Question: How are first-time homebuyers successfully entering our competitive market with low inventory?

Answer: The keyword from that question is successfully. Now more than ever, first-time buyers need to engage with a comprehensive and experienced team of experts to successfully access the D.C. area’s competitive real estate market. It is only a comprehensive approach that will ultimately leave the buyer (now homeowner!) pleased with their acquisition.

When working with first-time buyers I always quantify the subjective and objective aspects of the home buying process. Going to open houses (remember those?) and previewing homes in person or online is the “fun” and subjective part of this process — dreaming of hosting dinner parties with friends, backyard BBQs, the wall placement of a cherished piece of artwork, walking the dog to the dog park just around the corner, or strolling on a crisp fall morning to pick-up vegetables from a farmer’s market. That’s the fun stuff!

The objective nuts and bolts of the transaction — the contract strategy and negotiation, home inspections, mortgage application and underwriting processes — are far less glamorous but equally important to a successful acquisition. The subjective choices may rest primarily with the buyers, but the majority of the objective expertise will come from the experience of the real estate expert.

Our real estate market consists not only of the homes available for purchase, but also the lenders, settlement agents, home inspectors and real estate professionals that make acquisitions possible. When working with first-time buyers, it is imperative that I help them navigate the process by pointing out the potential issues, situations and problems they may encounter. The potential issues are numerous.

Our mortgage lending guidelines change every day and our buyers not only need to be aware of these changes but also need to be working with a trusted experienced lender. Appraisal guidelines are not the same as they were four months ago and are almost certain to change again before summer is over. Additionally, understanding a home inspection might be a hurdle for a first-time buyer. Home inspections often identify issues with properties that are unforeseen, but almost never unique.

Helping buyers understand that what they perceive as a problem in the inspection report, is oftentimes a situation that I have experienced and successfully navigated many times in the past, giving buyers a high level of confidence and comfort. And while it would be impossible to predict every possible issue, discussing in advance the potential or likely situations that may arise leads to fewer surprises and less stress in the transaction.

But before any of this can happen, the buyers must actually be under contract to purchase a home! How do first-time buyers differentiate their offer to purchase from all the other offers when the seller is going to receive multiple offers? Crafting a contract offer that both recognizes the needs and preferences of the seller and the uniqueness of the property and its value will help the offer rise to the top.

This is where most first-time buyers, who assume the contract negotiating process is primarily about the sales price, need the most guidance. The phrase that “the devil is in the details” is very applicable — more contract offers are dismissed by sellers because of the smaller, perhaps less-significant terms in the contract than on the sales price offered on the front page of the contract itself.

The single best piece of advice I can offer a first-time buyer is to find an experienced, local real estate agent with whom they are comfortable, sit down with them for an hour over a cup of coffee and discuss the entire acquisition process. Address the objective nature of the process and then move on to the fun.

George Myers is a lifelong Alexandria native and a licensed real estate agent with McEnearney Associates, Inc. in Old Town Alexandria, VA. George is a calm, low-pressure agent who listens and keenly observes in order to confidently navigate each clients’ uniquely personal decision to buy or sell. Contact George at 703-585-8301 or GMyers@McEnearney.com to learn more.

Being stuck at home may have some advantages – particularly if you own your home and can use some of the extra time many of us find on our hands for exterior maintenance and improvements. I consulted with a local Class A contractor and home inspector – to ask them for some commonly deferred exterior maintenance issues they see.

Walk around your house and notice items that maybe you haven’t before – peeling paint, cracks in mortar, blocked gutters… Look up, down, along and behind. Check out the roof (from afar), the siding, under the deck, along the retaining walls and sidewalks, etc. See if any of the following are issues at your home – and, make a list so you can tackle them one-by-one:

