U.S. job growth, powered by the sun

March 10, 2009

esolarchrisOk, since one of my kids works in the solar industry, this matters a lot to me. Not only that, but let’s use some of that “free” solar power while we still have the sun!

The U.S. solar industry is expected to support more than 440,000 permanent, full-time jobs, including many in the manufacturing and construction industry, by the year 2016. The solar jobs growth layer shows where these jobs are likely to be created across the country. You’ll see that many of these jobs are being created in states that have experienced the worst of the current economic crisis, including Pennsylvania, Michigan, and Ohio.

Official google.org Blog: U.S. job growth, powered by the sun.


Laptop Cat

March 6, 2009

Speed Bump in this morning’s Washington Post:

laptopcat

I have this problem every dang day. I clearly need some sort of “cat remover,” or perhaps a repellant like they make for deer (Not Tonight, Deer) except for cats. And please don’t tell me to get some dog urine. Ugh.

Kim Hannemann, Real Estate Consultant/Realtor®, Samson Realty
Cell: 703-861-9234 • Fax: 703-896-5055 • Email: KimTheAgent@gmail.com

It’s Good To Have A Friend In The Business®
samson-realty-and-bird

If you would like to discuss real estate questions, sell or buy a home in Northern Virginia – including Alexandria, Annandale, Arlington, Burke, Centreville, Chantilly, Clifton, Fairfax, Fairfax Station, Falls Church, Kingstowne, Lorton, McLean, Reston, Springfield, or Vienna – contact Kim today.

4 – 4.5% Listings with First-Class Service — Cash Back to My Buyers!


Why Is The Buyer’s Agent Paid By The Seller?

March 5, 2009

housequestionIt’s a strange arrangement. Here I am, the agent for the buyer, receiving my compensation from a party who not only is not my client, but whose interests are (one would think) directly opposed to those of my client – the seller. They want the highest possible price, my client wants the lowest. They don’t want to spend money on repairs, my client wants the repairs made. The list goes on. The two sides are in agreement on one thing only – they want the transaction to happen. Yet it it almost universal for the seller to pay the buyer’s agent. Huh?

This seemingly oddball arrangement exists for a couple of reasons. First, the historical background: until the mid-1990s, real estate brokers and agents operated under subagency agreements, whereby brokers listed property, and offered cooperative commissions to other brokers bringing in buyers for the listed property. Under subagency, these cooperating brokers and agents were legally bound to represent the seller.

conmanDespite this fact, most buyers thought “their” agent represented them, and acted accordingly, often to their detriment. By sharing how much they were willing to pay, when they had to buy, or how much they loved the home, they unwittingly provided the seller with useful negotiating information. Eventually the Federal Trade Commission put pressure on the states to have real estate agents disclose to consumers exactly whom they represent. Most states eventually adopted disclosure laws, and the industry adapted by creating buyer agency arrangements (similar to sellers’ listing agreements). But the existing commission arrangement remains in place – the seller still pays. Why?

no_moneytranspThe reason that sellers still pay the commission is because the main obstacle to buyers being able to buy is a lack of cash – cash for the down payment, cash for closing costs, cash for the move, cash for furnishings, and the list goes on. It takes a long time to save that money. Some people find it difficult; others find it impossible. Add the buyer’s agent commission, and the seller will have fewer buyers available.

The seller is receiving cash from the sale. If they pay the commission, more potential buyers are able to afford this property. The more potential buyers, the higher the likely sales price. The higher sales price provides the incentive for the sellers to pay the buyer’s agent in addition to paying their own.

There are “exclusive buyer agents” who accept their payment only from their buyer client and refuse the seller’s offer. They argue that the only way for a buyer to be certain to avoid any conflict of interest is to avoid firms that both list and sell homes, and to compensate their own agent. In practice, I have never been tempted to change my buyer representation perspective regardless of the offered compensation. I disclose to my buyer clients the compensation offered on every property, and have on occasion used higher compensation levels to assist my clients in the purchase.

Kim Hannemann, Real Estate Consultant/Realtor®, Samson Realty
Cell: 703-861-9234 • Fax: 703-896-5055 • Email: KimTheAgent@gmail.com

It’s Good To Have A Friend In The Business®
samson-realty-and-bird

If you would like to discuss real estate questions, sell or buy a home in Northern Virginia – including Alexandria, Annandale, Arlington, Burke, Centreville, Chantilly, Clifton, Fairfax, Fairfax Station, Falls Church, Kingstowne, Lorton, McLean, Reston, Springfield, or Vienna – contact Kim today.

4 – 4.5% Listings with First-Class Service — Cash Back to My Buyers!


Buyers — Read This First!

March 4, 2009

 

houseThinking About Buying A Home?

 

Wonderful idea . . . if you do it the right way.

kimh_006cutout

Step 1:   Find a Great Agent.

Step 2:   Relax.  We’ve got your great agent right here. (see photo –>)

Yes, You Want and Need an Agent!

