We’re all hearing how now is a great time to buy.  Interest rates are at historic lows, there are some great opportunities in the market and it’s cheaper to buy than rent right now in the DMV (DC, MD and VA for you newbies!)

Condos are a great entry point for new home buyers.   They typically don’t require as much maintenance  as a home and they’re a natural progression from renting an apartment.  And with a loan through the Federal Housing Administration (FHA) you can get in one for a low down payment of 3.5%.

But before you invest a lot of time, energy and money in pursuing a condo you should know that FHA has implemented some new financial rules that make it more difficult to get financing in one of these buildings.

FHA requires that a building be certified and in their system in order for you to get a loan on your purchase.  Many buildings are already certified however many are also due for recertification.  Have your realtor confirm their standing prior to you submitting an offer if you’re going FHA. 

If they’re not on the list many lenders can submit a certification package or if it is up for recertification the condo association is probably already working on that step.  It is at this point that you may run into problems.  FHA rules require that condo project budgets, insurance and financials be in order.  One aspect of this is causing problems.

If more than 15% of owners are 30-days behind on their condo fees, then lenders cannot fund on the project without waivers from FHA.  In a 4-unit building if only one person is behind then that 25%. 

Other issues that will be important to know: 

1.       What is the investor ratio?  Can’t be over 50%

2.       How are the condo reserves? Funds must be set aside each year to fund long term maintenance

3.       With new condo projects at least 30% have to be sold

These are problems that can be found out prior to you investing money on an appraisal, inspection or most importantly your time.  Do your research or better yet, ask your realtor to do it for you.

So you think you might like to buy a house.  Congratulations, now where do you start?  If you don’t know the answer to this, you’re not alone, trust me, and all the questions of location, size, style, price and quality only scratch the surface of it all.  That said, step one is, always has been, and always will be discovering the motivation behind what put the thought of moving into your head.  It seems silly to state what otherwise would sound obvious, but if you take a second to pause and ask yourself what matters to you and why you wanted to move from renting to owning, or trading up an existing house, you might just find the process smoothes out a bit and clarity quickly follows.

$$$… Know, Don’t Guess!

After finding your motivation, the next step is to find out what you’re capable of.  To some it may be a tough conversation about finances and savings, but either way it’s good to remember that it’s simply a way to gauge your buying power, and this knowledge comes without a price.  Lenders work everyday with people free of charge to get them pre-approved, a process that takes less than 24 hours and lets a buyer know what they will be paying monthly for their future purchase and how much the bottom line price of the house can be.  This means you won’t have to guess if your range is 2-3, 3-4, 5-6 or 1 million, and then you can shop with confidence!

Live There Before You Live There…

Let’s imagine for a second that you are considering moving to my beloved H St NE, a place of immense culinary variety, rich history, and the future site of luxury apartments, retail, and the much anticipated trolley!  I live there, work there, and play there, and the next part of the conversation between you and me would revolve around a 20 questions format in which I proceeded to list and elaborate on all my favorite spots to eat, catch out of the box burlesque shows, and even play mini golf without ever putting down my favorite cocktail.  Do you see where I’m going with this?  Get out there and enjoy yourself, get lost, ride the metro, and sample the variety of life the area you are thinking about living has to offer.  Find an open house, and when you walk out the door, practice turning left and right and seeing where you end up!  The point is that you can learn a lot simply by being on foot for a while and exploring, so give it a shot and you might just see me walking around too!

I’ll save the next step for when you’re done with these, slightly over stuffed from local cuisine, and ready to relax from all the exploring!  So have fun with it and I’ll see you around!

1.      Roofs.  I think roofs get a bad rap.  Many buyers are scared to death of a bad roof, but don’t think anything about replacing the HVAC system.  Roofs don’t cost as much as you think, and many times patching is part of maintenance and doesn’t mean you actually need a new roof.  Consult with a roofer you trust to determine if you really need a new roof, or a tube of calk.

2.      Discoloration (sometimes referred to improperly as mold).  Mold is a term to describe microbes that meet certain criteria – however, not all discoloration is mold.  True mold infestation is a serious problem, though 95% of what I see is discoloration that is solved with proper ventilation and drywall repair – and does not require men in space suits.

3.      Electrical issues.  No one want their house to burn down, though that is the quick jump-to fear when presented with an “electrical hazard” in the home.  The truth is, most electrical issues are “issues” as the code has improved and an electrician can take care of most things in an hour or two.  Not a big deal most of the time.

This morning I visited a possible listing in DC for a valuation assessment.  The homeowner told me on the phone about all the money and time he had spent on the property renovating it to top notch condition.

I knew I was in trouble when I approached the home and the front door was the wrong size.  Sure enough, upon entry, it seemed like “Harry Homeowner” (no offense to homeowners named Harry) renovated the home, from top to bottom, over the course of 5 years and created a disaster of poor workmanship.  The improper corner cuts, crooked tile, sagging floors, and bad design choices added up to a complete waste of money and time.

