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After a Great 2012, Looking Ahead to 2013...
Thursday, 31 January 2013 22:41

Just when I thought the 2012 market couldn't heat up any more... it got hotter.  Out of necessity my attention to the website went all the way down to zero, and the past year ended up being not only an incredibly strong year for area real estate in general, but my personal busiest to date as well.  Totaling over $15 million sold across thirty transactions, involving everything from $100K condos to beautiful million dollar homes, I am thrilled and honored to have not only made the NVAR Top Producers Club for the third year in a row, but to have been the #1 agent for 2012 by both volume and sales in our Arlington Coldwell Banker office.

My thanks go out to all of my fantastic clients I had the pleasure and opportunity to have worked with and gotten to know throughout the year - above any awards or honors, nothing can replace the feeling of playing that unique role in helping someone to find the place they will be calling "home" in the future.

This business has very little forward visibility, and so although no one can say what 2013 will be remembered for as far as real estate goes come December, as we close out January it looks like we're picking up right where we left off from 2012.  That said, I am going to try my best and make a point of updating things around here more regularly.  Check back tomorrow for an article focused on the low inventory "situation" we are presently facing in the area, and how it effects the dynamics for buyers and sellers at the moment.

Happy New Year!!!

Short Sale Process to Get Shorter
Friday, 27 April 2012 16:28

In a positive twist of fate, mortgage giants Fannie Mae and Freddie Mac have put into place new rules that will require lenders to respond in a timely fashion to offers submitted on "short sales" - those homes where the borrowers owe more than they have equity in the home, and either through hardship or other circumstance, are not able to cover that spread in the event of a sale.

Short sales have been one of the drags on the broader national housing recovery, and can often result in an eventual foreclosure if proceedings drag on for too long.  Unfortunately, a long process is often the name of the game, with three months a reasonably average turnaround time for lender response to an offer.  The time this process takes, and the fact that the bank can often come back with a completely different price after months of waiting, means that many contracts fall apart before they ever get to the next level.  For sellers, this can mean eventual foreclosure, and for buyers, a lot of wasted time and effort.

Of course, there are plenty of reasons for why the lenders *do* take so long in processing these sales, not the least of which is because it requires them to take a loss on the loan.  Whatever the reasoning, however, Fannie and Freddie have decided that the banks need to speed up the analysis for the sake of the buyers and the sake of the market.  New rules going into effect June 15th will require banks to respond to offers within 30 days under normal circumstances.  If more time is needed, weekly updates must be provided to the buyer, with a maximum 60 days allowed for the response.

Should these rules pan out as hoped, the result could be a more liquid and normal market in the distressed space, a potential positive for both inventories and home values nationally, and in certain sub-markets of the DC area.

HGTV: Americans in Dubai
Saturday, 31 March 2012 17:29

Last night through HGTV, I had the very surreal experience of watching one of my best friends from high school & college show off his take-out ordering skills from inside his high-rise residence above the Dubai skyline.  Occupying the last five minutes of Living Abroad's Dubai episode, my friend Matt and his wife Katie are seen talking about how Katie is his property over there (believe me not functionally the case) and how quickly cappuccinos can be summoned to their abode.  Crazily enough, also featured was their townhome in North Arlington, which I assisted them in purchasing several years ago.

I'm a fan of HGTV and a fan of Matt's, so it was a good episode - I suggest you catch it!  Matt is also a serial entrepreneur if ever there was one, not only being one of the co-founders of the Internet marketing company I allude to on my 'about page,' but having founded or assisted in the build-out of several (more profitable) ventures since then.  His latest - and perhaps greatest - project, a custom suit company operating out of the Gulf region: Knot Standard.  If you *ever* need a suit for yourself or are considering one as a gift for someone else, believe me, this is a route you will want to consider.

Changes to FHA Loan Program on the Horizon
Wednesday, 14 March 2012 14:40

Starting this April, buyers looking to take advantage of FHA financing for their home purchase are going to find those loans a tad bit more expensive to originate.  Although the same low 3.5% down payment requirement as before will remain in effect - making home purchases viable for individuals without tons of cash to plunk down at settlement - the upfront mortgage insurance premium (MIP) will be going up from 1.00% of the total loan amount to 1.75%.  This upfront MIP is the amount that HUD charges to guarantee the loan and to fund the FHA program, and can either be added to the total settlement costs of the transaction or financed as part of the loan itself.  So... if you were taking out a loan on a $500,000 home, putting 3.5% down, the amount collected or financed for upfront MIP would be going from $4,825 to $8,443.75.

FHA loans have a monthly mortgage insurance premium in place as part of the mortgage payment as well, which will be increasing slightly also.  Through March 31st, the rate of insurance on loans with an LTV (loan to value) ratio of 95% or less would be equal to 1.10% per year of the loan amount.  For mortgages where the LTV is higher than 95%, the rate would be 1.15% of the loan amount.  Come April, these percentages will move up to 1.20% and 1.25%, respectively.  To continue along with our example above, the monthly mortgage insurance premium for our $500K home would be moving from ~$462 per month ([$482,500 loan * .0115]/12) to ~$503 per month ([$482,500 loan * .0125]/12).

Lesson: mortgage insurance isn't cheap!  Some buyers might wish to consider certain conventional loan products as an alternative to FHA, where an increasing number of lenders are originating loans with as little as 5% down.  Those loans will still have a mortgage insurance cost associated with them, but the option exists to pay these as a lump-sum upfront settlement cost at a considerable long-term savings for the borrower. The loan sizes on these 5% down conventional products are usually capped within regular conforming loan limits though, or $417,000.

FHA loan limits in the DC area will remain at $729,750.

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Coldwell Banker Residential Brokerage
4500 Old Dominion Dr, Arlington VA 22207
Phone: (703) 524-2100 Fax: (703) 524-9014