Schools and Real Estate Values *FHA Appraisals

Tax Tips ** How to De-Clutter ** Determing Your Buying Power

  While we are bundled up inside on this snow day, why not take the time to get organized ready for 2016.  Here are a few good tips:
                   

5 Good Reasons to Amend Your Tax Return -- Energy Tax Credits— and How

                       

Missed tax deduction? Overlooked tax credit? Get what’s coming to you by amending your return. Read

                                           

                                       
                       

4 Tips to Determine How Much Mortgage You Can Afford

                       

By knowing how much mortgage you can handle, you can ensure that homeownership will fit in your budget. Read

                                          
                                         

                       

How to Get Rid of Stuff and Declutter Your Life

                       

You can get a warm, fuzzy feeling and make a few bucks by responsibly ditching all the excess stuff you accumulate. Read

                       

                       

  When you have questions about the local real estate market, call/email Karrina 703-336-3756,  Karrina@Realtor.com .  Find homes at www.KarrinasTeam.com
Karrina Taylor Brown, Associate Broker

RE/MAX Executives
8442 Old Keene Mill Rd.
Springfield, VA 22152                      

Copyright 2016 NATIONAL ASSOCIATION OF REALTORS®

                       
                     

Understanding As-Is Clauses

Home Inspection Issues in the Northern Virginia Market - Things to look out for when purchasing a property

Home Inspection Issues in the Northern Virginia Market

·         Things to look out for when purchasing a property

Once you have found a home to purchase, you will most probably have a contingency upon a home inspection written into your contract.  This contingency allows the purchaser to visit with a professional home inspector to go carefully throughout the whole home to check and make sure that everything works.  Homes of different types, built at different times often have typical defects for that type of property.  Now that the standard real estate contract language no longer has a defined standard as to what a buyer can expect from their home (see blog 3/19/14), then it is up to the seller whether they want to remedy certain deficiencies. And up to the buyer as to whether they want to accept the house in that condition, ask for improvements or a cash concession, or move on to purchase a different property.  The contract is totally negotiable through this contingency.

Let’s consider some local, industry-standard resolutions which have been established over time.

1.       “Not up to code”.  All building codes, including structure, plumbing, electrical and conditioning, are continuously changing.  Only a new house will be built to current building codes.  So no, an owner is not expected to bring a house up to current building codes in order to sell their home.

2.       Part of the house is older, and the buyer is being advised to “budget for replacement”.  This could be a roof, hot-water heater, furnace, carpet, etc.  At the time of the inspection, the unit was working, but older.  Basically, either the buyer noticed this expense when they made their offer, in which case they took that into consideration when making the offer.  Or, this new expense takes them by surprise and is out of their budget/ not something that they want to take on.  The parties should negotiate a satisfactory solution.  There is no requirement that the seller make a concession, and the buyer does not have to buy the home with this older equipment.

Do be aware that when you buy a home, there will be a continual need for maintenance and improvements.  I offer a home-warranty for my purchasers so that the costs of maintenance during the first year will be limited.

3.       Newly renovated kitchens, bathrooms and additions.  Contractors will tell you that they do not need a permit to “replace existing work”.  So if they are putting in new kitchen cabinets, or re-working a bathroom within the existing walls, then they do not need a permit for this work.  Many renovations were done throughout the 1970s, 1980s and 1990s without permits.  This way, the owner would avoid paying higher real estate taxes on a renovated property.  More recently, buyers have been insisting that sellers provide permits for work done in the property.  Inspectors, and the buying public, expect that the improvements be done within the building code of that renovation.  So they expect baths & kitchens to have GFCI outlets, bathrooms should be properly vented (and this includes properly venting the sewer systems.)

    Let’s look at some prevalent local property types and the items often un-covered during inspection.

