Real Estate and Reston, VA: August 2009

I remember when turning right on a red light used to be against the law. The law was modified to 'Right on Red after coming to a complete stop' to help traffic flow more smoothly and eliminate waiting at a light when there was no traffic coming that would keep you from making a safe right turn.

The number of people who either disregard this entirely or choose to see it as a guideline, rather than a law, astound me.

As someone who runs and walks frequently, I see evidence daily of how this law has become dangerous. At virtually every cross walk, I spend more time making sure I am not going to be hit that watching the safe crossing count-down.

I am not saying the law should be changed back, but I would like to see some public service announcements and possibly some tickets issued to remind the public of how important this law is.

Yesterday as I left the Harris Teeter in Reston, I came to a stop, looked to my left to see if traffic was coming and was startled by the blaring horn. I proceed to make my right turn, got in to the left lane to make a turn at the next light and looked over my shoulder to see who was beeping (and what they were beeping at).  Imagine my surprise when someone flew up beside me and gave me 'the gesture' with their middle finger.

Sorry I choose to obey the law...so feel free to beep and gesture. I will be that car that comes to a complete stop, pays attention to pedestrians and traffic and then continues on my way.

And to the 'lady' in the VW Jetta, "Have a Nice Day!"

In my last post I listed some things for buyers to consider as they begin the process of looking for a new home.  In this post, you will find that list continued. Hopefully, the items I bring up here, and in my previous post 'A Fresh Look At Buying A Home, Part I,' will help you to narrow your focus and allow you to begin a more targeted search for your new home.

1. How do you picture your weekends? Are you a career-oriented single looking for a place with a great master bedroom and close-by work out facility? Or are you part of a young couple who is moving to a new area and hopes for impromptu cookouts with the neighbors?  Is it important to have a dog park near by? Do you see yourself strolling to the neighborhood coffee shop each morning? Certain types of homes and neighborhoods lend themselves to certain lifestyles and social events. If you are hoping for certain types of activities, make sure that they find a place on your 'wish list.'
   
2. Is the neighborhood important to you or are you just looking for a great place?  I often take buyers out to look at properties during the day, but I always suggest that they come back and see a place between 7:30 and 8:30 in the morning and 5 and 6 pm. Why? This is when you will get a chance to meet your potential neighbors, find out how many cars really park in the parking lot and see if there is a 'rush hour' to get in and out of your neighborhood. Don't be afraid to strike up a conversation; most folks are happy to share the 'good, the bad, and the ugly.'  If you are looking for a place that has either a lot of children, or not many, it will give you a chance to see the bus stops. You will see how many people are out walking their dogs and if neighbors stop to talk to one another at the mailbox.  All of these things can give you a better sense of what kind of neighborhood you are considering.
   
3. What can you REALLY afford? The very first thing you should do when you decide you are ready to buy your first home is talk to a lender. There are a number of expenses, above and beyond the price of the house that you will have to pay. These include taxes, settlement costs, fees associated with your loan and more. Your lender should be able to give you a good estimate of these fees (the Good Faith Estimate)  when you sit down to apply for the loan so that there are no surprises at the settlement table.
4. What do you WANT to afford?  After my clients talk to their lender and get that an idea of what they can afford, I ask them to think about it in the context of their current living situation. If they are currently spending $1,200 a month on rent and the lender has told them that they can afford  a mortgage that results in an $1,800 a month mortgage payment, where is that extra $600 a month coming from?  Are they willing to take  less expensive vacations?  Are they willing to eat at home, rather than at restaurants?  Will they give up that Saturday afternoon trip to Costco?  The monthly costs of buying a house have to be viewed in the context of your whole life--not just your mortgage payment.
   
