Check out LuxManor Real Estate’s newest listing – a beautiful, custom-built home with 6 bedrooms, 5 full bathrooms, and 2 half bathrooms, conveniently located near Rockville Town Center, Rockville Metro Station, and more!
Wet Basements, Downspouts and Grading
I recently went to a past client’s home who also happens to be a friend. He asked for my opinion regarding some improvements he was considering and about a few issues in his home. Before going to the basement, we walked around the outside and I noticed two downspouts (the vertical pipe that takes water from the gutter to the ground) that were not connecting well to their downspout extenders.
I recommend ensuring that the water expelled from the downspout extender is at least 10 feet from the home. While his system was designed well, the downspout had become detached from the downspout extender *photos below*. This resulted in water against the foundation wall and erosion of the soil creating negative grading. When we went downstairs, we found issues at exactly the two points that looked like they could be an issue. Fortunately for him, we caught the issue early and his fix will be very inexpensive.
Some situations absolutely require installing a sump pump and/or a french drain. That being said, I’ve found many instances where having the proper grading and downspout extenders is all the fix the home needs. You won’t hear this from many wet basement company sales associates who make enormous sums of money needlessly installing a french drain system and installing a sump pump.
Secured Not secured
A new Montgomery County, MD law states that all single family homes and townhomes sold in Montgomery County must, with some exceptions, be tested for Radon Gas before closing.
Sellers can arrange for the test or permit the buyers to test. Professional testing costs about $170. Do-it-yourself kits are available for $10-$20 plus lab fees of roughly $35.
If the seller tests his/her property before putting the home on the market, it must be done within one year of closing. Results must be shared between the buyer and seller regardless of who does the testing.
Contact me as soon as possible regarding the new law, mitigation methods, and typical expenses should mitigation be necessary. LuxManor Real Estate is in direct communication with the County as they are still working on the mechanics of the law and exactly what will be required in October 2016.
Of course they do! When a buyer evaluates a property, he must factor in the monthly costs of owning a property beyond the monthly mortgage payment. Before a lender will approve a loan, the monthly fees are calculated into the debt ratio to ensure that the buyer will qualify. Even an investor paying cash for a home will look at the monthly fees to calculate his/her Return on Investment as compared to a different property.
I own 2 condos that have been wonderful investments. I have 2 others that are in a community where, when I bought, the prices were low and the fees were reasonable. Within a few years, the fees had increased substantially. The increased condo fees were a result of mismanagement and poor long term decision making by the property management company. Property values stagnated and eventually came down. I convinced the president of the condo association to go with a different property management company and thanks to their better management, the fees have leveled off and have since come back down to a reasonable amount. Property values have begun to rise again and the owners are doing much better.
There are communities where the monthly dues are higher than the mortgage of the home (especially with today’s low interest rates). Sellers must factor this in as well as any upcoming increase in the fees or a special assessment when pricing a home.
Well managed condos with solid reserves and low fees can price their homes higher than comparable listings with higher fees, all things considered.
What is the bottom line? Although there may be a lot of unit owners and the board makes the decisions about the community, everyone has a stake in making sure that sound decisions are made and there is good value for every dollar spent. Your property’s value will depend on it.
Check out amazing 3D virtual tours of two of LuxManor Real Estate’s current listings – 4407 Elm Street in Chevy Chase, MD and 217 Farragut Street NW in Washington, DC! These “dollhouse” views were created by CLH Marketing. Click the links below.
Updates for January 2016
1. LuxManor Real Estate is beginning its fourth year as a brokerage firm. Thank you for your support, referrals and selecting LuxManor for all of your real estate needs.
2. Welcome to Robert Tarzy. After years with a commercial brokerage firm, this Washington DC native has joined LuxManor Real Estate as a Realtor. He is a very hard worker, personable and focused on client satisfaction.
3. LuxManor Real Estate will be moving from the 2nd floor of Bethesda Crossing to the retail level within the building. Our business has grown thanks to your trust in our firm.
4. LuxManor Real Estate has a wonderful partner when it comes to renting homes. DMV Property Management manages a few dozen homes and will be expanding this year as we continue to service our clients’ needs. Feel free to take a look at www.dmvpm.com for more information. This company provides high quality property management at a very low cost for landlords.
5. If you have a rental property in MD built before 1978, please remember to register it or update your registration with Maryland Department of the Environment before the end of the year as needed.
7. Office manager Maaza Giorgis is about to celebrate her one year anniversary with LuxManor Real Estate.
8. DC Bill of Rights is due to DC tenants when they begin a lease as of mid-2015.
Q: Which is a more time consuming and difficult process, buying a Short Sale or a Foreclosure?
A: A Short Sale is generally much more time consuming and difficult.
Q: What is the difference between a Short Sale and Foreclosure?
