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Game Changer Moved to October 3, 2015

HI there!

The authorities have moved the requirements as stated in my last post to October 3rd. Please let me know what questions you have to help you be prepared.


It’s a game changer on August 1. Be prepared. New laws affect home buying and selling.


It’s a game changer in August 1. Be prepared. New laws affect home buying and selling. One of the biggest changes in the real estate industry in a long time is coming in less than a month. This will be challenging and there will be hiccups. The landscape of home buying and selling is changing dramatically. This has been very little reported yet.

For home loans originated on or after August 1, 2015, the home purchase for the buyer and the sale for the seller will be affected – causing a potential doubling in time from the point of going under contract to sitting down at the settlement table.

happy house

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act), enacted in 2010, created the Consumer Financial Protection Bureau (CFPB). The CFPB issued its TILA-RESPA Rule in November 2013. This becomes effective August 1, 2015. The Integrated Mortgage Disclosures under the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z) are in put into place at that time.

There are strictly defined timeframes for disclosure of information to the buyer. This change is meant to make the language of the terms of the loan more clear to the consumer. Secondly, the forms provide more information than in the past. This is designed to help buyers determine that they can actually afford a given loan.

There are two new forms Dodd-Frank is requiring:

1. The Loan Estimate. It includes material/information that has already been available on the Good Faith Estimate (GFE) and the initial Truth-in-Lending disclosure. The Loan Estimate form was designed to provide information to consumers to help them understand the features, costs and risks of signing for the credit they are applying for. Important to note is that for all loan applications filed after August 1, 2015, the Loan Estimate must be provided no later than the third business day after the buyer submits the loan application to the lender.

2.The Closing Disclosure, which combines the HUD-1 (settlement statement) and final Truth-in-Lending disclosure. This form must be provided to consumers at least three business days before closing.

Here’s what Buyers and Sellers will want to know – what this means for you, bottom line.

1. Expect 45-60 days from contract ratification to settlement. In the DC area, 30 day settlements have been the most common. Bottom line: closings will be 50% longer to twice as long as in the past, in general. Big difference in planning.
2. There is the strong likelihood of lender and seller delays, especially at first as the bugs are worked out in the new process.
3. Back to back and coinciding settlements may very well be problematic, and not advisable.
4. There will not be any more last minute changes to the settlement statement. Plan ahead to get inspections done early, repairs done well in advance of closing and do the final walk-thru, instead of 1 day or same day before closing as is most normal in our area, at least seven days before. You will want to know that the buyer and seller are in agreement as to the condition that the home conveys in.

1. To get the best possible negotiating advantage as a buyer, pre-approved for a loan prior to August 1, 2015. Buyers who did not get approved prior to August 1, and are competing for homes in our low-inventory market, will have to show a good hand against your faster closing date!
As a seller, you will have to be prepared to weigh the advantages of a quicker sale against other strong terms if you are comparing contracts in a multiple contract situation. This is trickier than weighing more apples to apples currently.
Being ready and ahead of the crowd of fall shoppers who are not approved will win buyers the homes they want in a shorter time – and even possibly at a better price, if negotiating is done expertly.
And for sellers, having input on the complex process from a real estate consultant will be a strong advantage, so that items and eccentricities are not missed that could cost the seller time and money.
2. Buyer and sellers need to plan more time to make the whole process happen, and will need to have more patience as the bugs are sorted out of the system. An agent to represent you who is knowledgeable in the changes and is patient will be a huge asset to get you what you want in your purchase or sale.

I hope this is helpful. Please contact me with questions or for a free buying or selling consultation. I can refer you to a great lender also.


Second Homes – Now is the Time to Buy

Hi! Tax Day – it’s a great time for a blog post about more tax deductions!

Have you ever considered buying a second home? A retreat from the busier lifestyle of the DC area? An investment? Well, now is a great time to buy. As a second home and Virginia countryside expert, I talk with people all the time about what will work for them.

Virginia Horse Farm

First, let’s talk about why to buy at all. You have probably seen your current or past primary home increase in market value. This added to your wealth, right?
Buying a second home gives you another way to invest in your future while enjoying the home (if it is a getaway for you) and benefitting from the tax breaks.

Why buy now? Mortgage rates are hovering around 4%. At one time not terribly long ago, they were double, and not too long before that double that double – in the teens!
Secondly, more baby boomers and others who have the desire and financial ability are expected to continue entering the second home market. This drives prices up. Avoid paying more money! Buy now before homes increase in price and you cannot afford as much house or perhaps cannot afford one at all. And before the availability of existing homes decreases and you have less to choose from. For instance, there is a shortage of older farmhouses in the Virginia countryside already.

There are so many options to choose from across the US and the world. And right in your own back yard where there is the ocean, some lakes, rivers, mountains and stunning countryside.
Whatever your preference, one recommendation is to consider how often you will use it and whether or not you will rent it out. You wil also want to consider:
1. How do I spend my free time now?
2. How much travel time would be the maximum I would want to spend to get to and from the home?
3. How often would I use the home?
4. How much maintenance is required or would I be willing to do?
5. What cost of owning the home is agreeable to me?
6. Do I want to enjoy the home seasonally, in more than one or in all seasons?
7. Does the area I am considering buying in have a growth history and /or a stable price sales history?

