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Ask Adam: Preparing to Sell

by ARLnow.com Sponsor — November 25, 2014 at 2:30 pm 418 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

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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 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.

by ARLnow.com Sponsor — October 7, 2014 at 3:05 pm 1,013 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 heard about a new first time homebuyer savings plan being introduced in Virginia. Do you have any information you can share with me about this program?

A. I’m glad you brought this up as it is a brand new program I am excited about. I have to be careful when it comes to anything that may be considered tax advice, so I am simply going to share the general information provided by the Virginia Association of Realtors (VAR). You can download a PDF document from for additional details.

The First-Time Homebuyer Savings Plan (FHSP) allows first time home buyers in Virginia to invest up to $50,000 for the future purchase of a home. Earnings on that money will be exempt from Virginia state taxes. The money can be invested in almost any account you have with a financial institution including savings account, life insurance plan, stocks, bonds, CD, money market or mutual funds. $50,000 is the maximum that can be invested in principle, but the money can grow in value up to $150,000.

From what I understand, these funds can only be used towards the closing costs associated with a home purchase. In most cases, the closing costs range from two-percent to three-percent of the purchase price so the above maximums should be more than enough for most homebuyers.

The money does not have to be for your own purchase. It can gifted to a relative or close friend. This may be especially valuable for a young child that you are putting money away for as your investment will have lots of time to increase in value.

When filing taxes, you’ll just include a 1099 from the financial institution you are investing your money with and a simple one page FHSP document.

I found the following two examples from the VAR website helpful:

Funding for a child

Phillip and Leigh put $10,000 into a mutual fund that they will use to help their son buy his first home. The money grows over the years. When their son is 26, he decides to buy a home. They sell the shares in the fund — now worth $18,500 — and give it to their son to help with his down payment.

Normally they would pay state tax on the $8,500 in earnings, but they file a FHSP form with their Virginia taxes and don’t have to pay a cent in state taxes.

Changing your mind

Emma decides to start putting money away for a first home when she graduates college. She opens a high-yield savings account with a few hundred dollars and adds to it when she can over the next 12 years. The account grows.

Each year, Emma files an FHSP form with the Department of Taxation so she doesn’t have to pay Virginia tax on the interest she’s earned.

Then Emma marries Sam, and Sam already owns a house. She won’t need the money after all. They decide to use it for a vacation instead.

Because Emma used the money for a “non-eligible” purpose — the vacation — Emma must now pay the back taxes on the 12 years of earnings on the account, as well as a five percent penalty on the amount of the earnings over that 12-year period.

Disclaimer: I am not a tax professional and I highly recommend speaking to one before making any decisions that pertain to the FHSP.

(more…)

by ARLnow.com Sponsor — September 30, 2014 at 2:30 pm 696 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 going to be selling soon and have been following the sales in our neighborhood. The homes currently on the market don’t seem to be priced as high as the homes that sold earlier in the summer. Which listings should we be looking at to determine the current value of our home?

A. This is an interesting real estate market we find ourselves in right now. Typically you can generalize the conditions of a market based on a steady plateau, incline or decline. This year has seen a lot more ups and downs when it comes to home sales. Some months have been much better than others as well as certain neighborhoods and price categories. My point is that you need to be looking at both the most recent sales and current listings to determine your home’s value in this market.

Most homeowners and agents look at the last six or 12 months of home sales to determine a home’s value. In this market, I have tightened my threshold to home sales within the past three months because of all the market fluctuations. I am also paying very close attention to any homes currently on the market and under contract.

The benefit of data from sold homes is that you are seeing what the market was willing to bear for comparable properties. You know exactly how many days it took to go under contract and if they had to adjust their price at any time. The photos and description will also provide clues as to how the home compares to yours and what adjustments you need to make in your comparison.

By factoring in active home listings, you can gain insight into the most current market activity. You can also visit the homes to see exactly how they compare to yours. You just have to be careful about how you evaluate the price. Just because someone is listing for more than the last house that sold, does not mean they will get it. As you can imagine, some sellers can be overly optimistic about their list prices.

The process I follow to determine a home’s value, starts by evaluating recently sold homes. I use this data to establish an initial baseline price that I think the home is worth. I then take that number and fine tune it with the current and under contract listings.

I evaluate my baseline number against the other homes currently for sale in the area. I usually look at active listings $50,000 above my number and $50,000 below my number. If it looks like there are some homes currently priced for less than my number that compare favorably, then I may need to adjust down. If it seems like we compare favorably to homes priced higher, then I may want to adjust up.

Then, I’ll look at the most similar homes to my subject property. If they are having a hard time selling for the number I was hoping to shoot for, then this information is insightful about the experience we may have on the market at that price. Conversely, if there are similar homes that went under contract quickly at my number, then maybe we should push for a higher price than they were asking for.

Lastly, it is important to take into consideration what I am experiencing with nearby listings I have active in the market. This is where it becomes important to work with a local area expert. I’ll also consider any upcoming criteria that may affect our listing (i.e. seasonality, interest rate hikes, buyer trends).