A: With a Short Sale, a homeowner is asking the bank (his lender) to accept less than the amount due to pay off the loan as a part of the sale of the home. With a Foreclosure, a bank or other such lender owns the property and the previous owner is not a party to the transaction.
Q: What is the difference in expected time frames?
A: Jim Roy of LuxManor Real Estate has been involved with several Short Sales. Two of them involved situations where the bank took over 24 months to give a response. After two years, both responses came back as denials and the homes went to Foreclosure. Please note that Jim Roy is a Certified Distressed Property Expert. One of the banks was later outed as actually rewarding its employees for stringing along Short Sales for as long as possible and never getting them closed. Jim has been involved with Short Sales that did close and they took about 75 days following the date of contract ratification. 45 days would be considered quick but not impossible depending on the bank.
Foreclosures can be approved in a day and close a week later. A standard sale (neither a Short Sale nor a Foreclosure) takes about 7 to 30 days to close depending largely on the buyer’s lender or if the buyer is paying cash.
Check out LuxManor Real Estate’s one minute videos on fixing a garbage disposal, explaining the difference between an EMD and a downpayment, and more!
Q: How have home values in the the DC Metro Area changed since 2005?
A: The DC Metro region is comprised of very different areas that reacted very differently to the adjustments we saw in the market. Call it a bubble, an adjustment, or a fluctuation in property values, some areas were hit harder than others.
Lower income areas saw their values appreciate quickly but were hit the hardest. They had the most NINJA (no job, no income, no assets but you can still buy a home) loans as well as other risky loans being pushed by the government and banks. The result was as follows: these areas experienced the most foreclosures and depreciation of property values. Other areas did not fluctuate as much as far as home values during this ten year span.
Q: Does it matter if I bought a condo vs. a single family detached home?
A: Yes. Between 1999 and 2005, many condos appreciated very quickly and people were rushing to get in on rapid property values. The lending market changed and banks began to foreclose on the people who took loans they could not repay. The condo owners who had not been paying their mortgages were also rarely paying their condo dues. Some condos and home owners associations (HOAs) became ineligible for certain financing due to their very high delinquency rates. This increased the number of investors which then affected their owner occupancy rates. These two factors severely exacerbated the problem for condos and HOAs and lead to more foreclosures and a further decline in values. These issues were not spread throughout all of the DC Metro Area but took their toll on certain cities and neighborhoods. LuxManor Real Estate believes the worst is long since over and that condos can make wonderful homes and investments. In fact, many condo buyers have done well over the last few years by buying and holding.
Q: Where are home values now?
A: Some DC Metro areas have not yet returned to their peaks while others have exceeded them. This post comes from a question from an investor who bought a nice condo in a gated community in McLean, VA. Only now are we seeing the value equal to the price he paid in 2005, despite a healthy community and a new metro that opened nearby. Fortunately, he now has a lot of equity in the home and has had a great renter (yes, just one) and no vacancy all these years.
Q: Are we likely to see another major dip in property values in the DC Metro Area in the next ten years?
A: LuxManor Real Estate does not believe so. This is based on the relatively small number of existing risky loans and therefore a low number of foreclosures is likely in the future. Banks have been very strict (perhaps too strict) for a decade as far as those eligible for financing. Provided smart decisions are made with lending standards going forward, we may never see such home value volatility again in our lifetimes.
Fed Did not Move Interest Rates September 2015
Q: What does this mean?
A: The Fed (Federal Reserve Bank) has the power to increase or reduce short term interest rates in an effort to spur what they feel is a slow economy or slow down an overheated economy by making borrowing less expensive and easier. This is typically the overnight rate that banks and other depository institutions lend money to each other. Bank must keep a certain percentage of their customer’s money on reserve.
Q: Where are the rates today?
A: .25%. They have been at this level since 2007.
Q: Will they likely raise rates in the future?
A: Many sources believe they will but they can’t increase them by much. An increase in rates will increase the government’s annual interest payments so they can’t afford to raise them too much. Hints that a raise is coming have been heard for some time.
Q: If they were to increase, would it be a rapid increase?
A: Most do not foresee a rapid increase.
Q: Does the Fed control long term rates like a mortgage?
A: The Fed has fairly direct control when it comes to short term rates but less control when it comes to long term rates like a 30 year mortgage. It is said that their actions have a domino effect and they’re the first domino in the chain.
Q: What is in store for long term mortgages?
A: Nobody knows for sure but few people predict that rates will stay where they are (near historic lows) for too much longer. A 1% increase in rates will have an impact on monthly payments and thus buying power. Interest rates are just one of many factors in home values.
Q: What if I buy now and rates go DOWN?
A: We’re getting away from The Fed’s recent decision but the answer is you may be able to refinance, pay off the mortgage and enjoy the lower rate. There are usually closing costs involved (like lender’s title insurance) so the difference between your rate and your new rate will need to be large enough to justify a refinance. Also, you’ll need to qualify and ensure you have enough equity.