Archive for September, 2010

So you put your house on the market at what you thought was a “fair price” which “left a little bit of room to negotiate” and nothing…  Crickets…  It may now be time to think seriously about Plan B – rent it or reduce it.

At first glance you may be tempted to rent, but you should consider the following.  1) your tax rate will likely change and you’ll have to pay more each year as an “investor” owner.  2) If you want to refinance, you will not be eligible for those fantastic owner occupied rates any more.  3) Your local jurisdiction will likely require you to register which will walk you through an application and inspection process.  4) You may now be subject to tenant’s rights when you want to sell again.

I frequently advise clients to rent rather than reduce, but you need to understand the reality of being a landlord.  Many of my clients end up hiring a management company which will charge 8-12% of the monthly rent to handle the midnight “my toilet is leaking” call.

If you’re not sure what to do, call me – we’ll go over the details of your situation and I’ll run through the pros and cons of owning the property as a rental.  If you do decide to rent, your horizon should be at least 3-5 years to make it financially feasible.

I spent last week in Austin, Texas at Keller Williams semi-annual convention.  I travel to Texas for training about 3-4 times a year and each time to go I leave recharged and refreshed with a new perspective on life and the marketplace.  Values of homes in Washington DC are certainly off 15-30% from their peak sometime about 2006 – but we have little to complain about.  Take for example places like Phoenix, Detroit, Miami and Las Vegas to name a few where values are down a catastrophic 70% in some cases.  Imagine you bought a condo in Columbia Heights for $450,000 and now its worth $135,000 – try that on for size.

I meet with many sellers who are extremely frustrated that values have not gone up enough to sell – and I’m not minimizing the impact that has on their lives.  However, 15-30% is recoverable in the foreseeable future – 70% is a lot harder to conceptualize.

The reality is the value of real estate, and about everything else in our world has adjusted.  So the question is what does that mean for your life and what are you doing about it?  Are you looking for reasons to stay out of the market, or reasons to postpone selling because you can’t net as much as you’d like, or reasons to ignore the reality of your situation – or are you looking to achieve results and move forward?  I’m all about results – call me and we can talk.

As fall begins to set in soon, it is important to complete a fall checklist to make sure your home is ready for the season and stays in good repair.  I recommend the following:

1. Change the furnace filter
2. Wash out garbage cans, disinfect, then rinse thoroughly.
3. Clean, repair, and ready patio furniture for storage.
4. Check your basement for cracks or leaks and repair as necessary.
5. Test/clean your sump pump.
6. For plants that are starting to die, cut back and prune.
7. Turn mattresses.
8. Store summer bedding and towels.
9. Store summer clothing.
10. Get out winter clothing and bedding. Swap cotton summer sheets for flannel sheets and duvet covers.
11. Do your “spring clean” now – while the weather is still warm.
12. Have carpets cleaned.
13. Schedule appointment to have air conditioner serviced and check the heating system.
14. Replace weather-stripping and caulk around doors and windows.
15. Replace all your spices and herbs. Buy baking supplies: flour, sugar, and fresh baking soda if you´re a seasonal baker.
Enjoy the cooler days ahead!

Yesterday four advanced members of Up With People (www.upwithpeople.org) arrived at my office to prepare the city for a visit by the international cast on October 17th, 2010.  I am proud to be a sponsor of this event, along with my brokerage Keller Williams Capital Properties, Greg Kingsbury and Preston Cherouny at Metlife, John Brasseux at Wells Fargo, Don Schreffler at Proficio Mortgage, KVS Law Group, The Menkiti Group, and the Eng Garcia Group.

I traveled with Up With People in 1995 so the organization is very important to me.  The cast brings with it a diverse group of young people committed to changing the world and reminding us about what is important in life – our connection with each other.

If you’re interested in learning more about being a host family, please email Phil at pworcester@upwithpeople.org.

More details to follow about how to buy tickets and participate in community service projects throughout the week.