Washington DC Foreclosure Auction, Day 1, March 8th, 2008

Live in DC? Concerned about the foreclosure rates across the country, think again!

I know everyone single one of the readers out there has been concerned about whats effecting the real estate market. From the credit crunch to the subprime fallout to the skyrocketing foreclosure rates across much of the country, there is reason for concern and rightfully so. What reassures me about our local market is an article I just came across from Tom Bridge, of DC.Metblogs.com, whose research points to DC maintaining its pricing and market stability for both the short and long term. Based on Tom's research, foreclosure rates in DC are among the lowest in the country, which includes many of the other major metropolitan markets. According to Tom, DC's foreclosure rates are 1 in 16,000 homes as of July, 2007, and only 17 were entering the foreclosure process in June of 2007.

According to my research, based on data from MRIS, Metropolitan Regional Information Systems, there are currently 81 homes on the market with bank addendum's, 18 of which came on in the month of August. Thats better than any market across the country as far as my research is concerned. Maybe you won't be gaining the equity of all of the owners over the past 7 years, but stability is better than many of the other markets across the country. Believe me, my entire family is in Florida.

DC Top city to Rebound after Slump according to BusinessWeek

Its about time!!! Just as predicted all along, according to John Burns Real Estate Consulting, out of Irvine, California, DC will be one of the first cities across the country to rebound despite what many of you have read in your local paper. This comes as a relief to many of the sellers out there that may have caught the real estate jitters. Among the other cities cited were San Diego and New Jersey. Refer to my original blog about my brother here.

Thank Peter Coy for todays recent insight, a writer for BusinessWeek. His article can be found here.

You may be asking what all this means. My interpretation of the release, despite difficulties in the mortgage industry is all too commonplace an answer. DC's population is nearly 40% subsidized by government funding. On top of the stability of public servants incomes as well as the general population here, the government is about to undergo a significant turnaround in their political population, thereby increasing the need for housing movement. I wouldn't be so worried, this is still the most powerful city in the world.

Do you know anyone going into foreclosure? A short short sale might be an unwelcomed option.

Despite my last post we have been working a significant amount with banks representing properties on their way to foreclosure. Keep in mind that the following information only outlines what a short sale is but it can be detrimental to ones credit.

This recent post is from About.com regarding Short Sales...

There are many ways to lose a home but signing away ownership in a manner that destroys credit, embarrasses the family and strips an owner of dignity is one of the hardest. For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings. One of those options is called a "short sale." When lenders agree to do a short sale in real estate, it means the lender is accepting less than the total amount due. Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose. If you are considering buying a short sale, there could be drawbacks. For your protection, I suggest that all borrowers
Obtain legal advice from a competent real estate lawyer
Call an accountant to discuss tax ramifications
As a real estate agent, I am not licensed as a lawyer nor a CPA and cannot advise on those consequences.

Be aware the I.R.S. will consider debt forgiveness as income, and there is no guarantee that a lender who accepts a short sale will not legally pursue a borrower for the difference between the amount owed and the amount paid. In some states, this amount is known as a deficiency. A lawyer can determine whether your loan qualifies for a deficiency judgment or claim.
Although all lenders have varying requirements and may demand that a borrower submit a wide array of documentation, the following steps will give you a pretty good idea of what to expect.
Call the LenderYou may need to make a half dozen phone calls before you find the person responsible for handling short sales. You do not want to talk to the "real estate short sale" or "work out" department, you want the supervisor's name, the name of the individual capable of making a decision.
Submit Letter of AuthorizationLenders typically do not want to disclose any of your personal information without written authorization to do so. If you are working with a real estate agent, closing agent, title company or lawyer, you will receive better cooperation if you write a letter to the lender giving the lender permission to talk with those specific interested parties about your loan. The letter should include the following:
Property Address
Loan Reference Number
Your Name
The Date
Your Agent's Name & Contact Information
Preliminary Net SheetThis is an estimated closing statement that shows the sales price you expect to receive and all the costs of sale, unpaid loan balances, outstanding payments due and late fees, including real estate commissions, if any. Your closing agent or lawyer should be able to prepare this for you if you do not know how to calculate any of these fees. If the bottom line shows cash to the seller, you will probably not need a short sale.
Hardship LetterThe sadder, the better. This statement of facts describes how you got into this financial bind and makes a plea to the lender to accept less than full payment. Lenders are not inhumane and can understand if you lost your job, were hospitalized or a truck ran over your entire family, but lenders are not particularly empathetic to situations involving dishonesty or criminal behavior.
Proof of Income and AssetsIt is best to be truthful and honest about your financial situation and disclose assets. Lenders will want to know if you have savings accounts, money market accounts, stocks or bonds, negotiable instruments, cash or other real estate or anything of tangible value. Lender are not in the charity business and often require assurance that the debtor cannot pay back any of the debt that it is forgiving.
Copies of Bank StatementsIf your bank statements reflect unaccountable deposits, large cash withdrawals or an unusual number of checks, it's probably a good idea to explain each of those line items to the lender. In addition, the lender might want you to account for each and every deposit so it can determine whether deposits will continue.
Comparative Market AnalysisSometimes markets decline and property values fall. If this is part of the reason that you cannot sell your home for enough to pay off the lender, this fact should be substantiated for the lender through a comparative market analysis (CMA). Your real estate agent can prepare a CMA for you, which will show prices of similar homes
Active on the market
Pending sales
Solds from the past six months.
Purchase Agreement & Listing AgreementWhen you reach an agreement to sell with a prospective purchaser, the lender will want a copy of the offer, along with a copy of your listing agreement. Be prepared for the lender to renegotiate commissions and to refuse to allow payment of certain items such as home protection plans or termite inspections.
Now if everything goes well, the lender will approve your short sale. As part of the negotiation, you might ask that the lender not report adverse credit to the credit reporting agencies, but realize that the lender is under no obligation to accommodate this request.

