Here is an awesome report from Arlington County to it’s people about Arlington trends, government and money – a must read for every citizen – Arlington Report to the Citizens 2013-2014. Enjoy!
How to NOT Miss Out on a Property in Arlington
One of the biggest fears that buyers have is missing out on a property. So what do you do? You should use ELIMINATION process vs. SELECTION. What does that mean? Instead of selecting properties that you like you consider all properties in your price range and the area you are considering. Then you eliminate unwanted houses one by one. You will be left with whatever is left and if new listings come on the market – you can use exactly the same process.
Also – when you search for homes – don’t add too many filters – you should consider ALL houses in your price range in the area that you are interested. If you are considering the whole DC Metro – you are crazy! Go and rent until you figure out where you want to live.
I set up my clients on automatic listing updates coming directly from our Multiple Listing Service and they are able to use the process above. They can save favorite Arlington homes and discard the ones they don’t want. If you’d like to receive such updates – please let me know – it is no trouble at all to set you up.
Also – very few For Sale By Owners list in MLS. Check Zillow.com or Craiglist.com to see if there is anything worth your attention. So if you do’t want to miss out on anything – you should constantly check those websites as well.
Remember – good ones go fast – so when you find “The One” – you need to write an offer quickly!
Caution: Retailers’ Data Breaches Can Damage Your Credit Score
If you ever shopped at Target or Neiman Marcus – you could be affected. Mortgage credit experts warn that massive data breaches at Target, Neiman Marcus and other retailers could have a significant side impacts on some real estate transactions in the coming months, as damaged credit files depress scores and jeopardize loan applications and home sales.
Let’s say you have a great credit score – 740+. Your lender is happy to give you a loan approval so you can move forward with buying your Arlington dream home. You ratify a contract and all is going wonderful. A few days before closing your lender will check your credit again to find that your score is not even in 600’s – there is no way you are getting a loan, not until your credit report is be cleaned up. That means no house, that means you potentially might loose your Earnest Money Deposit if the financing contingency has been removed. Would this situation create a lot of stress in your life? You bet.
If you are house hunting it would be great for you to use a credit monitoring service like Mint Credit Monitor, Credit Carma.That way you can detect any changes as soon as possible.
You can read an article by Kenneth R. Harney about this issue in Washington Post.
10 Showings Should Generate an Offer
From my experience on average 10 showings of your Arlington home should generate an offer.
If your Arlington home had 10 showings and you have no offers – there is something wrong – you are probably a little overpriced, buyers were disappointed with something they found (like photos were way better than the real thing, road noise, etc) or your house smells bad (really! like smoke smell will steer most buyers right out the door).
If you haven’t had 10 showings in the first 2 weeks on the market in Arlington – you are really overpriced or your agent made you look bad online. Have you checked your listing online? You can go to Zillow.com or Trulia.com and see what buyers are seeing.
This is definitely not an exact science. Sometimes the very 1st showing is the best offer you are going to get. But the rule of thumb is – the more showings – the higher odds of multiple offers – so count your showings!
How to Survive Through a Home Inspection
A necessary part and the lowest point of every Arlington rest estate transaction is home inspection. Buyers and sellers worry about it – what will be found? Will it kill the deal? Will the buyer be reasonable? Will the seller be reasonable? And when you throw in some confusing home repair jargon – it can really spin out of control.
So what do you do?
1. Expect that there will be something. There is no perfect house – not even a new home. There will be issues that will need to be addressed. I always ask my Arlington home sellers to budget from $1,000 up for home repair items and if it’s an older home – it can be a few thousand.
2. Hire a highly recommended inspector who can give you a clear report – ideally with photos and thorough explanations. The better you can understand the issue – the easier it will be to resolve it. Here is an excerpt from a recent home inspection report: “Kraft paper facing is combustible – gas vent requires 1 inch clearance to combustibles – a collar needs to be installed” Hah?! Would you know how severe this issue is?
3. Expect to compromise. Big ticket items definitely need to be resolved, but please don’t kill the deal nickel and diming the seller. I think agreeing to some credit towards small items is a great way to resolve them. I actually love credit for home inspection items – big and small – sellers love knowing the total amount and absence of responsibility after settlement and buyers love to have control over who does the repairs and how they are going to get done. How do you get these amounts? You get estimates.
There is definitely a lot more to home inspections and they are never easy, but if you keep your expectations in check – it will be an easier pill to swallow.
If you need a great home inspector – please ask!
Where can I get a free copy of my credit reports?
Before starting your house hunt in Arlington, VA you should check your credit. Trade Commission study found that 20% of all consumer credit reports have mistakes. You can do this by going to www.AnnualCreditReport.com
The only issue with this report – they won’t give you credit scores – which is crucial information for getting a loan. You can pay extra and get the scores, but then is it really free – right?
Or you can call a reputable lender – and he or she will do it for you for free. Please don’t call the 1-800 number on your bank statement and speak to a clueless rookie. Ask me, your friends and family for a name – and then call that person.
Woodmont Neighborhood in Arlington, VA
Great article in Washington Post about Woodmont neighborhood in Arlington, VA. Please read here.
