings, all assets become vested in a court-appointed trustee or receiver, who liquidates these assets to pay claims held against the debtor by the debtor’s general creditors. Bankruptcy discharges the debtor from further liability on all debts then owed, except for such exempted debts as tax claims, alimony, and support payments, liability for malicious injury and fraud, and debts not scheduled. Usually, a bankruptcy is reported by most credit agencies for a period of ten years.

A creditor of the bankrupt, whose claim is secured by a mortgage on real property, is normally entitled to the proceeds of the mortgaged property before any distribution of the bankrupt’s assets to general creditors. As a general rule, the discharge in bankruptcy affects a debtor’s personal obligations but does not destroy liens against the debtor’s property. Fraudulent conveyances, however, are void, and transfer of the insolvent debtor’s property to a creditor within prescribed periods (such as 90 days) of filing the bankruptcy petition may be voided by the trustee in bankruptcy, because it enables a preferred creditor to get a greater percentage of the debt over other creditors. One fundamental policy of bankruptcy is to ensure equality of distribution among creditors.

The bankruptcy of either party to a real estate agency agreement (listing) terminates the agency because title to the property passes to the trustee in bankruptcy. A discharge in bankruptcy does not generally relieve a real estate licensee from the penalties resulting from payment out of the state licensing agency’s real estate recovery fund to defrauded consumers.

A broker representing the debtor in the sale of property in a bankruptcy case should note three points: (1) The broker must be a disinterested person. (2) Court approval for the employment of a broker is required. (3) Once the sale is completed, the bankruptcy court must approve the commission, not to exceed a reasonable amount.

Bankruptcy of a lessee or vendee is usually a stated ground for default under a lease or contract for deed. Many leases and contracts for deed contain bankruptcy default clauses that provide the owner-landlord with the right of termination if the buyer-tenant goes bankrupt. Under the Federal Bankruptcy Act, however, forfeiture and termination clauses conditioned on insolvency or bankruptcy may be unenforceable.

The bankruptcy of a mortgagor or a trustor to a trust deed note affects foreclosure proceedings if the bankruptcy is initiated before the foreclosure proceedings have begun. In such cases, title to the property passes to the trustee in bankruptcy, and the referee (usually the judge) of the bankruptcy court must authorize the foreclosure proceedings. Filing of the petition in bankruptcy acts as an automatic stay of the foreclosure proceedings in state court.

Other types of bankruptcy actions are designed to reorganize and save a debtor’s business operation. These actions have the debtor’s “rehabilitation” as their prime goal. It does not affect secured debts, that is, those secured by liens (mortgage loans, real estate taxes), although it does suspend any pending foreclosure proceedings. A court-appointed referee is responsible for setting up the reorganization of the operation. The debtor is allowed to retain possession of the property while arranging a plan for payment. Although such proceedings deal only with unsecured property, the court can order a suspension of all actions by a mortgagee and thus prevent foreclosure.

The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 became effective in October, 2005. This law requires debtors to pass a Means Test to determine whether they can have their medical bills, credit card debt, car loans, and other debts liquidated through Chapter 7 or whether they must enter a repayment plan through Chapter 13. Additionally, debtors are required to complete an approved credit counseling course within 180 days before filing a petition.

For more information, contact a settlement attorney from our affiliates by visiting www.WashingtonLuxuryProperties.com or contact WLP Management Team directly.

Tips for Watching Your Credit Report

2010-06-15T12:11:00.000-04:00

As we recover from a mass of faulty loans, and the credit market continues to tighten, it’s more important than ever to keep an eye on your credit report. If you don’t, and anyone accesses your credit--for a home, car, a job, or even your insurance--you may face an unpleasant surprise and be denied or pay unnecessarily steep interest rates.

By that time, it’s too late. It takes months to correct errors or improve poor credit. The time to take action is well before you expect to need to draw upon your credit. How can you stay ahead of the game and protect yourself?

Pull your credit reports.
Federal law has now made credit reports from each of the three main credit bureaus—Experian, TransUnion and Equifax, available for free to consumers once a year. If you haven’t checked your credit recently (in the past 12 months), obtain all three to see where you stand, correct errors and for signs of identity theft or other unauthorized activity. If you have seen your credit report within the last year and addressed errors, financial experts recommend you access one report every four months.

To get your free credit reports, visit www.annualcreditreport.com to request them online or to download the form you’ll need to complete if you would prefer to request them by mail. You may also call 877-322-8228.

This web site is the only truly free credit report delivery service. Others—many with similar names—offer credit reports, but with a catch—you must buy another service to get the reports—most often a credit monitoring service. Although annualcreditreport.com will offer you the opportunity to buy your credit score when accessing your reports, doing so is not mandatory.

Dispute errors.
A past survey from public interest advocacy organizations (state PIRGs) reveals that 25% of the credit reports reviewed contained errors serious enough to result in the denial of credit, while 79% contained mistakes of some kind.

Carefully review each entry for accuracy. Compare your records with the credit bureau’s account of your credit history to make sure that each open account listed is open, that the payment history is true and that each loan is actually your loan.

If you locate errors, you may initiate a dispute online through the bureau’s Web site. Or, you may send a certified letter, with supporting documentation, to the credit bureau. (The Federal Trade Commission provides more detail and a useful sample dispute letter.) Instructions for either option are located at the end of your credit report. You’ll also find these steps explained in the company’s Frequently Asked Questions section of their site.

If you find fraudulent charges, you’ll need to:

request a “fraud alert” from each of the bureaus;
file a police report; and
file a complaint with the Federal Trade Commission (FTC).
The FTC provides detailed information on how to complete each of these steps when fraud is suspected.

If you have negative notations on your credit report, but they are factual, don’t file a dispute. Doing so is illegal. Derogatory information, including late payments and loan defaults can remain on your credit report for up to seven years, except bankruptcy, which often remains on the reports for 10 years, both making it very difficult to prove that you are a responsible consumer. If negative information lasts longer than these time periods, you may request that it be removed.

Unless the bureaus consider your disputes to be frivolous, according to the Fair Credit Reporting Act, they must respond to consumer disputes within 30 days.

Keep records.
As you dispute errors and if you report fraud, keep meticulous phone logs and copies of all of your correspondence. For Web submissions, keep screen shots of your requests and any email confirmations you receive from the bureaus.

In your log, track the date you spoke with someone, the name of the person, and what he or she said. To be particularly meticulous, summarize the content of your call and send it by certified mail to the person you spoke with. These notes may prove valuable if you have trouble resolving your issues with the bureaus or creditors.

Improve your credit.
Most of us are able to improve our credit. Doing so will help us qualify for better interest rates and terms on loans in the future. Several factors from your credit reports determine your credit score:

Payment history 35%
Outstanding debt 30%
Credit history length 15%
New credit applications 10%
Your credit mix 10%
Improving your credit score and your credit are virtually the same thing. There are no quick fixes, but five simple principles applied over time will improve your overall credit standing:

Pay your bills on time.
Past delinquencies have a decreasing effect on your credit as time passes.

Reduce your debt and keep it low.
Although no credit card debt is best, a good goal is to keep overall debt (not including housing) payment below 20% of your monthly budget.

In general, do not close old, unused lines of credit.
Add up the maximum available credit on each of your cards and take 20% of that number, in this case, $4,000[what does this amount refer to?]. Your credit card debt shouldn’t exceed that 20% of your available credit. Keeping the older cards open helps keep this “utilization ratio” in balance and shows stability.

Limit inquiries and applications for new credit.
Most applications for credit result in an “inquiry” on your credit report. Too many inquiries in a short period of time can have a negative impact on your credit. Apply for new credit judiciously.

Monitor your credit report for mistakes and evidence of identity theft.

For more information, contact our Preferred Lender on www.WashingtonLuxuryProperties.com or call WLP Management Team direct.

Should I rent or buy?

2010-06-07T12:22:00.000-04:00

Lender Desk Update: FYI

Should I Rent or Buy? As a practical matter? Financial decision? Family/Individual needs? Financial incentives? Emotional or impulsive decision? Yeah! I/we want a bigger/nicer house and prices are low! Wait, are prices really low or are they just lower compared to the market peak? As an investment, what will my/our new home purchase be worth in 2 years? 5 Years? What kind of rate of return can I get on my investment if I Rent? If I Purchase? Rents have a tendency to remain stable, + or - 2.9% while home prices increased 12.2% in 2005 and then dropped 20% in 2008.

The decision to Buy instead of Rent can be based upon the following formula:

If the Home Price is < 15 times the annual rent, it is better to Buy.

Conversely, if the price of the home exceeds 15 times what you would pay in annual rent, it may be better to rent.

Individual circumstances will, of course, impact one's decision. For example, higher tax brackets benefit from Buying due to the larger tax write offs. Costs of owning tend to be stable especially with fixed rate financing. Don't forget the pride of homeownership. Renting, however offers less responsibility and more mobility. Purchasers are seeking out the best combination of terms. This includes aligning oneself with the services offered by a team of professionals (Realtor, Lender, Home Inspector, Title Attorney, Homeowners Insurance Agent, Home Improvement Contractor, Financial Planner, CPA) to name a few.

When structuring your Purchase Offer, ask us, what is the dollar equivalent to me (the buyer) of striking out the financing contingency? What are the risks? What are the benefits? What about the expectation of insurance costs? Do I need a Clue Report prior to making an official offer? How about the home inspection contingency? Can I nail down the property's condition before making the offer and have the no inspection contingency translate back to me in the form of a lower sales price and/or more closing cost assistance from the Seller?

New: 1) $7,500 grant for 1st time home buyers in Montgomery County. There are income restrictions and funds are limited.
2) 10% down, no PMI, up to sales price of $1,366,350.

For more information, contact the WLP Management Team or our Preferred lender on www.WashingtonLuxuryProperties.com

Pull ahead will level out, fundamentals are strong!