Please, do not test your workmanship on what is likely your most valuable asset – your home!  It is like playing mechanic on the weekends to the Bentley in the driveway.  I have no issue with home renovation projects, though please make sure you consult with experts and have someone look over your work from time to time so you don’t renovate your entire home only to be told by your neighborhood Realtor that the entire home basically needs to be redone.

Ouch.

About this time every year I get the question about timing the perfect window for a sale.  There is a distinct impression that spring is the best time to sell, fall is the 2nd best, summer is 3rd and winter a distant 4th.  But is that really true?  Let’s take a look at some statistics…Click here

Notice the “Sales Trend” box on the right.  Clearly there are more sales in the spring, and the fall is indeed the 2nd most active period – though the rise and fall between seasons is not that much at all.  Only about 20-30%.  Additionally, remember there is more competition in the market in the spring and fall too, so it may not be to your advantage to list then.

Bottom line, the perception of a dramatic drop off in sales between seasons is, in reality, not so severe.  Rather than trying to time the market, let’s discuss what’s happening in your life and make decisions based on timing your life instead.

The report this week was that foreclosure filings are once again on the rise.  What’s going on?

The reality is there is a backlog of delinquent mortgages that have been caught in a process that is overloaded and thus delayed.  I’ve said it again, and I’ll say it now – the key to a full recovery in the real estate market is to move people out of homes they cannot afford and into homes they can.  Though well intended, I believe the programs to keep people in their homes on temporary modification plans only push the resolution of our marketplace further down the road.

It is time we, as real estate professionals, have the difficult, but necessary conversations that allow people to move forward in their lives – with new, more affordable living arrangements.  It is time to move delinquent loans to the marketplace now by having those conversations, and allow people to move on.

What does it mean to be in “sales” and why does that word conjure up a multitude of images in one’s mind, not all of which are positive.  I’m in my office this afternoon preparing for a monthly “sales” meeting and it occurred to me “sales” is actually a word that merely describes a multiple of segments in time during which one exchanges one form of energy (money) for something else (car, house, clothes etc).  There doesn’t seem to be anything inherently uncomfortable about that.  So where do we “salespersons” sometimes miss the boat?

It seems to me sales is actually a function to move people into action.  You can only move people into action when you help them see with more clarity where they are going and what they want.  If a sales person attempts to move someone to action – without establishing that clarity – it is hit or miss.  You might get lucky and hit the finish line, or you might knock the client into the water accidently.

This is what real estate sales is all about for us at BGC and is why seven people closed on homes with us last month.  It is about helping people see, with clarity, where they are going and what they need to do to get there.  Their own desire for more pleasure in their life (or less pain in some cases) will cause the “sale” to occur – our role is simply to listen to what you want to accomplish, frame is so that you clearly understand it, and let you naturally move in the direction you already intended for yourself to go long before we ever met.

My intention as we move into the fall season is to find more people to help find that clarity.  What is your intention this season?

I ran across this article in Inc 500 and thought I’d repost.  http://www.inc.com/inc5000/201108/a-few-thousand-reasons-to-be-optimistic.html  It seems there are several reasons to be quite optimistic these days.  What are some things you’re seeing that cause you to be optimistic moving into the fall?

So what are you supposed to do after the hurricane?  After a week’s worth of The Weather Channel nonstop, a lot of time has opened in my schedule and so I put together this list.

1. Inspect your home.  Take note of any damage or maintenance issues that have appeared like hanging gutters, missing shingles etc.
2. Look for any leaks or erosion around the base of your house.
3. Think twice before calling your insurance company.  You probably have at least a $1000 deductible, and minor damage is likely better paid out of pocket than risk increasing your insurance rates for 10 years for a $5000 claim.
4. Eat all the food you bought last week!  By the looks of the lines at Harris Teeter on Friday (yes, I too was in that line with my bottled water), you probably went overboard and have enough bread and milk to last you through Halloween, so eat up!

You deserve it after all – you survived the earthquake and the hurricane.  Let’s hope this week is less eventful.

I never thought I’d say an earthquake would remind me to send out an email about a hurricane, though it seems like this is a special week indeed!  In light of the possible impact of Hurricane Irene this weekend, I’m writing to remind you to prepare your homes now.  Basements can flood in a simple thunderstorm, let alone a hurricane, so take some time to ensure your exterior drains are clear, your gutters and downspouts are free of leaves and debris, and that your roof and windows are in good condition.  You might also remove deck furniture and other exterior items that can blow around in heavy wind.

Check out this website for more helpful information.  http://www.ready.gov/america/beinformed/hurricanes.html

At BGC we stand ready with a vast contact list of excellent vendors for any home improvement projects you may want to take on now, or this fall.  Simply call or email me and I can help.

We appreciate your referrals this summer and look forward to a robust fall market.

Now batten down the hatches!