A.      1980s townhouses.  During the 1980s, my (ex)husband and I used to refer to “ the attack of the killer townhouse”.  It seemed that all the treed lots within 15 miles of DC were being over-run by townhouses.  Now, these popular homes offer a simple and convenient housing style for many home-owners.  There are two major problems with these homes, which we sometimes still uncover; FRT plywood and polybutelyne pipes.   Fire- Resistant Plywood (FRT plywood) was used for the roof sheathing (under the shingles) in nearly all the townhouses built in the 1980s.  This plywood can become spongy and un-safe and is subject to failure.  Nearly all buyers will want this plywood replaced.  (Realtors are surprised to see it still out there after we have been requiring the replacement for years.  Also, I have seen some recently re-shingled roofs installed over this deficient plywood!  Do be aware though, that newer sheathing will also be fire-retardant, but OK.  Also, there is a particular type of FRT which is found for the first 3-4’ of a roof, next to the party wall which is OK.)  Likewise, polybutelyne pipes should be replaced.  These grey pipes were installed during the 1980s, and they are subject to failure.  In short a leak can spring up, and flood out at any time.  In the latter part of the decade, the polybutelyne pipes were installed with copper fittings, which we were told would be sufficient.  However, at this time, plumbers agree that these pipes too should be replaced.  Newer plastic pipes are white and made with PVC which is considered safe at this time. 

B.      1970s homes.   We do not have too many homes built during this time-frame.  There are single family homes and townhouses throughout the area.  This era pre-dates the energy crisis, and so homes with original siding, windows and insulation were not well insulated.  If these items have not been improved, then most of today’s buyers will expect to be replacing windows, siding and upgrading the insulation.  Also, some homes of this time-frame will have aluminum wiring throughout the house.  This wiring is now considered dangerous and subject to catching fire, and so nearly all buyers will want this wiring replaced.

C.      1960s & 1950s homes.  In this time-frame, it is mostly single family homes which were being constructed.  Often the exteriors are brick or mostly brick, interiors have dry-wall, and forced air heating systems.  (Today’s buyers may find the room-sizes small, and may not be satisfied with the size of the closest and kitchens.)  By this time, most homes now have central air conditioning installed, utilizing the existing forced-air duct work.

 The electrical systems of these homes were not designed for all the electrical appliances that we have now.  You may find 2 prong outlets, undersized electrical panels, in-adequate circuits.  Most buyers will expect a concession for electrical problems, as they most probably did not notice the issue when they toured the home. At this time, buyers expect Federal & Pacific Electrical panels to be replaced as they are noted as subject to failure. 

The copper pipes of these homes are starting to spring pin-hole leaks.  Particularly in homes which have had a lot of use (many occupants) over time.  These holes can occur in very random locations.  Underuse can be a problem too.  I have often sold homes where the seller was not using one or two of the bathrooms, and then the seals in the plumbing fixtures dry out and cause leaks.  

Sewer lines may have been constructed with Orangeburg lateral sewer lines.   This clay-type of sewer line will last for 30-60 years, which means that it is now subject to failure as it was used between 1940 & 1970.  The homes which have less grade between the home and the street will find these sewer lines failing first.  This repair costs several thousand dollars.  Neighbors and proficient local Realtors may know about neighborhoods where most home have had to have to the sewer lines replaced.  

D.      1940s homes and earlier.  At this time, we will find these homes being sold 3 ways; un-renovated, totally renovated, or something in between.  If you are buying an estate sale, or un-renovated home, expect to make major changes to the property to bring it today’s life-style expectations.  Many homes have been continually improved over the years, and so you will find the home inspection alerts from the various generations depending on when the home was updated.  Realtors will often call these homes “updated” rather than “renovated”.  If the buyer is paying a premium price for a newly renovated home, then they expect that home to conform to today’s living standards.  Original electrical panels are undersized and have fuses.  There may be “cloth & button” wiring in the home, which is considered sub-standard.  