2010-05-27T14:35:00.000-04:00

After an exciting April, it’s safe to say that May has been an interesting month so far. The market is woozy and slightly hung-over as a result of the last-minute rush to sneak in under the tax credit deadline at the end of April.

In addition, we have experienced volatility in the financial markets reminiscent of the financial crisis in late ‘08 and early ’09. The stock market has fallen significantly in May; the S&P 500 index is down 133 points (an 11 percent decrease) since the 1st of the month. The downward trend in the market and extreme volatility is bound to have a negative short-term impact on buyer behavior. Hopefully, this is just a much-anticipated and necessary market correction.

Our experience reflected buyers’ pull-forward behavior—buying perhaps before they normally would have in order to take advantage of the government incentives—as we ended the month 33 percent above where we were in April 2009. The National Association of Realtors just released its numbers for April as well, reporting that year-over-year existing home sales were up nearly 23 percent in April.

We expected that sales would contract after the tax credit deadline, and we are not surprised that market volatility and concerning financial news from Europe would have a dampening effect on home buyers. When the tax credit originally ended last November, before the extension was issued, December sales slumped as we worked through that pull-forward phenomenon as well. Just like we did then, we will continue to focus on the basics of great customer service, asking for referrals from you - our clients and friends.

The Fundamentals Remain Strong

First and foremost, mortgage rates have dropped significantly throughout May. The team at Prosperity Mortgage indicated that rates have dropped more than 37.5 basis points in the last few weeks. The headlines this week proclaimed that rates—now solidly below 5 percent—are the lowest we’ve seen in 50 years.

Note: A math equation for buyers can easily absorb: On a $400,000 house with a 30-year fixed mortgage, a mere 1 percent drop in the mortgage rate can equate to about a $200 per month savings in their payments.

Rates are just one piece of the overall affordability puzzle—one that we should definitely be assembling for our clients to show them the big picture. NAR’s Housing Affordability Index continues to trend upward, reflecting a positive relationship among decision-driving factors such as home prices, mortgage interest rates and family income. In March, the HAI continued to hover around 170, which is well above the baseline of 100 indicating that households earning the median income can afford the median-priced home at current borrowing costs.

Looking Ahead…

Consumer confidence is trending in the right direction, too. In the chart below, highlighting the University of Michigan's Consumer Sentiment Index, you can see that, while we're still below confidence levels of 2007, 2010 is already outperforming 2008 and 2009. In fact, in April, consumer sentiment was up 10 percent compared to the same month last year.

Any questions, contact the WLP Management Team at www.WashingtonLuxuryProperties.com

HUD Approved Condominium Search in MD, DC & VA

2010-05-20T18:32:00.000-04:00

Below is the link to check for FHA approved condo developments. Please be cautious when running the search. It's a situation where too much information may result in a false negative. Also, please be aware that their is a new approval process and developments may had been approved on the old version.
HUD's Lender Page - link to search function for approved condominiums:

https://entp.hud.gov/idapp/html/condlook.cfm

For further questions, contact our Preferred Lender on our website or call WLP Management Team at www.WashingtonLuxuryProperties.com

Important information about short sales in Montgomery County, Maryland

2010-05-20T18:15:00.001-04:00

For Montgomery County short sale transactions (and possibly all of Maryland, but I am not sure about that), the County will levy recordation and transfer taxes based on the unpaid principal balance of all existing mortgages against the property as if the excess debt over and above the sale price is being waived/cancelled. They will tax on the Short Sale price ONLY IF evidence is presented to us that the excess debt over and above the sale price is being paid off by the debtor or pursued by the lender.

That is to say, for example, in plain English, if the unpaid principal balance on the property is $150,000.00, and the short sale price is $100,000.00, then the transaction will be taxed as if the sale price were $150,000.00, assuming the lender were to forgive the unpaid balance in my example of $50,000.00. The exception to this, however, would be if the lender were going to pursue the remaining balance due (e.g., in the form of a promissory note or deficiency judgment), then the recordation and transfer taxes will be calculated based on the principal balance less the sales price and any amount the lender is continuing to pursue, which obviously still remains lower than the unpaid principal balance (e.g., in the same scenario above, the lender also wants the seller to repay $20,000.00 as part of an unsecured promissory note, then the County will tax on $130,000.00 [$100,000.00 + ($50,000.00 – $20,000.00)] = $130,000.00). The only instance where the County will tax based on the short sale purchase price will be where the lender intends to pursue the seller for the entire remaining unpaid balance (e.g., using the same example above, the lender makes the seller sign a $50,000.00 promissory note representing the entire unpaid principal balance).

Any further questions, contact one our Preferred Settlement Companies or WLP Management Team at www.WashingtonLuxuryProperties.com

Important information about maintenance in pre-1978 housing- EPA regulation

2010-05-17T10:42:00.000-04:00

Did you know there is a new EPA regulation regarding renovation and maintenance on housing subject to lead based paint disclosure? While the law targets contractors who perform maintenance, agents who hire contractors on behalf of sellers or landlords should verify that workmen are licensed, insured, and comply with the requirements under the new regulation. It is critical to use reasonable care and due diligence when selecting contractors or recommending workmen to clients to avoid exposure to liability claims.

The rule applies to renovators and maintenance professionals that work in housing, child-care facilities and schools built prior to 1978, where the work performed will disturb more than 6 square feet of interior painted surfaces or 20 square feet of exterior painted surfaces. The rule requires contractors to follow protective work practice standards including posting warning signs, restricting occupants from work areas, containing work areas to prevent dust and debris from spreading, conducting a thorough cleanup, and verifying that cleanup was effective.

Effective immediately, contractors performing renovations, repair and painting projects that disturb lead based paint must follow lead safe work practices. Beginning in April 2010, federal law will require that contractors performing renovation, repair and painting projects that disturb lead-based paint in homes, child care facilities, and schools built before 1978 be certified and follow lead-safe work practices to prevent lead contamination.

To learn more about renovation visit EPA's renovation, repair and painting web page: http://www.epa.gov/lead/pubs/renovation.htm

Any further questions, contact the WLP Management Team at www.WashingtonLuxuryProperties.com

"REALTORS oppose new tax burdens on real estate" letter sent to Senator Jim Webb

2010-05-16T23:28:00.000-04:00

Alan Rezaie
8227 Old Courthouse Road, #100
Vienna, Virginia 22182

May 16, 2010

Senator Jim Webb
U.S. Senate
248 Russell Senate Office Building
Washington, DC 20510-0001

Subject: REALTORS oppose new tax burdens on real estate

Dear Senator Webb,

I am a Realtor and your constituent. Reports indicate that Congress may vote this week on a spending and tax measure that could include two harmful tax provisions directly affecting real estate. I urge you to oppose these changes.

The first would require that ALL landlords provide an IRS Form 1099 to all contractors they do business with if they pay that contractor $600 or more in any given year. The proposal would apply even to those who own just one property. This is a trap for the unwary. Since many of my clients are "little guys" looking to supplement their income with real estate investments, any proposal requiring them to file Forms 1099 would impose new expenses and subject them to penalties they are ill-equipped to pay. Often these small landlords don't use tax professionals; if adopted, this proposal could force them to incur the expense of hiring tax professionals. This proposal is burdensome and overreaching. Oppose it.

I also oppose a proposed change to tax carried interest at ordinary income rates. A real estate investment however, is fundamentally different from a hedge fund or financial instrument investment. An investment in real estate is nothing like playing with other people's money. Real estate is a fixed asset held for a long period of time. The worst thing about this proposal is that, for the first time, a particular type of real estate investment gain would no longer qualify for capital gains treatment. This is a terrible precedent. Oppose it.

The real estate industry, in all its commercial, multi-family and individual investment categories, is still very fragile and likely to remain so. These proposals are ill-advised, inopportune and potentially destructive. Keep our real estate market recovery on track by opposing these measures.

Sincerely,
Alan Rezaie, Vice President
Washington Luxury Properties, LLC.
8227 Old Courthouse Road, #100
Vienna, Virginia 22182
+1.703.889.0199

TOP TEN REASONS PEOPLE SAY THEY DON'T GET TITLE INSURANCE

2010-05-04T20:52:00.000-04:00

10. I don't need title insurance because the house is only three years old.

WRONG. Before the house was there, there was always dirt. A larger tract, a
farm, a prior home etc etc etc A ftill title search in Virginia is at least 60 years.

9. I don't need title insurance because there has only been one owner.

WRONG. See answer number 10.

8. I don't need title insurance because I am buying from the builder and they can't/won't sell without paying all contractors and subcontractors.

WRONG. An advantage policy contains mechanics lien coverage. The lack of
payment to someone who has performed work does not have to be due to a
dishonest builder. There could be a legitimate question as to what is due or work performed. In either scenario, a lien can be filed after closing. Remember, liens follow property!

7. I don't need title insurance because it has been foreclosed on and I am buying from the bank who got it at the courthouse steps.

WRONG. We have found that some lenders are not doing full 60 year searches prior to foreclosure. They are doing current owner bring downs or partial
searches. A purchaser needs their own protection and not to rely on the work done for the bank.

6. I don't need title insurance because the title has been examined and everything was found to be clear.

WRONG. One of the purposes of title insurance is to insure against what is NOT of record. The examiner will do his search and follow the title from one owner to the next. The examiner cannot know the signature of everyone, but relies on the fact that it was notarized. The examiner caimot know that when a will states that there are three heirs that there are actually four.

5. I don't need title insurance because the examiner must have errors and omissions insurance.

Well, IF the examiner is still in business and IF the examiner actually made a MISTAKE in the reporting. Again, an examiner can only report what he finds.

4. I bought it on my last house and I never used it.

GREAT!! That is a good thing that you did not use it. But that has nothing to do with the current home purchase. (BTW: I had disability at my last job, never used it. Thought it was prudent to get it at this job, too!)

