Read that again because every word is important: One. Full-Time. Experienced. Realtor. With whom you get along. 

That sentence packed a lot of punch. 

The author did a great job of explaining each criteria, but I want to add a few of my own suggestions because choosing the right Realtor can help mitigate all of the other risks in the process…that’s what makes it arguably the most important step in your process. While I could go on for days about choosing a realtor, I’ll limit my advice to 3 tips:

Experienced: You’ll have to define your own level of ‘experience’ required.  Is it years in the business?  Transactions completed?   Transactions the team completed?  I would argue that one of the best gauges is the number and quality of transactions completed in the past 12 months that are similar in price and location to where you think you will be looking/selling.  I’m NOT saying to hire the ‘neighborhood expert’ that every agent seems to label themselves regardless of whether they actually live OR work there.  And agents with extremely high numbers of transactions tend to have junior associates that they hand you off to, so be sure you’re looking at the experience of the agent who will actually be looking at homes with you and working on your contract.

Getting Along: I would take this a step further and say you have to trust them. If you don’t trust your agent, get another agent. Ask for a reference who has bought/sold within the past 6 months. Then ask that reference “Have you given this agent’s name to anyone else? If no, why not? If yes, can I speak to that person?”

Finally I’ll add another tip about ‘getting along.’ You also need to be confident in their ability to explain things to you quickly and simply. In short, they must be able to educate you about the process and the decision points. Buying a house can be scary. There are dozens of pages of legalese, and decisions often need to be made quickly.  How organized is this person?  Do they take the time to answer your questions? Do they return calls, texts, or emails promptly? What hours and days are they available to you?  No one can be expected to work 24/7, but contract negotiations DO happen–often–outside of normal business hours and deadlines matter. It’s stressful enough to make big decisions on a deadline, you don’t need to make them in a vacuum. 

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• Is the community for profit or not for profit?
• Is there a buy in fee?  Is it refundable?  Does it go into a trust?  If the company managing that ‘fund’ goes bankrupt or runs into financial difficulties, what happens to that balance? At what rate does it amortize if we move out?
• Is this a fee-for-service community or a continuing care for the same price model?  If fee for service does the buy in fee entitle one to a discounted rate at Assisted Living or nursing care levels?
• Monthly fee – what is it currently and what are the projected annual increases (what have they been historically)?
• What happens if someone’s financial resources run out?  Are there foundations that step in?  Is the institution Medicaid eligible?
• What are the various assistance levels available and cost for each?   Pay special attention to the cost jump for assisted living, leading to the next question…
• Is there in-unit care that is available by the hour if the resident falls somewhere in between ‘independent’ and ‘assisted’?  Is it an in house service or is there a preferred provider or do we find someone on our own?  What are the fees for that?
• What is the percentage of independent living vs assisted living vs nursing care?   (You’ll find some communities even though they have all levels have really limited options in one or more levels.)  What happens if there isn’t room in the level when we need it?   Does assisted living require a move to a different building or is the care brought to the unit?
• Is assisted living regulated by the state?  Is there somewhere (online) I can go to review reports on inspections?
• Is there onsite healthcare/doctors hours?  Which types of physicians and how often?  What insurance do you take?
• Is there a shuttle bus and where does it go?  What private transportation options exist?
• What sorts of activities (they will usually give a calendar) are there for residents?  What other amenities (salon, bank/ATM, convenience stores, gyms, theatres, etc) are on site?  Keep in mind that at some point the resident will likely have to give up driving, so these features may become very important down the road.
• What sorts of ‘orientation’ activities exist to make sure someone gets integrated into the community quickly?
• What services are included in the service fee/rent?  Specifically, how many meals per day?  Which utilities are included?  Housekeeping?  Linen service?

The process of choosing a new home can be overwhelming in the beginning.  I hope these questions are enough to get you  started on the path to choosing a great home for you or your family member.  If you have other suggestions or comments please post them in the comments below!

If you or a senior you know is looking to sell a home in the Washington, DC, area I’d be happy to help you.  And if you reside outside the area, I’d be happy to help you identify a local real estate agent who can be sensitive to the needs or seniors during your transition.

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Our first time home buyer classes are educational sessions designed to give an overview of current market conditions and the home buying process.  We cover a recap of the market, current trends and market stats including days on market, average sales prices, and inventory levels.  We’ll also discuss the home purchase process and common pitfalls, financing basics and a how to get started checklist.

