Category Archives: Real Estate News

LuxManor Real Estate

New Radon Law in Montgomery County, MD – October 2016

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.

LuxManor Real Estate

How Have Home Values Changed Over the Last Ten Years?

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.

LuxManor Real Estate

Interest Rates – September 2015

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.

LuxManor Real Estate

The Value of the Open House

Now that we’re in the Spring Market and with the plethora of articles against Open Houses, I wanted to share my thoughts and findings regarding the relevance of the Open House.

Q: What is an Open House?
An Open House is when a property is available to be viewed by the public regardless of their interest in buying (neighbors are welcome), qualifications to buy (no approval letter is needed) or any other prior screening.

Q: How often do homes sell because of the Open House that would not have otherwise sold?

Based on having closed over 700 transactions, many of which had Open Houses, and other research I’ve done, it is clear that it is very, very rare for a home to sell solely due to the Open House. Estimates showing 2% of homes selling due to the Open House seem high.

Q: So what are the benefits of holding the home open?

Benefits to the Seller: The seller can obtain feedback through the listing agent who interacts directly with visitors to the Open House. As a LuxManor Realtor, I ask all Open House visitors what they liked and disliked about a home. Every so often there is something useful to be incorporated into our overall marketing efforts.

Benefits to the Realtor: the agent has a small possibility of selling the home himself to a potential buyer without having to come back to the property several times to service every person who calls (and qualifies) who wants to see the home. Buyers now learn about listings via the internet and their Realtor well before most other sources. A serious buyer without a Realtor can gain access and buy the property through a private appointment with the listing agent.

An Open House may also present an opportunity for the Realtor to meet neighbors who may have their own real estate interests as well as buyers who will eventually buy a different listing.

Q: Why would a seller not want his/her home held open?

Some sellers are private and would prefer not to have neighbors come inside. Others might prefer that all visitors have an appointment with either their own agent or with the listing agent. It is rare that items are stolen from an open house, but the risk level increases when allowing anyone into your home.

Q: What should I do to prepare for an Open House?

The same preparations for putting the home on the market should be done for the Open House. Cleaning, decluttering, depersonalizing, etc should be done before the home is available for any showings. Since the odds are higher that the home will be sold outside of the Open House, there is no reason to make a special effort for an Open House. As with such preparations, I always advise my clients to hide any small items of value. Before an Open House, LuxManor Realtors walk through the property and secure anything the seller may have overlooked.

Q: How do I know that the buyers with an agent are more qualified than buyers coming to the Open House?

You don’t. Many Realtors will rush out to show a property without even screening the potential buyer but at least the agent usually has a way to contact the buyer if need be (phone number, email address, etc). With an Open House, someone could walk in off the street, give a fake name and be out the door again. With an agent showing, the agent’s access is recorded in the lockbox and if there is an issue, there is a trail.

Q: When is it in the seller’s best interest to hold a property Open?

While the home may not sell because of the open house, there are certain markets (like 2003-2005) where the final sales price will be higher because of the Open House. In those years (hot seller’s market), many Realtors were literally too busy to show every client the listing before the listing went under contract. The more offers, the higher the sales price was likely to be. This does not work in a buyer’s market when the buyer sees the home and comes back Saturday or Sunday to a slow open house and then wants to haggle.

Q: Which is better, a Saturday or a Sunday Open House?

Before doing research, I would have bet it was Sunday. Surprisingly, the empirical evidence has shown that Saturday Open Houses can get just as much traffic as Sunday Open Houses.

Q: So what is the bottom line?

There is nothing wrong with holding a home open every so often (especially soon after the home comes on the market) and is common practice for many listings at LuxManor Real Estate. However, it is not likely to result in a sale. Hide your valuables and understand that this is far from the most important part of the marketing.

Adding an Open House to the marketing falls well below the following: quality and quantity of photos, complete and accurate listing in the MLS, beautiful fact sheets, information about the neighborhood, a proactive/responsive Realtor, feedback from actual buyers through their agents, staging/repairs and, of course, proper pricing of the home.

LuxManor Real Estate

New Maryland Lead Paint Law

If you are the landlord for a home located in Maryland, or may eventually rent out such a home, new regulations that go into effect 1/1/15 may affect you.

Here is where the rules will change: For homes built between 1/1/50 and 1/1/79, landlords will now need to have a professional test the property for lead paint (using dust wipes) every single time a tenant moves out and report those results to MD (paying the $30 filing fee to Maryland Department of the Environment).

Federal regulations (Yes, DC, MD and VA) require landlords and sellers of all homes built before 1979 to disclose if they have any knowledge or reports of lead paint for their properties. This is required disclosure to any tenant or purchaser.