3. Title Insurance claims really don't get paid.

Not only do claims get paid, but indemnity letters get issued to allow closings to continue.

2. I am flipping the property and won't own it that long.

You are always in the chain of title. Ten months or 10 years. And title insurance will protect you long after you sell.

AND THE NUMBER ONE REASON PEOPLE SAY THEY DON'T GET TITLE
INSURANCE.....................................................

1. SOMEONE told me that I didn't really need it... like their neighbor or their AGENT!!

Yikes! Do not get caught up in this mistake. Do not self-insure your clients
property. Give the information, but do not be the decision maker.

Any further questions, contact one of the Attorneys on www.WashingtonLuxuryProperties.com or contact WLP Management Team.

Virginia is one of the States impacted by Chinese Drywall

2010-05-04T14:59:00.000-04:00

Quick Facts about Chinese drywall:

*Emits gas that combines with airborne humidity to create a corrosive environment inside the home.

*Damages most metal components inside a home.

*Potentially causes adverse health effects.

*The fear and stigma associated with Chinese sheet rock, also known as toxic drywall, make it hard to sell a home, insure a home, and refinance a home.

*The bulk of the material was imported between 2001 and 2008, but some reports seem to indicated that Chinese drywall problems have shown up in homes built as early as 1997.

*Chinese drywall inspections are complicated and require specialized equipment.

*Chinese sheet rock is likely to be the largest product liability issue the construction industry has ever seen. Defective drywall has been conclusively linked, by the Consumer Products Safety Commission, to drastically accelerated corrosion. This toxic drywall emits a gas that combines with latent humidity in the air to create a highly corrosive environment that is potentially hazardous to one's health. This corrosion affects copper wiring, HVAC systems, appliances, and electronics. There are also significant reports associating tainted drywall to health issues, including nose bleeds, upper respiratory infections, sinus infections, headaches, itchiness, and chronic coughing, among others. Some doctors have gone so far as to advise their patients to "get out" of their homes.

There are many Chinese drywall problems.

What is Chinese drywall?

This term has become a generic term describing any tainted drywall. Chinese sheet rock is another common term to describe any of this toxic drywall material. Several reports indicated that the suspect drywall is not limited to drywall manufactured in China, however. Some Canadian drywall has shown up as tainted as well. Some of this drywall was originally manufactured in China and re-branded in Canada.

Investigations are ongoing. The Consumer Products Safety Commission, as well as several other government agencies are heading up the efforts to look into Chinese sheet rock. Currently, it is not clear exactly when this toxic drywall was imported to the United States. The majority of cases have been reported in the Southeast, but several reports seem to indicate that Chinese drywall problems are likely to show up across the country symptoms slowly manifest.

What is wrong with Chinese drywall?

Chinese drywall produces gases that cause a multitude of problems. These gases reacts with latent airborne humidity and creates a corrosive environment that reeks havoc and many common metals used in construction. Most notably, this corrosive environment has a profound impact on copper elements. Because drywall so prevalent in a home, the results are dramatic. Air conditioning systems fail within a year, appliances are replaced on a regular basis, and electronics degrade rapidly. In addition, there are some reports of house fires as a result of corroded copper wiring.

Issues range from corrosion to severe chronic health issues. Although Chinese sheet rock has not been affirmatively linked to health issues, the evidence is mounting. Dozens of reports contain details about adverse health effects. The health issues range from chronic mild headaches to crippling migraines. Upper respiratory illnesses and sinus infections have also been linked to defective drywall. The effect of problematic drywall on human health is being officially studied by the Consumer Product Safety Commission and the EPA. Of specific interest is that CPSC investigators analyzing Chinese drywall problems experienced similar symptoms when conducting in-home visits to homes reportedly affected by defective drywall.

More specifically, this drywall emits a sulfide gas that combines with water in the air. The combination results in hydrogen sulfide, which is highly corrosive. In addition, the government has identified that adults should not be exposed to hydrogen sulfide levels in excess of 10 ppm (parts per million) for longer than 10 minutes. It should be noted that this exposure level is for adults and for a short duration. Acceptable exposure levels for children have not been studied yet. Similarly, the consequences of long term exposure to lower levels have not been determined. Hydrogen sulfide is also known to be responsible for the “rotten egg” smell that many home owners have reported.

In addition to hydrogen sulfide, carbon disulfide. While the government restricts exposure to this gas to just 1 ppm, the consequences appear to be more severe. Adverse health effects of exposure to carbon disulfide include damage to the nervous system, cardiovascular system, and reproductive systems. Like hydrogen sulfide, the long term effects of low level exposures and the acceptable level of exposure as a child have not been determined.

Read more about Chinese drywall problems.

How can I know if my home is affected by toxic drywall?

Testing is complicated and requires a fully developed protocol and a high level of expertise. The first challenge is the continued education required to stay on top of defective drywall. Every month, the CPSC is releasing reports containing new information and discoveries. Successful Chinese drywall testing, requires, dedication to digesting this new information and constant effort to apply it to testing techniques used in the field.

Testing for defective building materials also requires a keen understanding of the process of building a home. Because many larger builders used the tainted drywall, an understanding of the dynamics of a large residential development and track building is mandatory.

Often times, test results have shown that the home is built only 30% with defective drywall. This presents a unique challenge. It is not possible, in this situation, to test a “representative number” of the sheets of drywall that were installed. When drywall is hung on site, a typical crew consists of five to eight members. Each member operates semi-independently, working in separate areas of the home. As material is hung, however, each member of the team will often pull material from the same pile. The result is a mixture of material in each room or part of a room depending on how the crew worked through the material.

With that in mind, accurate and reliable testing relies on testing each and every board of drywall in a home. Anyone who tries to convince you that a comprehensive test of the home can be obtained with just twenty or thirty samples is mistaken. The average home consists of more than one hundred sheets of drywall. Each of these sheets needs to be tested in order to guarantee that a home does not have Chinese drywall.

When was this drywall installed?

It appears that the bulk of the tainted drywall in the United States was imported during the construction boom and after the hurricanes of 2004 and 2005. The Federal Trade Commission (FTC) has determined that most of the affected homes were built between 2003 and 2008, however, some reports have indicated that Chinese sheet rock was used in homes built as early as 1997.

Reports vary, but it seems that the first of the defective drywall was imported in 2001 and none has been imported since 2008. Although the dates of import are relatively well established, the dates of install are not. It is likely that pallets of this material that had been imported prior to the ban have been distributed since 2008. With that in mind, homes built or renovated since 2008 may be affected as well. Drywall suppliers in the United States were notified that, if they disposed of any Chinese sheet rock after 2008, they were required to notify the authorities.

Where has Chinese drywall been found?

Tainted drywall has been found in 32 states across the United States as well as in the District of Columbia and Puerto Rico. Heat and humidity serve to exacerbate and accelerate the manifestation of the problems associated with Chinese drywall. It is likely that many homes located in areas that are not exposed to high heat or humidity have not begun to experience the issues associated with problematic drywall. Because the symptoms have not yet become evident, the issue has not surfaced in these areas. This assumption is supported by several studies that are being conducted on problematic drywall.

As a result of the effect of heat and humidity as well the huge amount of construction that occurred between 2003 and 2006, the bulk of the cases have been focused in Florida, Louisiana, Mississippi, and Virginia.

What is being done about Chinese drywall?

The Consumer Products Safety Commission (CPSC), along with the EPA and several other government agencies, are actively investigating defective drywall. Much of the information contained in this website is derived from one, or several, of the resulting reports. In addition, our Chinese drywall testing protocol utilizes the technologies identified by the CPSC as the most effective ways to identify problematic drywall.

Some builders who have acknowledged installing defective material in homes that they built have begun the process of remediation and are repairing homes that they have identified. Owners who have been approached by their builder should proceed with caution. We have been advised by several affected home owners that they were asked by the builder to sign various release forms. These forms release the builder from liability and relinquish any future rights to damages from the manufacturer to the builder. If approached by a builder, home owners should contact an attorney to ensure that they have a full understanding of the documents they are signing. In addition, owners should insist that their home be tested by a third party that is chosen by the owner, not the builder. The agreement can require the builder to reimburse the owner after the home is tested, but a third party inspector working for the owner will have the owner's best interest in mind.

How has the US Government responded to Chinese drywall?

Chinese drywall is a relatively recent development and the government has had little time to react. The Consumer Products Safety Commission (CPSC) has initiated an investigation into Chinese drywall. This investigation aims to determine basic background information surrounding Chinese drywall. This information will likely be used to develop official protocols for Chinese drywall. Testing and remediation protocols are necessary before any official response is possible.

Several governors have called for a FEMA bailout for Chinese drywall and some local municipalities are reducing or eliminating property tax payments for homes that contain Chinese drywall, but any large scale efforts are pending an official Chinese drywall test and remediation protocol.

Who is responsible for the Chinese drywall problem?

That remains to be seen. Several builders have taken it upon themselves to remediate the homes that they built with defective drywall. These builders should be commended, but home owners should be careful to ensure that work is complete and comprehensive. Most recommend that a third party should inspect the home after the builder has been remediated of tainted drywall. The release of liability required by the builder should include a clause to guarantee a home owner's right for a third party inspection and the results of that inspection should be binding. If problematic drywall is still present, the release of liability should not release the builder from the liability associated with this drywall.

In addition, several class action lawsuits have been filed. The most notable of these law suites involves drywall manufacturer Knauf. It is likely that the legal process will be a long one. It was also recently reported that Knauf does not have any insurance.

