Saturday's Washington Post published an interesting article about Fannie and Freddie's Home Valuation Code of Conduct.

Apparently the House Financial Services committee approved an amendment on October 22 that would eliminate the code with the creation of a new Consumer Financial Protection Agency.

The code, as it exists today, was a compromise between NY Attorney General Andrew Cuomo and Fannie and Freddie and their regulatory agency the Federal Housing Finance Agency. Cuomo was investigaing the two pseudo-governmental agencies appraisal practices. Lenders putting pressure on appraisers to quote the right numbers and inflating home values to make deals happen was being reported as the norm. Fannie and Freddie agreed to adopt the code if Cuomo backed off.

The code however, while creating appraiser independence, created a whole set of other problems. First, it created "clearing houses" or "appraisal management companies" who paid the appraisers much less for the same work while pocketing the difference. The appraisers who work for these companies often accept work far from their area of expertise. Personal experience: I once had an appraiser who drove from her home in Pennsylvania to do an appraisal on a home on one of my listings in Springfield, VA. She used inappropriate comps and as a result, the value came in lower than the agreed upon price, and we had to go back to the bank to renegotiate the price. As a result, the bank removed all of the closing costs it was going to give to the buyer originally. It could have killed the deal. Luckily it did not.

The code also has caused buyers to pay for the appraisal up front, and sometimes pay for multiple appraisals, if the first one is simply too low

The new bill that creates the Consumer Financial Protection Agency has an uncertain future, especially in the Senate, where big banks and mortgage companies are lobbying against it. There is an independent bill, however, cosponsered by 118 congressmen that will slap an 18-month moratorium on the current code.

Lets hope for the sake of consumers and agents that reason prevails.

One of the great things about being a REALTOR is the continuing education. Today we had our annual convention. There were great courses on SEO, social networking, business planning, and marketing.

The firm also raised over $16,000 for the Children's Miracle Network.

I'm looking forward to working on my business plan for 2010 and a great year in real estate next year.

So, you've looked around at a few new developments and you really want to buy, but you've fallen in love with the model. What, with all the decorator touches, the furniture, and all the upgrades, how can you lose?

Well, here are some possible pitfalls to consider when buying the builder's model:

1. From a Lending standpoint oftentimes it is hard to get the value if the price includes the furniture and/or built-ins etc.
2. The builders warranties may not convey to a future buyer.
3. They are sometimes built a little faster than the rest, and perhaps a bit more carelessly than others. For example, the non-models have a chance for pre-drywall inspections etc. But because the builder is hurrying to open a model to help sell the rest, they might skip this step.  The lots are often not the best so be sure they are comfortable with that. Negotiate hard on the price, Model homes may be considerably harder to resell because of all the "decorator" touches and upgrades.  If there are too many, you may end up paying too much for them, affecting your future bottom line.
4. Prior to settlement, the house should look like essentially a new home, just like all the other houses delivered by the builder.  If the carpet is worn, it should be replaced, paint fixed, etc.  Of course, if the buyer makes a killing on this purchase, the terms could be different than if they bought a newly built home, such as lender incentives, etc.  At a minimum, you need to know about the warranties on appliances, etc. and at least get seller to pay for home warranty. 
5. If you buy the home before the development is finished and the builder "rents it back" to you, the builder will pay you rent equal to the PITI. But the IRS may consider the rent as income and you may have to pay taxes on it. If you are buying the model after the builder is through with it, then this would not be an issue.
6. If you buy the model and the builder rents back to you, some of the "normal" time-sensitive new home construction warranties may not apply because of the age of the house. Lets say you bought a model home that's 2 years old at settlement and the builder rents it back for a year, therefore, its 2 years old at the time of settlement and 3 years old when you move in.  Lets say 6 months after you move in, some large windows lose thieir seal. They may have been improperly installed, but the builder will not honor the normal procedure of replacing it because of the age of the house.  So, between the as-is clause typically employed in a model home purchase and the time limits on new home construction warranties, you may end up paying for some repairs on your own.
7. But all in all, you may get a great purchase and really enjoy all the bonuses and upgrades that came with the house because it was the model.

Many thanks to Stephanie Reimann, Dan Stone, Claybrooke Dean, Zinta Rodgers-Rickert, Gayle Yates, Wendy Cervantes, Patsy Humphrey for contributing to this article.

Wow! Its been really crazy out here lately!

I've been running around all over the place- seems like I'm filling the gas tank every other day these days.

I've been getting tons of BPO orders- both residential and commercial. And lots of them in DC.

My newest short sale listing went under contract in 3 days and now all I have to do is finalize my seller's hardship letter and make sure the bank has received the packet. Then its just a waiting game.

In the meantime, I've got to finish these BPOs.

I'm looking forward to Happy Hour tomorrow!

Getting Ready. Brian Block, Nancy Alert, Linda Tyres, Cathy Baumbusch. 3AM 8/28/09

Nancy and Linda chuck some debris

Cathy and Brian haul some trash

Icky dirty trash! (I'm wearing a SKORT!)

Nancy and Brian serving breakfast to the laborers

Ryan Sanford, Nancy Alert, Cathy Baumbusch, Brian Block 9AM 8/28/09

Shift Change. Front, Cathy, Nancy, Linda and Brian. Day shift is behind. Includes Charlie Bengal, Robin Burdette and others.

Before

During

After

Thanks to Linda Tyres and Brian Block for most of these photos!

Yesterday I read a post from my friend and colleague Brian Block that talked about the highest priced sales in Fairfax County.

