November 27, 2008


As I mentioned the other day, my family is visiting Pasadena this week to see my son Chris, whose first “real job” with eSolar is here. I must say, despite the rain (yes, it can rain in southern California), it is one of the nicest small cities we have had the pleasure of touring. The streets are clean, the town is eminently walkable, there are beaucoup places to shop and eat, and of course the climate is absolutely seductive.

Real estate is in the same boat as in the northern Virginia area, but it will recover well, I believe. I continue to urge Chris to buy – perhaps after the first of the year – and take advantage of the current pricing and mortgage rates. If you happen to be looking in the Pasadena area, I can recommend Chris’s agent Irina Netchaev and her website Pasadena Views.

Go Jackets!

November 21, 2008

ramblinwreckThis coming week I will be visiting Pasadena with my family. The Pasadena resident member, Chris, is a proud Georgia Tech graduate. While he is indeed a helluva engineer, one of the reasons he chose to go to Georgia Tech was because of the athletic tradition of the school, which despite its relatively small undergraduate student body (e.g. half the undergrads of U of Georgia, Virginia Tech, U of Maryland, Florida State), is an extremely storied one.

On the Saturday after Thanksgiving, GT and UGa play their annual grudge match. Going into the contest this year, GT is 8-3 and sitting precariously atop its division, with a chance to reach the ACC title game. Georgia is 9-2 but out of contention for the SEC title. For GT to win its division, on the 22nd Clemson must beat UVA and NC State must beat UNC; then UVA needs to beat Virginia Tech the next week. Pretty convoluted.

UPDATE 11/22:  Clemson beat UVa and NC State beat UNC! If Virginia Tech loses either this week to Duke or next week to UVa, GT is in the conference championship game!

But it all won’t matter if GT beats UGa. We’ll be home by then so Chris will probably be watching at his favorite watering hole, provided the game is telecast on the Left Coast.


I’m a Ramblin’ Wreck from Georgia Tech and a hell of an engineer,
A helluva, helluva, helluva, helluva, hell of an engineer,
Like all the jolly good fellows, I drink my whiskey clear,
I’m a Ramblin’ Wreck from Georgia Tech and a hell of an engineer.
Oh, if I had a daughter, sir, I’d dress her in White and Gold,
And put her on the campus, to cheer the brave and bold.
But if I had a son, sir, I’ll tell you what he’d do.
He would yell, “To Hell with Georgia,” like his daddy used to do.
Oh, I wish I had a barrel of rum and sugar three thousand pounds,
A college bell to put it in and a clapper to stir it around.
I’d drink to all good fellows who come from far and near.
I’m a ramblin’, gamblin’, hell of an engineer.

Go Jackets!

Want To Buy A Home, But Can’t Afford To Fix It Up?

November 21, 2008

I hear this a lot:


“I’d like to buy a foreclosure because I can get a great deal, but almost every one I see looks like crap – dirty carpet, missing or broken appliances, lots of cosmetic repair work – and I don’t have much cash after the down payment, so how am I supposed to fix all this stuff?”

It’s certainly true that in looking for a great deal on a foreclosure, you are going to encounter a lot of homes that have not been cared for very well. As you can imagine, when folks can’t make their mortgage payments, they have little money or incentive to maintain the property as well as they otherwise might. If you do manage to come across a foreclosure in good condition, you can be sure it will sell quickly, and the buyer will pay close to market price. Not the great deal you were looking for, right?

home-improveFHA has a loan program that is designed precisely for this situation, and makes it as easy as possible to get qualified and get the repairs done. The loan program is called the FHA 203k Streamline program and it allows homeowners to finance improvements costing up to $35,000 into the original mortgage. (For those homes that need major rehabilitation, there is also a full FHA 203k loan which will allow more than $35,000 worth of rehabilitation work to be done, but is much more complex. This post covers only the “Streamline 203k” – for more info on the “full 203k” see here.)

Because the 203k Streamline is an FHA program, all standard FHA guidelines apply when qualifying for the loan – low down payment, etc.