Minor Problems which occur on many homes with Renovated Kitchens.

a.       Granite counter tops have been installed everywhere for sellers to quickly attract buyers.  Usually there are problems with the installation.  It is difficult to anchor the dishwashers to a solid counter top, so the dishwasher needs to be properly installed.  Most disposers do not have the required gap on the waste water line.  This air gap will prevent the waste water from draining back into the disposer.  An air gap can be created by anchoring the waste water line to the underside of the granite.  The stove may be missing the “anti-tip bracket”.  This small device is shipped along with the stove.  A competent installed with anchor the bracket to the wall, and then clip it on to the back-side of the stove.  Having this device installed will prevent the stove from tipping over (in the rare event that a small child or large stove is placed on an open oven door).  These kitchens should have GFCI outlets for any outlet close to the stove, cooktop, or sink.   Microwaves and stoves should each have their own electrical circuit.  The microwave should be installed a sufficient height above the cook-top. This will be a problem if older cabinets were used, and the microwave was simply inserted into the space previously occupied by an exhaust fan.  The refrigerator may have the handles installed in an inconvenient direction.  Most buyers will want these items remedied.  They paid for a renovated kitchen, and they expect the kitchen to meet the modern standards.

Universal Problems which occur on many homes.

b.      Exterior drainage concerns often come up for many single family & townhouse properties.  Over time, the fill dirt around the foundation system will wash away.  This creates a “negative grade” for the water to run back towards the house.  In this case, the top-soil should be pulled away, and then fill dirt brought to the site in order to create a slope away from the house.  This is a labor intensive repair, and so it is easier for young energetic buyers to deal with.

c.       Older bathroom tile should be re-grouted or re-caulked.  This will preserve the water-tight bath/shower enclosure and prevent having to replace the tile. 

This list is not meant to be exhaustive.   I am sure that home-inspectors and other Realtors will know of other items which are often discovered at a home-inspection.     These are the items and typical remedies which I have encountered while selling real estate for several decades in this area.    I do offer a one year home warranty to my buyers to mitigate the cost of repairs during the first year.  I recommend that you request that the seller sell the home to you in “normal working order” whenever possible.  And I work with some great home inspectors so that the buyers can be educated about the property that they are buying. 

Happy, educated house hunting!

* Check back for more details about how the current real estate contract lacks basic protection for the buyers of real estate in Northern Virginia at this time.

Real Estate Market Update

Local Real Estate Market, Winter 2013/2014

            Northern Virginia ; Washington DC

The market generally recovered in this area during the last year after bumping along the bottom for several years.  Prices rose in all areas of the region.  The past Spring 2013 saw a huge burst of activity and prices rose dramatically from their lows of 2010 and 2011.  The interest rate burst of the early Summer slowed sales somewhat through the Fall 2013.  It was hard to sustain the peaks of the Spring.  Renovated and well-presented homes are sold more quickly throughout the year.  Bank foreclosures sank to a 6 year low; to the same levels as the period before the Great Recession.  This makes it hard to find foreclosed properties. The number of short sale properties sold shrank last year and  will continue shrink in 2014, now that the tax exemption for sellers has been removed.  This all points to a decent market in 2014. 

The real estate market is generally expected to be good during 2014.  Prices are expected to rise  about 5%+/-, which is about half the appreciation of 9%+/- seen during 2013(*1).  In nearly all parts of our region, prices have recovered to at least their "pre-real-estate-bubble" prices of  2005 (*2).   In most neighborhoods in our region, nearly all the property owners are in good financial standing, and their homes are worth more than their mortgages(*3).  This means that sellers will only enter the market if they are happy with the prices.  In a few areas the high prices of around 2007 were met this Spring and in only in a few of these places were these "high" prices of the Spring 2013 sustained into the Winter(*4). 

At this time, there are fewer home on the market than have been seen since 2007, this will pressure prices upward.  However the government is not expected to continue their quantitative easing or bond buying.  Without this support, interest rates are expected to rise which will lead to monthly payments creeping upward.  When you also consider that wages are generally stagnant and that buyers are now financially conservative, this will hold down prices.  Investors will find it harder to find bargain properties.  The number of sales in 2014 is not expected to meet the number of sales seen in 2013.

If you would like to chat about the market, and how this will affect your real estate decision making, please call or email me.

