Over the last five years, the inventory of homes for sale has dropped in Northern Virginia - click to see larger

Really, what’s the deal?

Have you been looking at homes recently only to find that the listing you saw on Trulia.com  Wednesday afternoon is now under-contract?

Well, that’s been a problem for many home buyers in Northern Virginia this year (2012) and it appears to be a systemic issue affecting the broader real estate market. Take a look at this five-year snapshot and note the number of “active” listings in January 2012 compared to the overall period.

If you are a current home buyer then you are probably thinking, “that’s what I am seeing”.

The factors that have been influencing consumer behavior have been:

• uncertainty about the economy and job market like most parts of the country
• the continuous downward trend in mortgage interest rates have made existing mortgages more affordable through refinancing.
• a decision to stay-put

A stronger interest in “staying-put” has become the big influencer for existing home owners that are making real estate decisions. People are taking a second look at their communities in Northern Virginia and recognizing that they live in nice areas already.

So, why move? The grass certainly doesn’t look any greener and the commute looks longer!

As a result, I have met with many home owners in Vienna, McLean and Oakton Virginia who have decided to remodel and expand their homes rather than move.

My buyer clients understand that our strategy is essential

So, if you are a home buyer then you are caught in a “squeeze play” – the home owner affordability index works in your favor but fewer people are selling their homes. Rather than a hit or miss approach, having a clear strategy from the get-go includes much more than having a pre-approval letter from a mortgage professional.

These charts will update monthly so let’s watch the trend change from today’s date in February 2012.

Vienna Virginia Real Estate Trends

McLean Virginia Real Estate Trends

These charts can be re-engineered depending on what you are looking for from the real estate stats, so if there is something missing then let me know via email or comment below.

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A Vienna Virginia lot ready for a new home

While having lunch at Panera last week, I spotted a local home builder who I first met at my daughter’s pre-school years ago and called him over to chat.

After a brief introduction to the crew at my table, he launched into the number of builders who are now aggressively working the Vienna Virginia real estate market. His count was at twelve small, custom builders who are tearing down homes built in the 1940′s and 1950′s to put up homes starting around $1.2 million. A few years ago, there were only five or six.

As a quick note for those of you relocating to Northern Virginia: Vienna is really close for anyone who is working in Tyson’s Corner and is searching for more house than comparably located McLean, VA. The Metro’s Orange line ends here – a 20 minute Metro ride for anyone working in Washington DC. Other features include a Whole Foods Market, the 42 mile W&OD Bike Trail, an active Town Green, some good restaurants and a dive-bar you’ll call your own (yes, the VI).

Okay, I will give you other interesting tips too… about living here.

Out-of-Towners may feel some pressure

The experience of finding a home to buy is complicated by the fact most of these homes are “sold” before they are finished. Last summer, I was walking through a really nice new home ($1.3 million) with some buyers from Connecticut (who stumbled upon me here on my blog), and they commented that they loved the house but were unsure about the neighborhood. Although I belong to the pool club located around the corner and have seen huge changes to the neighborhood over the past twenty years, I could see their point, Especially when viewing the smaller, older homes in the neighborhood that are future tear down candidates.

Yes, seeing rusting old backyard sheds from the bedroom windows was a deal killer.

Who are these builders?

Anyone who is building within the Town of Vienna limits needs to comply with the Town restrictions on lot coverage. The limit is set at 25% which has kept any new construction away from the McMansion style. The good news is that the community is more in tune with the “Not So Big House” concept pioneered by Sarah Susanka. The result: Most of these new, luxury homes in Vienna have a ton of appeal.

Although I have experience with many of these builders there are some that are the new guys. Most of them now have web sites that offer photos of their work, and most will offer contacts for satisfied clients. All are willing to work with buyer agents, like me.

An important thing to consider is that all of these builders will have their own sales contracts that comply with Virginia statutes unless otherwise noted. Deposits you make are actually prepayments that the builder will use to complete your home, and any upgrades you pay for will be paid for upfront by you. Virginia does have a mandatory warranty on the structure but you should understand any additional warranties,  explicit waivers, third party warranties, walk through punch list inspections and 90 day follow up agreements.

I typically have my clients pay a local attorney to review the sales contract and review mortgage costs with a preferred lender. For relocating home buyers, I provide a list of excellent professionals.

Although the Fairfax County Building Inspector checks off on all the systems, I make sure that it is okay that my clients are permitted to have a top notch home inspector examine the place before the builder’s “customer orientation” meeting.

The walk through form is especially important.

