Selling and buying ‘short sales’ might become easier starting in November

August 22, 2012 — Under new guidelines from federal housing regulator and mortgage finance agencies Fannie Mae and Freddie Mac, the Federal Houston Finance Agency has announced steps to make “short sales” of “underwater” homes easier to sell, and thus easier to buy.

The steps include extending help to people who have financial difficulties but haven’t missed mortgage payments.

I’m writing about this here because rarely does a month go by that a client or friend asks me to share any ‘good deals’ through short sales.

The holdup with most short sales currently is that the holders of both the main mortgage and secondary liens, e.g. home equity lines of credit, must sign off on the deal because they are accepting less than the outstanding balances.

CREDIT: The Wall Street Journal

Virtually everyone, including yours truly, agree this process is overly complex. I’d like to think there is a better way to deal with these while netting benefits to the economy, the housing market and lender balance sheets.

According to reports in The Wall Street Journal and other media outlets, one part of the plan is for Fannie Mae and Freddie Mac to place a $6,000 cap on the amount of money mortgage holders can receive when the sale is completed.

Because second-lien holders still would be able to reject the sales if they see fit, it’s unclear how this and other provisions of the new plan will work, if at all. They are set to go into effect November 1, 2012.

At least one publisher in the mortgage industry, Guy Cecala of Inside Mortgage Finance, opined that $6,000 “isn’t a lot to offer.” No kidding.

So, don’t get your hopes up too far.

According to the Journal, about 80% of homeowners that are underwater with loans backed by Fannie or Freddie are not missing their mortgage payments.

The biggest holders of second liens in the U.S. reportedly are Bank of America, Wells Fargo, J.P. Morgan Chase and Citigroup.

Need a Handyman? Give Rodney Hampton a Call

August 1, 2012 — For my homes and those of my clients, Rodney Hampton is a handyman extraordinaire.

Rodney (pictured) and his team of painters, installers and all-around fixer-uppers have helped me stage homes for sale to maximize their appeal. And he’s helped clients just moving into homes to reduce their stress and get back to a normal lifestyle.

YOU can have the Andy Advantage by hiring my Handyman, Rodney Hampton; pictured here after finishing one of my many recent projects. CREDIT: The Andy Advantage

I cannot count on two hands anymore the projects he’s tackled for me and my husband over the past 15+ years. Like some folks, we procrastinate replacing or fixing things. They never seem to get done. Rodney can get it done–  fast.

  • Thought about sprucing up the laundry area with drywall, shelves and the outlets needed for the washer and dryer?
  • Need to replace the floor planks on your back deck?
  • How about getting that toilet installed that’s been giving you problems?
  • Ready to install new wood flooring?

The Answer: Call Rodney at 571-437-4113. Or email him at YourHandyMan01@yahoo.com.

Rodney is most accessible throughout Northern Virginia but can be in Montgomery County with some advance notice very easily.

Tell him Andy sent ya and you’re sure to get his 5-star treatment.

You can find him on Angie’s List (membership required for consumers). He’s been on Andy’s List (that’s mine :)) even longer!

Surtax starting in 2013 on property sales – get the facts first, starting with these

July 16, 2012 — Any you thought “Obamacare” was only about health care.

As political Washington loves to do, buried in the health care law that has been upheld by the Supreme Court, there is a provision that singles making more than $200,000 annually and couples making more than $250,000 annually face a new surtax of 3.8% on the certain types of investment income, including net rental income.

There’s a 3.8% surtax on income from rental property sales for some high-income taxpayers. CREDIT: blog.GoHoming.com

According to several reports my husband and I have read, if your income is solely “earned” from salary and other compensation from active participation in a business, you have nothing to lose from this new tax. Even if you have income above those thresholds, you might not be hit with the 3.8 percent tax, according to Kenneth R. Harney, who writes a weekly column about real estate matters for The Washington Post.