So, why is buying a second home a great financial investment? Often, when you or anyone buys a home, you borrow money to do so. It is referred to as “leverage.” For example, say you buy a $300,000 second home with a 20% down payment. And then suppose that the property increases in value a modest 5% per year. At the end of the first year of your ownership, the home will be worth $315,000. You have earned $15k on your investment of $60K, an increase of 25%! Isn’t that an impressive return on your money?

Do keep in mind that second homes are considered a luxury and can sometimes be a volatile market to buy in. So, get Realtor who helps you to buy wisely. Not every second home is a wise or good buy. Always invest with the current market in mind and also think of resale. Determine or project how long you will or might own it and whether or not you will make any improvements or corrections to it while you own that may increase its value.

Next – Tax Breaks – yes!

Here is a list:
1. Mortgage interest may be tax deductible depending on your use of the home, just as interest payments are on the mortgage of your primary home.
2. Property taxes – ditto on no.1.
3. Used an equity line to buy? This may be tax deductible also.
4. Renting at all: If you have used it to rent out, you may be able to deduct some expenses including depreciation, if the government considers your home to be a “vacation home.”
Ask your accountant about the distinct government regulations of claiming a home as a second home or vacation home. She can advise you on the government’s definition which has to do with the number of days you use the home for a rental vs the number that you enjoy it yourself as a vacation home. Possible other specifications. Find out the distinct guidelines. Make the numbers work well for you, if you can by adjusting the days you rent it vs. spend there yourself.

Again, as a second home and Virginia countryside expert – and a land and homeowner in Rappahannock County – I talk with people all the time about what will work for them and what they will enjoy. Reach out to me for a free consultation. Let us show around and show you some homes in the Virginia countryside or elsewhere. It will be our pleasure.

Have a great day and a wonderful summer!


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What to do when a buyer voids a contract?

What to do when a buyer voids a contract?


It’s not an exciting day when the buyer changes his or her mind. It’s definitely part of the risk of selling a home and getting under contract that a buyer may decide for any reason to want out of a contract. As a seller working with a skilled listing agent, one can do a lot prior to going on the market, while accepting contracts and during the contract to close phase to help avoid a buyer backing out of a contract.

Save money. Have a strategy.

Save money. Have a strategy.

Even so, sometimes buyers do. This could be for a reason they find in a home inspection, for an unexpected health or family reason, loss of a job or any number of reasons. They might state their reason and ask out or they might void the contract during the home contingency phase, for example (As a side note, this is one reason to have a strategy to eliminate contingencies being in the contract in the first place. Like doing your own pre-listing inspection and making corrections, and then advising the buyer that this has been done.).

When the buyer wants out, and can do so contracturally, or you as a seller simply agree to let them out of the contract, what then?
Some options:
1) Put your home back on the market immediately with no changes whatsoever to the home or listing information available to the agents and the public.
2) Put your home back on the market after strategizing, having learned from one buyer / one part of a possible sale, making adjustments to the information.
3) Put back on the market after strategizing, having learned from one buyer / one part of a possible sale, making adjustments to the home itself and the information.

My experience is the 3rd option is usually the best approach.

First, without exception, it is always important to assess where the market has changed since the home went on the market and since the contract was ratified. Markets are always moving in one direction or the other, and can be very local (I refer to it as hyper-local.), very specific to the neighborhood, even. Take a strong look at “What is the market of the moment?” In order to be in sync, timely, with decision makings in formulating a strategy.

Selling Your Home Without Having It Returned to You

Selling Your Home Without Having It Returned to You

Then, if due to a home inspection, what was the reason for the back out? Did the buyers say they were anxious or unhappy about any items on it? If so, it would it behoove you as a seller to listen to what the buyers found and said about it, make corrections if it makes sense, and note any big ticket items as “replaced, new or improved” to buyers?

Another reason the buyer might back out is for a more desirable home down the street that has come on the market since the buyer went under contract with you. If so, would it be a great idea to take a very strong look at that home and how it compares to yours? What about it is more likable to buyers – price, condition, exact location? You may want to or need to adjust your pricing strategy if that home or any others help you to see the market of the moment in a clearer sense.

I hope this was helpful. With a great strategy going into selling a home – choosing an experienced, skilled listing agent, completely preparing your home for sale, having a smart pricing strategy, and creatively and strongly marketing your property, you will be a long way to a hedge against a buyer wanting to void a contract. An once of prevention…. “an investment of $100 could save you $1,000.”


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New to Market in DC – Columbia Heights – DC Rocks too!

New to Market in DC – Columbia Heights – DC Rocks too!


Join us this Sunday at our open house for our new listing at 1401 Columbia Rd., N.W. It’s 1-4pm.

We have just finished renovations on unit 305. It is gorgeous. Take a look here!

See complete pics and even an HD Video

See complete pics and even an HD Video

We hope to see you this Sunday, March 29th, 1-4pm!


The Columbia Heights Gem

The Columbia Heights Gem

orig_09Columbia Rd_PK_3036858

orig_10Columbia Rd_PK_3036860

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