The maximum Streamline 203k mortgage amount is the lesser of:

  • The maximum (statutory) mortgage limit for area
 (Northern Virginia is $625,500 for 2009).
  • The “As is” value (usually the purchase price or outstanding debt in case of a 
refinance transaction) plus cost of rehabilitation
  • 110% of “After Improved” value; Condominiums are limited to 100% of “After Improved” value.
  • If the borrower has owned the property for less than one year, the acquisition cost is the maximum.What improvements are eligible under the new Streamlined (k) program?

The Streamline 203k program is for uncomplicated improvements to a home for which plans, consultants, engineers and/or architects are not required. It includes the improvements shown below:

  • Repair/Replacement of roofs, gutters and downspouts 
  • Repair/Replacement/Upgrade of existing HVAC systems 
  • Repair/Replacement/Upgrade of plumbing and electrical systems
  • Repair/Replacement of flooring 
  • Minor remodeling, such as kitchens, which does not involve structural repairs
  • Painting, both exterior and interior 
  • Weatherization, including storm windows and doors, insulation, weather stripping, etc.
  • Purchase and installation of appliances, including free-standing ranges, refrigerators, washers/dryers, dishwashers and microwave ovens 
  • Accessibility improvements for persons with disabilities 
  • Lead-based paint stabilization or abatement of lead-based paint hazards 
  • Repair/Replace/Add exterior decks, patios, porches
  • Basement finishing and remodeling, which does not involve structural repairs
  • Basement waterproofing
  • Window and door replacements and exterior wall re-siding
  • Septic system and/or well repair or replacement

That’s an extensive list of the sorts of things that need doing on most foreclosures. What properties are not eligible?  If they require the following sorts of work, you’ll have to use the “full” 203K:

  • Major rehabilitation or major remodeling, such as the relocation of a load-bearing wall; 
  • New construction (including room additions);
  • Repair of structural damage; 
  • Repairs requiring detailed drawings or architectural exhibits; 
  • Landscaping or similar site amenity improvements;
  • Any repair or improvement requiring a work schedule longer than six (6) months; or
  • Rehabilitation activities that require more than two (2) payments per specialized contractor.

Under the 203k Streamline guidelines, you must use contractors to complete the work unless you can provide documented proof that you can perform the work yourself (for example, if you are a licensed plumber or electrician) and the lender will verify your contractors’ credentials in the loan process. The contractor will also have to provide licensing, bonding and insurance documents and professional estimates. However, for the 203k Streamline program a general contractor is not required, so you can line up your contractors yourself.

Once the loan is approved and closed, the repair funds are held in escrow until payment is made to the contractors. You will have up to 3 months from your closing date to complete the work and no more than 2 payments (first payment and final payment) may be paid to each contractors. The first payment is limited to a maximum of 50% of the total cost, and all payments are disbursed to the contractor unless you are performing the work. In that case you have to provide receipts for materials and of course your labor is “free.”

For more information, you should speak with an FHA-approved mortgage professional. I can recommend a couple of good ones if you like!

What Caused The Problems?

November 20, 2008

Here’s a little video that gives one reason:

But it’s only one reason, and maybe not the main one. The greed of certain mortgage brokers could only have had this impact if the greed (and in some cases ignorance) of everyone else involved in those transactions was not also at work.

Monty Python Channel Comes To YouTube

November 19, 2008

Unbelievably, the Pythons have agreed to post everything in their own YouTube channel (watch the announcement video):

For closet Python geeks like me, this is a tremendous boon. However, for the business of real estate (as well as the businesses of home maintenance, cat care, and whatever-else-have-you), it will be a tremendous loss of daily production.

Thomas Jefferson High School for Science and Tech – We Came for the Yuks

November 18, 2008

examanswer1Thomas Jefferson High School for Science and Technology – TJHSST – is arguably the preeminent magnet high school in the United States. Two of my kids graduated from TJ and I spent a lot of time there over a seven-year period.

