The U. S. Capitol

As Realtors rally in Washington D.C. this week to lobby Congress to help protect the American Dream, I started to think that the American Dream has become an overused industry slogan that sounds a little gimmicky.

Wasn’t it Thomas Jefferson who downplayed the “ownership of property” language suggested by George Mason?

In my opinion, the American Dream is really about an individuals ability to pursue happiness, and not just about buying a home.

I am lucky enough to be a successful Realtor in my town of Vienna Virginia and have helped plenty of people buy and sell homes over the past 21 years. And having that experience has helped me understand that owning a home is, for most people, a key piece of their plan to pursue happiness on their own terms. Yes, I own my home and it brings me happiness (and stress).

There is one question that I always have to ask clients that reveals their honest opinion of what I do, and the fact they can never imagine doing what I do every day.

“Are you an active/inactive licensed real estate agent?”

The response is often a nervous laugh like, “not in a million years”.

The pursuit of happiness is actually a very complex, individual goal, and owning a home can be a big part of that picture for many Americans. Our local and national economy depend in large part on people owning real estate and paying taxes on those homes. And like anything worthy of your hard work, getting to own a home has always been hard for average folks.

I will never forget the story that my father told me one night after some guests left our house. My father let me know that one of the guests, an older gentleman named Henry, wasn’t one of my father’s favorite people. This came as a shock to me because it wasn’t my father’s personality to say negative things about people. It was that night that I learned that Henry had worked downtown for a bank in the 1950′s when my father was getting established with his medical practice. My father was on a promising track back then after completing Medical School, serving in the United States Navy during the Korean War, marrying a prominent Rhode Islander, joining a golf/tennis/hunt club, having a daughter and now wanting to buy a home.

Henry was the mortgage guy back then who took my father’s loan application in 1956 with the intent to fund the purchase a $19,500 home. “Sorry,” Henry said to him… “the bank has rejected your mortgage application.”

Luckily another bank gave him a loan to buy that home, but he never forgot that experience with Henry even after thirty years.

Today’s home buyers have to jump through many hoops to buy a home, only to find out that owning the home becomes a full time job in itself. Trips to Home Depot, upgrading this or that, and calling a local contractor to fix almost anything that needs attention. Honestly, some people are crummy home owners and bought it because… well, that’s what you are supposed to do, right?

Wrong.

For me, home ownership is enjoyable and a part of my pursuit of my happiness. My American Dream wasn’t to own my own home, far from it, and it shouldn’t be what we all strive to achieve. You shouldn’t feel unfulfilled if you decided to buy a boat to live on, live with your aging parents, travel around in a Winnebago or rent an apartment. It’s okay if it works for you.

What Realtors should remind Congress when they convene en mass , is that home ownership is an essential part of their local economy as well as the national economy.

Related articles

• The American Dream(jareddavissellslajolla.wordpress.com)

  ---

• NAR finalizes rally details, will gather thousands of Realtors in D.C.(agbeat.com)

  ---

• Was it Real Estate Stats Day?(dougfrancis.com)

  ---

To dig a little deeper, I looked at a subscription service called RBI which is produced by a division of MRIS. They generate better stats because they have more quality control of their data. Their QC finds the garbage stats, fixes ‘em, so their results are accurate. I have seen a very active market in McLean and Oakton, and my associates in Silver Spring and College Park tell me their market has been hot too.

The Vienna real estate market has been busy recently so I thought that I would use RBI to drill down on one zip code, 22182, and see what the stats revealed. I do this realtor thing full time… but these numbers surprised me.

A 10.25% price gain in one year

Source: RealEstate Business Intelligence, LLC - 22182

Comparing year-on-year numbers is always interesting, but to have increases that leap as much as these can cause heart palpitations if you are a future home buyer looking for a home in this zip code. The number of sales is up 100%, and the average sold price is up 10%. Wow!