Pricing homes is much more of an art than a science. Take a look at all the information you can get your hands on. I know it is tempting to take the easy route and base your price off of Zillow or, even worse, your tax assessed value. Please don’t do that. You run a huge risk of pricing too low and leaving money on the table or pricing too high and having to chase after the market. Either situation will cost you thousands of dollars.

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 — September 23, 2014 at 2:30 pm 644 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 have a 1980s condo in good condition that I’m planning to sell when my tenant moves out. The condo will be vacant, so per the advice of a Realtor friend I got an estimate to stage the condo. It came out to around $2,500.  Wouldn’t it be better to invest that money improving the condo (i.e. new appliances) rather than spend that money on staging?

A. It’s hard to say for sure without seeing the condo firsthand, but in most cases staging provides a return on your investment that is hard to beat. I know it is a lot of money to invest in something that seems so temporary, but I have witnessed over and over that it makes a major difference in how the home shows and how much interest it creates. Remember that you are trying to create an emotional connection between the home and the potential purchasers.

Take a look online at homes for sale and compare the photos of ones that look staged to the ones that are vacant. Ask yourself which homes you would be more inclined to visit if you were a buyer.

If your condo is relatively small or has any awkward shaped rooms then it is especially important to show it with furniture as these spaces can be challenging to visualize. It sounds counter intuitive, but vacant rooms actually look smaller. They also make it more difficult to judge what kind of furniture will fit.

New appliances are nice, but unless you are upgrading the whole kitchen, they may look out of place. It’s also possible that they won’t be the style or color that the new homeowner would prefer. There’s nothing worst than inheriting brand new upgrades you don’t like.

I answered a similar question about staging in a May article that I recommend checking out. Below are some statistics I shared in that article.

According to StagedHomes.com:

  • The average sales price of a staged property is 6.9 percent higher than a non-staged property
  • Staged homes typically sell 50 percent faster than non-staged homes.

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 — September 16, 2014 at 1:40 pm 527 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. This may be a silly question, but I am wondering if I can use an escalation clause if I am offering less than the listed price for a home? 

A. It’s not a silly question at all, but let me briefly explain what an escalation clause is and how it works for anyone who may not be familiar with it.

An escalation clause allows you start with an initial offering price and specify how much you are willing to escalate your offer price above the next best offer. You may start at $500,000, but specify that you are willing to go up in increments of $1,000 above the next best offer. If the next best offer is $525,000 then yours would escalate to $526,000.

You also specify a maximum amount that you are willing to let your offer price reach. For example, you may set a maximum of $535,000. Your offer will not escalate above $535,000 even if the other offers meet or exceed this number. The process of using an escalation clause is very similar to the process of bidding on eBay.

Back to your question… You will not want to use an escalation clause if you are the only one writing an offer for the property. All that will accomplish is showing the sellers how much you are willing to go up to. Savvy sellers are going to use this information to formulate a counter offer.

The only time it may make sense to include an escalation clause in an offer for below asking price is if you are competing to purchase a property for which you expect all other offers to be below asking price. An escalation clause in this scenario, has the potential to put you in the strongest position in terms of price, without going higher than you need to in order to outperform the other offers.

In a situation where an escalation clause reaches or exceeds the asking price, it is rare that a seller would counter on price. If an offer escalates to a price below the asking price, don’t be surprised if you receive a counter from the sellers if they still don’t think your offer is strong enough, even if you had the highest price.

To learn more, please check out a previous Ask Adam article I wrote about escalation clauses.

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 — September 9, 2014 at 2:30 pm 759 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 been in my house a few years and am about to start a home renovation. Prior to purchasing my home, a second full bathroom was added to my house sometime in the the 70s or 80s. My property assessment only lists one bathroom.

When the Arlington inspector comes to my house during the reno, is he required to make note of any discrepancy? If/when I do sell, and I want to maximize the value of the house, can the MLS listing include the second bath or is that information exclusively dependent on county assessment records?

A. If you have two full bathrooms, but the Arlington tax records only lists one… it makes me wonder if permits were ever approved for the installation of the second bathroom. That’s the first question I would try to answer if I were you. You can check for permits online: https://permits.arlingtonva.us/.

If your purpose is to have Arlington County account for the second bathroom then this can be arranged by contacting the department of real estate assessments: 703-228-3920.

If you are concerned about Arlington County discovering the existence of an unapproved second bathroom then this is a situation I recommend exploring with your contractor. A licensed contractor with experience in Arlington is going to have more insight into the possible pitfalls of this situation than I do.

The MLS is dependent on information manually entered by your Realtor. You are able to advertise all the bathrooms that exist in your home regardless of whether they are included in the tax record. You’ll probably still need to update some of the real estate websites that automatically generate information about your home (i.e. Zillow), just in case they are pulling from the tax record.

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 — September 2, 2014 at 2:30 pm 791 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. We’re going to be selling our house in Arlington. Between my wife and I, we have six real estate agents in our network of friends, including the wonderful person who helped us buy our home. How should we pick who to use?

A. For most people, their home is their most valuable asset they have. That being the case, you should treat this purely as a business decision. It should go without saying that this is not a contest to be won by who you like the most, but who will produce the best results.