TJBash is a “quote repository” containing (PG-rated) quotes by TJHSST students, alumni, and faculty mostly relating to humorous personal experiences occurring in class, such as:

// During “Word of the Day” in English

Erin: My word is “masticate”, which means to chew. I picked it because I like the way it sounds.

Ms. Bello: Does anyone want to use the word in a sentence?

Erin: I masticate every day.

Tim: I masticate 3 or 4 times per day. I even masticate with my friends.

Bello: Good job, guys.

Tim: Would you like to masticate with me, Logan?

Logan: *laughing too hard to answer*

Erin: Do you think you masticate too much, Tim?

Tim: There’s no such thing as too much mastication.


//In Chemistry, Dr. Acio is explaining variably charged metal ions

Dr. Acio: Tin (II) is called stannous, tin (III) is called stannic. Don’t do what one kid did and say it’s “satanic chloride.” It ain’t satanic, it’s stannic.
A: *mutters* No, there’s only one satanic thing in this room and it writes tests.

How To Get Out Of Debt . . .

November 14, 2008

I saw this one at a business planning seminar this week.

Vodpod videos no longer available.

I was an original fan of SNL but lately my body clock has been in a different time zone . . .

Holy Jeez, Another Post About “Why You Should Buy A Home TODAY!”

November 14, 2008

Every real estate broker, agent, organization and “affiliated business” has been banging the drum for the last few months about how important it is for buyers to get off the bench and into the game now. But is this really good advice, or just marketing hype?Nervous

Well, I’m a real estate agent, so what do you think I am going to say? You’re right, but keep reading anyway.

Consider the following:

  • Huge efforts are being made by mortgage banks, financially backed and politically demanded by the federal government, to halt the foreclosures that have been occurring in many communities. These efforts take the form of loan restructuring and even partial forgiveness, and include guarantees from the government. The incidence of foreclosures is going to drop substantially.
  • Homes that have been on the market in Northern Virginia, especially already foreclosed homes, are rapidly disappearing into the hands of investors and others, who know a buyers market when they see it. (In Prince William County, the foreclosure capital of the Mid-Atlantic, home sales were up 150+%  year-over-year in October.)
  • Mortgage funding is plentiful and cheap, and you can buy with a low (or even zero) down payment. You only need good credit and verifiable income.
  • Let’s not forget the $7500 tax credit.
  • People who don’t own a home would like one; people who own a home would like a better one. There is a huge amount of pent-up demand for homes in the job-rich Northern Virginia area, from people who couldn’t afford to buy in the 2003-06 boom and were too nervous to do it the last two years.

Speaking of booms, look what’s coming:


The housing demands of the Echo Boomers might be greater than that of the original Baby Boomers. Different, perhaps; tempered by different lifestyles, backgrounds and desires; but demand nonetheless. These are largely college-educated, fairly affluent people (in Northern Virginia), and they will want to buy.

You may be among them – in fact, you probably are. You are going to have a lot of competition for a home – unless you get out there in front and stop worrying about whether you buy at the exact bottom of the market.

I think Suze Orman can be a little simplistic, but (in addition to being rich) she has some good points here:

Loan Limits for Northern Virginia Going Down in 2009

November 7, 2008

housekeyThe Federal Housing Finance Agency today released the 2009 Conforming Loan Limits – the maximum size of loans that Fannie Mae and Freddie Mac can purchase in 2009 – and Northern Virginia is at the maximum $625,500. Most of the country has a $417,000 maximum.

Because of the Economic Stimulus Act enacted in August, loans originated in 2008 up to a maximum of $729,750 may be purchased by Fannie and Freddie. This means that, if you are hoping to buy home in the higher price range, you have a very small window of time in which to get your act together. When the clock strikes 2009, the interest rate on new mortgages between $625,500 and $729,750 will go up.

Making Your Home Stand Out In A Buyers Market

November 6, 2008

sellhomeIn a buyer’s market, besides pricing your home right, you need to do whatever you can to make buyers like your house more than the others.