Specific topics covered:

• Arlington, Northern Virginia and DC market analysis (average sales prices, days on market, etc.)
• Mortgage basics: rates, points, fees
• Financing basics: FHA, Conventional, Conforming, and “Jumbo” loans
• Calculating the tax benefits of homeownership
• Short Sale, Foreclosure/REO/Bank Owned basics
• Search tips
• Fees and closing costs
• Buyer agency and choosing an agent

Details:

Wednesday February 29th 7:00 – 8:15
Arlington Central Library
1015 N Quincy St 2nd floor meeting room
Ballston (Orange Line)

Though there is no cost to attend, you must contact us to register since seating is limited and we need to make sure that materials are available for you.

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Navigating the world of senior communities–from independent “active” communities, to assisted livings, to continuing care communities, to nursing homes–can be daunting.  I know.  I just spent an amazing amount of time researching and touring communities in our area.  If you think it’s hard finding a place for yourself, try finding a place for your mom!  And I’m in the business!

The resources out there to help are, surprisingly, not very substantive.  There are ‘referral’ services that I found to be shallow and not very good listeners and so were a complete waste of time.  There is a very good magazine that served as a starting point: the Sourcebook from Retirement Living.  Though it’s primarily a big book of ads, at least it’s a list of communities to start with and their charts are a great way to quickly cull the communities that will work for your situation.  It’s worth an in person visit to a few different places, and make sure that you come armed with an interview guide you have thought through in advance.  (I’ll work on another post with mine, but if you need one feel free to email directly and I’m happy to share.)  They all have their pitch and are very good at the tours so you may forget to ask about some of the items that are particularly important to your situation.

There are many excellent communities in our area, but you may be surprised to know that there are widely different financial models for different types of communities.  Some are pay-as-you-go, similar to a rental apartment.  Others have a ‘buy in’ fee up front, which can quickly run into the hundreds of thousands of dollars.  Some are refundable, some partially, some not at all.  And yet others are ‘life contract’ communities where the fee is steep, but it ‘guarantees’ you a stable and consistent fee regardless of the level of care you need, which can be a huge benefit to someone on a fixed income like most retirees.  Obviously financial and estate planning will play a huge role in your decision, so start pulling together a list of assets as well as a detailed monthly budget early in the process.

Most communities are not real estate ‘sales’ that go through a traditional real estate agent (though there are a few notable exceptions in our area, like Leisure World and the Jefferson at Ballston).   However, having just gone through the process, I’m more than happy to share with you my ‘lessons learned’  so far.  I would love to ‘pay it forward’ and give anyone a head start on the process.  It’s hard enough juggling our own lives every day, and throwing in such a huge research project on top of daily living can seem overwhelming at first.  Just shoot me an email and I’ll see if I can help.

And if you know a senior looking to buy or sell in the DC area, I’d be happy to help with that too

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1) Get organized.  Financing will be the first hurdle you face and it’s important that you are both open and honest about your savings, debts, budgets, and credit ratings.  It’s important that you both be comfortable not only with your share of the mortgage and other housing expenses, but with the rest of your budgets too, since coming up short at the end of the month may now affect whether you have a roof over your heads!

2) Independently, list your “must haves.”  Then, sit down together and compare lists to make sure you’re not contradicting each other.  Go to open houses together to discuss which parts of the house you liked and didn’t like.  Make sure the houses you’re previewing are in your price range!  Consult your agent if you are finding that you disagree on some of the key factors–a good agent will be able to discuss different floorplans, potential renovation projects, and alternatives that would be a nice compromise.

3) Consider how you will take title (joint tenants with rights of survivorship or tenants in common), and what will happen if one of you wants to sell.  I know it’s not romantic, but being part of a couple means you have to be practical sometimes.  How will you split the equity (or loss) accrued?  It’s imperative to put your understanding into a binding written agreement – hire a lawyer to do this! Though it may seem morbid, also include what happens if one of you were to pass away or otherwise become incapacitated.  This is a good time to update your wills to ensure consistency with your agreement.

You’ll be learning a lot about each other throughout this process.  Be patient!

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The delinquency rate is an important one to follow because it’s one of the best leading indicators we have for predicting ‘shadow inventory.’  Shadow inventory is the elusive backlog of future foreclosures–that is, homeowners who are inevitably headed towards foreclosure but the paperwork is still going through so the bank has yet to take possession of the house and/or list it for sale.  Foreclosure processes vary widely state to state, and it’s notoriously difficult to predict when a property will actually hit the market.  Buyers and market bears are always shouting about the huge backlog of inventory coming down the road, dooming recovery progress in the shaky housing markets.  Yet here in the DC area we have been waiting years for this alleged ‘tidal wave.’