It is important to note that, in this zip code, any new home that was built in the past two years has sold above $1.2 million. Many of those homes replaced an older home so the net inventory of homes has remained close to the same. It is this limited supply, continued job growth in the local economy, and the fact interest rates are about 1% lower that has helped fuel prices of the existing inventory.

The following chart looks at the last two years, and note that the trend of “sold’ homes rises as it hits May and June. Expect to see the same trend this May and June.

The chart above will change every month as RBI publishes their data so plan to revisit this page in early June or July.

Although I can generate charts for any zip code to get that extra local read on real estate activity, I clearly remember my statistics professor at Boston University showing us many ways to interpret statistics. Yes, all of those economists will use them to draw conclusions to validate their points. What I see here is a real estate market under considerable inventory pressure in a very desirable place to live. The problem: it’s expensive to buy a home in the Washington DC area!

Do you want really geeky real estate statistics?

If you are really interested in geeky real estate analysis, forget referencing Trulia or Zillow and read reports from George Mason University’s Center for Regional Analysis where the PhD’s publish their data.

Related articles

• Luxury Home Builders betting on Vienna Virginia(dougfrancis.com)

  ---

• A Trove of (mls)Information?(dougfrancis.com)

  ---

Make sure you get one!

Twice in the past month I have sat with clients at closing and they asked, “where is the house survey?”

The house location survey is an accurate drawing of the property that will show the corners, fences, driveway, house, shed, deck, or patio and include some very important measurements.

Your lender doesn’t require it

In my twenty one years as a Vienna real estate agent, I have always seen the house location survey because it was a lender requirement. But apparently that has changed for most mortgage lenders recently… and my clients weren’t especially happy about it.

Having a survey is important if you ever want to build a fence, add a deck or know if your neighbor’s shed is on your property.

Maybe it’s just me, but not having a survey done when you are buying a home is a ridiculous idea. With all of the new requirements and multiple hoops that real estate buyers have to jump through these days to get a mortgage, dropping the requirement of having a survey is absurd since they only cost about $250.

When you are meeting with your mortgage lender, ask if there will be a survey done. If they tell you that it isn’t required then I recommend that you contact the settlement company or escrow officer and get one made by a licensed land surveyor.

Tell me what your house survey disclosed to you!

Oh, and by the way, ask your lender why they don’t need a survey?

Related articles

• Yes, They Will Visit You…(dougfrancis.com)

  ---

• How to Market a House(dougfrancis.com)

  ---

Shuttle Discovery arriving at Udvar Hazy (Doug Francis via Flickr)

One interesting thing about living in Northern Virginia is that your friends and family will be motivated to come and visit.

With Washington D.C. just a short drive away (10 – 25 minutes on the weekend) and destinations like the Smithsonian, Air & Space Museum, National Archives or the Cherry Blossoms, who can blame them? On any given week, there are some pretty cool events going on.

On Tuesday, I experienced one of those unique events when Space Shuttle Discovery arrived at the Udvar-Hazy Center in Chantilly, Virginia. Knowing that this was a historic event, we kept the kids home from school and headed out to the historic Sully Plantation which offered a great view of the final approach.

The initial flyby of Discovery caught us by surprise as I was taking some photos of the 1750′s plantation house. Since we knew that Discovery had arrived in the area, my wife who is a Fairfax County teacher taking a “personal day”, called her school to alert them. Based on that intel, the school’s Principal ran a required monthly fire drill which got all the kids outside just as the shuttle flew over the area.

Now that’s education!

Living here offers plenty of opportunities to be a part of historic events, or go to historic places that you have only read about. Although we were at Sully Plantation to get a view of the Discovery, I highly recommend taking a tour of it too.

To see all my Space Shuttle Discovery photos on Flickr, click here.

Related articles

• Want to know about Flight Paths?(dougfrancis.com)

  ---

• Shuttle Discovery flyover dazzles D.C. area(washingtontimes.com)

  ---

• Space Shuttle Discovery(uw20sciencemediaandculture.wordpress.com)

  ---

What is our house worth?