Does this mean we should avoid homes built before 1979? Not at all (especially given the quantity of them in the DC metro area), we just need to make sure testing is done, rules are followed and disclosures are given.

Note: manufacturers had to stop lead based paint production on 12/31/78. They knew this and were making as much as possible until that date. They were allowed to sell whatever inventory they had beyond that date. It was more expensive but considered better quality.

If your home has been certified lead free and/or was built after January 1st 1979, you are not affected by current lead paint rules and this does not apply to you. If your Maryland rental property was built before January 1st, 1950, there is no change the existing rules and you still need to have your home inspected and tested for lead paint hazards every time a tenant moves out.

How can your home be certified lead free? You’ll need an certain test done (XRF) and if any lead paint is found, you’ll need to properly remove it inside and/or outside the home. The process may not be cheap in the short run but once you’re determined to be lead free, you no longer need to file appropriate paperwork. When you’re ready to rent or sell, this will be a big advantage that you’ll be happy to use to market your home.

When you’re ready to sell your home (regardless of year built or jurisdiction) make sure to contact LuxManor Real Estate to ensure all aspects of your sale are handled correctly especially when it comes to lead paint.

All information was verified through Pete Hanson, owner of Whitehall Associates. Whitehall has handled Jim Roy’s lead testing (as well as other Environmental Testing) needs for years and done a great job for him and his clients. petehanson@comcast.net is his email. 301-908-0325 is his mobile number and 301-879-1421 is his office number.

LuxManor Real Estate

Real Estate Market Report

Performance Report: How the has the real estate market evolved over the past year?

Compared to one year ago (largely due to the last few months), the market has slowed down to a very noticeable degree.

Relative to August 2013, the number of listings one year later that sold is down about 7%. Days on market have increased substantially (up 16%) but the average sales price is about the same as July 2013. Values were up slightly in June 2014 from the previous month but down in both July and August. Many buyers are not motivated to give up the very low rates they locked in over the last few years and most lenders are still quite strict with their lending guidelines.

It has been reported that applications for new home purchases have decreased 9% while the average loan size increased about 1% for August 2014.

What does this mean for sellers? Proper pricing, effective marketing and the condition of your home are crucial in getting the most money and a quick sale but patience may also be needed.

What does this mean for buyers? If you can qualify for a loan and find a home that meets your needs, you will be in a better negotiating position. You can also enjoy a mortgage at historically low interest rates.

Low-E and Argon Gas Windows Explained

Most heat is lost (or comes into the property) near windows and doors. This is why most homes have their vents or radiators near an exterior wall and specifically near a window. High performance Low-E and Argon gas windows do a great job of saving you money in your heating/cooling bills by keeping heat where you want it.

Low-E, meaning low emissivity, is a very thin layer (or several layers) of metal that block longer wave lengths (heat) visible light passes through. When Argon gas is sealed between the panes of glass, it acts as an additional insulator (heat and sound) and is non-toxic should a pane break and you inhale it into your system.

Single pane windows offer very little efficiency. You can feel the cold by touching the glass inside a home on a cold day. Single pane windows can be helped if storm windows are used but the air in between is no different from the air we breathe. High performance windows are designed to cut down on heat transfer, and subsequently, your heating and cooling bills.

Bonus tip: Ensure your weather stripping is in place around exterior doors. If you can see light between the door and the frame, air is getting through, too and costing you money.

The Top 3 Equity Building Improvements Before You Sell

By investing some time and a minimal amount of money in your property, you can increase your equity by much more than you put in. If you have further questions, LuxManor Real Estate can help you decide where your money is best spent and recommend contractors who can make it easy and affordable.

Where should you spend money on your home to maximize your bottom line? Here are the top recommendations to increase your equity well above the costs:

  1. Increase your curb appeal

Curb appeal is what beckons potential buyers into your home. Simple, yet dramatic improvements can be made to a house exterior including: cleaning the yard of any debris, trimming trees and shrubs, spreading fresh mulch in the planting beds, mowing the lawn and reseeding any bare spots, putting a fresh coat of paint on the front door, installing a more aesthetically pleasing placard with your house number, and a new welcome mat outside the front door. These improvements can be made for less than $1,000 and will go a long way to setting the stage for the impression the buyers will get once in your home.

  1. Go clean and neutral with walls and flooring

Present your home as an open canvas, where buyers can envision their own furnishings and personal touches. Busy wallpaper can be a distraction and hindrance to selling a home. A fresh coat of paint in a neutral color, such as an off-white or beige, will brighten your rooms and will appeal to the widest range of buyers. Painting each room in the same color will also be more cost effective. The same philosophy goes with flooring. If your carpet has heavy wear or deep stains, you should consider replacing it with new, neutral colored carpet. If there are hardwood floors underneath carpet, you may want to expose and refinish the floors instead.

