First, a few clarifications. Both buyers and sellers have closing costs in a transaction; the sellers’ are typically much higher (because they pay both real estate brokers) than the buyers’. These fees are typically paid at closing—they come out of the sellers’ proceeds, and the buyer can either pay cash, or can negotiate to have their portion of the closing costs paid by the seller (read more here.)

For this post, I’ll focus on the buyer’s fees. A lender should provide you with a Good Faith Estimate (GFE) when you apply for a loan. This GFE is essentially an estimate of your “HUD-1” form, which you will receive at closing. Each lender has their own preferred format, but you should be able to compare apples-to-apples by looking at the section headers, or, even better, the line item numbers. It’s important to note, though, that lenders only control certain sections, while others may be simply based on their own experience. When comparing lenders, it’s important to focus only on the line items that the lender actually controls.

The fees vary by jurisdiction, broker, and settlement attorney, but a good way to categorize them would be:

• Prepaids – These are generally required by the lender, and may include prepaid insurance, prepaid property taxes, and prepaid interest. Another common prepaid item is condo/HOA fees. These vary based on the day of the month that you close, since they are pro-rated between buyer and seller.
• Points – A point represents 1% of the loan balance and are charged by lenders. This, along with the fees, can easily amount to thousands and thousands of dollars, so it’s important to discuss this with your agent and your lender.
• Fees – These are fees charged by real estate brokers, settlement attorneys, and lenders, and are the toughest to judge for “reasonableness” without experience. These vary widely, particularly among lenders. Some real estate agents will pay their broker’s fee on your behalf—be sure to ask them. For lenders, whose fees can be substantial, it’s important to know early in the process what they’ll charge. These fees can generally be found on your Good Faith Estimate in the 800 section, but look in the 1300 “Additional” section too. Broker’s and attorney’s fees are scattered throughout the closing statement sections.
• Title Insurance – This is paid by the buyer and, depending on the policy, can amount to thousands of dollars. It’s a one time charge that covers you in the event of a problem with the chain of ownership. See my post on how to save some money with title insurance here. This is in the 1100 section.
• Government and Transfer Charges – Paid to the local jurisdiction. These can be quite substantial—for example, in the District of Columbia, the transfer (paid by the seller) and recording taxes (paid by the buyer) are 1.1% each. Northern Virginia sellers just had big increase (from $1 per $1000 in value to $5 per $1000) in their transfer taxes.

The Veterans Administration was on track to insure 300,000 mortgages this fiscal year, which ends Sept. 30, versus 325,000 in 2009.  The V.A. insures 25% of the loan amount on a V.A. loan, available to those who can show 24 months of continuous active duty service and no dishonorable discharge.

Remember, active duty folks, the IRS has stated that eligible taxpayers must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2011. If a binding contract is entered into by that date, the taxpayer has until June 30, 2011, to close on the purchase.  Members of the uniformed services, members of the Foreign Service and employees of the intelligence community are eligible for this special rule. It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States* for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.  Read more about the home buyer tax credit extension for eligible military personnel stationed overseas here.

If you need assistance starting your home search in the Greater Capital Region, please contact us.

Their website makes it easy to search by city, apartment style, and even pet policy.  You can search Avalon Communities’ Washington DC apartments here.

* This post was sponsored.

http://zipskinny.com

The IRS has stated that eligible taxpayers must buy, or enter into a binding contract to buy, a principal residence on or before April 30, 2011. If a binding contract is entered into by that date, the taxpayer has until June 30, 2011, to close on the purchase.  Members of the uniformed services, members of the Foreign Service and employees of the intelligence community are eligible for this special rule. It applies to any individual (and, if married, the individual’s spouse) who serves on qualified official extended duty service outside of the United States* for at least 90 days during the period beginning after Dec. 31, 2008, and ending before May 1, 2010.

*Only one spouse must be overseas to qualify.

So if you’re a member of the military currently serving overseas, you have an extra year to take advantage of the $8000 home buyer credit.  If you’re going to be PCSing to the Washington, DC, or Northern Virginia area and would like to start looking for a home, please contact us.

The site had its inspiration in a local Arlington County resident, and is not without its own controversy around privacy and other matters. Nonetheless, it’s a valuable tool for buyers investigating potential neighborhoods.

It doesn’t appear to have Virginia data yet (the site has a form where you can request the data from your local police department); DC and Montgomery County, MD are already online.  Another valuable tool as you narrow the search?  The local police department — just give them a call and get the rundown on crime.