5. When do you need to be out? Be sure you know what your time restrictions are for getting out of your current situation. If you are in a month-to-month rental, you have flexibility. If you are in a rental with a move-out date, you need to be sure you have a back up plan in the event that the 'house of your dreams' cannot be ready at the same time.  This might be a good time to consider a  brief stay with friends or family, or to talk to your landlord and see if they have any flexibility. Many of the best purchase deals right now are Short Sales. The downside to a  Short Sale contract is that it is almost impossible to predict how long it will take to get approved by the bank, or banks, involved. This makes buying a Short Sale challenging for someone with a firm Move Out date. Having a 'back up plan,' will save you from a huge amount of stress if your settlement is delayed, or your contract falls apart. Don't wait until you have a property under contract to begin putting this plan together.This is definitely a time to be pro-active and think of all your options.
6. Do you need help to find your new home?  While you may be comforted by the help your parents or a trusted friend provide, there is no substitute for having an Accredited Buyers Representative (a Buyer's Rep or ABR) at your side, negotiating on your behalf. A Buyer's Rep will help you negotiate the best deal for your new home and help you through the sometimes stressful process of home inspections, radon testing, loan application, appraisal and settlement. Because so many properties that first time buyers are considering are foreclosures or short sales, this is really a time when you want to be able to rely on the recent experience of your ABR to guide you through the complexities of buying. Bring the parents and best friend along for moral support, but I would advise relying on a professional to help you through the process.

You have probably guessed that I am a planner by nature.  Particularly in a buying situation such as we are seeing now with Short Sales and Foreclosures, planning for different scenarios is the best way to protect yourself from the uncertainties that are inevitable. 

Buying a new home can be stressful under the best of circumstances, but with  some thought and planning you can minimize your stress and, in the end, wind up with a home that you can enjoy for many years.

Most of us were raised to get an education, start a career and buy a home.

So you find yourself having finished your education and happy in the resulting career. The next step, logically, is to buy your first home.

Before you pull up Craig's List and start hitting the Sunday Open Houses, there are a number of things you should consider. Most of us think that the number of bedrooms and the location are the big decision factors, but there is a lot more thought that needs to go in to such a large investment.

 This is list is not intended to be everything you should think through, but it will get you started on the right path.While the list is geared mostly toward first-time buyers, these are things that every purchaser should consider before buying a new home.

1.  How much do you have in Savings?  How much do you owe?  I was watching a show with Suze Orman the other day and she made the point that if you have money in savings, but you owe more than that in credit cards and student loans,  you don't really have anything in savings--that money is all owed to someone. 
   
2. What are you willing to sacrifice to buy your new home?  You may love the great location of your apartment, close to public transportation and the night life.  Chances are very good that you will not be able to go from a rental in a great location to a comparable home in the same location.  Most people will have to sacrifice either the great location or find a smaller place.  Which is more important to you?
3. What are the maintenance expenses associated with the type of property you want to buy? With a condo this is easier to calculate. All of the outside maintenance is handled by your condo fee (but, yes, you must pay the condo fee,  so it is not without cost). You will be responsible for the inside appliances and systems, flooring, walls, plumbing, etc. A townhouse generally will require you to maintain the outside (house and yard).  This includes replacing rotten trim, installing new windows, replacing the roof, mowing the lawn and everything else outdoors.  The detached home is similar to the townhouse but with more yard, more exterior surface, more interior surface.  These costs can really add up and the cost of ignoring these improvements can be quite high. In each of these types of property, you will have responsibility for the appliances, plumbing, electric and internal surfaces.
4. How will your commuting expenses change? If you move further out, you will use more gas, possibly pay tolls and put more wear on your car. If you have a car lease, you could end up spending a lot of money to cover that extra mileage. Spending more to get to work each day may seriously impact your monthly expenses.
   
5. Are you a 'do-it-yourself' type or will you need to hire help?  This goes for maintenance, yard work, cleaning and improvements.  How much time are you planning to put in to your new home?  If  you would rather spend your free time relaxing,  will you have the resources to pay someone for help after buying your new place? The bigger the place, the more there is to clean (and maintain).
   
6. Is your desire to buy property based on what is best for you or based on what you think is best for you? If you have a job with a lot of travel, do you want to come home at the end of each week to take care of your new home? Some people find that relaxing. Others do not. Which type of person are you? Do you plan to stay in the area for a long time, or are you just here for a year or two?
   
7. What is your Five Year Plan? You should not buy a house that you cannot stay in for at least 5 years.  If your 5 year plan includes starting a family, which is more important: the extra bedroom or the built-in TV with  surround sound in the family room ?  If you are downsizing, is the 3-story walk-up condo the best best or should you think about a first floor unit or one with an elevator? Do you have family that visits from overseas for extended periods of time or a child that lives with you during the summer? These are all considerations when deciding what makes one property better than another.

