2017 has been quite a year in DC real estate world. I’ve had the honor of helping many buyers on their homeownership journey and through the process I’ve had the opportunity to observe both the challenges and triumphs that come with purchasing a home. With that I’d like to share the most common mistakes that I see buyers make and some tips on avoiding them:
- Not getting fully pre-approved before looking at homes
Putting some numbers into an online calculator is not going to cut it. Figuring out how you are going to pay for a house is equally as important as what house you are going to buy. Would you go shopping for anything else without knowing how much money you have to spend? It’s VERY hard to reduce your budget and price range mid-search and be happy with the new options.
- Deciding exactly what you want after online research alone.
There are things that you can’t see or feel online. These things may make a difference in the direction of your home search. Your search may confirm that what you think you want, is actually what you want, but I find more often than not that this may change as you explore different options. Stay open minded.
- Attempting to buy the house that you think that you will need or want in 5 years rather than what makes sense today. (Exception — if you are getting to the age where you think you may be buying your last home, this does not apply!)
DC is expensive, and it’s hard enough to afford a home that meets your needs today, much less your future needs and the needs of your unborn children. As a young-ish adult, a lot can change in a few years. Buying in a good school area before you have children may cost you a lot in the long run if you miss out on a chance to build equity in a faster appreciating area. Having 3 bedrooms when you only need 1 means you’re paying a lot every month for space that you may not really need.
- Your family, friends, co-workers are great people who mean well, but they are not real estate professionals, and they may not be giving you advice that is actually helpful.
Real estate is a hot topic in D.C. and everyone wants to share their advice and experiences. As a real estate professional, I know that everyone’s search is different with different objectives, priorities and preferences, and my job is to help buyers reach the best possible outcome using my knowledge and experience. Your parents will always be advising that you proceed with caution, because they don’t want you to make a mistake or purchase that you will regret. (more…)
A good real estate property description should be detailed and compelling, and give the reader a good idea of whether a property is something that they might be interested in. I often find descriptions and listing remarks filled with the same ambiguous phrases and vague euphemisms that lead to more questions than answers. The MLS listing remarks are limited to a short 400 characters, so it’s sometimes necessary to read between the lines and consider both what is included and what isn’t. Below I’m sharing some insight into what these overused statements really mean.
Cozy = I hope you don’t like a lot of space or have a lot of stuff. Potentially too small for normal sized furniture.
Charming = Sometimes a synonym for old or “vintage.” Most often, not recently updated.
So much potential = Be prepared to spend time and money realizing that potential.
Solid bones = Usually used when there isn’t anything positive to say about the rest of the house.
Perfect for entertaining = Is any house not perfect for entertaining? I haven’t yet figured this one out.
Possible mold or water damage = There’s definitely mold and water damage, enter at your own risk.
Possible off street parking = Depends if you have a smart car or SUV, or, once you remove a concrete wall and regrade the yard you may be able to park there.
Lots of development in the area = The neighborhood might not look like much right now, but just wait! Maybe a good idea to do some research on the area first.
Close to commuter routes = Not walkable, but if you have a car, you can get anywhere, even to work. May also indicate traffic noise or volume. (more…)
Question: I’m thinking that I’m going to be ready to sell my condo and move in a year or two, and I’ve set aside some money for improvements. I’d like to try to make improvements that result in a higher sales price or at least get back the money I spent on them. What do you recommend?
This is a great question and is a common discussion that I have with prospective sellers when they are preparing to sell their home. I strongly recommend starting this process as much as a year in advance (or more), and it’s always a good idea to consider the resale value of any money that you invest in your home. That imported Italian tile may be the most beautiful that you’ve ever seen, but that doesn’t mean the buyer who buys your home is going to be willing to pay any more for it.
To start with, I’m going to assume that all of the major systems and appliances of your condo are in normal working order. By major systems, I mean the HVAC, water heater, electric panel and wiring, plumbing — all the big ticket expenses. If they aren’t, you should start there.
It may seem obvious, but if your furnace is 30 years old, the chances of it coming up as a buyer objection when you go to sell are pretty good. Unfortunately, replacing mechanical systems doesn’t make your home LOOK any better, but I recommend saving receipts and creating a list of improvements (with the amount spent) so that buyers can better visualize the value of that new air conditioner. It’s not a bad idea to keep a running spreadsheet so that you have this info ready to go without having to dig through your records. (more…)
This week, we had a special “Development News You Can Use” request for information about the St. Elizabeths Hospital East Campus redevelopment. It’s no secret that there are many development projects under construction in wards 7 and 8 right now (21 to be exact), but this is one of the ones that hasn’t gotten as much recent publicity.