One more useful  site as you are getting to know the area is the sex offender registry.  There is no requirement in our area that sellers disclose that a sex offender is nearby, so do your homework! Here is the link for the DC registry, and Virginia registry.

It depends whom you ask.  For real estate statistical purposes, the local association defines “Northern Virginia” as Alexandria City, Arlington County, Falls Church City, Fairfax City, and Fairfax County. These are also the counties covered by our local association Northern Virginia Association of Realtors (NVAR), and NVAR members have access to all the homes for sale in those jurisdictions.

But if you ask locals, many would also include Loudoun County to the West,  Prince William County to the West and South, and sometimes Stafford County to the South as well as part of our metropolitan area.  You can see a map of counties at Wikipedia here. To look at homes in these ‘outer’ counties, you need to work with a realtor who is a member of those local associations.

The Washington, DC, Metropolitan Statistical Area (MSA) includes counties in VA, MD, and also includes the District of Columbia–a large swath!   It is further divided into two divisions:

• the Washington–Arlington–Alexandria, DC–VA–MD–WV Metropolitan Division, comprising the majority of the metropolitan area, and
• the Bethesda–Gaithersburg–Frederick, MD Metropolitan Division, consisting of Montgomery and Frederick counties.

Counties include:

• MD: Calvert, Charles, Frederick, Montgomery, Prince George’s
• DC: District of Columbia
• VA:  Arlington, Clarke, Fairfax, Fauquier, Loudoun, Prince William, Spotsylvania, Stafford, and Warren Counties, PLUS the independent cities of Alexandria, Fairfax, Falls Church, Fredericksburg, Manassas, and Manassas Park.
• WV: (Yes, you read that right…our MSA stretches all the way to West Virginia) Jefferson County

Obviously the MSA is too large a tract to  be looking at for your next home (and be careful drawing any conclusions from real estate statistics based on such a large area).  Commuting times here are a big issue, so it’s critical to narrow your search based on where you’ll be working.  Contact our team for help thinking through what some viable options are for you!

Read More: Wikipedia entry on “Northern Virginia”

Probably not. Let’s cover some basics to see why.

What is a short sale?

It’s a sale where the debt owed combined with the costs associated with the sale exceed the property’s market value.  In other words, the borrower (owner) is “underwater” on the house.  The creditor(s) MAY be willing to agree to allow the property to be sold for less than the loan amount.

You can recognize these listings by key phrases in the comments section such as “short sale” or “third party approval required” or “lender approval required.” They are typically priced very aggressively so they get a lot of buyers’ attention.

How long do they take and why don’t they close?

Though the stats are far better than they used to be, relatively few short sales close – about 1 in 8. The reasons are varied: they are tremendously complicated transactions, they require demonstration of true financial hardship (not simply being underwater), they required reams of paperwork, they take a long time causing frustrated buyers to walk away, and all the while the seller is playing ‘beat the clock’ against the foreclosure department. There are even some who say that banks make more money in a foreclosure than a short sale so the incentives for the bank to cooperate are not there. Of course, you have to look at each case individually, and there ARE some ways that you can optimize the odds of (though not guarantee) a short sale closing.

So in summary, it is notoriously difficult to close a short sale, and the timing is impossible to predict. You can read more here. If you’re on a timeline for a move, then short sales, in most instances, are not going to be a viable option for you. If you do decide to pursue a short sale, make sure you have contingency housing plans in place.

If you’re PCSing to the DC area and starting your home search, call us to talk about timing and the current state of the market. We’d love to help you find your next home!

It’s officially passed the House and Senate, and is now awaiting the President’s signature. Along with the extension of the $8000 First Time Buyer credit (now applies to any buyer under contract by April 30, 2010 and settling by June 30, 2010), there is now a new credit category: long-time residents of the same principal residence which has been given the shorthand name of “move up buyers”–though in reality it could just as easily apply to “move down buyers.”

If a homeowner has owned and used the same residence as their principal residence for any five consecutive years in the last eight (as of the date of purchase of a subsequent residence), then they are treated as a “first time home buyer” eligible for a (up to) $6500 tax credit when they file their next return. Other key points:

• This credit applies to purchases under contract between December 1, 2009 and April 30, 2010.
• Income limits are higher than with the previous credit: $125,000 AGI for a single individual and $225,000 AGI for a married couple (and then phases out until $145k/$245k).
• Homes purchased for more than $800,000 are ineligible.
• Thanks to all the fraudsters out there, purchasers must now submit documentation of purchase along with their tax return.