One consistent is that home owners insurance companies are relinquishing themselves from any losses or liability associated with Chinese drywall. Under specific exclusions that are present in nearly every policy, the home owner is not covered for "latent defects" and gradual "deterioration." Several reports indicate that policy holders that have attempted to make a claim for defective drywall on their property insurance have been dropped or received notice that their policies will not be renewed. A few reports take this a bit further and indicate that homes related to those that have submitted claims for Chinese drywall are also being dropped. For example, a home has submitted a claim to XYZ Insurance for Chinese drywall. Subsequently, XYZ Insurance is proactively dropping or not renewing policies for other homes in the neighborhood as problematic drywall causes an increased risk of electrical fires. Similarly, XYZ Insurance is not renewing policies on homes in other neighborhoods that were built by the same builder as the home with tainted drywall. Until these related homes can confirm that they do not have Chinese drywall, home owner's insurance is more expensive and harder to find.

What builders have been linked to Chinese drywall?

Chinese drywall has been linked to various companies throughout the country. It should be noted that there was little reason to suggest that this issue would occur. Given the opportunity to choose differently, these builders would certainly choose to use a domestic drywall alternative to Chinese drywall.

At the time that Chinese drywall was imported, the country was in the middle of the most dramatic construction boom in recent memory. In addition, hurricanes that had ripped through the coastal Southeast further pushed the drywall industry to its limits. Material was simply not available or very hard to find in the United States. Many reports indicate that, although Chinese drywall was actually more expensive, suppliers had no domestic option.

Several builders have admitted to using Chinese drywall. Several of these builders have taken steps to correct the problem. Lennar, for example, has begun to repair many of the homes affected by Chinese drywall. In addition, WCI Communities has acknowledged the use of Chinese drywall, as has DR Horton, Ryland, and Beazer. Many other builders are implicated but have yet to acknowledge the issue.

Owners are advised not to count on the assessment by the builders. Large volume construction does not lend itself to the tight controls that are necessary to identify with 100% confidence that a home does not have Chinese drywall. Often times, drywall is delivered to a home, but used in a home down the street because the delivery for that home was short. It is not likely that the builder would ever know that material was installed in this way. Also, owners are advised to obtain a third party inspector of their choice and not to rely on the group hired by the builder and to insist on a guaranteed protocol and insurable test results.

How can you test for Chinese drywall?
Read more about our Chinese drywall test and compare it to the other tests.

Can you repair a home with Chinese sheet rock?

Although there is no official protocol for repairing or remediating Chinese drywall, there are several contractors and consultants who are able to effectively repair the problems of Chinese drywall.

Certified Chinese Drywall Testing, LLC does not endorse any specific method or contractor. Several different classifications of repair exist.

The first classification involves repairs that seal the drywall in an attempt to prevent it from emitting the dangerous gases. The first question, obviously, is “does this work?” A typical wall has holes for electrical outlets and switches. Even if a sealant is applied to the face of the drywall, the backside of the drywall may continue to produce the gases that can seep out of the wall cavity through the electric outlets. If these outlets and switch plates are sealed, what does the gas do to the electrical and plumbing systems?

A further concern with these systems relates to maintaining a continuous seal on the drywall. A home that is under normal use is constantly subjected to drywall damage. For example, it is relatively common for door knobs are accidentally pushed through the wall behind the door. What impact does this have on the system?

The second type of repair relates to exposing the drywall to a chemical that will draw the dangerous gases out of the drywall. Several different chemicals can be applied, from chlorine to peroxide, but the principle is the same. The primary concern is the permanence of this solution.

Finally, the third type of repair consists of removing all drywall from the home and replacing it with non-toxic drywall. This seems to be the most comprehensive repair and is consistent with other remediation protocols that call for the removal of the offending material as a first step.

Regardless of which protocol, or blend of protocols, used, a home owners should ask for a guarantee. None of the fixes for the Chinese drywall problem are cheap and home owners should be sure they are making a good decision.

The states most impacted by Chinese drywall are

Florida
Louisiana
Mississippi
Virginia

For further information, contact Joseph Weissglass
President
Certified Chinese Drywall Testing, LLC
(P):877-399-2238
(F):877-399-2239

or WLP Management Team at www.WashingtonLuxuryProperties.com

How to Choose a Good Realtor®

2010-05-03T20:41:00.000-04:00

What is a top realtor?
A top Realtor® is one who puts your interests before his or her own, and has the experience and know-how to get you the home that best suits your needs for the best deal possible.

A Realtor® (pronounced ré-al-tor) is a designation of those real estate agents who, along with the companies they work for, are members of the National Association of Realtors. Virtually all top agents are Realtors®; it is quite common for the words Realtor® and real estate agent to be used interchangeably.

Why is choosing a top realtor such an important part of the home buying process?
Buying a home is a huge financial commitment, and the difference between various choices can be significant. It doesn’t help that home buying is foreign territory to most people, even if they have done it before. Practices, procedures, and terminology are well-known to real estate professionals but baffling to those outside of the industry. Following are some of the reasons why using a good realtor is so important in the home buying process:

Realtors often know of properties that are not advertised and that you would have no way of knowing about unless you knew the owner.
Realtors can be “the voice of reason” when you are overcome by your emotions (which is easy to do when house-hunting). If you fall in love with a property, a realtor can be there to help you recognize the property’s flaws. Conversely, a realtor can help you to see the positive side of a property with which you might not be immediately impressed. In addition, realtors can provide information about the neighborhood, schools, comparative sales in the area, and other important home-buying factors. This objectivity and information is critical when you are making such a major decision.
Realtors are skilled, experienced negotiators. When conducting a sale, there are many angles through which to negotiate beyond the asking price, such as financing, condition of the house when you move in or out, etc.
Realtors can help you navigate the home buying process in general, making sure you are not rushed into making a decision, that you have time for inspections and appraisal, etc.
But remember – the above describes top realtors, not all real estate agents. Read on to learn how to discern between less than ideal agents and top realtors.

How can I determine if an agent is a top realtor?
Get referrals, and then check references.
There is simply no substitute for getting referrals from friends. But once you’ve gotten referrals, check references. Referrals can be flawed--a friend might refer you to a family member, regardless of their experience; they may refer you to someone who was great 15 years ago, but hasn’t had much experience since; or to someone they’ve only heard is great, but whom they have no personal experience with themselves. Bottom line: you are leaving a lot to chance if you don't check out the past behavior of real estate agents. You should get references from an agent’s three most recent clients and call them to verify that the agent is being truthful about his or her accomplishments.

Look for properties that you’re interested in, and for agents who are selling the type of home you’re interested in.
You should check the “For Sale” signs in the area that interests you. Typically, you’ll find one or two agents who are doing more business than the others in a certain neighborhood, who probably have significant experience and knowledge in that area.

Beware of common traps.

Avoid seller’s agents; if you are buying a home, work with a buyer’s agent who is not also representing the seller.
An agent working simultaneously for the buyer and the seller has the best interests of both parties in mind, as opposed to an agent who is exclusively working for the buyer and only has the buyer’s best interests in mind. If an agent is representing both you and the seller, they will be trying to make money for both you and the seller when it’s time to negotiate. Your goal is to find someone who is in your corner exclusively.

Let’s say you tell the person you think to be your agent, “Let’s offer $250,000 but I’m willing to go as high as $265,000.” If the agent were acting as sub-agent of the seller, s/he would be obligated to present the offer like this: “Their offer is $250,000 but they are willing to go as high as $265,000.” That pretty well destroys your negotiating power.

Be careful at “Open Houses.” Oftentimes, the agent working for the seller will try to pick up home buyers at these events, so that they can represent both the buyer and the seller for that house (and thereby make a 6% commission).

You have the right to be represented by someone who will be your agent without giving you cause to worry about it. There are companies that work only with buyers. If you can’t seem to find one locally, go to the webpage of the National Association of Exclusive Buyer Agents.

You can also check with your local real estate companies for agents who work only with buyers. In many states the real estate industry has created a Buyer ’s Broker Representation Agreement that you can use with an agent.

Regardless, you should understand that you ought to have someone in your corner, someone who will help you understand the process, help you understand values, help you develop a negotiating strategy, and help you execute it just as if s/he were dealing with a member of the family. That person is out there and it is really important that you make an effort to find him/her.

Avoid the agent who works only for him or herself.
We just explained why it is important to work with a Buyer’s Agent who represents your interests exclusively. But there is another common kind of agent: one who works primarily for him or herself.

There are many ethical real estate agents, but there are also agents who look out only for their best interests. Their primary concern is how much money they can make on the transaction and how hard they have to work to earn it. Getting referrals and references, and conducting interviews is the best way to avoid these agents.

Make sure your agent will show you ALL properties you might be interested in (not just the ones they’ll make the most money from).
Real estate agents get paid a commission, but it is almost invariably a portion (usually half) of the traditional 6% commission that is paid by the sellers. While a recent survey indicates that the average commission paid by sellers has actually dropped to little more than 5%, the buyer’s agents still retain the 3% they always have, with the rest going to the listing agent.

Buyer’s agents will often ignore listings that would provide them with a reduced commission. They think they deserve 3%, and won’t show you a home on which they would earn 2.5%. You need to let your agent know that you will be shown ALL the properties you might be interested in, regardless of the commission structure.

Avoid inexperienced agents.
Experience counts in the real estate field – ideally, you want to use an agent with at least five years of experience. A word of warning: the newest agents are likely to be the ones who take the “Up Desk,” meaning they’re the ones who answer the phone when you call a particular real estate office. They do it because they are trying to convert phone-in callers into clients. Frankly, you may not do as well being represented by one of these people. How are they going to get ahead? That’s their problem, not yours.

Interview potential agents.
You’ll want to ask potential agents questions about how long they’ve been in the business, how many deals they are currently processing, and other questions designed to tell you their level of competence.

There are five basic questions you should ask a prospective real estate agent before you start to shop for a home. When interviewing potential agents, remember that it’s important not only that you know what questions to ask, but also what answers to expect. Here are some questions to ask:

1. How long have you been licensed as an agent?
Check that the real estate agent currently has a license in good standing and ask him or her about their professional experience. Look for a real estate agent who has been in the business for at least five years. Ask the agent about his or her work schedule and how s/he wants to be contacted. Ideally, your agent is a full-time realtor who is easily accessible by email, cell phone, and in person.