• Does your chimney have a cap on it or is it open to the elements? Most chimneys need a cap to keep water from getting into the flue.
• Are there sticks, leaves or other debris in gutters? When these build up they can cause leaks. Consider guards, screens or some system for keeping them clear. While at it, make sure all drains are clear (by basement doors, yard drains, and at garage entrances). Follow buried downspouts to the evacuation point making sure they’re clear so water can flow freely. Downspout extenders should remain attached and carry water many feet away from your foundation.
• Is soft-washing or pressure-washing needed at gutters, trim or siding? We think of decks getting washed – but the main house may need it, too. I often note white gutters that have become a dingy, streaked gray.
• Is your roof streaked with blackish-gray stains? This organic matter can be cleaned and makes a world of difference in the home’s appearance.
• Check wood trim (windows, doors, corners, porch pillars and posts) – winter and lots of rain is hard on wood. There may be soft spots or obvious rot. This is easily remedied – in fact, a product like Bondo, first popular in auto-body work, may be used… It has a great application on wood rot.
• Trip hazards – as the ground freezes and unfreezes during colder months, it can heave pavers and flagstones, creating trip hazards. Level these as they create liability for you and others.
• Caulking is often overlooked – make sure it is not cracked around windows, doors and trim – avoid water intrusion. Simply re-caulking can mean moisture is not getting in where it shouldn’t be.
• Mortar may suffer following winter – check between bricks and stone, and also on porches and stoops. Railings may need to be re-anchored if mortar has cracked.
• Grading is a common reason water enters a home. There should be a slight grade away from the house (inspectors also recommend that you don’t put mulch right up against the house – run a foot or two of stone, then mulch if you have beds where you want some kind of cover).
• Metal railing and lintels (metal piece over doors and windows) can corrode during repeated wet weather if paint gave way and the metal was repeatedly wet. This can cause bubbling/de-lamination of the metal – as metal expands, it puts pressure on mortar and may cause cracking. New railings may be needed, though a skilled contractor can sometimes save the situation.
• Inspect fences for leaning, missing pickets, mal-adjusted doors and gates.
• Clear laundry vents – excess lint is one of the biggest causes of house fires. And ensure a cover is in place to keep critters out.
• Re-seal asphalt driveways – a new coat of black sealant can make a huge impact.
• Check for and seal holes where mice, squirrels or other critters may gain entrance.
• Walk along retaining walls – monitor for movement and soil displacement – make sure they’re not bowing. (There should be some drainage method so pressure does not build up behind them – this is why they sometimes topple!)
• Check under decks – look at deck hangers, note any popping screws or nails on the surface. Check posts for rot. Ensure there are no loose railings or posts. Keep these elements strong for safety!

Admittedly, we could double this list – but this offers a good start on basic maintenance. And, much of it you can tackle yourself or hire contractors to do…. Remember, they’re essential workers, looking for work and since this is exterior, you don’t need to worry about them coming inside.
 

Ann McClure is a licensed real estate agent in Virginia and Maryland with McEnearney Associates, Inc. in McLean, VA. If you would like more information on selling or buying in today’s complex market, contact Ann at 301-367-5098 or visit her website AnnMcClure.com.

With restaurants and most activities closed, many businesses shuttered or the employees sent to work at home, and governors’ stay-at-home orders, you may have a lot of extra time on your hands. Many people are taking stock of their own personal situations during this crisis.

Now is a good time to consider whether you need a new home, or perhaps it’s time to downsize from the ol’ family homestead. The real estate market was very strong heading into the COVID-19 pandemic and there is good reason to believe it will regain its strength when the crisis passes. It isn’t dormant, however. Real estate transactions can, and do, still take place today.

Let’s discuss some of the facts and a key measure of real estate success. Days on Market (or DOM) is a term that you are likely to see thrown around in real estate, but what does it mean? DOM refers to the number of days a house has been listed on the Multiple Listing Service, or MLS. Real Estate Brokers, Agents, and third-party websites all utilize the MLS to showcase their clients’ properties, research homes available on the market, and keep track of pending and completed transactions.

Every day that a home stays on the market or “active” in the MLS, a new day is added to the DOM counter. To stop the counter, homes need to be taken off the market – meaning that a house goes under contract, and someone has committed in writing to buying that home. In a HOT real estate market such as Northern Virginia has been, the inventory of available homes is low, so the number of days a home spends on the market should be relatively short. The median days on market during the week of March 15-21 was five, down from six DOM the week before.

Despite physical distancing measures enacted because of COVID-19, there seems to be a steady stream of people. Some people may be hesitant to see houses right now, but it is possible to follow social distancing rules while viewing homes with a responsible agent.

The real estate market has begun to cool off due to the COVID-19 pandemic, and the long-term impact on the real estate market is uncertain. We may have seen a short-term peak in home prices, but in the long-term real estate prices typically rebound in due time.

Fortunately, we are not in the same position that we were 13 years ago during the previous housing “bubble” burst. These days, it is harder to qualify for a mortgage, homes have more equity, and steadily low-interest rates allow for a new batch of qualified buyers to be able to afford to enter the real estate market. Because of the low-interest rates, prices are at their highest, and I believe that we are headed into a plateau in that regard, as homes can only go so far up in value. But in the DC area, there is still pent-up demand for housing. Your best play in a precarious market is to make your move now, especially if you have built-up equity in your home.