Some other restrictions apply (e.g., must keep the home for at least a year), but the key points are above. Update 11/14: here’s a nice summary article that appeared in the Washington Post. Some other FAQs that have since been answered:

• There is no requirement that you sell your current home. You can rent it out, or sell it later. BUT you must occupy the new home as a primary residence
• Many types of dwellings are eligible: new construction, existing homes, condos, mobile homes, or boats that function as a primary residence BUT in no case can it cost more than $800,000 or the property is ineligible.
• If you close between Nov 6 and Dec 31 of 2009, you can claim the credit on your 2009 return or even amend your 2008 return (important to know if your income has changed, making you ineligible in 2010!)

And there are some special provisions for military buyers: If you or your spouse served on qualified official extended-duty service outside the country for at least 90 days between Jan. 1, 2009, and April 30, 2010 then you qualify for an additional year (through April 30, 2011)!

This is key news for our area, which has seen a dramatic drop in housing inventory, especially at the first time buyer price point–this could well create demand in the next category up (up to $800,000 that is) of homes, and will create some breathing room, inventory wise, for the continuing first time buyer demand.

This could be the ideal time for these move-up or move-down buyers:

1. Prices for inventory at the first time buyer price point are stable or even rising
2. Interest rates are still at historic lows
3. Upper end homes have dropped (and are continuing to drop) in price

Combine these three points and you get “sell high” and “buy low”. If you’re thinking of selling your home to “move up” or “move down” and want more information on the tax credit, please contact me.

Read More: Why is the $6500 tax credit important?

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Read more: How Do I Protect Myself if I Buy and Sell a Home at the Same Time?

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Read more: Six Myths About Choosing a Listing Agent

Read more: Marketing Your Home

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Dan & Beth were truly a pleasure to work with, and it was my honor to help them find their home just in time for Dan’s recent deployment.  Here’s what they had to say (I find their individual differences in style hilarious, so had to share them both here):

Katie doesn’t just help you buy a house in the dc area.  She takes
the time to teach you about how to find what you are looking for and  is there with you throughout the entire process.  She is trustworthy  and intelligent and offers resources and information we didn’t find  elsewhere.  We feel very fortunate to have had the chance to work  with her and recommend her whole heartedly!  – Beth

Katie is a  straight shooter who knows her stuff.  – Dan

Thanks, Dan & Beth, for the kind words!

If you are PCSing to the Washington, DC, or Northern Virginia area, I’d love to help you find a home, too.

Atlanta, GA – 45.3% higher in DC

Dallas, TX – 44.7% higher in DC

Denver, CO – 44.1% higher in DC

Fayetteville, NC – 61.2% higher in DC

Philadelphia, PA – 25.2% higher in DC

San Diego, CA – 11.2% higher in DC

Wichita, KS – 76.2% higher in DC

There ARE a few places more expensive though…

Honolulu, HI – 5.9% lower in DC

New York, NY – 12.2% lower in DC

San Francisco, CA – 9.3% lower in DC

With such a high cost of living, the cost of housing often creates ‘sticker shock’ in those relocating.   The lengthy commute times, along with school district quality, are big drivers of housing prices.  If you can be flexible on either of those it will go a long way towards finding affordable housing.

Don’t despair about the high cost of living though — DC is a great area to live!   We have mild weather with four seasons, plenty of cultural activities, a central east coast location with plenty of transportation options, and an ethnically and culturally diverse area.  Plus all the politics you could want! (wait… is that a ‘pro’ or a ‘con’??)

Need help or looking for more information on your relocation to the DC or Northern Virginia area?  Contact us – we’re happy to help!

• Falls Church City AND Falls Church in Fairfax County
• Alexandria City AND Alexandria in Fairfax County
• Fairfax City AND Fairfax County

It’s critical to know which area you’re talking about — services and schools are provided by the jurisdiction and can vary widely! Falls Church City, for example, has its own school district.  But you could have a mailing address of Falls Church and instead be part of Fairfax County, and part of their school district.  Even within the “Falls Church” portion of Fairfax County, the high school district might be Marshall, McLean, Stuart, or something else!  (And to make it even more confusing for out-of-towners, the East Falls Church metro stop is actually in Arlington County!)