2. How many homes did you sell last year and for what average price?
Ask your agent about his or her recent experience helping people in your area buy and sell homes. See if s/he will provide you with the contact information of former customers as references.

3. How many clients are you currently working with?
Look for an agent that works with a few clients at a time, but not so many that s/he won’t have enough time for you. Ask if the realtor will be acting as a “dual agent”, i.e., representing both the borrower and the seller. (As mentioned above, this is not ideal). If the agent will be representing you exclusively, ask whether s/he expects you to pay the commission instead of the seller.

4. What are your fee and commission structures? Will you be willing to show me ALL properties I might be interested in, despite your commission structure?
Most real estate agents work purely on commissions from the sale. When a homeowner sells a home, they pay a real estate agent a commission and closing fee. This listing agent’s commission is usually about 6% of the sale price. The listing agent then shares his or her commission with the buyer’s agent. For helping you buy a home, your agent will receive about 3-4% of the sale price. Some agents offer discounted commissions, rebates, or flat-fees for their services. Cheaper may not be better: a discounted real estate agent may not work as hard to help you find the best home.

5. How can you help me afford the home I want?
Your agent should be knowledgeable about the financing process and mortgage loan options available to you. You should ask him or her about tax and insurance policies that may impact your purchase. Also ask about the agent’s experience in making tough negotiations. Is your agent going to work hard to get you the best price on a home?

During the interviews it is important to use all of your senses. Don’t just listen to what an agent says because some agents use a highly developed sales presentation. What you want to identify are more subtle factors, using skills you have been using all of your life in evaluating people. Remember that your goal is to find someone trustworthy and with whom you communicate effectively, and these qualities have nothing to do with a canned sales presentation.

Use your common sense and be a skeptic.
A word of warning: there are many sales people who are not nice people, but have been through what I like to call Charm School. They can do a good job of appearing to be nice when, in fact, all they are thinking about is how much money they can make off of you.

Here’s another sad-but-true aspect of the home-buying situation: Although great numbers of real estate agents are honest, hard-working people with whom you can place your trust, there are also great numbers who are unethical and will try to manipulate you into doing something that makes them a big commission but puts you into a situation which can be damaging.

Many families are facing foreclosure now and in the near future. And many got into this situation because they let some smooth-talking real estate agent tell them juicy tales about how much money they were going to make. They let some smooth-talking mortgage lender stuff them into a toxic sub-prime loan that they said they could refinance out of.

There are some real estate people who seem to be unable to talk with a client without launching into a sales presentation. They get so used to using superlatives that they can’t have a simple give-and-take conversation about the facts of a particular neighborhood or home. Every house isn’t the cutest one in town, and not every house is a terrific buy. Indeed, half are cuter than average and half of them are better buys than the other half. But you wouldn’t know that from talking to some agents. These people are so intent on making a sale that they overlook their primary mission: listening to what the client wants and helping him or her get it.

Obviously, when selecting a real estate agent, you want to avoid this type of person if you ever want to get a straight answer. But even if you think that you’re working with a person you think is right for you, it is important to review and summarize what has happened and been said after a day of looking at homes with an agent. Once you’ve done that, ask yourself this simple question about each point, “Does that make sense?”

Don’t be totally forthcoming (even if you trust your agent).
Finally, even though you have chosen an agent you hope you can trust, you may not want to be totally forthcoming with him or her. You should be honest, but you don’t have to tell him or her everything about your intentions.

For example, when making an offer, you should go through a process to decide what a property is worth, which is likely less than the listing price. So you and the agent try to come up with an offering price. It would be quite natural to say, “It’s listed for $250,000, probably worth about $240,000. Let’s offer $230,000, but I’d be willing to pay $240,000 for it.” You may not want to do that.

Think about what is going on in the mind of your agent when s/he presents the offer. If s/he knows you are willing to come up to $240,000 he will probably not be as tough a negotiator as if he really believes that $230,000 is your BAFO, your Best and Final Offer. He will work harder to close the deal at your offering price.

Your agent’s job is to communicate your intention and if she is portraying you as having reached your limit--that there won’t be any counter-offers--you stand a better chance of buying that home for $235,000 instead of $240,000.

For any questions regarding this subject, contact WLP Management Team and simply visit us at www.WashingtonLuxuryProperties.com

Housing Affordability Index

2010-04-30T23:18:00.000-04:00

Housing Affordability – Whichever Index You Look at, The Value Story is Great for Buyers:

*First, there are actually several indexes out there from various sources. For example, the NAHB (National Association of Home Builders) has one they call the Housing Opportunity Index or HOI and the NAR (National Association of Realtors) publishes the Housing Affordability Index or HAI.

*While both indicate we are at or near record levels, I want to focus on the NAR index as the topic of today’s note. There are ‘hot links’ to both above in case you want to access the actual reports.

The NAR Housing Affordability Index – What is It?

*Essentially, the index is a measure of the financial ability of U.S. families to buy a house.

*In the simplest terms, an index value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home.

*An index above 100 signifies that a family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment.

The NAR Housing Affordability Index – Trending Higher:

*The current index at the end of 2009 stood at 171.6 and you can see below that is 56 points above where it was at the end of 2007!

*What this shows is that the relationship between home prices, mortgage interest rates and family income is very favorable right now.

*The NAR has said that it is the most favorable since tracking began in 1970!

The Impact of Mortgage Rates:

*While pricing is obviously important, mortgage rates drive a significant piece of the affordability puzzle. The chart below shows the context of today’s low rates – It really tells a story and spells out the opportunity presented in the current market.

*It’s important to keep in mind that for every increase of 100 basis points (or 1% in rate); the monthly payment goes up about $63 per month for each $100,000 borrowed. Over the life of a 30-year loan, that can add up quickly - to $22,680 for each $100k borrowed.

Call today and consult with WLP Management Team at www.WashingtonLuxuryProperties.com

Letter Sent This Past April to Senator Jim Webb Regarding Renew Critical Housing Programs: NFIP and RHS

2010-04-30T23:16:00.000-04:00

Alan Rezaie
8227 Old Courthouse Road, Suite 100
Vienna, Virginia 22182

April 13, 2010

Senator Jim Webb
U.S. Senate
248 Russell Senate Office Building
Washington, DC 20510-0001

Subject: Renew Critical Housing Programs: NFIP and RHS

Dear Senator Webb,

Congress left for recess, leaving two critical housing programs unauthorized or unfunded. On March 28, authority for the National Flood Insurance Program (NFIP) expired, and lenders have stopped accepting applications for the Section 502 rural housing program, which is expected to exhaust its commitment authority by the end of the month.

Until Congress returns and extends these programs, worthy homebuyers will be left without access to mortgages. Given the many challenges financial and real estate markets are facing, now is not the time to create another, but avoidable, obstacle to real estate transactions. Please do not let this continue.

As a Realtor, I can personally attest to these programs' importance. Since the NFIP expired, my clients are no longer able to purchase a home or commercial property in many parts of my community. They cannot buy the NFIP insurance needed to obtain a mortgage for those properties. In addition, those families and businesses with existing mortgages are not able to renew their required coverage.

Rural families in every state in the nation rely on the Section 502 single family guarantee program to allow them to repair, renovate and purchase homes, as well as prepare sites with water and sewage facilities.

Today, property owners in every state depend on these programs. Each day the Congress fails to act, thousands of real estate transactions will be delayed and homebuyers and homeowners will be left in the lurch.

Upon your return, Congress must swiftly take the necessary steps to ensure the continuation of these critical and essential insurance programs.

Sincerely,

Alan A. Rezaie

Tax Hits on Property "Short Sale"

2010-04-30T19:51:00.000-04:00

It's not so unusual these days to have mortgage debt that exceeds the current value of your principal residence. If you hang on to the property long enough, you have a reasonably good chance of riding out the storm with little or no harm done. On the other hand, if you have to sell now, you face what's called a "short sale" -- which means selling for a net sales price (after subtracting commissions and other closing costs) that's less than the outstanding mortgage debt.

What are the tax consequences of a short sale? The easiest way to explain it is with some examples.

Tax gain on a short sale. Say you paid $200,000 years ago for a principal residence that you could now sell for a net sales price of $300,000. Unfortunately, you also have $350,000 of first and second mortgages against the property because you took out a big home-equity loan a couple of years ago at the top of the market when the home was worth $500,000.

Believe it or not, you'll have a $100,000 gain for tax purposes if you sell. Why? Because the net sales price exceeds the tax basis of the home: $300,000 sales price minus $200,000 basis equals a $100,000 gain. (Your tax basis equals what you paid for the property plus the cost of any improvements made over the years, minus any past depreciation writeoffs if you rented the property out or used part of it for deductible business purposes.)

While it doesn't seem fair that you could have a $100,000 tax gain from a sale that leaves you $50,000 in the red with your mortgage lenders, that's the way the law works. Mortgage debts don't enter into the gain-on-sale calculation.

Not Home Free: Some homeowners are finding that when they sell their homes in a short sale their mortgage companies are going after them for some or all of the difference.

Now for the good news: You'll probably be able to exclude the $100,000 gain for federal income-tax purposes, thanks to the federal home-sale-gain exclusion break. If so, you won't have to report the $100,000 gain on your Form 1040. You may or may not qualify for the same favorable treatment on your state income-tax return.

Tax loss on short sale. Of course, you can also have a short sale where the net sales price is less than your tax basis in the property.

Say you paid $415,000 for a principal residence that you could now sell for a net sales price of $300,000. You also have $350,000 of first and second mortgages against the property. For tax purposes, you'll have a $115,000 loss if you sell because the sales price is lower than your tax basis in the home: $300,000 sales price minus $415,000 basis equals a $115,000 loss.