It is time to tell you that there is one essential ingredient when it comes to marketing a house.

Back when they first sent me to real estate agent boot camp in the days of telephone cold-calling, the sales gurus  talked about condition, location, motivation and pricing before we were shown the Criss-Cross directory and told to make 50 calls.

Every “No” is a step closer to a “Yes”, Floyd barked at us.

The telephone bit wasn’t my style, but, I learned some golden nuggets during that old-school training. Understanding how to market a house is essential today especially with super informed home buyers who often have more data than their agent. You know what I am talking about because you have probably looked at the “comps” before looking at any home.

The interesting x-factor is that every home is unique (even in a Toll Brothers Community) determined by the particular lot and refined by the individual home owner.

Some home owners suck at maintaining a home — and some are amazing.

The problem is that home buyers who are looking at the “comps” miss that subtle differentiation because they are so focused on the numbers. And here is a new problem: so are many of the agents. Looking at the comps, some agents are recommending to their clients to price just below the market to capture home buyers who are looking for a deal… assuming that they will bid-up the deal-of-the-week.

Last week I saw this strategy backfire on an agent in a community where I was marketing a home. I had changed the status to “Under Contract”, and about two hours later she left me a panicky voice mail about her new listing and her possible need to “modify her pricing”… (up).

Leaving cash on the table

To undercut my clients, she recommended her clients price their home $25,000 less than my client’s. In her defense based on the comps, it looked like a reasonable price. But the strategy was flawed because the current market was much more active than the previous few months. National real estate sites like Zillow can give you give you good insight into past activity, but they aren’t good at showing you what’s been going on in your market over the last two weeks.

When I told her that she was priced too low, she responded that they hoped to get it “bid up by eager buyers”. The reality was that she didn’t expect me to help my clients be successful.

So, do today’s buyers like to be “gamed” like that?

Over the years I have seen this strategy actually work in all price ranges. Getting a buyer’s interest is essential, but if you are a home seller with a superior home in an active real estate market then you have to at least try to get the market value of your home.

If you don’t want your money, then donate it to Habitat for Humanity

The essential ingredient when deciding how to market a house is determining the right price for today’s market. Too high and the buyers walk, and if it’s too low then the seller leaves money on the table.

Yes, homes still need to get appraised. Yes, some agents will over-price listing.

But, all home sellers should know that establishing a realistic asking price is the essential element in how to market a house. After that, the market will determine the real value.

Related articles

• Lafayette, CA Real Estate – Multiple Offer City!(teamrothenberg.com)

  ---

• Reality Check for March 2012(ilovevacaville.wordpress.com)

  ---

• Phoenix – Area Home Prices Headed Upward (dawnrajda.wordpress.com)
• Luxury Home Builders betting on Vienna Virginia (dougfrancis.com)

Flickr photo credit: jferzoco

It isn’t unusual for a home buyer to ask the seller, in their written offer, to give a specific dollar credit at closing to pay some of the buyer’s closing costs.

And with mortgage folks favoring 20% down payments then that credit can really help with the other typical closing expenses.

Does your offer?

Offering to pay some of the buyer’s costs has been a strategy used by new home builders for years. They understand that their “net profit” is the same, and offering a credit can really motivate a home buyer who is struggling to come up with the cash to close when deciding to purchase. As long as the numbers add up, then, it’s a deal! Remember, these guys are in the sales business.

Okay, this post is tailored to what I am seeing in the Northern Virginia real estate market so my inside might not jibe with what your situation is elsewhere… but please read on to learn a little.

A couple of clients recently mentioned to me that their lenders started to give then advice on how to spend those valuable dollars, and both times it seemed to benefit the bank! Luckily they said something to me because it smelled like a sneaky tactic to help the bank make a bit more money (or profit).

One lender suggested that the buyer pay an extra 1/2 point to buy down the interest rate. In that case, the extra $975 payment at closing dropped their rate by an 1/8th of a point or 0.125.