This lead me to thinking about properties that have been on the market for an extended period of time.  In today's market, some agents un-list and re-list properties over and over so that it doesn't like like its been a long time on the market. BUT, some agents don't use this practice, which I think is a good thing.

So, for your viewing pleasure, I'd like to highlight properties that have long DOM (days on market) figures.

For some, its a function of price range. Those properties are only for, shall we say, the most discriminating buyer. For others, its a mystery.

Here is a list of properties in our area that have been on the market for over 1095 days- that's 3 years for us "division challenged".

And if you're in the market, some of these properties might be worth a second look, and I'm sure the listing agents would love to receive an offer.

This property in Falls Church needs lots of TLC- REALTOR-speak for alot of work. However, it does have an in-ground pool and a nice screened in porch. The entire estate is situated on well over half and acre. The location is hard to beat- Lake Barcroft is one of the most prestigious neighborhoods around. It has 3 bedrooms, 3 full bathrooms and half bath. Its in need of renovation but could easily become a million $ property with the right fixes.

This modest home is occupied by a month-to-month tenant. It is close to East Falls Church metro, shops and other conveniences. There are 4 Bedrooms, and 3 full baths.

This lovely garage townhome has a McLean address. It sports 5 levels and all are serviced by an interior elevator. Other features include: huge storage basement, family room with patio, main level living room,dining room and expansive kitchen, two levels of bedroom/study space; Hardwood floors throughout. 

 This is a beautiful 2300sf living space on the 4th floor of Crystal Gateway condo. Its in the heart of Crystal City, adjacent to the metro. There's alot of action here and the apartment is HUGE. Its orginal price for this 3BR/2.5ba unit was $1.2M. There's marble, granite, and even a study. The master bath rivals a luxury hotel's. 

This waterfront home offers a country-club atmosphere. It is adjacent to two parks and water-based activities are the catch of the day. There's a private dock, spectacular views of widewater Potomac, and deep-water boating ability. 4 Bedrooms, 4.5 baths, and over 5000 square feet to spread out.

This beauty sits on 2.2 acres of peaceful woodland. Sun-filled rooms warmed by random-width pine floors, exquisitely detailed millwork, built-in custom cabinetry, 5 masonry fpls, 4 spacious bdrms, den/guest room, walk-out rec room w/cozy wood-burning stove, gardener's greenhouse, multi-level deck views wooded paradise. Perks 5BR, which means it can be expanded. 

This one-of-a-kind private estate mansion is on the banks of the Potomac in Fairfax County. This is the lap of luxury- 5 bedrooms, 4.5 bathrooms. SEVEN garages, attached, detached, and yes, even one underground. Enjoy walking the grounds- just a mile from the orginal Mount Vernon estate- George Washington's home. Fine living on 5 acres here. 

I'm happy to report that I won the lottery! No, I didn't come into any money- but it many ways, this is just as good.

Earlier this month, our company announced that we were asked to participate in an Extreme Makeover Home Edition project in our area. There would be a residence in MD and a community center in DC. I attended a pre-project rally on Aug 13 and was fired up and ready to get started on it. I even got a top, top secret line on the address of one of the projects and drove by to check it out. The organization that the building belongs to is a WONDERFUL group of people that do so much for children in the District. They truly are doing great things. We couldn't wait to get started.

Then, there was the announcement that the the community and sponsor response was SO GREAT that unfortunately, the company would have to choose their volunteers by lottery. Naturally, we were biting our manicured fingernails in anticipation. Then we learned we did get selected to participate. We got our time slot- which is 3AM-9:30AM Thursday morning, 8/28. This is the day before the "big reveal".

We don't know which site we will be at and we don't know what we will be doing. We are just grateful and excited to be helping a deserving family and a deserving community. There is nothing better than to give with your own hands and your own sweat.

I am very much looking forward to Thursday morning!

Hello blogosphere!

I previously reported (in haste I admit) that the $8000 credit could be used as downpayment- however, that went out the window almost as soon as it was announced.

It has been officially announced, however, and this time it stuck, that the credit can be used towards closing costs.

How does it work? Well, its basically a short-term loan with the tax credit used as collateral.

Its brilliant!

A buyer has to buy a property between Jan 1, 20098 and Dec 1, 2009.

That's right, DECEMBER 1ST, not 31st!!

The credit is 10% of the purchase price of the home, up to $80,000. So, for most buyers in our area, they would qualify for the max credit, since most properties are well above $80,000.

The credit applies to first-time homebuyers only - those who have not owned a home in three years or more. Also, both parties in a marriage must meet this test.

Individuals with an adjusted gross income of $75,000 or less OR couples with a joint AGI of $150,000 or less qualify for the full credit. The credit is phased out as income increases. An Individual AGI of $95,000 or more or $170,000 for couples puts you out of the running for the credit.

The tax credit does not have to be repaid, so long as the buyer stays in the property a minimum of three years.

Different government agencies, non-profits and FHA-approved mortgagees can provide these bridge loans secured by the anticipated tax credit.

So, if you've been putting it off- now is the time!

Hi everyone! I bring GOOD NEWS! Ok, its not "the" good news, but it's pretty great!

The HUD Secretary today annouced that the $8000.00 first time homebuyers tax credit will now be "monetized" which means that the credit is now available for FTHBs to use as a DOWNPAYMENT! Isn't that wonderful?

Here is the link to the full story: http://www.realtor.org/press_room/news_releases/2009/05/re_summit

There really is NO BETTER TIME to be a First-time Homebuyer!