Similarly, there is a portion of Fairfax County that has a mailing address of “Alexandria” which is a different jurisdiction from the “Alexandria” that is actually Alexandria City.  And again, with “Fairfax” in Fairfax County vs “Fairfax City” (at least they use “city” to help us out on that one.)

With all this confusion, it’s no wonder that many agents in their real estate listings don’t enter the school pyramids in the listings.  Even if they do, it’s best to check the address using the individual jurisdictions’ school boundary locators on their websites (see right hand side bar).

When looking through our Multiple Listing Service (MLS) for a home, you can tell the jurisdiction by the MLS code, which is a two letter code followed by 7 digits.

AR = Arlington County

AX = Alexandria City

FA = Falls Church City

FC = Fairfax City

FX = Fairfax County

So read carefully!  And when someone asks whether you’re interested in “Falls Church” or “Fairfax” or “Alexandria,” ask them “Which one?!”

For help with your real estate search in Northern Virginia, please contact us!

Alexandria’s own Thomas Jefferson High School for Science and Technology, with its application/merit-based admissions, was named #1!  Serving grades 9-12, it has 1805 students and scored a perfect 100 on US News’ “College Readiness Index.”
Coming in at #47 is McLean’s Langley High School, with a College Readiness Index of 77.6.  It’s an open enrollment school in Fairfax County, serving grades 9-12.

Of course US News is the only report out there.  Newsweek’s 2009 Top Public High School rankings included many area schools as well: Arlington’s H-B Woodlawn came in at #37, Rockville MD’s Wooten at #59,  Arlington’s Washington-Lee at #68, Fairfax County’s W.T. Woodson at #72, and Potomac MD’s Winston Churchill at #95, and Arlington’s Yorktown at #100.

Not to be outdone, Business Week also puts out its own list.

Northern Virginia Magazine also reports on the local schools, and named Thomas Jefferson, Langley, McLean, George Mason, and W.T. Woodson as the top 5 high school picks back in 2006, and has this helpful public-vs-private article with some key stats by school.

How can you evaluate the quality of a school district?  There are so many factors to consider; you must decide what’s important to you and your child.  Is it curriculum?  Test scores?  Diversity of student body?  There are many sources of information online, like greatschools.org, schoolmatters.com, and the National Center for Education Statistics.  And, of course, you should visit the school if possible.

When researching school districts for your move, be warned: Fair Housing laws make it very difficult for real estate agents to answer your questions because we cannot be perceived as ‘steering’ buyers towards or away from a particular neighborhood in a discriminatory matter.  (Same goes for crime stats, as discussed in this article.)  So it’s imperative that you do your own  “homework” on school districts.

For links to local school districts, see the right hand sidebar.

As a result, as you might imagine, property values tend to be higher in easy commute areas, or said another way, the closer you are to major employment centers, the more expensive the housing is likely to be. In particular, being close to a metro stop is likely to drive up home prices significantly.

How can you investigate what your commute will be like once you relocate? The easiest thing to do is to ask some of your future co-workers. Ask them where they live, how long it takes, and how they travel (car? metro? bus?) Try listening to traffic reports from a local radio station (WTOP reports every ten minutes) so you can get a sense for where the backups occur, since they typically occur in the same areas each day. You’ll also want to be aware of ongoing major projects in the area, like the extension of the metro line through Tysons Corner, which will tie up traffic in that area for the next few years.

You might also want to check out traffic websites during the hours that you expect to be commuting (try traffic.com and trafficland.com for cameras.) Finally, once you arrive in the area for a visit, try some test runs from the area you’ll be commuting from–yes, it’s painful to get up extra early so that you can leave your future home at the expected time, but there’s really no other way to be sure of what your commute will be.

While metro proximity is at a premium, don’t forget that the DC area has extensive bus service, as well as VRE railway service. And if you live near a slug line, that’s a creative option too.  Look at some of the links in the right sidebar of this page under “Traffic & Transportation” for some helpful resources.

Read more: Visit our main blog about real estate in Washington, DC, and Northern Virginia.

- Rental Resources

- Purchase Resources

- Schools and Other Local Information

- Traffic & Commuting

and more.  Please bear with us as we add resources, and don’t hesitate to contact us if you are relocating and need information.   You can also visit our main web site at: www.wethmangroup.com and our other blog at http://blog.wethmangroup.com