*1 Zillow.com reports that our region’s prices rose 8.9% during 2013 and are expected to rise 2.3%      during 2014.  RBIntel reports that our region’s prices rose 5.5% last year

*2 Zillow.com November 2013 Real Estate Market Report

*3 Zillow.com Negative Equity Report, Q3 2013

*4 TaylorBrownAroundTown, January 2014

Get Your Home Ready for Winter

1. Check your windows

Cleaning your windows will give you an opportunity to check for cracks and damaged caulking. If you notice any damaged caulking be sure to fix it immediately. If you removed your storm windows for the warmer months be sure to put them back up.

2. Clean the Gutters

You want to do this before the winter rain and snow comes. While cleaning your gutters you can see if they are still secure and free of cracks.

3. Clean your drains

Ensure that all your floor drains are free of leaves and debris. This will protect you from basement flooding.

4.  Have your furnace inspected

By doing this now you will avoid being stuck in the cold while you wait for an appointment.

5. Plug hidden leaks

Doing this you will save money on your monthly utilities and stay warmer. Check around spigots and laundry vents and check door frames while you are at it.

6. Protect Pipes from Freezing

This is the time to turn off the water inside the house and drain the spigots.

7.  Trim Bushes and Trees

Trim your bushes and trees so they are not touching your house. Wait until the leaves fall before pruning. This will help ready your shrubbery and trees for spring. Also check for dead and broken branches. These can be a safety hazard and should be removed.


8. Clean your Chimney

If you have a fireplace you want to make sure you get your chimney cleaned before it gets really cold. If you don't clean your chimney it is a potential fire hazard. There is nothing better than a warm fire on a cold winters day.

9. Check your Alarms

Make sure your smoke and carbon monoxide alarms have working batteries. The colder months usually means

10. Gather Emergency Supplies

Stock up on batteries for Flash lights, locate candles, find snow shovels, buy cat litter or sand, buy some bottled water for emergencies.

CIAS: Press Release

For more information, please contact:

Karrina  Taylor Brown

703-336-3745

Karrina@Realtor.com

www.TaylorBrown.com

Local Agent Receives Training to Effectively Counsel Real Estate Investors, Provide Wealth-Building Strategies.

Arlington, Virginia - 06/12/2013- Karrina Taylor Brown of Re/Max Allegiance in Arlington has earned the prestigious Certified Investor Agent Specialist (CIAS) Designation, having completed extensive training to understand the different real estate investor types, and the investment opportunities, financing options and calculations needed to provide solutions for each. The five real estate investor types include: First-Time Investors, Move-Up Investors, Portfolio Investors, Performance Investors, and Rehab and Resell Investors.

"For decades, investing in real estate has proven to be a consistent and stable way for individuals to build wealth," Karrina said. "Real estate investment supports a number of industries, including construction, retail and professional services, and is a strong way to energize and increase investment in our local economy."

Over the past 12 months, investment and second-home properties comprised more than $300 billion in sales, representing approximately 27 percent of all residential real estate transactions. In addition, in market conditions affected by mortgage industry challenges, 48 percent of investors made all-cash purchases. 

"As markets face the challenges of distressed properties and a difficult economy, real estate investors have the opportunity to find productive deals while helping communities stabilize," Karrina said. "Investors provide much needed liquidity to the market, decrease vacancy rates, improve neighborhoods, and present solutions for homeowners who need to sell." 

With the CIAS Designation training, Karrina will help Arlington-area residents build wealth through real estate investment, and homeowners facing foreclosure find potential buyers for their properties.

Today, millions of homeowners are either delinquent on their mortgages or in the foreclosure process. One potential solution for homeowners in this situation is a short sale, in which the lien holder accepts a sale price of the home that is less than the mortgage amount owed. Increasingly, real estate investors are facilitating this solution. 

"When it comes to properties that actually end up in foreclosure," Karrina added, "up to 30 percent of them can't close conventionally. Investors are often the only ones who can buy them."

The Distressed Property Institute provides live and online CIAS Courses to train real estate professionals how to address the needs of all real estate investors. 

For more information about the CIAS Designation, visit www.cias.com.