Buying or selling in the real estate market is still possible during these uncertain times. Unlike in 2007, we now live in a digital age, and ingenuity has blossomed because of it. What once had to be trod physically to be known, can now be done virtually. Looking to buy? Tour a home without ever leaving your couch, sign all your documents electronically, and visit a prospective neighborhood without stepping foot outside of your car.

But what if you want to sell? Listing appointments can be done via Zoom, drone videos can be taken to showcase the topography of your property, and the plethora of social media options means more avenues are available to showcase your home to prospective buyers.

A great real estate agent can navigate the murky waters ahead. By utilizing all the available tools, we can get through these tough times together.

Jean Beatty is a licensed real estate agent in VA, MD, and DC with McEnearney Associates, Inc in McLean, VA. If you would like more information on selling or buying in today’s complex market, contact Jean at 301-641-4149 or visit her website JeanBeatty.com.

Question: The ads are everywhere for online financing sources such as R—et Mortgage and Q—en Loans, what is your experience with these kinds of companies?

Answer: Out of State, Out of Our Minds

Todd,* my delightful buyer, was a sharp, tech-savvy businessman determined to get a great rate mortgage over the Internet. He logged on to a well-advertised website and sent along the details of our Sales Contract. Appropriately proud of his sterling credit, Todd pledged 20% down and started to plan his move to Old Town Alexandria. End of story?

NO SUCH LUCK! Enter Chaz* from the California-based mortgage brokerage which had received the loan form. “I’ve made loans for 30 years, little lady,” he boasted to me, “Don’t worry. Where are you calling from? West Virginia?”

Chaz:

1. Didn’t know any local appraisers and chose one from Baltimore.
2. Had heartburn about any home over 60 years old, let alone this 192-year old classic.
3. Promised 3.25% interest rate and didn’t lock it in as rates drifted higher.
4. Blamed Todd for not telling him the building could also be used commercially.

After bragging about his California successes, “I’ve closed every loan I’ve gotten my hands on, missy,” Chaz demanded another 10% down, raised the interest rate to 5.25%, emailed a lame apology note and left early for a long weekend, three days before our settlement!

Epilogue: A local lender saved the day, jumped in, took the file and settled in four days! There are excellent area banks and mortgage brokers who know our Northern Virginia/D.C./Maryland homes, offer very competitive rates and give hands-on service. Start locally, save your sanity.

Not convinced, read on…

Can You Look Them in the Eye?

Another out-of-state lender played “yo-yo” with a buyer’s emotions early last week. “We’re just so swamped,” whined Jimmy from his XYZ Co.* office in Plano, Texas, “with interest rates at a 40-year low, everyone wants to refinance. I don’t know why our regional office hasn’t returned your phone calls this week; maybe they’re busy, too.”

For the next five minutes I heard a string of unbelievable admissions. “I know we’re supposed to settle next week, but I have to tell you that I don’t have the appraisal in yet, somebody here forgot to send the condo management office an important declaration form and, oopsie, the figures I used for Mollie’s* Good Faith Estimate were based on California closing costs,” he said.

“And, by the way,” Jimmy rattled on, “would you tell her we might have to slip settlement a couple of days.” I could not let him continue. “Stop right there,” I insisted, “I will not tell her it’s slipping, because it’s not going to!”

“Mollie has a moving van coming from New York on Saturday. She had your full loan approval three weeks ago, wanted to use your company because her family used it years ago and she is a real buyer, not just a re-fi, so we have to make this work! What can you do right now?” I pleaded.

The stress Mollie went through over the next 48 hours was so avoidable. If she hadn’t been wed to using XYZ company, she’d have had a far more comfortable and personal transaction. Look them in the eye. Talk to the local competitive lenders who are working in the D.C. area day in and day out, who answer their emails and cell phones, who meet you at your office or mine, who know the closing costs for the jurisdiction and who meet your deadline, not theirs.

Oh, Jimmy you ask? He pulled it out in the end and we settled, but not without getting branch office supervisors involved, spending hours on the phone and guessing at the final closing costs. Even then, the instructions from XYZ Co. overcharged for the appraisal and had an available line-of-credit showing as a fully-funded $30,000 second trust which threw the closing docs way out of whack.

If Mollie could have looked Jimmy in the eye, she might have punched him in the eye. Stay local, stay happy.

Ann Duff — your positive advantage for Residential and Commercial properties throughout the area. Experience and Energy, Negotiations and Knowledge — all with a splash of fun! Let’s Get Busy!

*Note: Names have been changed.

This week’s Q&A column is sponsored and written by Ann Duff of McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant Alexandria market news, contact Ann at 703-965-8700 or email aduff@mcenearney.com. You may also submit your questions to McEnearney Associates via email for response in future columns.