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by ARLnow.com Sponsor — January 20, 2015 at 1:30 pm 1,298 0

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This regularly-scheduled sponsored Q&A column is written by Adam Gallegos, Arlington-based real estate broker, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit your questions via email.

Q. Do you see an increase in the number and proportion of original homes (mostly ramblers) in North Arlington that go on the market and are bought by families to occupy with modest improvements rather than by developers to tear down and replace with new, much larger homes?

The reason I ask: New and recently new resales of McMansions appear to be selling ever more slowly, and the prices of new McMansions appear to be decreasing. In this context, the financial viability of developers buying and tearing down the original (mostly ramblers) homes for replacement with McMansions would seem to be getting weak.

This suggests to me the possibility of a meaningful decrease in developer demand for and in the developer driven prices for original homes for replacement, thereby creating an opening for families to buy the original homes, perhaps at somewhat lower prices, for them to occupy. And maybe some developers will give more emphasis to renovations and expansions of the original ramblers at modest cost for new family owners.

A. It’s hard to quantify the proportion of builders that are still buying lots because a number of the homes purchased for tear down are bought before they go in the MLS. I also don’t have a way of organizing the data to tell me whether the purchaser was a builder, renovator or primary resident. Using the information we do have available, I searched single family homes priced under $700,000 that have sold in Arlington within the last two years.  Knowing that many builders pay with cash, I divided the sales into two categories: 1) cash buyers 2) conventional, VA and FHA home loan buyers.  The numbers were almost identical in 2013 and 2014.  See below:

  • 2013 – 76 cash buyers and 352 home loan buyers
  • 2014 – 74 cash buyers and 311 home loan buyers

Arlington single family home sales over the last five years

Though there is not a significant change between 2013 and 2014, some of these cash buyers maybe be planning to renovate rather than tear down and rebuild. I wish I had a way to quantify their intentions for you.

According to the following chart that I pulled from Arlington County’s website, it looks like demolitions and construction starts slowed down in 2014, which seems support the idea that new builds are trending down a little bit.

We can keep an eye on whether that trend continues so feel free to check back with me later this year.

I would like to see more renovations and fixer uppers available on the market. We certainly work with a good number of homebuyers who would love to stay in Arlington if they could find the right home within their budget. Even for the family who may want to build a new home for their primary residence, it has become very challenging to compete for prime lots.

Please send your questions to adam@rlathome.com.

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

by ARLnow.com Sponsor — January 13, 2015 at 1:00 pm 955 0

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This regularly-scheduled sponsored Q&A column is written by Adam Gallegos, Arlington-based real estate broker, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit your questions via email.

Q. I would love to shorten the length of my 30-year mortgage. I’ve heard that bi-weekly payments can shorten the loan to almost 20 years. Is that true? If so, how does it work?

A. Whenever we get mortgage questions, I like to bring in a mortgage expert. I shared your question with Paul Nagel at First Home Mortgage to gain his insight and advice.

A decade or two ago, a way of making mortgage payments, called the “Bi-Weekly Payment Program” was introduced, and gained popularity. For an annual administrative charge, the program would automatically take half of your monthly mortgage payment from your bank account every two weeks. By doing so, you would pay off a 30 year mortgage in 23-24 years, notably reducing interest paid to the bank.

Before going any further, it’s important to know that this is not a bad program — it does as it advertises and saves money. That said, there’s a much easier way to reduce the term of your mortgage 6-7 years, save approximately the same interest, and skip the $100 – $300 yearly administration fee for the bi-weekly program.

By way of background, a Bi Weekly plan actually makes one extra payment every year due to some simple math:

  • A typical mortgage makes one payment per month, or 12 payments a year
  • The Bi Weekly Payment Plans make one half-payment every two weeks;
  • With 52 weeks in a year, that makes 26 half-payments during the year
  • 26 half-payments equals 13 full payments, or one extra payment every year than making one’s mortgage payment every month

The fact that one extra payment is made each year accounts for well over 90 percent of the benefit (i.e. shortening the life of the mortgage). Said differently, if one, on their own, makes one extra payment per year, they would obtain almost the identical benefits of the Bi Weekly Program, but save the $100-$300 administration fee.