Look, I just want to find a house to buy. I can look on the Internet. Why would I need an agent?

Many think the buyer’s agent’s job is to say, “Here is the kitchen.”  Or that it’s about looking in the MLS to find the buyer a property they like. Or that it’s making showing appointments with listing agents and sellers. Yes, we do that, but the real job of a buyer’s agent is to find you the best property for your needs given your circumstances, and get you the best possible bargain on it, and get you through the maze of legal and contractual tasks you’ll have to do to complete the purchase.

But couldn’t I just use the seller’s agent?

This is what is known as a big mistake. The seller’s agent and the seller have an agreement specifying the responsibilities of the agent. All of their legal responsibilities are to the seller. They are working for the seller, not for you, and they have a contractual obligation to sell that property at the highest possible price, on the seller’s best terms.signpaper

The buyer’s interests don’t enter into it. The sellers’ agents don’t care if you could buy a better property for less, or get a better deal on this one, and they don’t care about any potential problems or issues with the neighborhood or the home itself, now or later.

The seller and his agent know more about the property than you. A good buyer’s agent can fill that information gap. They spot issues that buyers need to know about before they make an offer. When you get to negotiations, a buyer’s agent has been watching what’s been sold in the area recently. You haven’t—and you’re not going to get in now. A buyer’s agent keeps your interests front and center.

If the seller’s agent convinces you that he can represent you as well as the seller—a situation known as “dual agency,” which is legal in Virginia but not everywhere—you have to ask yourself:  What happens when the interests of the seller and buyer diverge, as they usually and naturally do? In that situation, the agent can’t do much more than back slowly out of the room, shut the door, and let the parties fend for themselves. Have fun … 

checkbookHow much does a buyer’s agent cost?

The quick and easy answer is … nothing!  Wow!  What a deal!

That is correct. The listing contract calls for the seller to pay the seller’s agent a set percentage of the sales price, and share that amount with the buyer’s agent, if there is one. If there isn’t, the seller’s agent gets to keep it all. Of course, the only person bringing money to the table is the buyer, so in that sense the buyer is paying it all—whether they have an agent, or not.

So, not using a buyer’s agent is not going to save you any money—and remember, you certainly aren’t going to get as good a deal, and may wind up making a huge mistake on the most important financial decision of your life. Why not get what you are paying for?

What’s this “cash back to the buyer” thing?

moneybag

Just another one of Samson Realty’s little improvements to the way business is done in the local real estate industry. What we do is offer the buyers we represent a rebate of 0.5% of the sales price, if the buyer agent commission is at least 3%. While there is no standard, about 90% of commissions offered are in that range.

On a $400,000 purchase, that would be $2,000 to you. It’s our experience that most buyers, especially first-time buyers, are short of cash, and every little bit helps!

Aside from the commission having to be 3% or better, the only other caveat is that there are sometimes limits imposed by your mortgage company on the amount of seller subsidy and other incentives you can accept, which might curtail the rebate in some cases.

I’d be happy to answer real estate questions for you with no charge and no pressure. Email me, phone me, or check my blog – updated regularly with all kinds of interesting stuff – at

It’s Good To Have A Friend In The Business

Tips for Buyers

Can you afford to buy a home? Did you know that paying rent can be more expensive in the long run? When you pay rent, your money is gone forever. But when you make mortgage payments you build equity in your home. Your home may also appreciate in value, often faster than the rate of inflation. Property taxes and mortgage interest paid on your personal residence are usually 100% tax deductible, and profits on the sale of your home are often tax-free. There are numerous advantages to owning a home. Here are some things to consider when buying your first home:

Credit and Affordability

preapprove

Get a copy of your credit report. Most lenders will get a credit report and review it with you as part of their pre-approval process. The sooner you do this the better. If your credit report contains items that need correcting, you’ll want to fix them before you make an offer on a home. Many web sites offer calculators that help you determine how much home you can afford. Many of these use standard debt ratios of 28/36, meaning that your housing payments cannot exceed 28% of your gross income and that your total debt cannot exceed 36% of your gross income. However, depending on your assets, credit history and earning potential, you may qualify for more than what the standard debt ratio calculations would indicate. Contact a lender such as Prosperity MortgageFirst Savings Mortgage, orWells Fargo Home Mortgage to determine how much you can afford. These lenders are backed by strong banks, they know the best programs, and best of all, they’re nice people that I know personally.

Down Payment?

Buyers often assume they need to save 10-20% of the purchase price before they can buy a home. While most loan programs require cash for the down payment and closing costs, some allow 95-100% financing, and often the sellers can contribute closing costs.

Other Considerations

In addition to your mortgage payment, you will also pay for property taxes and homeowners insurance. If you buy a condominium you’ll likely pay a monthly condo fee. Could your requirements change? Will you have a larger or smaller family in the near future? Will you some day need a home office or work area? Consider how your needs may change in the next several years.