I wouldn’t hold your breath.  First, these delinquency stats have been relatively stable for years, and we haven’t seen the big bump in foreclosures yet in our area–the fact is that our local market (particularly close in Northern Virginia and DC) has remained strong enough to absorb foreclosures and short sales as they come to market.  Second, remember that banks control the inventory they take possession of, and they are well aware of the laws of supply and demand.  If a bank is trying to recoup as much value as possible, why would they flood the market with inventory, thereby depressing prices?  The carrying cost of a property for a bank is minimal–after all, they don’t pay themselves a mortgage–so the only real incentive for them to get properties off the books is regulatory requirements that affect the amount they have to hold in reserves.  So it’s a big of a juggling act for banks.

Delinquencies, of course, are tied to unemployment rates: no job = can’t pay the mortgage = delinquency.  DC’s strong job market is another reason we don’t see the avalanche here that other parts of the country might experience.  But stay tuned…the lack of a budget deal from the super committee could mean serious cuts in government spending in our local market.

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According to Reuters, a bipartisan panel of Congress agreed on a measure yesterday that would increase the limit. The increase would apply only to FHA, NOT to loans backed by Fannie and Freddie. It still has to pass the House & Senate, but indications of passing are good.

This is important for our local market, which is considered high priced. When loan limits dropped to $625,500, it meant less purchasing power for buyers trying to borrow more. This primarily affected homes in the $750-900k price range, which, after the drop meant that even with 20% down, in order to get the very best rates buyers were limited to homes under $750k (unless they came up with more cash.) At the new $729k limit, buyers can purchase up to about $875k with 20% down and still get extremely competitive (historical lows, actually) interest rates.

Stay tuned to see if the measure passes.

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What’s shakin’ in the real estate market, you ask?  Well, the actual real estate is shaking, of course. Or at least it was yesterday.  Hope you all got through unscathed! 

Speaking of the earthquake, please do a careful once-over on your properties.  FYI, most home insurance policies do NOT cover earthquake damage.  Here’s a handy earthquake checklist from the Weather Channel, and FEMA’s list of what to do during an earthquake.  Once the quake has passed, check your home for water and gas leaks, as well as any electrical shorts.  If you find a problem, contact the utility company or fire department for assistance.  Now on to the next disaster: Hurricane Irene.  Here’s a handy article on preparing your home for a hurricane.  Up next: How to prepare your home for locusts!  (Kidding)  And, if you’re tired of all these disasters and are just getting out of Dodge, here’s your vacation checklist, including some good home security tips.

Speaking more generally about the market, it’s been a busier-than-average summer.  Inventory is still low, and mortgage rates have hit ALL-TIME lows.  Turns out that a credit downgrade actually caused investors to flee into US Treasuries (strange, I know), which are helping to keep rates low.  Thinking of refinancing?  I know some great lenders and settlement companies if you need advice.  A good rule of thumb is that if rates are 1% lower than your current rate, and you are planning to stay in the property at least a few more years, you should look into refinancing. But check with a lender about your specific situation.

Low rates aren’t enough to convince anyone we’re headed towards recovery though, and a NY Congressman has proposed another housing stimulus–this one with matching of down payment funds of up to $20,000.  Personally I don’t think it will go anywhere in our current political environment, but we’ll see.  The Administration is, however, working on a proposal to keep Fannie Mae and Freddie Mac around, which will help keep rates low. 

Conforming loan limits are due to change October 1, which will increase rates for those home buyers borrowing more than $625,000.  (Our area’s current limit is $729,750.)  Loans must close BEFORE 10/1/11 to qualify for the existing limitations.

Our local real estate and job markets continues to outpace, well, the entire world. And no wonder: Tysons, Herndon, and Arlington made the Best Places to Live for the Rich and Single, and Great Falls, Tysons, and Potomac made CNNMoney’s “Top Earning Towns” list.

We have scheduled our next first time home buyer class for Tuesday September 13, so if you know someone who is interested in learning more about the market and the home buying process, just have them register for our class.

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]]> http://blog.wethmangroup.com/2011/08/30/dc-real-estate-market-update-august-2011/feed/ 0 http://blog.wethmangroup.com/2011/03/21/can-i-make-an-offer-now-if-i-dont-want-to-settle-for-several-months/ http://blog.wethmangroup.com/2011/03/21/can-i-make-an-offer-now-if-i-dont-want-to-settle-for-several-months/#comments Mon, 21 Mar 2011 15:07:40 +0000 Katie Wethman http://blog.wethmangroup.com/?p=1323

Cheaper to Buy Than Rent in DC Area According to Trulia’s first quarter 2011 index, it is officially...