All this feeds into a bigger question: specifically whether it’s good or not to make extra payments to your mortgage. The technical answer to this question is relative to what returns you money could earn invested elsewhere. For example, if your interest rate was currently 4 percent, and you could invest in your uncle’s oil well and earn 20 percent annually, it would not make much sense to save 4 percent in interest but skip the opportunity to earn 20 percent with your Uncle. Conversely, if you were earning 1 percent in a Certificate of Deposit, making extra payments to your mortgage could make sense.

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

by ARLnow.com Sponsor — January 6, 2015 at 3:00 pm 2,304 0

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This regularly-scheduled sponsored Q&A column is written by Adam Gallegos, Arlington-based real estate broker, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit your questions via email.

Q. I saw the article about the rising home prices in Arlington. However, prices in South Arlington (22206) seem to be either stagnant or decreasing. Do you know why?

A. The demand for homes was lower throughout the entire region for a good portion of 2014, which created a fairly well balanced market.

My theory is that there wasn’t a great sense of urgency among homebuyers. Interest rates have been low for so long that consumers are numb to the idea that they may go up significantly at some point. In fact, I think a spike in rates would actually spur activity.

Rents went down, which helps to lower the urgency to buy among renters. Home prices weren’t rising quickly enough to scare anyone or lowering enough to excite anyone. All of these factors combined for an unexciting year for local real estate.

I really don’t think there is anything to worry about. From what I’m seeing in your ZIP code, prices are holding steady for the most part. I expect them to show gradual improvement this year.

The only thing that concerns me a little is the loss of the streetcar. Development along the Columbia Pike corridor was basically stagnant from the late 1970s when the Orange Line Metro began service until recently when the potential for a streetcar began to grow.

The streetcar gave the county a tool to attract new retail, restaurants and development. It is something that often came up when talking with homebuyers looking in South Arlington. I really don’t know how much effect (if any) the loss of the streetcar is going to have on home prices. It is more likely to affect the 22204 ZIP code, but it may have some carryover to the 22206 as well.

It’s just something to keep an eye on. Personally, I think home prices in the area will perform well if Arlington can continue to find ways to attract businesses to the Columbia Pike corridor and Shirlington.

Please keep the questions coming to adam@rlathome.com!

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

by ARLnow.com Sponsor — December 30, 2014 at 12:00 pm 640 0

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This regularly-scheduled sponsored Q&A column is written by Adam Gallegos, Arlington-based real estate broker, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit your questions via email.

Q. We are planning to buy some time this coming year. It’s kind of our 2015 goal. We are in a month-to-month lease so we have some flexibility on timing. When is the best time to buy in your opinion? 

A. I get this question a lot. As I have explained before, when supply is higher so (usually) is demand. Therefore, you are not going to gain a lot of advantage trying to time the market based on seasonality.

Right now seems like a pretty great time to buy in my opinion. Here are five reasons why:

  1. Buying at the beginning of the year allows you to take advantage of more interest tax deductions than if you buy towards the end of the year. Double check with your accountant on this.
  2. Interest rates are as good now as you could possibly hope for. I guess you could get lucky and they will drop another fraction of a point, but not enough where it is worth not buying now.
  3. This is the slowest time of year for real estate agents, mortgage officers, settlement attorneys, home inspectors, movers, etc.. Therefore, it is a great time for you to get their undivided attention.
  4. While other home buyers are distracted by the holidays, you could be in a great position to negotiate a better deal or find a hot property before someone else does.
  5. The second half of 2014 was lackluster for the real estate market. Homes continued to sell, but not in a fashion that created significant price appreciation. This is good for you as a home buyer. However, from what we are experiencing in our office and from talking to other brokers, a wave of new buyers are putting plans in place to buy in 2015. In other words, based our small sample, I anticipate strong buyer activity going in to the new year.

Have a fun, safe NYE!  Please keep the questions coming in 2015.  You can send them to adam@rlathome.com.

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

Ask Adam: New Cherrydale Condo

by ARLnow.com Sponsor — December 23, 2014 at 12:30 pm 1,601 0

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This regularly-scheduled sponsored Q&A column is written by Adam Gallegos, Arlington-based real estate broker, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit your questions via email.

Q. I heard a rumor that 3800 Lofts in Cherrydale is going to become a condominium? Any truth to that?

A. It’s true. 3800 Lofts is going to convert from rental apartments to condos. You may remember that the building was originally intended to be condos back in 2005/2006. They were going to be called The Bromptons. The newest rendition is called 38 Place.