Kim Hannemann, Real Estate Consultant/Realtor®, Samson Realty
Cell: 703-861-9234 • Fax: 703-896-5055 • Email: KimTheAgent@gmail.com

It’s Good To Have A Friend In The Business®
samson-realty-and-bird

If you would like to discuss real estate questions, sell or buy a home in Northern Virginia – including Alexandria, Annandale, Arlington, Burke, Centreville, Chantilly, Clifton, Fairfax, Fairfax Station, Falls Church, Kingstowne, Lorton, McLean, Reston, Springfield, or Vienna – contact Kim today.

4 – 4.5% Listings with First-Class Service — Cash Back To Home Buyers!


Making Your Home Affordable – The Plan

March 4, 2009

mhalogo

The US government’s Making Home Affordable plan was released this morning. Millions of homeowners wanting to see if they qualify under the plan for either a refinancing or a loan modification will be eager to check out this program.

You might qualify for refinancing under the plan:

  • If the home you want to refinance is your primary residence; and
  • The loan on your home is controlled by Fannie Mae or Freddie Mac; and
  • You’re current on your mortgage payments (not more than 30 days late on your mortgage in the last 12 months); and 
  • You have sufficient income to support a new mortgage.

You can owe between 80-105% of the current value of your home, but no higher than 105%.

If you think you might qualify to refinance, you’ll need to give the following documents to your mortgage lender:documents

  • Your monthly gross (before taxes) income of your household, including recent pay stubs.
  • Your last income tax return.
  • Information about any second mortgage on the house (you can only refinance your first mortgage under the plan, but having a second mortgage won’t automatically exclude you).
  • Account balances and minimum monthly payments due on all your credit cards.
  • Account balances and minimum monthly payments for all your other debts, like student loans or car loans.

You might qualify for a loan modification (first mortgage only) under the plan: 

  • If you originated your mortgage before Jan. 1, 2009; and
  • You are an owner-occupant; and
  • You have an unpaid balance that is equal to or less than $729,750 (for a single-family home); and
  • You have trouble paying your mortgage due to financial hardship – perhaps because your  mortgage payments increased, or your income was reduced, or you suffered a hardship (such as medical problems) that increased your bills, or you can show that you soon will be unable to make your payments. You will be required to enter an affidavit of financial hardship; and,
  • Your monthly mortgage payment must be more than 31% of your gross (pre-tax) monthly income.

You must successfully complete a three-month trial period at the modified rate. If you make all payments on time, you will keep this lower rate that will be fixed for five years.

The idea is for your monthly payments (not including private mortgage insurance) to reach 31% of your pre-tax monthly income. The monthly payments are defined as payments on the principal, interest, taxes, insurance (not including mortgage insurance) and homeowners association/condo fees. First, the lender will reduce the interest rate to no less than 2% on the loan, so that the monthly payments are less than 38% of your monthly income. Then, the Treasury will match further reductions, dollar-for-dollar, with your lender, to bring the monthly payments down further, to 31% of your monthly income.

If you keep your payments on time after the modification, the government will pay up to $1,000 each year in the first five years toward reducing the principal on your mortgage.

After five years, the interest rate on the loan will start to increase by no more than 1% per year, but can’t go higher than what the market rate was on the day your loan was modified.

The amount you owe versus the current value of your home doesn’t matter for this program.

The foreclosure process will stop while you’re being considered for the program, or for any alternative foreclosure prevention option.

The borrower does not have to pay any charges or fees. Any fees are supposed to be paid by the company that holds the loan, and the servicer of the loan will pay for your credit report. The company that services your loan will get a an incentive fee of $500 for each modification they do. Once your lender modifies your loan, they’ll be paid a $1,500 incentive.

Gather these required loan modification documents:

  • Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources;
  • Your most recent income tax return;
  • Information about your assets;
  • Information about any second mortgage on the house;
  • Account balances and minimum monthly payments due on all of your credit cards;
  • Account balances and monthly payments on all your other debts such as student loans and car loans;
  • A letter describing the circumstances that caused your income to be reduced or expenses to be increased (job loss, divorce, illness, etc.).

Then call your mortgage servicer (the company you make payments to). Your servicer is not required to join the program, but the government hopes that the incentives will motivate them to participate.

Kim Hannemann, Real Estate Consultant/Realtor®, Samson Realty
Cell: 703-861-9234 • Fax: 703-896-5055 • Email: KimTheAgent@gmail.com

It’s Good To Have A Friend In The Business®
samson-realty-and-bird

If you would like to discuss real estate questions, sell or buy a home in Northern Virginia – including Alexandria, Annandale, Arlington, Burke, Centreville, Chantilly, Clifton, Fairfax, Fairfax Station, Falls Church, Kingstowne, Lorton, McLean, Reston, Springfield, or Vienna – contact Kim today.

4 – 4.5% Listings with First-Class Service — Cash Back to My Buyers!