History: St. Elizabeths was established in 1855 as the Government Hospital for the Insane. In 1916 the name was changed to St. Elizabeths Hospital. There are 2 campuses on 176 acres, and approximately 70 buildings — to put this in perspective, the national mall is 146 acres. The West Campus is owned by the federal government and under the control of GSA (the award winning U.S. Coast Guard Headquarters are located there). The East Campus is owned by the District of Columbia, this is the redevelopment project that we will explore in this column. While the buildings are vacant and disrepair, there is something both eerie and beautiful about them at the same time.
Location: St. Elizabeths is located in Congress Heights, the east campus is bordered by Martin Luther King Jr Ave to the west, Alabama Ave SE to the south and the Congress Heights Metro Station adjoins the south east corner of the property.
Development Summary: The redevelopment of Saint Elizabeths East is a multiphase project. Progress has been slow but steady since the release of the new Master Plan in 2012. Phase 1 will include the 15 acres nearest the Congress Heights Metro station and the highly anticipated 4,200 seat arena that would host Wizards practice, Washington Mystics home games and other entertainment. (more…)
In this fast paced and competitive DC housing market, buying is a challenge in itself without adding in the extra variable of selling a home at the same time. Sure, in an ideal world, you would be able to keep both your old home and buy a new one, but the DC real estate market strikes again and for many this is not financially feasible (or maybe you don’t want to experience the joys of being a landlord).
When selling and buying, timing is everything and advance planning is your best bet for a successful move, without having to move more than once. There is no one size fits all solution to this challenge but there are a few options to consider:
Option 1: Sell first, then buy. This usually includes an extended settlement date or rent back on the sale, to allow time to purchase.
Pros: you will have any proceeds from your sale to apply to your purchase. You won’t be stuck with 2 housing payments at the same time if it takes longer than expected to sell your home.
Cons: You will have a limited amount of time to find the home that you want to buy and ratify a contract (usually 2-4 weeks). There is a risk of not finding a home, or not ratifying a contract, in which case you may find yourself making sacrifices that you didn’t intend to make, or opting for a plan B of a temporary housing arrangement. (more…)
As we enter November, we’re starting to see late fall price reductions and some great deals. This week I am highlighting 4 homes that have the highly sought after 3 bedroom/2 bathrooms (or more) that offer the ideal space and layout for many buyers.
East end DC continues to win with affordable, newly renovated, single family homes and this one is no exception. With a huge master suite and fully fenced back yard, this home offers suburban amenities in a close in urban location — 1 block from the St Elizabeths East redevelopment and 0.7 miles from Congress Heights Metro station.
This one level, 3 bedroom, 3 full bathroom condo is move in ready and offers an amazing amount of space for this price and location. Renovated in 2007, with in unit washer dryer, and a separate exterior entrance. Located across from Moreland’s Tavern (opening this weekend), Second Wind Crossfit and more, this location has more walkable options in close proximity than you might expect.
This spacious foursquare is being sold as a short sale but is in great condition with new central AC, furnace and a renovated kitchen. The unfinished basement and attic spaces offer space for future expansion. This home is a great option for a patient buyer looking for a move in ready home for 2018.
This fully renovated home is back on the market with a new lower price and has a master suite that you might expect to come with a much higher price tag. Located 1.5 miles from the Potomac Ave metro, it is easily accessible to Capitol Hill and downtown DC.
One of the top questions asked by buyers who are considering a condo purchase is, “What is the condo fee?” Often followed by, “Why is it so high?” The monthly fee is an important consideration as it can range from $150-$1,000+ per month in our area and there are a few factors that play a large role. Here are a few frequently asked questions and answers on this subject:
What are condo fees?
In a condo building, condo units are individually owned and maintained by their owners. The property (which may be one building, or a series of buildings) also includes parts that are not individually owned, that are controlled by the condo association. This typically includes the grounds, roof, elevator and any other limited or general common elements not owned by an individual owner.
Condo fees are paid by unit owners to cover the costs of management, operation and maintenance of the property. Operating expenses include the day-to-day operations of a condo building such as administration (sometimes in the form of property management), utilities, trash removal or landscaping.
Reserve funds are allocated for future anticipated building maintenance such as a new roof or elevator. Each component of a building has an anticipated useful life expectancy with regular maintenance costs and an eventual replacement date and cost.
Condo fees are the primary revenue generation activity of a condo association, and if there are unexpected expenses, an association may need to levy a special assessment.
There are many reasons why a condo building may have higher than average condo fees. It is true that building amenities like a pool, gym increase the operating expenses of the building and have maintenance costs. These features can also add value for owners and increase the market value of units in the building potentially offsetting any added cost. (more…)
Last week, The Wharf celebrated the grand opening of the first phase of the project. What was once an underutilized strip of nondescript buildings hiding the prime DC waterfront has been transformed into a dazzling array of glass and steel. Before you get too nostalgic about the historic Maine Avenue Fish Market, keep in mind it will be back and better than ever in 2018.