3800 Lofts (photo by Adam Gallegos)38 Place is located at 3800 Lee Highway. In addition to being within walking distance of Ballston, Cherrydale has plenty of its own charm and conveniences to offer. There are some nice little cafes and restaurants, wine shops, a bakery, tea shop, yoga studio, hardware store and niche retail. I’ve found that there is a lot of neighborhood pride in Cherrydale.

38 Place is four stories with retail on the ground level. There are two one-bedroom homes and 20 two-bedroom homes. Sizes range from 800-1,500 square feet. Current retail includes Subway, House of Steep and Kite Runner Cafe.

3800 Lofts (photo by Adam Gallegos)As a side note, I highly recommend Kite Runner Cafe for great kabobs.

The interior finishes include wood floors throughout (including bedrooms), GE stainless steel appliances (with gas cooking), granite counters, maple cabinetry and full size washers and dryers in the units. There are some loft features such as nine foot ceilings with exposed ductwork, large windows with Mecco shades and modern lighting fixtures. The homes come with underground parking.

Sales are slated to begin in January. The 1-bedroom units will start in the mid $300′s and the 2-bedroom units will start in the low $500,000′s.

I would love to hear feedback about the building in comments from anyone who has lived here while it has been a rental.

Happy holidays!

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

by ARLnow.com — December 16, 2014 at 12:00 pm 625 0

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This regularly-scheduled sponsored Q&A column is written by Adam Gallegos, Arlington-based real estate broker, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit your questions via email.

Q. I saw a mention on ARLnow this past Tuesday that Arbour Realty has been acquired.  Isn’t this your company? Are you going to continue the Ask Adam column? 

A. Yes, Arbour Realty is a company that my wife and I started in 2008. We were recently acquired by a company called Real Living | At Home. Real Living is a national brand owned by Berkshire Hathaway. Real Living | At Home is the regional franchise.

They have been one of the fastest growing real estate brokerages in D.C. and Maryland. Purchasing Arbour Realty is part of their strategy to begin their rapid growth in Northern Virginia. Real Living is on the cutting edge of technology and real estate services, providing a clear advantage over traditional brokerages.

Real Living | At Home logoWe will now have an in-house staff of PR, marketing, photography, videography and technology professionals working on our behalf when we are selling homes. We are looking forward to leveraging the myriad of resources provided by Real Living to take our real estate services to the next level.

We are keeping the Arbour Realty team together under the new brand. I will remain a leader in the Virginia office, but will focus more on our clients and less on the administrative duties of running a company.

I will continue to write the Ask Adam articles for ARLnow so please keep the questions coming. I truly enjoy responding to your questions and following the comments that follow my articles.

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

Ask Adam: Being a Good Client

by ARLnow.com Sponsor — December 9, 2014 at 2:30 pm 524 0

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This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit your questions via email.

Q. I work in the consulting field and know firsthand that you can have good and bad clients. We are in the process of hiring a real estate agent and I would like to know how I can be a good client in hopes of getting everything I can out of the relationship.  

A. I have not thought about things from this perspective before, but it certainly has validity. Below are four suggestions that I think will help you build a productive relationship with your real estate agent.

Commitment — If someone is committed to working with me then I am going to give them 100 percent of my effort regardless of how much money they are spending or how long they may take to accomplish their real estate goals. Although I expect their up front commitment, I feel they should hold me accountable for delivering everything I promise. I include language in all of my buyer and listing agreements that allows clients to cancel the agreement at any time.

Communication — It helps me help my clients when there is a productive flow of two-way communication. For example, let’s say you are buying a house with me and I am sending you homes I have picked out that I think will be a good fit. It helps tremendously to hear what you like or don’t like about them. If you despise split-level homes and would really prefer a cul-de-sac … these are things I will be looking out for in the future.

Set Expectations Early — I find it is easier to cater to someone’s expectations when I know exactly what they are. Let your agent know what you expect from him or her. Describe your goals and find out how he or she can help. Put anything and everything on the table. This way everyone is on the same page from day one.