It’s never fun to put a lot of money into a house you are selling – especially when you feel like you lost out on the big boom –  but there are many affordable ways to improve your chances of attracting serious offers and getting the best price possible: 

  • Paint the interior. Fresh paint can do wonders. This is the perfect time to change those kid-decorated rooms to more neutral colors. You can do it yourself unless you don’t feel comfortable about the quality of your work or are pressed for time.
  • Repair cracks and holes. Repainting gives you a good excuse to patch holes left from hanging pictures, and to fill any small settlement cracks that may have formed over the years. Remember to check kitchen and bathroom areas that might need recaulking, too. 
  • Clean or replace carpeting. If your carpeting is in good shape, free from stains, you might try renting a carpet cleaner. This can give new life to your carpeting. But if your carpet is stained, odiferous,or just plain old, your best option may be to replace it. A dirty or ugly carpet will not impress buyers.
  • Clean or paint the exterior. Curb appeal is everything (well, except for location-location-location), and no matter how great the interior of your house looks, a dirty exterior can make buyers flee before they get inside. A good power washing can brighten it up considerably – but if you have faded siding or peeling paint, you should strongly consider a fresh coat.
  • Pay attention to the driveway. If you have a paved driveway, fill in any significant cracks. Clean up any rust marks or oil stains too.
  • Clean the windows. It will improve the brightness and curb appeal. Don’t forget the window sills and tracks – dirt and mildew accumulates there, and can be a real turnoff. 
  • Make your landscaping stand out. Again, curb appeal is very important, and your landscaping will make a difference. Make sure you keep your lawn mowed and neat. If you have existing decorative landscape plants, take care that they are in pleasing shape. Make sure you have fresh looking mulch, and remove any dead or dying plants. If you have some empty space, consider putting in a few showy plants. If you have a front porch, adding some planters or hanging baskets of flowers is a nice touch.
  • Remove exterior clutter. Get rid of that old grill that you no longer use, and if you have kids, organize or remove some of their toys from the yard. Keep it simple – no pink flamingoes or other items that may not appeal to everyone.
  • Clean up your clutter inside. What may not seem like clutter to you may be instantly perceived as clutter by someone else. This includes jam-packed closets, the stack of mail or newspapers on the counter, and the handy but unsightly treasures stuck to your refrigerator. While these things may not seem to take up space, they give the impression of crowdedness.
  • Clean out the attic, basement, garage, and other storage spaces. Most buyers will be interested in storage space. This space can be the difference when the buyers decide to make an offer. If you currently use those storage spaces yourself, at least organize them and make it look like there is plenty more storage. Consider clearing some of the stuff out – after all, you’ll be moving soon anyway!
  • Create more open space. Remove unnecessary furniture and personal items that take up space. Maybe you have a coffee table that collects magazines and dust, or a treadmill/clothes hanger in your bedroom. When you open up more space in your rooms, the buyers will have a better visual image of how their own furniture might fit into the house.
  • Clean the kitchen and bathrooms like never before. These are the real selling points, and they have to shine. You want every inch of the bathroom to look as if you could eat off of it, and you want your appliances and counters in the kitchen to look like new. If you have a problem with ants or some other pest, make sure you take every possible step to eradicate them – and don’t leave your traps or bug spray in sight.
  • Update your lighting. Replace any burnt-out bulbs, and make sure the bulbs in a multi-bulb fixture all match. If you have windows that provide a lot of light from the outside, keep the blinds or shades open and working properly to let this light in. Most buyers love rooms that receive a lot of outside light, so if you’ve got it, flaunt it.
  • Finally, deal with odors. Every home has its distinct odors – favorite foods, plants, that special air freshener you can only get in Guam – but prospective buyers will zero in on smoke and pet odors. You can try to minimize these odors, but they are almost impossible to hide without changing all the carpeting, curtains and upholstery in the home. Cheap cover-up sprays can just make things worse. Try quality scented candles or potpourri – don’t go overboard! – or better yet, do some baking before you are expecting to show the house. Try to refrain from cooking strong smelling foods like fish or sauerkraut on weekends or when you otherwise expect you might have visitors.