In addition to the shops, restaurants, piers and plazas, there are two condo buildings that are part of the first phase of the development, 525 Water and Vio. It’s understandable that a waterfront view and prime walkable location will come at a price, but the record setting $1,000/square foot price tags at VIO were still somewhat startling even for someone accustomed to high housing costs in DC.
Sure, we’d all love a brand new waterfront condo, but let’s be realistic here, the prices are way out of reach for most DC residents. With that in mind, today I’m exploring the other options in the Southwest Waterfront neighborhood, within a few short blocks of the Wharf and at a fraction of the cost.
While real estate agents have been touting The Wharf as a selling feature for years, history shows that the real price appreciation of existing units in the immediate vicinity has yet to take place.
355 I Street SW #114 | 1 bed/1 bath | $395,000 | condo fee $321/month
- Potomac Place Condominium
- Newer construction, built in 2005
- 730 square feet with balcony, in unit washer dryer, open floor plan
- Rental parking available within the building for an additional cost
1301 Delaware Avenue SW #N725 | 2 bed/2 bath | $325,000 | coop fee $851/month
- River Park Mutual Homes Cooperative
- Monthly fee includes all property taxes and utilities
- Amenity filled community
- Total monthly payment (with 20% down) is less than $2,200/month
490 M Street SW #W608 | 1 bed/1 bath | $299,900 | coop fee $704/month
- Waterfront views!
- As close to The Wharf as you can get
- Monthly fee includes all utilities (+cable) and property taxes
- Parking available for sale for $45,000
Myth: When choosing a lender, shop around for the lowest interest rate
Reality: When exploring lenders and mortgage options there are many factors to consider besides the interest rate including:
- A lender can’t offer you an interest rate until you have a property lined up to purchase and they have reviewed your financial qualifications. Those low rates that you see advertised are available to specific borrowers for specific loans, not everyone who uses that lender.
- Different lenders do not all offer the same products. Shopping for a mortgage is not like shopping for a car.
- Many lenders have reputations, some good, some not so good. In a competitive offer situation, submitting a lender letter from a mortgage provider who doesn’t have a good reputation is not going to help get your offer accepted. In fact, it will likely have the opposite effect.
Why do sellers care?
- A seller who accepts an offer from a buyer whose financing is declined can lose a significant amount of money in terms of carrying costs and a potentially lower sales price if the market has changed.
- Yes, real estate agents are partial towards advising sellers to accept offers from buyers who are working with reputable (usually local) mortgage providers. They don’t receive any financial incentives for recommending a specific lender, and don’t want to be in a situation where a deal falls through because of a bad lender.
What’s the risk?
- If you decide to work with a lender, and they don’t have your loan ready by the settlement date, you as the buyer may be in default of the contract. There is no penalty to the lender. The seller can pursue damages for this default.
The lender you choose has a substantial impact on your home purchase. This decision can impact whether or not your offer is accepted on a home and whether you are able to complete the transaction (or if you will face financial penalties as a result of default).
Yes, a lower interest rate will save you money, but only if you’re first able to complete your home purchase. It’s important to consider more than just the interest rate when exploring your financing options and make an informed decision that will set you up for success.
Wondering what questions you should ask prospective lenders? Check out our list here.
Tired of hearing about homes selling in less than a week and multiple offer scenarios? Me too. So let’s explore the other end of the spectrum today and take a look at a few homes that have defied the odds and continue to remain actively listed, after a year (or more).
Homes that last on the market for a long time and have a high number of days on market can tend to be overlooked by buyers who remain focused on the newest listings, but they can also present great opportunities (and have way better negotiation prospects than new listings).
2620 Moreland Place NW — Chevy Chase DC — $800,000
- $800,000 for a 3 bed/3 bath detached home in Chevy Chase DC is well below the market average
- Originally listed in March 2016 for $925,000, and reduced as low as $710,000 in June 2017 but is back up to $800,000 — it’s possible that the seller would consider a lower price once again
- Listing remarks specify that the home is subject to an existing lease, but the photos show a vacant home (added 8/2/17)
2619 University Place NW — Columbia Heights — $899,900
- Over 3,000 square feet including a finished basement and only 4 blocks to metro
- Insider tip — the home has a few additional rooms that are not legal bedrooms, but is much larger than the 3 bed/3 bath size suggests
- Originally listed in August 2016 for $950,000 and reduced to $899,900 in February 2017
- Outdoor space is limited but this would make a great investment property — no yard maintenance for tenants to keep up with! Prospects for adding an upper level deck are good
350 G St SW #N104 — Southwest/Waterfront — $479,000
- Originally listed in August 2016, this 1 bed/1 bath 892 sq ft condo has held a consistent list price of $479,000 for the last 428 days
- Located in the Potomac Place condominium community, this unit is in one of the newer buildings that was built in 2004 and the condo fee of $422.42 includes great building amenities (outdoor pool, multiple fitness rooms, business center, concierge)
- A few short blocks from The Wharf and all of the amazing things planned for this development