  1. Give your kitchen and bathroom a face lift

Kitchens tend to be the heart of a family home, so anything you do to improve the kitchen will add value. You don’t necessarily need to invest in an expensive renovation to freshen up your kitchen’s appearance. You can spruce up a kitchen by installing new knobs or pulls for cabinet doors, painting or staining cabinetry, regrouting kitchen counter tiles, and replacing vinyl flooring with laminate or tile.

For bathrooms, you may want to replace the toilet and vanity if they are stained or outdated. A new toilet and vanity can cost less than $500 and will make a big difference in the room’s appeal. You may also want to refinish a stained tub, caulk or re-grout around the tub/shower, buy a new shower curtain, or replace the light fixture over the sink.

Note: for some homes, a complete kitchen and/or bathroom renovation may be the best choice. Jim Roy can assist you with such decisions.

Simple Steps to Shrink Your Heating Bill

During the winter, the heating bill can account for more than half of a homeowner’s utility costs. Read on to learn a few easy tips on how to lower your bill and still stay warm during the frigid months of winter.

Insulate your House
Take into account the little gaps around doors, windows, and other exposed areas. Plug any leaks or holes that allow warm air to escape from your home. Caulk around doors and windows and use weather-stripping as necessary.

Keep your Heat Pump Clutter Free
If you have electric heat, make sure to keep your outside heat pump free of leaves, grass, dirt, drifting snow or anything that could restrict the air flow. Pour hot water over any coils that are frozen to remove the ice. Make sure the insulation on the refrigerant line is in good condition.

Inspect and Clean Ductwork and Vents
Check heating system filters at least monthly and clean or change them as needed. Dirty filters can increase operating costs significantly, damage equipment and reduce efficiency. Be sure that heating registers and vents are not blocked by draperies or furniture. Vents should also be cleaned regularly.

Keep Fireplace Dampers Closed
Make sure fireplace dampers fit tightly and keep them closed when you’re not using the fireplace to prevent warm air from escaping through the chimney.

Let the Sun in
On sunny days, open drapes or blinds to allow nature solar heat to warm the house. Keep drapes and blinds closed on cloudy days and at nights.

For any questions on this or other real estate matters, please contact Jim Roy, your housing expert at LuxManor Real Estate.

Jim Roy, Principal Broker
Tel: 301-254-7253
jim@luxmanor.com
www.luxmanor.com

Winterize Your Home

Why Winterize?   Preparing your home for winter now will prevent minor issues from snowballing into major issues in the coming months.

Performing a few simple maintenance checks will help ensure:

  • Your home is running efficiently
  • Energy costs are reduced
  • Your property is protected, and
  • You and your family stay safe & warm throughout winter

If you have any questions about winterizing your home or are thinking of selling your property, contact Jim Roy at 301-986-9401.

Click on the link or image below to print our Winterization Checklist!

Checklist to Winterize Your Home

Checklist to Winterize your Home

Increase in Northern Virgina Grantor’s Tax

A Grantor’s Tax is basically a sales tax. It occurs when a property’s ownership is conveyed from one party to another and is paid by the seller (grantor).

In the recent transportation bill passed in Virginia, the Grantor’s Tax will increase from $1/$1000 to $3.50/$1,000. For example, if someone sells a $500,000 home, the tax is currently $500. It is set to increase to $1,750 for that same sale. If signed by the Governor, this will presumably become effective on July 1, 2013.

Note: this is substantially less than either DC or Maryland charges its sellers.

There is no impact on buyers. Here are all the changes:

Statewide – $880 million annually

  • Removes 17.5 cents per gallon gasoline tax
  • Adds 3.5% wholesale tax on gasoline and 6% on diesel (with refunds for personal-use diesel vehicles)
  • Increases sales and use tax to 5.3% (excludes food)
  • Increases sales tax on cars to 4.3%
  • Increases vehicle registration fee on alternative fuel vehicles to $100
  • Includes revenues from federal Internet Sales Tax Act; if the federal government doesn’t authorize an Internet Sales Tax by 2015, the wholesale gas tax will increase to 5.1%
  • Dedicates additional General Fund revenues to transportation
  • Dedicates $300 million over 3 years to Dulles Rail Phase II

Northern Virginia Region – $300-350 million annually that stays in the region

  • Increases sales tax an additional 0.7%, to a total of 6% (excludes food)
  • Increases real estate Grantor’s Tax by $0.25 per $100, to a total of $0.35 per $100
  • Increases hotel transient occupancy tax by 3%