Commission — If you negotiate a compromise on the commission rate, just be sure that you have not negotiated out the incentive for your agent to go above and beyond on your behalf. It’s not always about the dollars and cents, and I assume that most agents are savvy enough to not get themselves into this situation. I am just putting it out there as an item to consider, as I have seen that beaten look in another agent’s face before where the demand on their time compared to their potential compensation, stopped making sense a long time ago.

The fact that you are considerate enough to ask the above question tells me that you are likely to have a great relationship with your agent. Best of luck with your home sale or purchase.

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

by ARLnow.com Sponsor — December 2, 2014 at 2:30 pm 536 0

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This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit your questions via email.

Q. One of the criteria we have been using in evaluating homes on the market is the number of days they have been listed. What’s puzzling is that we are finding that the numbers vary from one resource to the next. Zillow, Redfin and the listing updates our realtor provides are all different.

A. The primary source of this data is the Multiple Listing Service (MLS). When your Realtor sends you updates, you may notice that days-on-market is provided in two different formats within the MLS listings. There is “DOM-MLS” and “DOM-Prop.”

DOM-MLS is the amount of time the current listing has been active. DOM-Prop is the amount of time the current property has been actively listed. It takes 90 days for a property’s DOM-Prop to reset back to zero. With that in mind here is an example:

Agent 1 has a home listed for 50 days. The sellers decide to take it off the market for a couple of weeks and re-list it with Agent 2. Agent 2 is able to find a buyer and it goes under contract in 25 days. In this example, the DOM-Prop is 75 and the DOM-MLS is 25 days.

It usually matters more to me how long the property has been listed (DOM-Prop) than how long it has been listed most recently (DOM-MLS).

The discrepancy I have found with some of the real estate websites is that they count days-on-market even if the property is not actively listed. Sometimes I will have a property in an alternative status like “temp off.” The MLS does not count days-on-market while in temp off, but some of the real estate sites do.

Our local MLS just created a new status called “coming soon.” It will be interesting to see which real estate websites count the days in “coming soon” as days-on-market.

In summary, the count of DOM-Prop in the MLS is the most accurate and valuable indication of how long a home has actually been on the market.

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

Ask Adam: Preparing to Sell

by ARLnow.com Sponsor — November 25, 2014 at 2:30 pm 451 0

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This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit your questions via email.

Q. We are planning to list our Arlington house for sale right after the holidays (early January). What are some things we can do now to get our home ready for the market? 

A. Below are five things you can do now so you hit the ground running in January:

  1. Coming Soon – our local Multiple Listing Service (MLS) just added the ability to advertise your home as a “coming soon” listing. You can also advertise your home on Zillow as “coming soon.” I highly recommend asking your Realtor to list in both of these locations before going live in January. You can also post a coming soon/for sale sign out front. It’s a great way to test the market and generate interest. Be prepared, you may attract someone who wants to see or even buy your home right away. It’s a good idea to have a plan in place for how you want to treat these situation.
  2. Your Network – get the word out to your social network that you plan to sell your home. You never know who may know someone looking for a house like yours. It’s helps to include photos, number bedrooms/baths, square footage, lot size, location and a short list of feature highlights.
  3. Prep The Home Inspection – make sure anything that may come up in a home inspection is addressed now. You may even want to have a home inspector come through for a preliminary inspection to help you identify items that will come up. You can also check out an article I wrote back in May of 2013 about preparing for a home inspection.
  4. De-Clutter – you are going to be packing up everything to move eventually, so get started early on the things that do not need to be out. Do not just shift everything to the garage or basement. You want the house to appear as if there is ample storage space. If needed, you can rent some of those temporary storage pods.
  5. Professional Photos — if you are going to be advertising your home as a “coming soon” listing, you should go ahead and get photos taken as soon as you are done with your home prep. Please don’t skimp on the photos. If you take them with your iPhone, the rooms are going to look small, dark and unattractive. Insist that your Realtor invest in professional photos. Photos are going to help potential buyers determine whether your home is worth seeing so putting your best foot forward is of major importance.

Happy thanksgiving!

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

 

by ARLnow.com Sponsor — November 18, 2014 at 2:30 pm 494 0

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This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit your questions via email.

Q. We recently purchased a home and are loving it so far. We haven’t had any problems with flooding and hopefully never will, but being worrywarts we are wondering if we should purchase flood insurance for our home.