Except for a short downturn a couple of years ago, the Vienna home market has been a good bet for small home builders. Over the past decade I have seen at least 100 new homes pop up and all have been purchased, and as of yesterday, I saw 44 new Vienna homes for sale in our MLS. As the homes that the builders are buying to tear down (range $450,000 to $575,000) are gradually coming onto the market, they are convinced new house can be built there will be a market from $1.2 million to $1.6 million. So far, their bets have been right.

If you have questions about new homes in Northern Virginia, send me an email ( doug@dougfrancis.com ) or a call (703-304-6827). And if you are a local builder, leave a comment with your thoughts!

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Basically, expect an aircraft to fly overhead (click to enlarge)

One of the benefits to living in Northern Virginia is that you can get a flight almost anywhere in the world at one of the local airports. Each of these “local airports” qualifies to be in the top-tier of U.S. airports for passenger traffic and daily flights.

Recently, when a real estate client from Texas asked me about airport flight paths over Vienna , I had to say the area is covered with overlapping flight paths. We have Dulles International, Reagan National, Andrews AFB, and plenty of helicopters going wherever helicopters can land!

I happen to live in one of the overlapping areas where I can see planes on approach to National to my right, on approach to Dulles to my left, on approach to Andrews overhead, and hear a medevac helicopter en route to Fairfax Hospital. The helicopter wins out in the noise department since the airplanes, for the most part, have low sound output on approach.

On the map above, I did not include BWI Airport which is outside Baltimore and a major Southwest Airlines hub because those planes don’t touch our airspace.

40 million passengers equals plenty of flights

You should know that Washington Dulles International handles over 23 million passengers a year, and Reagan Washington National Airport handles over 16 million passengers a year. Added up, that’s a lot of flights.

Although most residents can’t tell the difference, flights on approach to Andrews Air Force Base (in Maryland) make a final approach over Northern Virginia. And one morning at my son’s early morning soccer game in Alexandria VA, I counted ten Air Force C-17′s  gaining altitude.

yes, helicopter flight paths too

Helicopter traffic is significant and includes medevac choppers to the hospitals, every imaginable military helicopter, Coast Guard helicopters, Fairfax County Police helicopters, U.S. Park Service helicopters, and the TV News choppers out searching for “news”.

In reality, living here isn’t quite as noisy as I may have depicted here. Really!

It’s just going to be impossible to find a home in Northern Virginia that isn’t near a potential flight path.

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Charging Station outside Petco in Vienna

Over the weekend when I took my dog into the new Petco in Vienna, VA to browse for some new puppy toys, we literally walked right into my first encounter with a car charging station.

I have probably walked by this little power station a dozen times without noticing it, but I am sure that anyone living in Vienna or passing through in an electric car might want to know it is now there.

Where is “there” you ask?

This charging station is located at 225 Maple Avenue East, Vienna, VA 22180 – got that programmed in yet? The service is provided by 350Green and there are instructions on a display screen so you can provide payment.

This handy power station must have been installed when they renovated this building last year, which now has the Petco and a Walgreen’s. My reliable source at Petco told me that he has seen a few Chevy “Volts” and Nissan “Leafs” charging up recently.

It appears that 350Green is building out the infrastructure to providing electric vehicle charging stations.  I also stumpled upon an iPhone App for locating charging stations wherever you are on the road named CarStations.

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Up to $100,000 but there's a catch

ORIGINAL POST: When a real estate client came to me all pumped up because his Credit Union was offering to pay up to $100,000 of his closing cost, I thought we should sit down and review the typical expenses for a home buyer worksheet again.

I’m sure you can understand why he was so excited since $100k is considered a big chunk of change… even for those in the top 1%!

$100,000 is a rather excessive number

Our first stop was to look at their online estimate and then the fine-print in the offer.

Their online “closing cost estimator” had a nice breakdown and their estimate was reasonably close to my estimate.

In his case the estimated amount was about $14,500.

The fine print states:

Closing cost offer only good for 5/5 Adjustable Rate Mortgages (ARMs)**. You must use one of our preferred title companies to get closing cost credits. Closing cost offer is limited to $100,000 per loan. If application is withdrawn or does not close, the borrower pays all applicable fees. For New York properties borrowers are required to pay title insurance premiums and may use any title company to obtain the closing cost credit of up to $100,000. Includes lender’s fees, title fees, recording fees, and recording/transfer taxes. We do not pay optional owner’s title insurance.

One of the first items that I cover with my Vienna home buyers and sellers are typical transaction expenses. Spending time going over my cost estimate worksheets always puts the process in perspective and answers some tough questions.