Will the IRS let you claim a writeoff for that loss? Nope. You can only claim a federal income tax loss on investment or business property. A loss on a personal residence is considered a nondeductible personal expense. Most states follow the same principle.

Excess debt. In both the preceding examples, the mortgage debt exceeded the net sales price by $50,000. If the lender won't let you off the hook for any of that excess, you'll have to figure out a way to pay it, and you won't get any tax break for doing so.

If you're more fortunate, the lender will forgive some or all of the excess $50,000. To the extent debt is forgiven, you have so-called debt-discharge income, or DDI. The general rule is that DDI is taxable income. For the year that DDI occurs, the lender should report the amount to you (and to the IRS) on Form 1099-C. Happily enough, there are some taxpayer-friendly exceptions to the general rule that DDI is taxable.

Here they are:

Up to $2 million of DDI from mortgage debt that was originally taken out to acquire, build or improve the borrower's principal residence is tax-free (you must reduce the basis of the residence by the tax-free amount). This super-favorable rule is not available for DDI from debt that was not used to acquire, build or improve the principal residence, such as DDI from a home-equity loan used for other purposes.

If the borrower is in bankruptcy proceedings when the DDI occurs, the DDI is tax-free.

If the borrower is insolvent (that is, has debts in excess of assets), the DDI is tax-free as long as the borrower is still insolvent after the DDI occurs. If the DDI causes the borrower to become solvent, part of the DDI will be taxable (to the extent it causes solvency). The rest will be tax-free.

To the extent DDI consists of unpaid mortgage interest that was added to the loan principal and then forgiven, the forgiven interest that could have been deducted (had it been paid) is tax-free.

If the DDI is from seller-financed mortgage debt owed to the previous owner of the property, it's tax-free. However, the basis of the property must be reduced by the tax-free DDI amount.

The important thing to understand is that a real-estate short sale can potentially result in a taxable gain and/or taxable DDI. Thankfully, you can probably exclude the gain from taxation under the federal home-sale-gain exclusion deal, and you might be able to exclude some or all of the DDI, too, under the favorable exceptions explained above.

Please speak with tax advisor on further questions or call the WLP Management Team at www.WashingtonLuxuryProperties.com

Condominiums and FHA loans- Quick Note

2010-04-30T19:47:00.000-04:00

There are many condominiums that have been FHA Approved (10101 Grosvenor, etc.). For those that are not currently FHA Approved, please remember that it is the Board of Director's which approves the process. It is not the Management Company which often does want to fool with the documentation involved. There is some resistance to this from time-to-time, as some uninformed board members may equate FHA loans with sub-prime loans; however, nothing could be further from the truth. In any case, getting the condominium board to sign off on the process forces the management company to comply and provide the lender with the necessary documents. Going this route can often be much more efficient than going through the management company!

We have had a number of condo Projects approved. See us if you want to sell a unit using FHA financing in a non-approved complex. It takes at least 30 days providing all required docs are received.

Experience counts. Contact our Preferred Lenders or call the WLP Management Team only at www.WashingtonLuxuryProperties.com

What Can You Afford?

2010-04-30T19:42:00.000-04:00

Before you look at houses for sale, you should find out how much you can comfortably afford to buy. Remember, no matter what loan amount your lender is willing to provide, it is your responsibility to decide the loan amount that you can comfortably afford while meeting your other financial obligations, both now and in the future. Lenders have predetermined qualifications.

When considering your qualifications for a loan, lenders have predetermined parameters for how much of a person’s income should be allowed for their housing expense and for their total debt to income ratio. These qualifying ratios vary by lender and may be somewhat flexible, depending on the loan product that is being offered. For example, there are many lenders and types of loans today that use 33/36% for qualifying ratios.

The first number (33%), also called the “front-end ratio,” is the amount of monthly income allowed for the total housing expense. This includes the home loan payment, which includes a monthly amount for real estate taxes and hazard insurance, any required mortgage insurance, plus any homeowner association fees that apply.

The “back-end ratio” of 36% includes the housing expense plus all other long-term monthly debts. Examples of long-term debt are payments on cars, credit cards, student loans, and any other fixed obligations.

Example of guidelines
A single person with an annual salary of $40,000 has a gross (before taxes) monthly income of $3,333.33. Using the qualifying ratios just mentioned, the amount allowed for housing is $3,333 x 33% = $1,100. The amount allowed for total debt is $3,333 x 36% = $1,199. As you can see, that does not allow for much in the way of debt; in this case, only $99 per month. Any debt in excess of this amount will have a direct effect on the amount that can be borrowed.

Guidelines vary by lender...

Remember, these ratios are only common or general guidelines and can vary depending on the loan program and the lender. Qualifying ratios are never cut and dry — there are many grey areas. That’s why it’s important to work with a home loan consultant to find the loan product best suited to your particular needs.

Learn more about determining your affordability by contacting our Preferred Lender at www.WashingtonLuxuryProperties.com or WLP Management Team.

Special Rules for Members of the Military, the Foreign Service and the Intelligence Community

2010-04-29T19:23:00.000-04:00

Extension of Tax Credit Deadlines

The home buyer tax credit is available for qualified purchases with a binding sales contract in place on or before April 30, 2010 and closed by June 30, 2010.

However, for qualified service members who are ordered on a period of official extended duty, these dates are extended for one year. For these home buyers, the tax credit applies to sales with a binding sales contract in place on or before April 30, 2011 and closed by June 30, 2011.

A person who is forced to return to the U.S. for medical reasons before completing an assignment of at least 90 days of qualified official extended duty outside of the United States may qualify for the one-year extension.

Definitions

"Qualified service member" means a member of the uniformed services of the U.S military, a member of the Foreign Service of the U.S., or an employee of the intelligence community.

"Official extended duty" means any period of extended duty outside of the United States for at least 90 days during the period beginning after December 31, 2008 and ending before May 1, 2010.

More information on this exclusively on www.federalhousingtaxcredit.com

Call WLP Management Team with questions at 703.889.0199 VA/ 202.445.0037 DC/ 301.335.4920 MD
www.WashingtonLuxuryProperties.com

How to Distinguish Mortgage Brokers from Direct Lenders

2010-04-29T19:09:00.000-04:00

HOW TO DISTINGUISH MORTGAGE BROKERS FROM DIRECT LENDERS:

We wanted to stress the importance of knowing who is funding the loan for your clients. If you are not working with one of our affiliates- Prosperity Mortgage/Wells Fargo to fund the loan, please be sure that it is a reputable lender--preferably an institutional lender (Bank of America, SunTrust, Met Life, etc.)--attempting to fund the loan. They along with Prosperity/Wells Fargo are Direct Lenders with no middle man between. It is MOST important that your transaction be safe and make it settlement.

How can you determine, if necessary, whether the lender is a direct lender and not a broker? There are a few options:

1) Ask them directly: "Are you a direct lender?" This can work, although we have seen that many brokers will fudge the truth on this....Many will say they are, so read on.

2) Check their website: If there is a strong institutional lender affiliated with the lender in question, this will be advertised on the website (Wells Fargo with Prosperity Mortgage, for example.) ABC Mortgage Broker (as an example) would not qualify as a strong institutional lender! An institutional lender has the funds to "portfolio" the loan if necessary.

3) Is there a "yield spread premium" listed on the loan estimate? This is a dead giveaway; a broker is basically a "middle man" between the banks and the borrowers. They are not affiliated with any one bank, and therefore merely sell the loan to one of the institutional lenders--IF that lender chooses to buy the loan. The yield spread premium represents the broker's profit--on top of their straight commission for doing the loan. Brokers were not previously required to disclose this information, but with the current reforms it is now (thankfully!) a requirement.

4) The biggest issue with using a broker in the current environment is that they do NOT have bank approval immediately. They review the loan per Fannie Mae/Freddie Mac guidelines, assume an Approval, and then attempt to sell the loan to one of the institutional lenders. The obvious problem comes in when those lenders choose not to buy the loan after it is too late in the process. This is happening all of the time now, and transactions are not settling as a result!

For more information, contact our Preferred Lenders at www.WashingtonLuxuryProperties.com or call WLP Management Team.

Realtors® Confidence Index Report

2010-04-28T16:41:00.000-04:00

Each month a number of Realtors® respond to a questionnaire describing their experiences with current market conditions. The information is subsequently compiled and presented in the Realtors® Confidence Index Report. Of particular interest is the variety of additional comments that the respondents provide. These responses are generally brief, to the point, and highlight Realtor® views on the most important issues. Issues highlighted recently in a survey responses are summarized below and an illustrative selection of the approximately 1,000 comments follows.

Key Issues for REALTORS®
• Appraisals: Respondents reported that the appraisal process continues to be a problem, with out-of-the-area appraisers in some cases providing inaccurate appraisals and using inappropriate comps. The comps issue was highlighted in many cases.
• Distressed Property: The major issue identified in the comments focused on the length of time required to complete a transaction. There appeared to be consensus that in many cases the banks/financial institutions delayed the process unnecessarily and/or were not responsive to the customer.
• Mortgages: Obtaining a mortgage is reported to continue to be a problem, given tighter credit standards and a perception that some lenders are not customer responsive. Many Realtors® reported that financial institutions were just not customer responsive.
• First-Time Buyers: There appeared to be general agreement that the first-time buyer tax credit had been a help.
• Buyers Downsizing: For the first time we obtained a number of comments describing buyers’ desire to downsize their space demands in order to conserve energy and save money.
• Market Conditions: Realtors® reported that the bottom -half of the market, price-wise, has been active, while the upper end continues to be very slow . We appear to have several segmented markets: foreclosure/non-foreclosure, and lower price/higher price. A number of people noted that foreclosures had a negative price impact on non-foreclosures, and that non-foreclosures tended to sell more slowly due to less price discounting. According to respondents, while foreclosures are absorbed by the market relatively quickly, frequently in competitive bidding processes, the length of time to complete short sales continues to be excessive.
• Job Market: There seems to be agreement that the actual or perceived lack of jobs is having a major negative impact on the market

Representative Comments:
Appraisals

• Appraisal problems are not allowing any stabilization to occur and are driving declining values down even further.
• The Appraisal process is very difficult as far as comparable sales.
• Appraisals have become more difficult. My latest appraisal came in quite low because there were no ranch style homes that sold within 1 mile of the property. Comps used were in less desirable areas.
• Appraisers are using foreclosures and short sales for comparables.
• Many appraisers are selected from distant cities and do a miserable job selecting comps.
• Appraisals are keeping prices lower than need be.
• I do appraisals of residential homes. The new federal government regulations are now slowing the mortgage process and are having a negative impact on my business.
• We are selling houses, but they are not appraising—appraisers are from out of area and using REO’s for comps.