I hope that these questions have got you thinking about your new home purchase in a productive way. There is so much more to buying a new house than identifying a property and signing the mortgage papers.

Thinking through these issues before you buy will hopefully go a long way to make you a more satisfied purchaser and a happier homeowner.

For more things to consider before buying a new home, go to  A Fresh Look At Buying A Home, Part II...

As a result of the meltdown of the real estate industry, there are, indisputably, some really great opportunities for buyers.

Yesterday, I heard a radio commercial advertising an opportunity to buy foreclosed homes. The call to action was an 800 number where you would receive a list of foreclosed properties that you could consider.

The advertisement had the woman telling her friend that she was in a new home for $100 a month. Excuse me?! That would mean that she bought a property with a loan of roughly $17,000 if you assume a 30 year payment and a rate of 6.5% and 20% down-payment.  That would be a sales price of $21,250.  I am not saying impossible (well, yes, in my area I am) but not realistic. Why would a bank sell you that property?  It sounds like a scam to me...and the scariest thing is that they probably get thousands of calls every day.

(In response to one of the comments this post received, I want to clarify that there are areas in the country where it would be possible to buy at this price.  In the area where I practice, this is not a reasonable expectation, however, this is the market where the radio ad was running. I was able to find 3 mobile homes at that price or lower, but no condominiums, townhouses or detached homes. Keep in mind the point of this post is to take reasonable, well thought out risks).

If we have learned anything from this recession, it should be that there are some things we need to keep in mind:

1. There is no substitution for savings. Save your money and do not over-leverage yourself to purchase things that you cannot afford. We should all strive for investments, but we still need to have that safety net of savings in the bank.
   
2. Risky loans are called 'risky' for a reason. Do not take on a loan that is beyond your comfort level now, or in the future.
   
3. Understand the terms of any loan or investment that you have or wish to make.  That fine print has some pretty important information. It is no ones fault but your own if you do not read it.
   
4. A home is the place that you can come at the end of a long day and relax.  A rental can be a home, too. Don't succumb to the pressure to buy a home unless you are ready both financially and emotionally.
   
5. When you buy a property, make sure it is somewhere you could stay if you had to.  If you don't think you could stay there for more than a year or two, you should not be buying the property in question.  You never know what could happen in the short term to derail your plans (does 'recession' come to mind?).
   
6. Buying the house is only the first step; you need to have the resources and enthusiasm to maintain it, too. Unlike a savings account, a house requires constant maintenance and investment.  The house payment is only the first of many, many expenses. The bigger the house, the bigger the bills. Electric and gas bills are often a factor of house size. So are maintenance expenses.  Be sure you buy a house that suits you, but also that suits your wallet.
   

I truly believe that if something sounds too good to be true, it  probably is (or else I did not read the fine print).  And I am an optimist.  I have learned through the years that there is nothing that can replace hard work and good planning.  All those folks who thought there was an 'easy way' are paying the price as property values plummet and it is difficult to sell their properties. I feel badly for them, but that is what happens when you make investments that you do not understand.

Make sure you trust the people that you work with--but at the end of the day, you must take personal responsibility for your actions.

The old adage that your home is your biggest investment is still true. It is just not your biggest investment account.  Remember, if it sounds too good to be true--it probably is!

Be smart, buy smart and enjoy the rewards!

Here is another really great one sent to me by a good friend. Read the article, but be sure to watch the video. Enjoy!

Keith Urban, "Kiss A Girl"

TNT Fitness has been providing personal training services to local Northern Virginia residents since 1999.



I have participated in their group personal training at both Reston Sport & Health and Herndon's Worldgate in Northern Virginia.  If you are looking for a way to work toward your personal fitness goals, this is a wonderful program, made more affordable by its group nature.

At the Reston Sport & Health, I show up 2 mornings a week (and sometimes on Saturdays, when make-up classes are offered) for 45 minutes of Ab work, weight lifting, squats and stretching. The well educated and fun trainers, Brock and Dianne, put us through our paces and adapt each exercise to our individual limitations.  No need to worry if you are new to weight lifting, are working with an injury or are looking to push yourself further. Each participant is given weights and exercises appropriate to their personal level of fitness and personal goals.