A. Interestingly, you are the third person who has asked me about flood insurance in Arlington during the last month. Typically this is the type of question that comes up more in Alexandria where flooding is more prevalent. Maybe the hard rains we had this summer have caused some concerns.

Almost all lenders require flood zone certification prior to them lending you money to purchase a home. They want to be sure that you have flood insurance in place if your home is in a flood zone as determined by FEMA. It sounds like your concern goes beyond just the minimum standard of protection.

I shared your question with insurance expert Max Olson at Nationwide Insurance. Below is what he had to say:

A great place to look to see the likelihood of a flood for your property is www.floodsmart.gov. This website will tell you what the likelihood of a flood is for your property and will even give you ranges on the cost of flood insurance as long as you type in your address. People think that floods only happen in high risk flood zones, but 20 percent of all flood claims occur in low to moderate risk flood zones.

On the other hand, keep in mind that certain scenarios people call “flooding” would already be covered under most home insurance policies (like a pipe bursting and ‘”flooding” a basement or a sump pump failing and “flooding” a basement). Your insurance agent can go through all the different scenarios and what would be covered under a flood policy vs your home insurance policy.

Below is contact information for Max incase you have additional questions or need a great insurance agent.

Max Olson
Olson Insurance Agency
Nationwide Insurance
(571) 438-6902 office
olsonm13@nationwide.com
nationwidemax.com

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

by ARLnow.com Sponsor — November 11, 2014 at 2:30 pm 1,369 0

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This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit your questions via email.

Q. It seems like the real estate inventory is slowing down in Arlington, at least in the 3-plus bedroom single family homes under $700,000 my husband and I have been looking at. I presume that is because we are heading into winter. Am I right, and when will the inventory pick up again? I’m pregnant and due May 1 so hoping the answer is before April! 

A. When you say that the market is slowing down in the segment you are looking for, it sounds like you mean that available inventory is low. Actually, housing inventory for the Northern Virginia area has been on the incline this year. Even in Arlington the supply of housing inventory has risen month-over-month, besides a little dip in August.

We usually see a slowdown in new listings this time of year, but I don’t expect your options to increase substantially in early spring. When someone is frustrated by their lack of options, I often find that it has a lot do with them wanting something that doesn’t truly fit their price range.

Months of supply in Arlington's housing market (image via Adam Gallegos)Currently there are 38 single family homes for sale in Arlington that have at least three bedrooms and a price tag under $700,000. My recommendation is to try a search for homes between $700,000 – $800,000. I’m guessing that by increasing your price range that you will see some housing options that are closer to what you are looking for. I’m not suggesting this exercise to frustrate you. I just don’t want you waiting for something that may not become available, especially with a baby on the way.

To make sure that it is not just a slower season, ask your Realtor to pull home listings that came on the market this past spring. If you see a number of options you would have been interested in then that is a good sign. Prices may have adjusted somewhat since then, but it will give you a some idea of what next spring may bring.

I’m guessing you will need to adjust your criteria somewhat. Either way, I would not put your search on hold all winter. All kinds of things happen in peoples lives where they may need to sell a great house in the middle of December.

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

Ask Adam: How is the Market?

by ARLnow.com Sponsor — November 4, 2014 at 2:30 pm 1,573 0

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This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit your questions via email.

Q. I’ve heard grumblings of the real estate market slowing down. Are you seeing that in Arlington too? If so, why? 

A. The real estate market was rocking and rolling last year. Homes were selling quickly again and prices were climbing at a noticeable pace. It feels like some of the frenzy has died down recently, but pockets of the market are still selling quickly. In fact, (according to RBI) Arlington has sold 10 percent more homes in 2014 than at this time in 2013.

I put together the following chart so we can see exactly how different segments of the market are selling, this year compared to last.

Year over year closed sales percent change in ArlingtonMy personal theory is that they have oversaturated the rental market with all these new apartment buildings in Arlington. In years past, quite a few renters decided to buy because their rents were rising annually. In some cases it was less expensive to own than rent. Now, we are starting to see rents come down. Renters are more comfortable renting and fewer are buying homes.

If there are more renters and fewer first-time homebuyers in Arlington, some of the people owning those homes that would like to move up are having a harder time selling. There is a trickle up effect that is created from a drop off in first-time homebuyers.