Related posts brought to you by Yet Another Related Posts Plugin.]]> It’s a tricky thing to time a home purchase with the expiration of a lease.  Often buyers ask me: Can I make an offer on a house I like now even though my lease isn’t up until later this year to minimize the overlap?

Typically contract to close will be 30-60 days. There are several reasons for this.

The first is your loan.  You can not lock in an interest rate until you have a property (the letter has a rate, but if you read the fine print it will say somewhere that it’s ‘subject to’ an acceptable property…at that time they give you whatever the current rate is.  Once you find a property, a lender will lock you in for 45 days for free, and beyond that you need to pay a rather hefty fee (thousands of dollars).  For that reason, most buyers look to close within 45 days of contract.

Most sellers obviously want a quick close as well (unless you pay a premium to make them wait), so it’s rare to see a closing that is many months away on a resale.

Occasionally sellers will want a ‘rent-back’ or post-settlement occupancy agreement, wherein they reimburse the buyers for their costs to stay in the property for up to 60 days past settlement.  More than 60 days will create problems with your lender, as that’s typically the time frame after which they will consider it an ‘investment property’ and your loan terms will be different.

Buyers should also remember that the first mortgage payment isn’t due until the 2nd full month after you settle.  So, for example, if you settle in April, then your first payment isn’t due until June 1.  This is because you make mortgage payments in arrears, rather than in advance like you do with rent.

Of course every situation is different, but an experienced agent can help you utilize some of the contract’s clauses to minimize any overlap between your lease and your mortgage.  Every situation is different, so contact us to discuss your rent-to-own transition or attend a free first time home buyer class.

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]]> http://blog.wethmangroup.com/2011/03/21/can-i-make-an-offer-now-if-i-dont-want-to-settle-for-several-months/feed/ 0 http://blog.wethmangroup.com/2011/03/14/i-got-my-condo-docs-now-what/ http://blog.wethmangroup.com/2011/03/14/i-got-my-condo-docs-now-what/#comments Mon, 14 Mar 2011 16:50:53 +0000 Katie Wethman http://blog.wethmangroup.com/?p=1383 Yet Another Related Posts Plugin.]]> In Virginia, buyers of condominiums and properties within a homeowner’s association have a three (calendar) day review period to review the “resale package” or “condo docs” following a ratified contract.  In the District buyers have three business days.   (Typically these are not available in advance because associations charge a fee, and most sellers are reluctant to incur that fee before receiving an offer.   Several items in the package are also time-sensitive, so if the package is too old then sellers will need to pay for an updated package, so most sellers choose to wait until the offer is received before ordering.)

Sometimes the documents are electronic or online, or often they come in a big binder for your reading pleasure.   Some of the items that are supposed to be included* the resale package are:

-          Bylaws, rules, and regulations of the community (e.g., pet, noise, and rental policies)

-          The annual association budget

-          Two months of Board minutes

-          A statement from the property manager about whether the unit is currently in compliance with rules (do NOT assume that if there is a violation the seller will remedy it prior to settlement!)

-          Master insurance policy

*Unfortunately sometimes items are missing from the resale package.  You can ask for the missing items, but it does NOT extend your three day window for rescission.

There will be a lot of information to read through in a short amount of time, so I recommend buyers first prioritize these three items:

-          Review the rules and regulations to make sure you can live with them.  Even if you’ve verbally been told otherwise (e.g., “oh, no one actually carpets over the hardwoods and it’s never a problem” or “there are lots of owners with dogs even though the policy says no pets”,  or “of course you can install a washer/dryer.”  These are the rules and you should be prepared to have them enforced.  There are no guarantees that a lax Board will always remain lax.

-          Look at the percentage of units that are more than 30 days past due on fees.  Could it be indicative of a financially strapped community with short sales and foreclosures to come?

-          Compare the reserve balance to the engineering study, which is a study that estimates the remaining useful life and cost to replace or repair for community items such as parking lots, roofs, and common areas.  Engineering studies are typically performed every five years.

-          Is there a move in fee or capital contribution required at settlement?  This is becoming a big trend for condos to assess buyers a fee to help fund their reserves, sometimes it can run into the thousands of dollars.

The three day period can be a stressful one, because it’s difficult to get more details if needed in such a short amount of time.  Property managers are often restricted from giving information to non-owners, further complicating the ability to get details related to a buyer’s concerns.  The remedy is to negotiate with the seller for an extension of the period, or to void the contract, so it’s best to read the documents immediately upon receipt to identify any potential issues early.

More resources:

Search the MLS for properties

Contact us to discuss your home search

Attend a free First Time Buyer Seminar

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