But, you have to agree, an offer to pay $100,000 is going to get anyone’s attention.

Developing a winning negotiating strategy is part of the reason why I cover expenses, because you can include having the seller pay some of your closing costs in your offer to buy their home. This is perfectly normal in the Northern Virginia real estate market where homes are expensive (our average price in 2011 was $483,160) but, remember, you can only use the amount as allowed by the lender’s predetermined “normal” transaction costs.

In my real estate practice, having a consistent negotiating strategy is essential for my client’s success. But when this lender then suggested to my client that he ask the seller to give a closing cost credit then steam started to come out of my ears. Wait a minute, didn’t their advertising get him interested in their program because they were willing to pay the closing costs?

And now they are suggesting he get the seller to pay some… ?

wait a minute, this is BS.

This is a fairly complicated switcheroo-ski if you ask me. Keep in mind, if there is a seller credit then that amount will be used first before the lender steps up with their $100,000 credit. That credit goes to closing costs and not to escrows, pre-paids or the down payment. If the credit is too much then the seller gets to keep her funds.  In this case, I recommended to remain focused on the Sales Price without the distraction of a seller credit.

Besides wanting my clients to get treated fairly, I also want them to get the best deal and maximize their mortgage options. As a licensed real estate agent, I understand the FTC regulations restricting real estate agents about giving mortgage counseling… but I will do my best to point out a rotten egg if I smell one.

Have you reviewed the typical expenses of your real estate transaction?

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Use simple bullet points

Recently, when a client was interested in putting together an offer on a particular house we had seen, he asked me if I had picked up a brochure.

“No I didn’t. Did you?”

Since neither of us had one I decided to contact the listing agent to ask her to email one over to me so I could note any updates or recent improvements to the house. It seemed like a reasonable request since the home has been on the market over 250 days and we had seen it twice.

Here was her response:

“Yeah I do not have a brochure..I am sorry..I used to do brochures back in the day but with the internet clients had no use for them…”

Um, “back in the day”… are you kidding me?

Maybe you are an experienced Internet real estate surfer, but you are probably looking for something you can hold when you check out a house in person.

Am I wrong?

Seeing a house online is only the first step. You know, when you can check out the photos, the location, local schools or local shopping. R-E-S-E-A-R-C-H!

Internet clients still want to see the house

The next step is to have your buyer agent set up a convenient time to see it when the house can be yours. Don’t wait until the Sunday open-house where three other people will be on your tail in the kitchen, bathrooms or living room. Most of those people at the open house are distractions from making one of the most important decisions you’ll ever make.

A good real estate brochure doesn’t have to be complicated but should include bullet points like HVAC updates, interior upgrades, kitchen information, and list community high points if possible. Walk to Whole Foods or near the W&OD Bike Trail are selling points people! No one is going to buy a home because of a fabulous brochure, but when there is a helpful list it may provide insight into the age of the roof, heating system, or something else equally important.

Get it?

Sorry for the rant, but not putting a basic piece of helpful consumer information is a costly oversight for everyone.

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A rugged trail

Another interesting hiking trail is the Billy Goat Trail on the Maryland side of Great Falls.

It only took us about fifteen minutes to drive there from our home in Vienna, and there is plenty of parking at the Great Falls Tavern and Visitor Center which is located in the Chesapeake & Ohio Canal National Historical Park. The hike will take you about two hours, end to end, although you might get distracted by all of the cool vistas of the Potomac River. There is a very nice view of Great Falls just off the C&O Canal near the Tavern.

Billy Goat Trail is rugged with plenty of rocks that must be climbed

You may get a scape or two!

A view from the tow path

This part of the Potomac River is very interesting since it is where Great Falls has cut through the rocky terrain. The water will be running fast here so do not go into the water any time of year. The NPS has many notices of the dangers of the swift moving current in the Potomac.

The walk along the towpath along the C&O Canal is very interesting too, and is a real treat after scaling rocks for an hour or more. Overall, you should plan for a two to three hour hike so you can enjoy everything there is to see.

Although there are many hikes that I have mentioned here before, this hike should be very high on your list of things to do when living in Northern Virginia. With that in mind, this link to the National Park Service has the map you need to plan your trip to the right spot and the Billy Goat Trail.

If you are looking for an afternoon hike, consider heading over to hike the Billy Goat Trail and I am sure you will have a great time.

Perfect for an afternoon hike year-round!

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A home in Vienna, Virginia | Doug Francis via Flickr

For many folks, as the clock strikes 2012, careful plans to sell their home or to buy one go into action. Setting new goals is an important way of improving your life and making each new year more meaningful than the last. Our lives are short and knowing that you are personally responsible for the life you lead right now (this instant) can be an awakening. Owning a home can be an important pillar of that plan.