Distressed Property

• Aggressively priced short sales in good condition are commanding above asking and multiple offers.
• Short sales are impossible. Short sales usually take too long….odds are good that sale won’t close by 30 June for homebuyer credit.
• Short sales take too long—90 to 120 days.
• There really needs to be some sort of standardization in the handling of short sale and REO properties
• There is multi bidding going on for short sales in this area
• Short sales take forever.
• Short sales are a problem in this area.
• Foreclosed homes with financing help are the only activity we are seeing. Prices are under great pressure.
• Foreclosures are affecting the pricing, sending the appraisals lower based on sales of foreclosures.
• REO’s are priced so low that it causes a blind auction that I have been unable to compete with.
• We have many more foreclosure listings in the higher price ranges.

Mortgages

• Banks or lending institutions are almost impossible to deal with……..bunch of morons.
• Deals are taking longer to process through the Mortgage lenders because of added required documentation.
• Debt ratio just lowered 10 percent throwing out some who were previously qualified.
• FHA still seems to be the mortgage produce of choice. Even so, this prohibits moderate income buyers because of a lack of savings. Tighter credit underwriting requirements also make it harder for moderate income buyers to participate in the market.
• FHA transactions have become problematic due to appraisal and other property condition restrictions including objections to items contained in Homeowner Association deed restrictions and covenants.
• Higher end buyers are challenged to get non conforming loans
• It is extremely hard to get a buyer qualified. Even ones with decent credit are being declined for issues that may have happened 5-6 years ago—with strong credit since the issue.
• Banks are taking too long; waiting to hear back from a September cash offer.
• Major complaint of my buyers is that the banks are not responsive at all. I have had 3 deals fall apart because the banks were taking too long to make a loan decision.
• Getting a mortgage approved is a horrendous task.
• Stupid banks.
• The mortgage industry has gone to the extreme for documentation.

First Time Buyers

• The first-time home buyer credit has made a huge difference in increasing sales over the last year in our county by 4 percent. Prices are dropping to meet the price ranges of these first-time home buyers since they are the majority of the market….The $6,500 tax credit has had little effect since most buyers who are ready to sep up have a home to sell….
• A lot of people are listing this early this year to take advantage of the tax credits that are still in place.
• First time home buyer $8,000 has been, and continues to be, a strong motivator for purchasing in the $100-$250K range.
• There are first time homebuyers, but they can’t get loans due to changes in credit scores and/or lack of down payment.

Downsizing

• I believe that smaller sized homes will be the new trend.
• A large section of buyers in the market are moving down to smaller more affordable housing.
• Almost all of my buyer clients are asking about average monthly utility bills. That was not the case two years ago.
• Buyers seem to be more considerate of buying smaller homes for fear of upkeep including utility costs.
• Clients want to downsize due to the current economic conditions due to the fact it does not look like anything is improving.
• Green technology seems to be very popular with buyers of all ages.
• Homes are getting smaller. Energy costs are out of sight.
• McMansions are dead….

The Market

• Anything under $100,000 in good condition usually sells within a week and half the time has multiple bids.
• As you know, the homes over $300,000 are like zombies—very little movement.
• Buyers are putting in unrealistic low offers due to all the press about foreclosures and short sales—on regular properties.
• Buyers are unrealistic as to price and sellers won’t put their homes on the market for fear they won’t get what they want.
• Every townhouse or condo has multiple offers on it. It is a matter of price and availability. The number of months of inventory is very low, around 1.5 months.
• I have a well priced home that received 7 bids in about 3 weeks. It is all about pricing.
• The upper range of the market is suffering—the expensive market is sluggish.
• Homes over $900,000 are still in downward pricing.
• In the $250K and under range I have experienced multiple offers on properties that I have shown.
• It is about job stability. Once we have that, housing will improve.
• Jobs seem to be the key.
• Multiple offers the norm—there is a lack of inventory.
• Sellers still think they can get top dollar for their properties without regard to today’s numbers. They then let it sit on the market as a way of “getting their price” and then get testy regarding the market.
• Almost no hope for a traditional seller right now. They cannot compete with bank pricing.
• This is a split market based on price. Above $200 K, sales prices are almost comatose.
• The smaller, less expensive homes are selling quickly, possible multiple offers.
• Buyers all want to make low-ball offers on the more expensive homes.
• Due to the high unemployment rate it is very difficult for buyers to have any hopes of purchasing a home for 2-5 years.
• 11 percent unemployment and increasing gas prices are killing our market.

For further questions, contact WLP Management Team at www.WashingtonLuxuryProperties.com

Who Qualifies for 100% Home Loan?

2010-04-28T13:19:00.000-04:00

One well deserving group of homebuyers who still have an opportunity to buy a home with absolutely no money down is the past and present members of our Military.

Through the United States Department of Veterans Affairs (www.VA.gov), vets are just about the only people left who can buy a house with no money out-of-pocket. With the war in Iraq winding down, many of our brave soldiers will soon be coming home. As they look to start their next chapter stateside, some will want to buy a home. And, the combination of lower home prices coupled with VA financing will present vets with a home-buying opportunity seldom before realized in the housing market. With our adjacency to Washington, D.C., many military installations and the Naval Academy, much of our population is associated with the armed services and might want to settle in Anne Arundel County or the surrounding areas. Plus, the Base Closure and Realignment Commission will bring literally tens of thousands more to the expansion of Fort George G. Meade. In this week's column, we will give a thumbnail sketch of the VA financing program and help outline who qualifies, how it works and where to get more information.

Who qualifies: According to the United State Department of Veteran Affairs, there are over 70 million people, or a quarter of the U.S. population, who are potentially eligible for VA Financing. But according to the Bureau of Labor Statistics, we only have 2.4 million people currently active in the armed services and reserves. Consequently, many more people qualify for VA Financing beyond present-day active-duty soldiers. Specifically, the following are eligible for a VA home loan:

*Active duty personnel
*Personnel with previous qualifying military experience
*Reservists, National Guard and Coast Guard
*Unmarried surviving spouse of a veteran killed as a result of service-related activities
*Honorably discharged

To determine whether or not you qualify, it is necessary to obtain a Certificate of Eligibility. As anyone who's been in the military knows, nothing gets done until you first fill out some kind of form. To get your Certificate of Eligibility, you must first complete a Request for a Certificate of Eligibility (VA Form 26-1880). Once this form is reviewed, you will know your status regarding a VA loan and receive the certificate necessary to apply for a VA loan.

How a VA loan works: A qualifying vet can get a VA loan for amounts up to $999,999, so this program isn't just limited to lower-priced homes. For non-VA home loans that have small down payments, it may be necessary to obtain expensive mortgage insurance. VA loans do not require mortgage insurance; instead, they include something called a funding fee. The funding fee can be financed as part of the total loan, so there is no up-front cost. The funding fee is used by VA to help defray the cost of administering the VA home loan program. For most vets, the fee will be 2.15 percent of the loan. If you have previously secured a VA loan, the funding fee is increased to 3.3 percent, but if you put 10 percent or more down on the house, it is reduced to 1.25 percent. If you have a service-related disability, or are the surviving spouse of a vet who died in service (or from a service related disability), the funding fee will be 0 percent. As a result, the amount of the funding fee can vary substantially, depending on the VA borrower's specific circumstances.

In addition to being able to finance 100 percent of the purchase price, VA home loans also have several other benefits. Versus traditional mortgages, VA loans have no minimum credit score required for loans under $700,000, and buyers can qualify for VA loans with incomes that are lower than what would be necessary in the regular home mortgage market. Similar to a normal home loan, VA loans are available with adjustable interest rates, as well as fixed interest rates for both 30 and 15 year loans.

The process of buying a house isn't really any different for a VA buyer than it would be for a buyer who is paying cash or getting a normal home loan. You can finance all single-family homes (attached or detached) using a VA loan. Some condos are also eligible, but they must be approved by VA. The only difference with a VA loan is that the Veteran's Administration has their own inspectors and appraisers who take a look at the house and pass judgment on its ability to qualify for VA financing.

Generally, VA loans are designed to cut a break for those who have made a sacrifice for our security. Unlike other home loans, you don't need any cash, high credit scores aren't required and low incomes can qualify for a fairly sizable loan. It's clearly the best deal going in today's mortgage market.

The VA home loan was first created as part of the Servicemen's Readjustment Act of 1944. During World War II, much of the male population had been at war for many years, giving them no way to establish or maintain credit. It's hard to use that credit card or get a car loan when you're in a foxhole in France. So the primary purpose of the 1944 Readjustment Act was to assist returning servicemen in obtaining the credit necessary to buy a home or start a business. Over the years, the VA home loan program has been expanded and modified. For our service men and women or surviving spouses, it remains today as a small way for the rest of us to thank them for their service and commitment to our country. For more information on VA home loans, go to www.Homeloans.VA.gov.

Any further questions, contact one our Preferred Lenders or WLP Management Team at www.WashingtonLuxuryProperties.com

"Green" Maintenance

2010-04-28T11:18:00.000-04:00

Making the decision to green your home doesn’t mean you have to build a wind farm on your suburban lawn or replace your roof shingles with a vegetable garden and solar panels. In fact, most green initiatives cost you very little and save you a lot. Introducing a few of these simple techniques into your home is easy, and will even save you money.