Three times during  a 12-week session we do body fat and body weight checks. The trainers provide you with information you can use to work toward a weight loss goal  and this monitoring helps keep you on track.

My personal goal was to increase my weight bearing exercise and 're-distribute' some of my body fat. I have been able to accomplish both of these goals through the TNT Fitness Program.

Each session we are provided with diet guidelines and stretching information.  We update the  weekly log with how we are doing on our cardio, 'homework' (assigned exercise designed to strengthen our abdominal muscles), stretching and diet.

The pricing for the sessions vary based on when you joined and whether or not you belong to the health club. I do not belong to the health club, so I pay an additional 'club use' fee.  In addition to participating in TNT, this club use fee allows me to do the cardio work out at the gym  that I am supposed to do on each of my TNT days. There are also evening TNT sessions. 

The program builds a  real group camaraderie; last week I missed a happy hour, but understand that it was well attended by people in my group (as well as several folks who switched to an earlier group to adapt to a new work schedule).

Speaking of work schedule adaptations, the trainers are great about working with you to make up classes when work or personal obligations get in the way. There are also numerous opportunities for make-up classes at many different locations and times.

If you are looking for a way to change up your work out routine, or to start a new one,  I suggest you look in to the TNT Fitness program. More information is available at www.tntfitness.com.

We have all seen the studies that show that after a long summer break, children take a while to get back in the groove of school.

The Reston Regional Library is ready to help you combat this problem this weekend by offering an opportunity to buy your children some books they would like to read, at a price you would like to pay.

Friends of the Reston Regional Library are sponsoring the 2009 Childrens' and YA* Used Book Sale. This sale will be held on Saturday, August 22 from 10-4 and Sunday, August 23rd from 1-4.

There will also be teachers materials available, so it is a great way for new teachers to stock their classrooms or for experienced teachers to refresh their materials.

These materials will only be available at this sale; the September sale will not feature any children or young adult books.

So take an hour or so this weekend and go by the Reston Regional Library, located at 11925 Bowman Towne Dr., Reston, VA 20190, and pick up some books for the children, grandchildren,  students or the child next door!

*Young Adult

Pricing a listing correctly is a little bit art, a little bit science, and mostly  based on a whole lot of data.  Before you pick a price for your house, consider the following pieces of advice:

• Don't Set the Price Too High. I have had (many) clients say to me, 'Price it high so I have some wiggle room on the negotiations.'  While I understand where you are coming from, I never recommend starting high...it almost always results in feedback that your house is priced too high. This is a sure way to have your house languish on the market for a few weeks (buyers will wait to see if you do a price reduction) and ultimately get an offer lower than what you would have gotten if it was priced correctly at the beginning. Not to mention the stress of getting your house ready and waiting for buyers who don't show up...
  

• "Did I price it too low?" When I price a house and it quickly goes under contract, my clients sometimes fear that their asking price was too low.  I contend that a house that is priced properly, in very good condition and staged to appeal to a broad number of clients, should sell quickly. That doesn't mean it was priced wrong--it means it was priced right!

• What did Sally Sue Get For Her House? The days of finding out what the house down the street sold for and tacking $5,000-$25,000 on the price  to set your asking price are over.  If you list your home for more than the most recent comparable (house that sold), you better be able to explain why.   Appraisers are being very particular and are not going to bring you an adequate appraisal unless it can be justified on paper. Not getting an adequate appraisal can result in the re-negotiation of the sales price or, even worse, your buyer can just walk away if they have an appraisal contingency.
  

• Do not 'back in' to your price. I have had people tell me that they need a certain amount of money out of their house. That's great. It has no bearing on what buyers are willing to pay for your home. Stop worrying about what you want and start thinking about what you can get. The market will bear what the market will bear--regardless of your situation.
  

• Too Much Information and Not Enough Facts. Zillow, Trulia, Realtor.com and all of the other sites  out there are  great resources. No individual site should be used to create a valuation of your property. It doesn't matter to you what other homes are listed for. You care about what other comparable homes have sold for, recently, and if there were any seller concessions given (closing costs, repairs, etc.). Comparables are based on Sales not on Active Listings.
  