That said, the negative effect of too many rentals is being countered by extremely low mortgage interest rates. Rates just hit another low for the year this past month. We are also seeing current homeowners trying to cash in on the increased value of their homes.

Too many people try to generalize the market with a label… good, bad, strong, soft, active, slow, etc. In my opinion, it would be irresponsible to generalize the market as whole. It is important to study the micro segment of the market you are interested in.

I would love to hear what our readers are seeing out there with the local market. Please share your experiences in the comments.

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

Ask Adam: Timing Our Purchase

by ARLnow.com Sponsor — October 28, 2014 at 12:30 pm 670 0

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This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit your questions via email.

Q. My fiancé and I are in the market to buy our first home. We currently rent in Arlington and are wondering how we should go about looking for a home from a timing perspective. Is it better to shop a few months before your lease is up so there is a clean break? If we buy a house and have six months left on our lease, what is the best way  to get out of it? What are the best times of year to buy? Any help would be greatly appreciated.

A. I highly recommend getting the process started well in advance of when you actually want to move in to your new home. If for no other reason, it will create a more relaxed environment for you and your fiancé. It also gives you time to work out any surprises you may learn about during the mortgage pre-approval process.

Step 1 is to find the right Realtor for you. The Realtor you select should be able to provide you with some lender recommendations if you don’t already have someone in mind. The Realtor can also begin educating you about the homebuying process, current market conditions and what is available in your price range.

The lender will be able to help you understand how much you are approved to borrow. They will also break down how much it will cost you up front and on a monthly basis to purchase a home.  If there is anything you need to address regarding your application, that can be taken care of now while you have time.

It usually takes about 30-45 days from the time you ratify a contract until you close and get the keys to your new home. It can take anywhere from a couple weeks to several months to find the right home. Therefore, I suggest getting started with the process at least three months before you would like to move.

Dealing with lease agreements can be tricky. They obviously vary from one situation to the next. In my opinion, the ideal situation is a landlord who will let you go month-to-month at the end of your lease. This will provide you with plenty of flexibility. In this situation, you don’t necessarily need to be out looking at homes quite as early, but it doesn’t hurt to begin preparing.

If you have a hard end date to your lease, then I suggest having a conversation with your landlord ahead of time. Despite the penalties outlined in the lease, they may be willing to let you out early, especially if you are willing to help find a new tenant to replace you.

The condo and townhouse markets tend to be pretty steady throughout the year so there is not as much seasonal fluctuation to account for. The exception is November through January when there tends to be fewer homes on the market and fewer buyers to compete with. The single family home market usually has the most homes to choose from and the most buyer activity from early spring through mid-summer. Sometimes we see an uptick in the fall as well.

You can either pick a time of year when there will be a greater supply of housing options and more competition, or you can pick a slower time of year when you have fewer homes to chose from, but fewer buyers to compete with. I’ve worked with happy home buyers every month of the year. I could say that it is a matter of preference, but usually it is more a matter of timing other events in your life, like the lease you mentioned.

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

by ARLnow.com Sponsor — October 21, 2014 at 2:00 pm 593 0

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This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit your questions via email.

Q. I saw one of those real estate TV shows the other day where the buyers were allowed to live in the house for several days before they completed the purchase. It was a great way to test drive the house if you will. Is it possible to arrange this on a purchase in the Arlington area?

A. Technically, it is possible to occupy a property before closing in Northern Virginia. In fact, there is even a standard form for such an event, called the Purchaser’s Pre-Settlement Occupancy Agreement. I can understand why a “test drive” sounds like a good idea to a purchaser, but pre-settlement occupancy is not for that purpose and it is rarely agreed to by sellers.

Sellers and listing agents recognize that it is standard practice for purchasers to request various inspections as part of the buying process. They have gotten used to the risk of pulling their listing from the active real estate market so purchasers can proceed with processing of their loan and inspections. But, it’s unlikely that they are going to agree to someone moving in before the sale is complete to make sure they still want the home.

Less than 1 percent of home purchase contracts in Northern Virginia include a pre-settlement occupancy agreement. The ones that do, usually entail a purchaser who was going to be homeless due to a delayed closing. It was not in place to further test the home. When I’ve represented a seller in these situations, we made sure that all contingencies had been removed and that we were holding a substantial deposit. We also had a level of comfort from the professional manner that the purchaser and her agent had conducted themselves throughout the transaction up to this point.