Individual circumstances can, of course, complicate matters. The surtax does not interfere with the current tax-free exclusion on the first $500,000 (for joint filers) or $250,000 (for single filers) or gain you make on the sale of your principal home. Those exclusions did not change. Any profits above those limits remain subject to federal capital gains taxation and, possibly, to the new surtax.

Read more from what is one of the quickest and (we believe) accurate assessments by Harney in this past Sunday’s editions of The Washington Post here.

As always, check with an accountant if you have any questions.

If you need a referral on a good accountant — as many of my clients have over the years — let me know. I’m glad to connect you with someone I trust.

Existing E-ZPass holders escape fee increase, until the battery dies

July 10, 2012 — One has to wonder if the E-ZPass “transponder” many of us use to navigate toll collections on the Dulles toll road / Rte. 267 in Northern Virginia and I-95 in Maryland on up to New York City isn’t becoming a means to increase tax revenue even though no such increase is justified by relevant costs.

The Virginia Department of Transportation July 9 announced its new policy on charging for E-ZPass accounts effective Sept. 1, 2012: Customers who have accounts as of Monday, July 9, 2012 won’t be charged a monthly fee until they replace transponders or add a new one.

Commuters who share rides on Virginia’s toll roads will need a “Flex” transponder starting Sept., 1, 2012. This is different from the standard transponder, pictured. CREDIT: Gothamist.com

Here are the highlights:

  • The current account holders are okay till they get a new transponder or add one to their accounts. At that point, they will be charged 50 cents a month per new standard transponder.
  • A driver who opens a new account with Virginia after today will be subject to the 50-cent monthly fee for each standard transponder.
  • The existing $25 deposit will no longer be required for new transponders. Account holders who already paid that deposit will have have it converted to prepaid tolls when they replace transponders. Or they can get a refund if they return a transponder and close their accounts.
  • New customers still be be required to make a pre-payment covering $35 in tolls when opening an E-ZPass account.
  • There is a new type of transponder: “Flex transponders”. You don’t need one of these specialized units if you don’t plan to carpool in the express lanes. People who plan to travel three to a car and get the free ride need to get one of the Flex transponders with a carpool setting.

You can read more at this report by The Washington Post. And here is a Q&A that some of my clients have inquired about; it should answer just about any question you have.

See my blog post here May 31, 2012 about making your views count.

Approval of Phase 2 of Metro’s Silver Line to Dulles Airport should boost property values

July 7, 2012 — It was oh sooooo close but the all-Republican Board of Supervisors in Loudoun County, Virginia approved the second phase of the Metro subway system’s extension into Loudoun County, including Washington-Dulles International Airport.

The vote all but ensures that the Washington Metropolitan area has one of, if not THE, most accessible and cleanest commuter train / subway systems in the world.

While the extension will come with costs to the county and construction inconveniences, one now can reach the region’s three airports using public transportation, without an expensive taxi ride.

With his decision to support the Silver Line after strongly opposing it, Supervisor Kenneth D. Reid (R-Leesburg) delivered the fifth and deciding vote for a project that supporters and at least a few of my clients predict will have a lasting impact.

“This is a huge investment in Loudoun’s future,” Tony Howard, president of the Loudoun Chamber of Commerce, told The Washington Post. The Chamber represents 1,200 businesses. “It’s important not just for our economy in the next quarter or the next year, but for a payoff that will be generational. . . . The chamber is absolutely elated.”

Read this assessment of the vote and what it means by The Washington Post here.

Phase 1 of the Silver Line to Wielhe Avenue near Reston is to be complete in late 2013. Phase 2 is supposed to be complete by 2018. CREDIT: Washington Post

Help ensure home appraisers in Northern Virginia and Montgomery County, MD have ALL the data they need

June 26, 2012 — I often get questions about appraisers not fully appreciating the rising value of  homes for sale in parts of Northern Virginia and Montgomery County, Maryland. It’s no wonder because more mortgage loan officers and RE/MAX colleagues are sharing experiences of appraiser reluctance to report local appreciation.