There are thousands of real estate agents in the D.C. area. Their level of experience, areas of expertise, organizational skills and ethics vary wildly. Not to mention their marketing, sales and negotiation skills. Commenters on my previous articles have shared many a horror story about the person they unfortunately chose to work with in the past.

I’ll provide some criteria to use in your evaluation, but I’m guessing you intuitively have a hunch who would be the best choice.

Experience — I am much less interested in how many years someone has been in the business as I am by how many transactions they been involved in like yours. You want someone who who can skillfully handle all the situations that may present themselves during the home sale process.

Time – Make sure that they have enough time to make your listing a priority. Ask how many other active and under contract listings they have right now. If they are also working with buyers, find out how many buyers they are helping. You’ll have to compare these numbers amongst the agents you are evaluating to decide what you feel comfortable with.

Niche – Do they have a niche or are they a generalist? If they do have a niche, does it fit with the home you are trying to sell? Think of it this way… if you had a serious health concern, wouldn’t you seek out the specialist who is most qualified to help you?

Marketing — ask to see examples of the marketing they do. Ask what things they are doing to market properties that are beyond the norm. This one is huge in my opinion.

Negotiation – ask about their strategies for negotiating in the current market. Bonus if they can show you examples of their results.

Violations – check the DPOR website to see if they have open or closed complaints against them. You may also want to check Yelp and Angie’s List for reviews.

Team or Individual – teams have become very popular in the real estate community and they come in all shapes and sizes. Understand up front who you are going to be working with and in what capacity.

It’s also important to pick someone you feel comfortable working with. If these are friends of yours, you probably have a good feel for this one and how similar your styles of communication are. For example, if you prefer email and texting, don’t pick the agent who is still dialing in to an AOL account.

I hope this helps. Having been in situations like this before, it is best to be up front and honest with the parties involved. They may not love your decision, but they will respect it if they are true friends.

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 — August 26, 2014 at 1:30 pm 1,299 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. Do you know about any new condo developments coming to market in the next year or so? Specifically along the Orange Line corridor. I have seen close to a dozen new apartment buildings crop up in the last 1-2 years, but I cannot recall seeing any new condos. Anything in the pipeline?

A. I’m assuming you are are aware of Gaslight Square, which are luxury condos currently being sold between Rosslyn and Courthouse.

AKA Virginia Square being converted into condominiumsThe only other development on the radar is the condo conversion in Virginia Square located 3409 Wilson Blvd. It was originally built to be a condominium building called the Joule in 2006. A company called AKA bought the before it was occupied and repurposed the building for luxury corporate rentals. ARLnow.com reported last month that they are switching back to condos this fall.

I haven’t been in the building in eight years, though I remember that the homes have a lofty feel with high ceilings and exposed ductwork. It is slim on amenities, but has a nice rooftop terrace. The new condo website boasts that the condos will include quartz counters, stainless steel appliances and solid hardwood floors. Pricing has not been released yet, but you can register for updates at ARC3409.com

An alternative, if you don’t mind leaving the Orange Line, is Columbia Place Condos. They are located just off of Columbia Pike on S. Walter Reed Drive and 11th Street. Sales are underway and delivery is expected to begin this winter. Prices for the almost 1300 square foot, two-bedroom, two-bath homes begin in the $500,000′s. It’s a boutique building with only 14 units total.

Feel free to check back with me at any time or provide more detail about what you are looking for and I can let you know when I hear about something matching your criteria.

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 — August 19, 2014 at 3:30 pm 535 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. I started looking for a good iPhone app to use during my home search and was a little overwhelmed. Do you have one that you recommend?

A. I have tried a bunch of different real estate apps and have narrowed them down to my top three favorites.

Mobile real estate app1) Homesnap is the one I use most often. If I want to learn about a home and whether it is for sale, I open Homesnap and press a button on the screen like I’m taking a photo of it. It pulls up a map and asks me to confirm the home I am interested in. I am then provided with details such as the following:

  • Estimated value
  • Sales price and listing data, if it is for sale
  • Number of bedrooms and bathrooms
  • Lot size
  • Square footage
  • Year built
  • Parking
  • Historical sales data
  • Comparable listings
  • SmartZip HomeScore and InvestorScore

I can sign up for notifications when the price changes. I can even request that a competitive market analysis (CMA) be delivered to me.

In short, it’s the perfect nosey neighbor tool!

2) Maybe I’m a little biased, but I like using ArbourMobile.com when I’m searching for a specific address, city or zip code. It’s quick, accurate and has up-to-date information provided by the local multiple listing service (MLS). It allows me to display results in a list or on a map.  It provides all the listing detail including Walk Score. If I were in the market for a home, I would be inclined to use the favorites, notes and share functionality as well.

3) I like to use Zillow when I want information about real estate outside the DC area. Like if I’m on vacation dreaming about owning a beach house and wondering what the Zestimate is for the house next door. I would prefer to use Homesnap in these situations, but they currently have a limited service area.

In a previous article, I have listed some additional apps that may come in handy during the home buying process.

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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