Monthly savings: about $37. My recommendation was to apply that $975 to other “real” closing costs… because later they would probably want to buy furniture or curtains for the new place.

The other lender seduced my client with a promise to pay up to $100,000 in closing costs. But when we were putting together the offer to buy a home, he told me that the loan officer suggested he ask the seller to pay some of those closing costs.

“What?”

The sales contract that we use in Northern Virginia is very specific that the lender has to approve where the closing credit is being spent. It can’t be used for the down payment or prepaying taxes, but there are plenty of expenses where the money can be used such as:

• Home Owner’s Association Fees
• Home Warranty
• Survey
• Appraisal
• Title Company Costs
• Home Owners Insurance

My advice, as a real estate agent, is to look at your current estimated expenses with your agent to make sure you are using the total credit before you start to add additional points to your new mortgage expense.

417 MacArthur Avenue NE Vienna

It seems rare these days that a rambler in such good condition, on such a charming street in the Town of Vienna hits the market for sale.

Located just up Beulah Road, this four bedroom home has an updated kitchen, gleaming oak hardwood floors, a large deck (perfect for your gas grill) and plenty of natural light.

One surprise may be the one-car garage in the back which is perfect as a workshop, or for your classic 1967 Mustang GT, or for your bikes. Actually, down the street there is easy access to the W&OD bike Trail!

Updated kitchen

Rather than go on and on, take a look at my “working photos” over on my Picassa page at Google. There are about 120 there so you will get a good idea of how this home is set up and if you want to see more.

This home will be in the MLS on Thursday (3/22/2012) and a lock box will be on the door so that your Realtor can get you in. If you have further questions, please contact Doug at 703-304-6827.

Asking Price: $575,000

This is a RE/MAX Presidential listing and I am the Listing Agent for the Seller.

You can always use the Vienna Real Estate Guide.

Related articles

• A Trove of (mls)Information?(dougfrancis.com)

  ---

• Understanding inventory pressure(dougfrancis.com)

  ---

Impressive kitchen!

New on the Fairfax real real estate market, this end unit town home has undergone extensive updating over the past two years.

Now we all appreciate having a nice kitchen and this one has been updated top to bottom…. like the 18 x 18 tile floor, dovetail cabinetry, stainless steel appliances, granite counters and recessed lights.

This home gets fantastic natural light….

The master bedroom features a totally remodeled master bath… like a grand soaking tub, custom tile shower, double vanity and more. The bedroom has plenty of space, a vaulted ceiling and walk-in closet.

Yes, there is a two car garage

Rather than go on and on, take a look at my “working photos” over on my Picassa page at Google. There are about 150 there so you will get a good idea of how it is set up and if you want to see more.

This home will be in the MLS on Thursday (3/22/2012) and a lock box will be on the door so that your Realtor can get you in. If you have further questions, please contact Doug at 703-304-6827.

Asking Price: $465,000

This is a RE/MAX Presidential listing and I am the Listing Agent for the Seller.

Related articles

• Luxury Home Builders betting on Vienna Virginia(dougfrancis.com)

  ---

• Understanding inventory pressure(dougfrancis.com)

  ---

Source: MarketingCharts.com

It might as well be said by someone, so why not me?

Everyone looking to buy a home is using the Internet. 100% = everyone.

Whew, that feels good.

After reading this morning’s real estate article in The Washington Post where they regurgitated a National Association of Realtors statistic that only 90% of buyers are using the Internet, I thought that someone needed to set the record straight. That last 10% simply does not exist and I will make a $10,000 bet buy the first person who can produce someone in that 10% lunch at Chick-fil-A.

The Post article discussed listing databases and how some listings are on some but not on others. I have heard this complaint from clients for years who have found a listing on Realtor.com but not FranklyMLS, or on Zillow but not Homesdatabase. What really grates them, and probably you, is when they/you learn from the agent that the listing already is under contract.