I truly don’t believe that most sellers are trying to hide anything. Many have been living happily in their respective homes for years without noticing any imperfections. I think the fear more stems from not knowing the buyer and what may trigger their nerves. Maybe there is a creak when the wind blows that makes the buyer afraid that the house is haunted. Next thing you know, they are lawyering up to get out of the contract instead of investigating what the actual issue is.

There are also a number of scams out there where a “purchaser” will occupy a property and then use legal roadblocks to stay in the property without paying for it. Obviously, this is a mess that every seller wants to avoid.

A few minor notes about the standard pre occupancy agreement:

  1. An “occupancy deposit” is often required in addition to the earnest money deposit.
  2. It does not provide the occupant with the ability to alter the property before closing. In other words, this is not your opportunity to get a jump start on painting or renovations.
  3. The purchaser usually pays a per-day rate to the seller for the time the property is occupied prior to closing.
  4. The purchaser is required to maintain adequate insurance covering personal property and liability during the occupancy period.
  5. The purchaser is required to transfer and pay for utilities during the occupancy period.

In summary… although pre settlement occupancy is possible, it will have to be a pretty special situation for most sellers to agree to it. I recommend that you take all the time you need deciding whether the home is right for you before entering a contract. Don’t be afraid to schedule multiple visits. You’ll also want to talk to your Realtor about the various inspections you should consider in lieu of a test drive.

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

by ARLnow.com Sponsor — October 14, 2014 at 12:30 pm 1,624 0

Ask Adam header

This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit your questions via email.

Q. My condo is considering a limit on the number of rentals in the building. We will basically have to get on a waiting list to rent out our condo if the max number of allowable rentals has been reached. Will this hurt our values?

A. I’ve personally been a victim of what can happen if the ratio of owner-occupied units to renter occupied units is not kept in check.  I bought a condo in 2002 that I lived in for a while and eventually decided to rent out. A few years after moving out, mortgage interest rates dropped considerably and I tried to refinance the home. Even with over 30 percent equity and lender connections all over town, I could not find anyone who would refinance this home for me because the percentage of rented units exceeded 50 percent.

I had no choice but to stick with my original (more expensive) mortgage. Fast forward another few years and I decided to put the condo on the market. The first offer I received was from an investor who was planning to finance his purchase with 25 percent down. We quickly found out that he was not going to be able to buy in my building because the percentage of renters was still above 50 percent. This narrowed my pool of buyers to those who could pay cash or those who planned to occupy the unit as their primary residence and had financing that would look past the percentage of rented units.

To help answer your question, I reached out to mortgage expert Paul Nagel at First Home Mortgage.  He had the following to say:

One little known role of the condominium developer and/or manager is to protect and ensure that as many financing options are available to potential buyers of any homes for sale in that condominium complex. More financing options available translates to more available buyers, which most likely translates to selling one’s condominium with less time on the market, and selling the home at a higher price as there will be more competition/buyers for each unit for sale.

Maintaining a proper budget, master insurance policy coverage, and sufficient emergency funds are examples of some of the criteria that Fannie Mae, Freddie Mac, FHA, the Veterans Administration, and many other loan programs require to be met as a condition for financing a home purchase in that condominium complex. If one of the criteria is not met, for example, a buyer may not be allowed to use an FHA loan to purchase a home in a given condominium complex.

One such criteria of almost all loan programs is that at least a majority of units must be “owner occupied” or, in other words, not rented to a tenant. Accordingly, a developer or condominium manager often works to limit the number of homes rented to tenants, so that the sales of units in that condominium complex are available to be financed by as many loan options as possible. Conversely, if the number of units rented is not regulated by the condominium manager, sometimes a “downward spiral” occurs, where unit owners cannot sell their units, so they rent the units, making it even harder to get financing for home sales in that unit, resulting in even more units being rented.

Getting back to your question, I think Paul and I agree that proactively limiting the number of rentals in a condominium complex is good for the long-term value of your home. I say this even though it may discourage potential investors from purchasing in your building. You will be protecting mortgage options for those who want to refinance or purchase. You will also be attracting occupants who have a vested interest in maintaining the condominium.

I know there are some people who feel as though their condominium is better off without such limits.  I hope you will share your opinions and reasoning in comments.

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

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