*Check the insulation in your attic and install more if needed.

*Lower the temperature on your hot water heater to 120 degrees Fahrenheit (55 degrees Celsius).

*Toss a water heater blanket over your hot water heater.

*Install ceiling fans in high traffic areas.

*Wrap exposed water pipes with insulation.

*Install a programmable thermostat and learn how to use it.

*Hang a clothes rack in your laundry room (or, better yet, an outdoor clothesline).

*Check all toilets, under-sink plumbing and faucets for leaks or constant running.

*Replace your air filters regularly.

*Make sure the vents in all rooms are clear of dust and obstructions.

*Mark any cracks in the basement with dated masking tape.

*Install CFL and LED light bulbs in some locations.

*Choose energy efficient appliances, even if you have to pay more up front.

*Set up your home electronics with a SmartStrip that can be turned off when not in use.

*Air-seal your home.

*Plant shade trees on the south and west facing sides of your home to provide shade in the summer and allow sunlight through in the winter.

*Plant evergreen trees on the north facing side of your home to protect against cold winds in the winter.

*Take advantage of tax benefits for any improvements you make. There are many great incentives available for upgrading to energy efficient appliances and windows.

*Set automatic sprinklers to run early in the morning, preferably before sunrise. Winds are generally calm and humidity is higher, so most of the water reaches your lawn. Delay watering after storms.

For further questions, contact WLP Management Team at www.WashingtonLuxuryProperties.com

What you need to know about "Short Sales"

2010-04-28T11:14:00.000-04:00

What is a Short Sale?
A short-sale occurs when the individual selling the property is selling the property for less than what they owe for the property. This means that after the seller agrees to the price, the lender must also agree to the price. Despite what anyone might try to tell you, that’s the only difference between a short-sale and a normal sale.

If you’re in a hurry don’t even consider a purchasing short-sale. Short-sales work best for investors who have no emotional attachment to a property. Short-sales work well for investors who won’t need to live in the home. Short-sales don’t work well for home-buyers who are on a schedule.

If there are multiple offers on a property, walk away. If you make an offer on a property with multiple offers there are only two possible outcomes:

1.You waste your time pumping up the price for someone else
2.You paid more than anyone else. If you paid more than anyone else, you didn’t get a bargain. If you paid retail for a short-sale, you paid too much.
Find out if there are multiple offers or worse yet contracts before you even look at the property. It’s maddening and I wish the associations would do something but too many properties that are listed as “Active” aren’t really active. There is no sense looking at something that isn’t for sale.

Here are some of the many pitfalls of a short-sale.

Time to close
Short-sales take a long time to close. Although lenders are getting better in short-sales, they are notorious for making slow decisions when negotiating. I had a client who agreed to pay cash and purchase a short-sale in 3 days. The seller accepted the offer but the lender took 4 months to agree to the offer. When buying a short sale, you have to act quickly. After you act quickly, you often have to wait a long time.

Multiple offers
Short-sales often involve competitive buying. That is to say, there are multiple offers on the property. Despite what you may have heard about this being a buyers’ market, there are always buyers who are interested in something for nothing. Homes that are nicely priced, in good condition and in good locations are selling quickly.

The property isn’t available
At one time, fully two-thirds (maybe more) of the short-sales listed for sale right now … are not available. This is perhaps the most maddening part of short-sales as a considerable portion of my day is spent sorting through properties that are listed as "Active" in the MLS but they are in fact not on the market. MRIS has started cracking down on this, why are these properties listed for sale when they are active?

The simple and sad answer is that many agents who are selling short-sale properties don’t understand there aren’t any special rules for short-sales. If a property is offered for sale, the agent has a duty to the public in addition to his/her duty to his client. His duty to the public and Fair Housing Laws require that he promptly present any offers to purchase to his client. If the client agrees to the offer, but the caveat that the contract must be approved by the lender, that contract should be listed in the MLS as under contract with a kick-out. Most agents these days leave the property as active, wasting the time of buyers and agents everywhere.

Often, a selling agent continues to list the property as active because it is not uncommon for a short-sale buyer to back-out after the purchaser finds out just how much hell they’ll have to suffer to get a bargain. The selling agent might not be aware that listing this property as active in the MLS is unethical, but the selling agent certainly does not care if you waste your time trying to buy a property that has already sold.

In some cases, an unethical selling agent wants to continue to market the property even though the property is under contract. This way the selling agent can get a couple of back-up offers in case the first contract blows up.

The counter
The last and worst part of a short-sale is the bank’s counter. The lender will only counter-offer after the buyer has invested a lot of time and effort negotiating the deal. After months of waiting and waiting the bank will finally respond with a price that is five or ten thousand less than the market price of other homes currently for sale. Yes, it’s a bargain but at what price.

Contact the WLP Management Team at www.WashingtonLuxuryProperties.com regarding short sales. If you have the time and patience, you might get lucky and score a real deal!

10 Must-Have Features in New Homes

2010-04-27T23:10:00.001-04:00

So what home features are buyers asking for the most in their search for a new home?

AVID Ratings Co., a firm that provides surveys and employee training to home builders across the United States and Canada, conducts an annual survey of home buyer preferences.

The company found the following hot home features reign supreme in today’s market:

1. Large kitchens with an island.

2. Energy-efficient appliances and high-efficiency insulation and windows. (These were the most sought-after “green” features from buyers.)

3. Home office or study

4. Main-floor master suite

5. Outdoor living room

6. Ceiling fans

7. Master suite soaker tubs and oversize showers with seating areas

8. Stone and brick exteriors

9. Community landscaping with walking paths and playgrounds.

10. Two-car garages

Are there any surprises from the list?

For more information on new home purchase, contact WLP Management Team at www.WashingtonLuxuryProperties.com

Quick Tips for Staging Your Home

2010-04-27T22:58:00.000-04:00

Before you show your home to any potential buyer be sure to go through your whole house with your agent to finish the Staging process. Meanwhile, here are some quick tips to help you start. Follow these general tips and your home will look better than the competition. Staged Homes sell faster and/or for more money!

INSIDE

• Clear all unnecessary objects from furniture throughout the house. Keep decorative objects on the furniture restricted to groups of 1, 3, or 5 items. In general, a sparsely decorated home helps the buyer mentally „move in‟ with their own things. • Rearrange or remove some of the furniture in your home, if necessary. Many times home owners have too much furniture in a room. When it comes to selling your home, thin out overcrowded rooms to make the rooms appear larger.
• Clear all unnecessary objects from the kitchen countertops. If it hasn‟t been used for three months…put it away! Clear refrigerator fronts of messages, magnets, pictures, etc.
• In the bathroom, remove any unnecessary items from the countertops, tub, shower stall and commode top. Keep only the most necessary cosmetics, brushes, perfumes, etc., in one small group on the counter. Coordinate towels in one or two colors only.
• Take down, reduce, or rearrange pictures and objects on walls. Patch and paint all walls, if necessary.
• Review the house interior, room by room, and:
1. Paint any room needing paint.
2. Clean carpet and draperies that need it.
3. Clean windows.
• If you need room to store extra possessions use the garage or rent a storage unit.
• Leave on certain lights during the day (your agent will show you which ones). During showings turn on ALL lights and lamps.
• Play light FM music every day in the house, for all viewings.

OUTSIDE

• Go around the perimeter of the house and move all garbage cans, discarded wood scraps, extra building materials, etc., to the garage or, if applicable, take them to the dump.
• Check gutters and roof for dry rot and moss. Make sure they are swept & cleaned.
• Look at all plants. Plants are like children…they grow so fast. Prune bushes and trees. Keep plants from blocking windows: “You can‟t sell a house if you can‟t see it!”
• Remove any dead plants, weed all planting areas and put down fresh mulching material.
• Keep your lawn freshly cut, edged and fertilized during the growing season.
• Clear patios or decks of all small items, such as little planters, flower pots, charcoal, barbeques, toys, etc.
• Check the condition of the paint on your home, especially the trim and the front door. The first impression, or „curb appeal,‟ is very important.

IN GENERAL
Try to look at your house “through a buyer‟s eyes,” as though you‟ve never seen it before. This exercise will help you see what needs to be done. Any time and money invested on these items will usually bring you the return of more money and a quicker sale.

For more information and assistance with staging your home for sale, contact WLP Management Team at www.WashingtonLuxuryProperties.com

10 things to do before you sell your home!

2010-04-27T21:56:00.000-04:00

1.You should remove all the clutter in your home. Remove personal items such as your collectibles, posters on the wall and photos. Make sure your bathroom and kitchen countertops are clear of clutter.

2.There is a chance a potential buyer will look in your closet. Your closet should be very organized and not packed with junk.

3.You need to clean everything. Clean the carpet with a vacuum and a steam cleaner. Clean the windows, stove, ceiling fans and anything else that should be cleaned. You should give your house a deep clean.

4.Paint your walls with a neutral color if your walls are dirty or if you have bright colors on the wall.

5.Update your cabinet hardware and door knobs with new fixtures.

6.Fix any items in your home that are broken such as a leaky faucet.

7.Remove all pets and pet supplies. Move your pets to a temporary home. All of your pets things should be removed such as the litter box, toys, beds, etc.

8.Give the exterior of your home a fresh new coat of paint by painting your front door and trim. If your home doesn't need a fresh coat of paint you can power wash the exterior.

9.Make sure the outside of your home looks well keep. Plant some flowers that are in season. Cut the grass and keep the bushes trimmed. Power wash your windows. Sweep your porch and sidewalk.

10.Before the potential buyers arrive you should make your home smell good by baking cookies or burning a candle.

For more information, contact WLP Management Team at www.WashingtonLuxuryProperties.com