A 2012 real estate resolution?

If you have made a real estate resolution for 2012 then here are some of my top tips for both sellers and buyers.

Top 5 home seller tips:

• Minimize – Even if you live in a grand mansion, you want your home to appear as spacious as possible. Some common themes include removing a chair from the living room, clearing off the kitchen counters, or taking 30% of your clothes out of every closet.
• Paint – A fresh coat of paint can really transform a room at a very low cost. Instead of the white that we used to recommend, using a classic color that is in style will appeal to today’s picky home buyer.
• Flooring – Nothing will turn off a buyer faster than flooring that’s in poor condition. Most hardwood floors can be refinished or super-cleaned (even 50 year old hardwoods). Carpets can be swapped out in a day. And vinyl floors cab be replaced.
• Landscaping – Home buyers started to assess your home as they pull up, so you want to make sure your yard, plantings, driveway and front door are looking their best. Handles, door knockers, doorbells and front a mat all set the stage for what they see next.
• Appliances – Home buyers look closely at kitchens, and seeing an old range, fridge or dishwasher can be a deal breaker. Laundry machines, hot water heaters and AC units are systems that are factored in when making a decision to buy one home over another.

Top 5 Home Buyer Tips

• Price Range – Your mortgage lender will pre-approve you for a maximum price range, but it is up to you to decide how much you really want to spend.
• Long-term Needs – Buying or selling a house is expensive, so it is essential to consider what your situation will be like in five years. Will you have children, be retiring from your job, or relocating out of the area? Any of these factors need to be calculated into making your home selection today.
• Quick Decisions – Being able to make decisions quickly can especially help you in the active Northern Virginia real estate market. Get to know the sales contract and the process for putting in an offer quickly when you find a home that fits your needs.
• Flexibility – Your willingness to compromise will help you be successful. For example, buyers looking at Vienna VA homes often make a compromise on smaller homes because of pricing and commuting times.
• Teamwork - This process will easily involved fifteen important people who are all working on deadlines, and each can easily disrupt the flow of the process. Online home searching is the easy part of the process. You should view your real estate agent as the project manager helping you understand your options, meet deadlines, be a resource and ultimately achieve your goal of buying a home.

If you have made a resolution for 2012 to buy or sell a home in Vienna, VA or virtually most of Northern Virginia, you can start be meeting me here on my blog and then having me over to see your home to see what it is worth, or to meet to discuss your plans to buy a home and how I can help achieve your goals. Send me an email at doug@DougFrancis.com and I will follow up from there.

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What a people reading here?

It is always interesting to read back through the old blog stats… okay, it is a little geeky.

Like you, I have read through many blogs about home buying and selling from real estate agents all over the country. Some I like, but most others need some style help. When I started this blog, I really wanted to put my experiences down because they share common experiences that many people are experiencing  in a real estate transactions from Vienna Virginia to San Diego California. And, in 2011, a good number of clients met me online before we met face to face.

Let’s see what they were reading

Okay, we got a problem!

Although every home buyer wants a home inspection, there really isn’t any set criteria to help them know what to expect.

If you are a home buyer, an inspection typically takes place after a contract has been accepted or ratified by you and the seller. There will be a set contingency period when you will hire a professional home inspector to make a visual inspection of the major systems in the house. It is an example of home-schooling because most buyers learn more in three hours than they ever would otherwise.

Your home inspector should provide you with a complete, written report of the systems that he was able to get a look at. It should note how old appliances are, give you an idea on the condition of the home, and make recommendations for repairs or future replacements. Remember, a home inspection can’t possibly catch everything, but keep in mind that you are hiring a “trained eye” who looks critically at homes every day.

I always recommend a couple of good inspectors, but you can easily Google local home inspectors or look on Angie’s List or Yelp. Online reviews are good but you’ll need to contact them and ask a very specific question.

Skipping the photos is a risky shortcut

My easy tip for home buyers: ask your potential inspector if his report will  include digital photos?

It is going to be essential for Northern Virginia home buyers to have thorough reports that provide good documentation including digital photos in their home inspection reports. In my opinion, the new NVAR Regional Sales Contract is going to put greater emphasis on home inspections.

Even if you aren’t working with me, please make sure your home inspector uses a digital camera.

If you are just starting the process of finding a home to buy then check out my Home Buyer Tips , or you send me an e-mail at doug@dougfrancis.com to discuss your plans.