A home sale contract does not have to be jeopardized because the appraiser does not have — or does not collect — all the relevant facts. CREDIT: TotalMortgage.com

The impact on buyers and sellers can be significant and maybe even kill a deal. When an appraisal comes in much lower than the mutually agreed-upon contract price, the buyers typically need to revise their loan request. That could mean having to renegotiate the contract price with an unhappy seller. What’s worse, this may not even be possible.

Sometimes the appraiser will do his or her job but experience push-back from the appraisal management company that hired him to “revisit” an upward adjustment, e.g. get rid of it.

A recent poll of members of the National Association of Realtors fthroughout the U.S. found 33 percent reported appraisal problems. This is the single most important valuation obstacle to seeing a sustained recovery in regions such as the Greater Washington, DC area where we have multiple economic indicators that justify rising home prices.

The bottom line: make sure agents on both sides of the transaction have accurate data on “comparable” sales or pending sales. This can demonstrate how a market is improving, especially over the past three months. Make sure the appraiser sees that data. I do this EVERY time for my clients.

If you’re careful, the coming wave of foreclosed properties can provide an opportunity

June 23, 2012 — A variety of media reports point to a huge and long-lasting wave of REO (real-estate-owned) properties that have been foreclosed on coming on the market soon.

If you’re interested in seeking that diamond-in-the-rough opportunity, as some of my clients are, there are several things to watch out for. What follow are just a few. Best to have me standing at your side guiding you each step of the way.

Foreclosed properties offer investors opportunities looking to build a portfolio of rental properties. CREDIT: Wikimedia Commons

1. Ask yourself: is the property likely to be part of a large collection of foreclosures that will make the neighborhood an attractive place to live?

2. How much in the home has been stripped by the vacating owner? What will it take to replace and or repair it?

4. Can you at least meet the lender’s minimum bid? If that price is a lot more than two-thirds the local government’s appraisal, try to find out why. (I can help you with that.) If it’s a lot less than two-thirds, ask yourself why. That could signal a reason to walk away.

5. Check the paperwork on your bid.

– Are  you providing all the necessary documentation?

– Have you initial everywhere you’re supposed to?

– Have you provided proof of funds?

If the property you’re bidding on is an attractive one and you think there will be competing bids, the slightest snafu could kick you bid out of consideration.

Read more from the Friday, June 22, 2012 editions of The Wall Street Journal. If you’re not a subscriber, call me and I’ll clue you in to the rest of the story.

Willing to pay another $1 per month for each Virginia E-ZPass transponder?

The states in purple accept the E-ZPass transponder, which is headed for a $1 per month, per transponder fee increase. CREDIT: Virginia Department of Transportation

May 31, 2012 — In case you missed it, comments are being accepted through 5 p.m, Tuesday, June 12, 2012 by the Virginia Department of Transportation (VDOT) to add a $1 fee every month for each E-ZPass transponder to help pay for a “new business model”, according to VDOT.

Below is the text of the email (emphasis added) that circulated recently seeking comments, which can be emailed to vdotinfo@vdot.virginia.gov.

“With Virginia’s E-ZPass program doubling over the next several years as new toll roads open, the Virginia Department of Transportation (VDOT) is proposing a monthly fee of about $1 per transponder to pay for administrative and operations costs.

“VDOT has the utmost understanding that E-ZPass operations brings convenience and efficiency to toll operations.  E-ZPass allows for electronic toll collection at Virginia toll facilities and lessens the need for manual collection. However, there is a cost to providing the service to the participating toll facilities, most of which are not operated by VDOT.

“The Virginia E-ZPass program is being expanded to support several new toll facilities scheduled or expected to be opened over the next few years.  The cost associated with the enhanced distribution and specialized services for the new facilities and additional transponders requires a new business model.