Nobody mentioned the airplane noise from The Reagan National Airport, but that’s the only downside of living there.
Caution: The Seller Does Not Have to Disclose This!
Does the seller need to disclose a leaking pipe, a broken hot tub or a roof leak to the future buyer in Arlington, VA? They should, but they don’t have to. Actually in Virginia the owner states that the property and all improvements are sold “as is”, thus disclaiming any warranties or representations as to the condition of the property. The Disclaimer Statement that the owner gives to the purchaser advises the purchaser to use whatever due diligence the purchaser thinks necessary, including home and other other inspections to the determine the condition of the property. The purchaser must complete all such inspections prior to settlement. Here is the disclaimer statement that every purchaser gets to sign – read it for yourself.
So you are spending your life savings to buy this house – how do you protect yourself? I don’t think there is 100% bullet proof method, but there are some steps you can take:
1. Buy from a seller who is represented by a Realtor. Listing agents have greater disclosure obligations to purchasers that their seller clients have to purchasers. A listing agent must disclose to prospective purchasers all “material adverse facts pertaining to the physical condition of the property which are actually known” by the listing agent. Something is “material” if it could affect the decision of a reasonable person as to weather to purchase. So a leaking pipe in the bathroom probably won’t be a material fact, but if the agent knows there is an issue with the underground main water pipe that will cost thousands of dollars to fix – that should be disclosed, because it would affect purchaser’s buying decision.
2. Ask seller questions about the condition of the property. There are so many old homes in Arlington with basements that flood – you have to ask about the history:
- Does the basement flood during rain storms?
- How old is the roof?
- Have there been any roof leaks?
- Have there been any odor remediations – smoke, dead body (yes – it’s possible), fire, etc.
- Does the owner know of any past or current mold issues?
- Have the permits been pulled for the addition or major updates?
- And any other question that is relevant for the property you are purchasing.
If the seller answers the questions and then you find out that the answers were not true – you might have recourse in court. The sellers should answer these questions honestly, because they might end up in court and spend a lot more money and time than the repair of the actual issue.
3. Hire a reputable and experienced home inspector. Great home inspectors check every nook and cranny, but they can only inspect what they see. If there is an issue behind the wall that is not showing the signs yet (like water spots on the dry wall) – they won’t be able to discover it. They will discover most of the problems though – so please do a home inspection.
4. Talk to neighbors. Do they know anything about the house that you should know about?
The older the home – the more potential issues. If you’d like fewer issues – buy a newer home or a home that has been well maintained. Sometimes sellers have huge folders with every home repair/improvement receipt – I love those sellers. There is no 100% perfect house – every house has something that needs repair, but do as much due diligence as you can BEFORE settlement, or you can be really stuck with a lemon.
This list is more from my own experience than from some special source. Maybe you know another good way to figure out the issues with a property – I welcome any feedback and would be happy to modify the list. Or maybe you disagree with some of the above – again – I’m all ears. After 11 years and hundreds of transactions I have never had a seller disclose anything in Arlington, VA – so buyers – it’s on you to figure out what you are buying. Sellers – you are lucky to live in VA.
CNBC Cramer says – go buy a house this weekend!
Cramer says it’s a good time to buy – are you still procrascinating? You might really miss the boat!
To watch the video you can click on the photo or here.
Arlington, VA Seller Closing Costs Explained
Many sellers don’t realize how much they will have to pay in closing fees. The largest chunk of the fees is real estate commission.
Click Closing statement Virginia 2018 to see a sample HUD statement – it’s a document you will sign at closing that will show all your closing fees. Look at seller’s side to see the costs for the seller.
1. First you will pay prorated amounts for taxes and condo/HOA fees to the buyer. If you already paid taxes and condo/HOA fees for the month you are settling – you will get a credit instead.
2. Grantor’s tax. You will pay $1 per $1,000 per thousand. So if your house sells for $700,000 – your tax will be $700.
3. Congestion fee. That’s an additional tax that went into effect July 1, 2013. You will pay $1.50 per $1,000. So if you sell your home for $700,000 – you will pay $1,050.
4. The 1st part is real estate commission. This can vary a lot. Some of this commission will be paid to the listing agent and some to the buyer’s agent. If you work with me you will pay 5% – 2.5% to Keller Williams and 2.5% to buyer’s agent.
5. Realtor administrative fee. In addition to the commission some companies/real estate agents charge an administrative fee – that can vary from $250-$600. I do not have this additional fee and will charge you ZERO.
6. Settlement company’s fees. These charges will include a settlement fee, seller document preparation fee, mortgage release fee. I would say budget for about $750.
7. Termite inspection. If the buyer marked that you will do a termite inspection – you will have to pay for that . Costs vary from $35-$70.
8. Home Owner’s Association document fee. You will have to deliver a package of HOA documents to the buyer if your community is a planned development. You will pay $150-$350 for these documents.
9. Repairs. Don’t forget to take into account that once the home inspection is completed – you will have to pay for some repairs.
These are main fees for the seller. If you’d like to calculate your closing costs and see your NET – go to this site. Then choose a proper jurisdiction and enter all required information.