GDoN Revisited by Hipchickindc

by Prince Of Petworth February 5, 2010 at 11:00 am 9 Comments


In real life, hipchickindc is licensed as a real estate broker in the District of Columbia, and as a real estate salesperson in Maryland. Unless specifically noted, neither she nor the company that she is affiliated with represented any of the parties or were directly involved in the transaction reported below. Unless otherwise noted, the source of information is Metropolitan Regional Information Systems (MRIS), which is the local multiple listing system. Information is deemed reliable but not guaranteed.

Featured Properties: 1704 U St NW #E

Original List Price: $425,000.

List Price at Contract: $425,000.

List Date: 11/20/2009

Days on Market: 31

Settled Sales Price: $408,000.

Settlement Date: 1/29/2010

Seller Subsidy: $8000.

Bank Owned?: No

Type Of Financing: Conventional with $88,000. down payment

Original GDoN Post is: here.

Recent Listing is: here.

I haven’t profiled a condo in a while, so here’s a look at Victoria Court. This property, which was built in 1981, has a total of 12 units and 6 deeded parking spaces. (Deeded parking spaces are favorable in urban markets, where they can theoretically be sold independent of a residential unit.) Located in the vicinity of Dupont Circle, Adams Morgan, and the U Street Corridor, this two bedroom, duplex unit features an updated kitchen, a fireplace, and both a patio and a balcony. This unit did not include a parking space with the sale.

A sales history for Victoria Court exists in the multiple listing system for sales since 1996. I’ve compiled the sales history ordered from lowest sales price to highest, with date of sale shown at the right side of the report, which can be seen here. There is some discrepancy on the data, particularly in the year built date, which is odd since all of the tax records clearly state the date built as 1981.

I’d like to make note that one of the reasons I started including type of financing and amount of down payment is because in previous Good Deal or Not (GDoN) comments, there has clearly been a range of understanding of current financing options. We’ve seen significant changes in the lending industry guidelines over the past couple of years, particularly in terms of higher down payment requirements for conventional loans, the disappearance of second trusts used as a financing strategy to avoid mortgage insurance, the increase in the use of FHA (Federal Housing Administration) loans, and the resurgence of the requirement for private mortgage insurance. Continues after the jump.

One of the reasons a buyer may choose to work with an FHA loan is because the down payment is typically 3.5%, compared to at least 10% for conventional products. In the recent past, buyers were able to use FHA financing for condos, even if the entire building had not gone through an FHA approval process. If the building met certain criteria, including a restricted percentage of investor-owned units, for example, then it could be allowed through a lender-submitted FHA spot approval process. The spot approval has recently been done away with and FHA now requires entire buildings to be approved. New construction condos are typically up to speed and are applying routinely, but older buildings may no longer be eligible to FHA buyers until the entire building submits an application. Buildings that have been previously approved for FHA financing will have to re-apply after two years. It now may actually be easier for FHA buyers to purchase a house or a new construction condo (with restrictions, of course) than to buy in older buildings.

This is probably very confusing information, especially for people who have not recently or ever financed a real estate purchase. If someone is thinking about the possibility of buying a property in the near future, the best thing you can do to get started is to get recommendations for two or three loan officers. Understanding financing options is a crucial first step in the buying process. If you own a unit in a condo, the association may want to consider looking in to applying for FHA approval and making sure that any subsequent sellers advertise an approved status in their listings.

  • Anonymous

    Interesting. I wonder if this particular property would have sold for a higher price if it were available to FHA buyers.

  • Anonymous

    I recently spoke to someone in the investment industry who insisted there was no way you could possibly buy a condo in the DC market without at least a 20% down payment. Was I being misled? It’s all very confusing to someone who really wants to buy a home but has no idea what they’re doing.

  • JustMe

    I can’t believe someone paid list price for that crappy unit, but the location was a good one.

    I recently spoke to someone in the investment industry who insisted there was no way you could possibly buy a condo in the DC market without at least a 20% down payment. Was I being misled?

    Mostly, yes, you were being misled. Now, there are several condo buildings where the units are owned to a large degree by investors, and these you will need 20% down payments for, but most decent buildings that are mostly owner-occupied you will be able to get financing with well less than 20%.

    • DCster

      I don’t necessarily disagree with your evaluation of this condo’s worth, but the buyers didn’t pay list price, in the end they paid about 6% off list price.
      I used to live across from these condos – it was a nice block, but the downside was the noise of the fire engines from the station about a block away (but then I’m sure whoever moves here isn’t looking for the silence of suburbia anyway).

  • Neil

    Anonymous at 12:12, I bought via FHA loan last fall for 3.5% down. Your source was incorrect; you should talk to a mortgage lender or broker.

  • Neil, the rules have changed since then, although it is still possible to buy a condo with an FHA loan. It’s just a huge challenge.

    JustMe, the unit sold for a net of $400,000.

  • The buyer

    I bought it. I love it. It’s worth every penny!

  • mark g. griffin

    Victoria Courts was developed by Royce Lanier, a very talented architect who did several very nice buildings around town. He developed the Dove House at New Hamshire and S Street and the big townhouses on New Hampshire Avenue near Washington Circle. He also developed the Morrison Clark Inn just of Mass, on 11 h Street. His buildings have a reputation for being well built and well designed. Nor everyone liked the facade of this building when it came on the market because it was considered very modern at the time. I have always loved the design. I prepared the condo documents for this project.

  • Mark and The buyer, thanks for stopping by!


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