The proposed monthly fee would cover costs for:

•    Buying nearly one-half million transponders

•    Implementing a retail program where transponders can be obtained at various stores in Northern Virginia and eventually Hampton Roads

•    Providing service at select DMV locations

•    Upgrading information technology to accommodate the expanded program

•    Account management and processing of toll transactions (managing billing of all transactions)

•    Customer service and the operations of three customer service centers

The fee would also help control costs and manage the selection and demand for E-ZPass transponders.  My clients who drive the Dulles corridor frequently hope the fee will be regularly evaluated to ensure that the charge is generating just enough revenue to maintain and operate the program without generating excess revenues above expenses.

“VDOT is accepting comments on the proposed monthly fee through Tuesday, 5 p.m., June 12, 2012.  All comments will be reviewed and taken into consideration prior to the final decision on the proposed fee structure.

“You can go to www.virginiadot.org/e-zpass for information on the proposed monthly fee increase and provide their comments online.  You can submit your comments directly to vdotinfo@vdot.virginia.gov or mail them to:

“Office Communications – Third Floor/Annex Bldg. Virginia Department of Transportation 1401 E. Broad St. Richmond, VA 23219.”

VDOT expects to have a final decision in June.

Angie’s List is helping you find more service providers, including me FYI

I’ll admit it. For a long time I’ve had doubts about paying to be on someone’s list of recommended service providers. But now that friends, clients and colleagues are asking, I bit the bullet last month and accepted an invitation from Angie’s List to join its professional network.

Shame on me for not ‘walking the talk’ of one of my mantras: you get what you pay for.

As a part of Angie’s List, I’ve quickly connected with a handful of people beginning the search for a Realtor. Needless to say, I’m now a believer in using AngiesList.com.

If you’re a part of Angie’s List, please do check out my evaluations. I may not be perfect, but I value feedback from people who care enough to give it. It would be a privilege to serve those you know who belong to Angie’s List and want the best that honesty, integrity and market savvy have to offer.

Previewing homes for buyers – here’s how I do it

May 14, 2012 — I am often asked what I do when I preview homes for buyers. How do I know whether a home comes close to what they would consider buying?

I start by conducting a thorough inventory of what they want and what their needs will likely be for the next 5-10 years.

I enjoy previewing homes, especially when I find a matches that make complete sense for my clients. CREDIT: The Andy Advantage

– Where would they like to live and why?

– What can they prudently afford?

– Are there any family additions in the offing?

– Do existing children need a big back yard?

– How important is close access to the Washington, DC-area’s Metrorail system?

You get the picture.

With that information in hand, on my own I preview qualifying homes and schedule visits with my clients I think are worth showing. As we walk through each one, I watch and listen closely to what they like and what they don’t, especially if there are any show-stoppers such as only a one-car garage. After that, the responsibility falls to me to ‘home in’ on properties that meet at least 80 percent of their needs.

With that I place them on a “drip” of homes that might meet most of their criteria that they receive via email as frequently as the homes materialize in the regional Metropolitan Regional Information Systems, or MRIS

In the early going, most of the homes that pop up may miss the mark. But as I sharpen the search criteria, this is a very efficient way to get a quick bead on properties as they are put up for sale.

On a parallel path, I research and visit neighborhoods to get a first-hand sense of the location. I might get in touch with agents who are active with listings in those neighborhoods to let them know of my clients’ interests.

Whenever a good prospect materializes, I preview it and quickly relay any relevant information that my client should know. I don’t recommend taking a client to see a home unless it meets that 80% threshold.

In the type of market we’re experiencing now in Northern Virginia and Montgomery County, Maryland, timing could be integral, perhaps critical, to submitting a contract that can win the next house of your dreams.

For a taste of how I preview a home, watch these previews of homes in May 2012.

Short home preview excerpt (1:53);

Long home preview excerpt (3:46).

In the shorter version, watch for what appears to be at first an excellent match  . . . until I peak through the sliding glass doors in the kitchen.

I welcome your comments!