• Sometimes The Market Is Changing Quickly and You Must Adjust: If you pick a price and you do not see steady traffic, you have priced your home too high. It happens.  A quick adjustment will show buyers that you are serious about selling. Your Realtor can advise you what amount of traffic is appropriate in your area in your price range.  Specialty properties will see fewer buyers and mid-priced homes will see the most. If you are not getting a reasonable amount of traffic for your type of home, it is almost certain that your home is overpriced.
  

• Stop worrying about what your neighbors will think and price your home to sell. It is not a great feeling to know that you have the most recent comp in the neighborhood and it is low. Remember, it is not your fault that the real estate market is experiencing a downturn.
  

Follow-up with Realtors and Buyers who have seen your home. Have your Realtor do this if you have listed it through a Broker; you will get the most honest feedback that way.  Once you have the feedback, Listen To The Themes That You Are Hearing. If you hear more than once that your home is priced too high, or if you have the condition mentioned by a buyer or two, you are beginning to see a theme. If you ignore what you hear, you will realize less money in the long run. This is not the time to bury your head in the sand or stand firm on your price (if the evidence points toward the need for a price adjustment).

Despite all that goes in to pricing a property, there are times when only a price modification will make it sell. Don't be shy about agressively lowering your price; every home has a price point at which it will quickly get a contract.  Again, keep an eye on the traffic--you should see an appropriate number of buyers coming through your home. If you don't, you must adjust your price to optimize your profit. Price adjustments can signal buyers that you are a serious seller who is willing to make changes to get to market price.

By being honest with yourself about your home's value and listening to the pulse of the market, you should be able to arrive at a price for your home that will be competitive and will allow it to sell quickly.

ales in the Lake Anne section of Reston, Virginia continued briskly in July, with more homes closing this year than last in all categories except detached homes. Below are the statistics comparing sales from last July to this July for both number of units sold and the average net price (price less seller incentives).

Number of Detached Homes Sold From 7/1/08-7/31/08:     3
Average Net Price in 2008: $  486,000
Number of Detached Homes Sold From 7/1/09-7/31/09:   1
Average Net Price in 2009:   $  560,000
Percentage Price Change:   *because of the small sample size, this will not be an accurate reflection of the change in value

Number of Townhouses Sold From 7/1/08-7/31/08: 6 
Average Net Price in 2008:  $  523,500
Number of Townhouses Sold From 7/1/09-7/31/09:   13
Average Net Price in 2009:    $  439,615
Percentage Price Change:   -16%

Number of Condominiums Sold From 7/1/08-7/31/08: 14  
Average Net Price in 2008:  $  328,318
Number of  Condominiums Sold From 7/1/09-7/31/09:   18
Average Net Price in 2009:    $  279,808
Percentage Price Change:   -14%

Total properties (all 3 types) sold in July of 2008: 23
Total properties (all 3 types) sold in July of 2009: 32
Percentage change in numbers sold:                     +28%

The sales of condominiums and townhouses in the Lake Anne area of Reston, Virginia reflect real estate trends that are being reported in other areas: while sales are going up, prices are going down. This was not true of detached homes, as reflected in the data above. Of course, the nature of Lake Anne is that there are  fewer detached homes than townhouses and condominiums. The decrease in price may be attributed to a national increase in the number of short sale and foreclosure properties being sold, but this information is not readily available.

As you can see from the decrease in price and increase in sales of condos and townhouses, many entry level and mid-level buyers are taking advantage of the current buyers markets and advantageous interest rates to purchase homes. The government First Time Buyer incentives are also likely to be contributing to the increased number of units sold for these low to mid-priced homes.

Across all areas in Reston, an increase has been seen in the number of townhouses sold. In Hunters Woods and North Point, there as been an increase in the average net sales price while Lake Anne has seen a decrease.  Keep in mind that since in many cases the numbers of units sold is relatively small, a very high or very low price can have a big impact on the average price.

For more information about sales in the Hunters Woods section of Reston: Market Report Hunters Woods July 2009

For more information about sales in the North Point section of Reston: Market Report North Point July 2009