Home Buyers

The real estate market catches a hint of Spring 2010

We had a bright and sunny weekend here in Northern Virginia, and a surge of home buyers were out looking at the homes for sale that had popped up late Thursday afternoon and Friday morning. A little marketing tip is to put a home into the MLS database Thursday to feed all the IDX sites out there that send e-mails to registered home buyers.  Our MLS, actually the Metropolitan Regional Information System (MRIS), is the #1 source and they pump out the data you see on Trulia, Zillow, Frankly MLS, Roost, Redfin or Sawbuck. They have their own “ad-free” site for you called Homesdatabase.com which is excellent.

So I showed some townhomes in Fairfax around $350,000 and the newest listing was swamped with buyer agents and their eager clients. At one house there was a guy with an Alexander Ovechkin jersey who looked like he would fight us for it!

I tried to show a home in Vienna priced at $599,900 in my neighborhood but the agent, who I know well, told me she had two offers on Friday. One offer was so good that it was accepted by the home sellers… before the scheduled open house!

Vienna, VA Home Buyers can’t wait for the Sunday Open House

I also showed a home in Vienna around the corner priced at $699,900 and again I knew that agent well. She was holding an “open house” and there were three families there at the same instant, all looking quietly and wondering if they would be in a bidding war over this classic 1970’s colonial? It seemed like it was the house du jour…

Residential real estate is the ground floor barometer for the economy and, mark my words, the economists will be talking about this in five weeks. Again, I am seeing a frantic home buyer surge as they are trying to find a home, and get a contract accepted to get the $6,500 or $8,000 home buyer credit before the deadline… and lock in a low mortgage interest rate (currently below 5%).

Real estate in Vienna, VA is fueled by the location to employment centers like Tysons Corner or Reston  (some people like the W&OD Bike Trail) and Fairfax is fueled by price where many homes have dipped significantly but have great locations or neighborhoods.

This is the time, home buyers of Northern Virginia, to have a buyer agent or ABR working for you!

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New FHA Home Mortgage Guidelines for April 2010

David Stevens who is the Assistant Secretary for Housing – Federal Housing Commissioner had the FHA issue new guidelines on January 21, 2010 to help reshape the government insured home mortgage agency and how it offers low down payment loans to home buyers. It is a little boring or even dry for Washington D.C., but important if you are planning to use this type of financing to purchase a home.

• Impacts loans assigned on April 5, 2010 and beyond
• Upfront mortgage insurance premium of 2.25% (yes, it still can be financed)
• FICO Scores above 580 can put 3.5% down payment
• FICO Scores below 580 must put 10% down payment
• The maximum Seller concessions shall be 3% (that’s a closing cost credit to the Buyer)
• Increase Enforcement of FHA lenders (this has been going on for the last 18 months)

That is it in a nutshell, and if you want to read the HUD Mortgagee Letter 2010-2 or the HUD.GOV gripping press release then enjoy the read!

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Buying a Home with an Older HVAC Unit?

Considering buying a home with a central air conditioning or a heat pump system? Well it is essential that you know that as of January 1, 2010, manufacturers aren’t going to build any new systems using R-22 refrigerant or any new spare parts for those existing systems using R-22. And, virtually all those old HVAC systems use R-22 to work their magic.

Eliminating a Greenhouse Gas at home

The 1992 Montreal Protocol was amended to phase out HCFCs (Hydro chlorofluorocarbons), commonly referred to as a Greenhouse Gas, which have been identified as causing damage to the ozone layer. The refrigerant known as R-22 is HCFC-22. The U.S. EPA implements Title VI of the Clean Air Act, and the 1st of January was an important phase-out date under the amended Montreal Protocol.

This situation came to light recently when a RE/MAX colleague was called out of town and his buyer client’s had a home inspection on a cute little Vienna, Virginia home. The home inspector must have pointed out that the Lennox system was from 1992 (yes, there is a manufacture date on the label) and that it would need replacement when it pooped out.

In the meantime, there are home buyer warranty programs that have coverage for existing R-22 systems in the first year which addressed the buyer’s concerns. This specific R-22 coverage is new, but like all types of insurance they have limits and fine print for pre-existing conditions. It is best for home sellers to provide this coverage (costs about $450 at closing) to the buyer in case service is needed in the first year.

Home Owners should budget now to replace R-22 heat pump systems

If you are a current home owner like me who has an R-22 heat pump system, then it may be time to start budgeting for a replacement heat pump or A/C system. Most systems now meet EPA Energy Star standards and qualifications using a replacement refrigerant like Puron® or SUVA 410A®. New Energy Star units use considerably less electricity and the savings are significant and almost pay for themselves over five years.

Only a licensed HVAC contractor can calculate what type of system you will need to install to properly heat or cool your home. Using the square footage of your home and other factors, they will determine the proper “tonnage” of your compressor unit. Too big and it won’t work properly. Today’s systems are quieter outside and have multi-speed air handlers for better air flow inside.  But remember, gget a few estimates and the highest SEER rating that fits your needs.

Make sure to get a few estimates of replacement systems, and make sure that your system qualifies for the $1,500.00 Energy Star Tax Credit.

The EPA has published consumer guidelines that may be helpful if you are concerned about this issue or are planning to replace your R-22 Air Conditioner or Heat Pump system this year.

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Vienna, Virginia | My Buyer’s Agent Advice of the Week

I had a home buyer Tweet me and ask if I had any words of wisdom to pass along. The funny thing is that I love giving advice, but 140 characters weren’t going to cut it because what I do really can’t be distilled down to a sound bite. It also raised an issue that many socialists have written dissertations on… the desire for a silver bullet or quick fix.

A picture and a paragraph won’t be enough

Buying real estate in Northern Virginia is going to be a complicated task that will require some planning and very hard work:

• You need to figure out how to pay for your home (and adjust if necessary)
• You need to figure out the best location (and adjust if necessary)
• You need to figure out what style of home you want (and adjust if necessary)
• You need to figure out a reasonable sales price (and adjust if necessary)
• You need to do some comparison shopping (and adjust if necessary)

Plus there really are distinct differences between living in Arlington, McLean, Vienna or Oakton, Virginia.

and now for Doug’s words of home buyer wisdom…

Right now, today, I can share some wisdom that is worth passing down and it will require you to do some serious soul searching. Did you ever read “What Color is My Parachute” when you were searching for a job or life purpose? In that book the author has his readers do some serious thinking to help them discover their individual strengths, and then organize and understand the importance of capitalizing on those strengths.

Where do you see yourself in five or ten years? Today you have opportunities to buy into a neighborhood for the long term, rather than starting with a first-timer home and then moving in five years to your “family” home. Today’s long-term mortgage interest rates are low and should be low for a while, and home prices have been knocked down too. I won’t bother you with equations, but as rates go up then your buying power goes down.

Right now, in Fairfax County, Virginia, I am not seeing builders building too many detached homes under $1,000,000. Understanding the basics of supply vs. demand proves that the supply of detached homes under $650,000 will remain unchanged (actually decrease) over the next ten years. And the population forecast is on the upswing too.

So, my buyer’s agent advice or words of a wisdom… this is the time to buy a home with the long-term in mind.

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