The article also touches on an idiotic debate in the real estate industry where some brokerages are deciding not to allow their listing to be posted on third party sites like Trulia or Zillow because those sites actually make money. Yes, it comes down to the fact Trulia and Zillow make a profit placing ads around listings. The Post even states: “more than 30 million people visited Zillow in January” which must mean they have successfully tapped into THE CONSUMER.

If you are selling a home, wouldn’t you want it on a site with 30 million visits?

With that in mind, I did add a more advanced real estate search capacity to this blog. I will do my best to fill in certain area specific search pages to make life easier for you… and know that I encourage feedback so please let me know how I am doing.

Here are a couple of screen shots for what I have planned for a search called Vienna Real Estate Guide. The great thing is that this will be data from the MRIS database which is our regional MLS. Make sense?

The focus here is on the consumer (that’s you) and hopefully filling in those blanks you find on those third party sites.

On another note, when I am the listing agent on a home know that those third party sites are giving major exposure for my client’s homes (that’s a good thing). The goal is to meet the buyer where they are looking. In my opinion, if an agent told me that they didn’t post to Zillow or Trulia it would probably be the end of the relationship.

A few years ago I started noticing a trend when my clients would come to meeting with printouts from multiple real estate web sites. They really didn’t care if it was the Redfin, Frankly or L&F site because they had questions about the homes and I was their professional real estate guy. Today’s savvy consumer probably has an app or three on their phone to look at homes which I feel is very helpful. In my experience, finding the house is the easy part.

If the site works for you, then use what works for you!

After reading that Post article you may start to wonder about the “Tangles of the Web”. Go into it knowing that you should not put all your eggs in one basket (wed to just one site) because by using multiple sites know you will be seeing almost everything (legal made me restate that).

Related articles

• Zillow ends Listings API, pulls FSBOs from Redfin, other sites (agbeat.com)
• How Trulia Soared Through the Housing Crash (xconomy.com)
• Luxury Home Builders betting on Vienna Virginia (dougfrancis.com)

Is this about selling real estate?

Commission Impossible

The producers have captured the essence of today’s very hip real estate agent who is always chasing the sale, using technology like an iPad, using Facebook, shrink wrapping their cars, and using YouTube videos to market themselves. Of course, they also capture the emotional (petty) rivalry between agents trying to earn a commission – made him real to me!

After one of the first episodes when Phil went off on a real estate agent tangent, a few of my friends told me that I “had” to watch the show. Okay, like Phil I am married, have kids, been a Realtor for 20-something years and have always joked about the absurd things I see week in and week out. “You should start blogging about it”, they said to me a few years ago… so here I am.

I think the show is a riot, and I am extremely happy that Phil doesn’t wear glasses… need I say more?

Phil’s view on his job: “A Realtor’s just a ninja in a blazer. The average burglar breaks in and leaves clues everywhere. But not me, I’m completely clueless.”

Here is Phil making the sale… without even knowing he’s doing it.
Okay, what Realtors need to know about Phil:

• Phil Dunphy is the new face of real estate for millions of people. Sorry Alec Baldwin (Glengarry, Glen Ross).
• Phil learned to plan ahead if you are shrink wrapping your slogan on your wife’s mini van.
• If you are doing a “first-time buyer seminar”, make sure your sister-in-law is in the audience when she is supposed to be.
• Phil will allow anything to get a sale… speeding neighbors who are clients or an inappropriate kiss  (Greg Kinnear, “Me, Jealous?)
• Phil hosted the SCARB (Southern California Annual Realtor Banquet)

Ty Burrell plays the role of Phil Dunphy in ABC TV’s Modern Family

photo by Jennifer Tse via Flickr

Related articles

• Greg Kinnear on Modern Family (polentical.com)
• Luxury Home Builders betting on Vienna Virginia (dougfrancis.com)
• Understanding inventory pressure (dougfrancis.com)