Having trouble selling your home? These tips can help!

I have been receiving a lot of calls recently from sellers who have been having trouble selling their homes so I thought I would write about what sellers can do to help bring traffic through their home in an ever dense listing season. Please understand that whether you are a FSBO (for sale by owner) or listed with another agent, these are some tips, many of which I have used for my clients, that will help offer you the competitive advantage.

The top 10 tips for selling your home, according to Realestate.MSN.com are:

1-Videotape your house, inside and out, and watch the tape as if you were a prospective buyer. Make sure you upload the video clip to a video site such as video.google.com and make sure the link is available on your MLS listing. If you would like to see an example of one I have done go to video.google.com and search "1817 Irving St NE" (Keep in mind that I am no photographer)


2- Take a second look at your listing price. If you are skeptical about lowering your price I can only recommend visiting open houses in your neighborhood or asking your agent to take a day to see similarly priced homes in your area.



3-Do whatever it takes to be away from your home during showings and open houses. Buyers typically become more relaxed when they can speak freely with one another or their agent.






4-Ask your listing agent to talk to buyer agents who have brought clients through your house. CSS (Centralized showing service) is a great company that allows the listing agent to track who has shown your property and forwards any agents information that has shown your home. The feedback from their clients can help you make adjustments to account for the market's perception of your home.









5-Possibly hold an open house on a weeknight. Competition is lower, and you'll attract the interest of buyers who can't make weekend appointments because of other commitments. Im not sure if I am the biggest fan of this idea, I tried it once before and havent seen nearly the same results as weekend open houses.

6-Take out some extra online ads or print ads, even if your agent is doing a good job with promotions. Look for out-of-the-ordinary places to advertise, I have had a lot of success with craigslist.com, an open source posting site that allows you to market, list and expose your home as frequently as you wish to potential buyers.




7-Neutralize your color scheme. Most buyers prefer pale, neutral or pastel colors that make it easier to imagine a new home as their own. Houses with white & yellow exteriors sell for the highest. For the inside, I would either recommend going with a pastel color or having a professional interior decorator chose a paint scheme for you. Many clients have had much success with a somewhat complex interior paint scheme that appealed much more strongly to buyers decorating interests by assessing their direct market of buyers tastes.

Above is an example of an interior of a two bedroom condo that went under contract in three days.

8-If you've had offers but you considered them too low, try readjusting your goals, remember, the price you get for your house isn't determined by anything but what the market will determine. I recommend working from bottom line needs and re-adjusting according what the market will bear..

9-Is your listing agent giving your house adequate attention? MAKE SURE YOU ARE PROTECTED before signing a listing agreement. In every listing I represent I make it perfectly clear that if, for any reason, my client believes that I am not giving their property the due loyalty, exposure and marketing effort that it deserves, Ill remove myself as their agent. All too often I have seen and spoken with agents that think that once they have a listing agreement signed, they can walk away and their client is bound to them, even if they don't do a thing for their client. PROTECT YOURSELF!!!

10-Re-list your house to give it a kick start. During your listing there are two numbers that represent the time your property has been on the market, one for the days on market with the current agent and the other for the total days on market. Remember that all agents have full access to both so keeping your home on the market just makes the number higher.

BONUS! 11-Another option, not mentioned above is staging your home. This is an especially good idea if you have already moved into your new home. I have found that time after time buyers walking into vacant homes have a difficult time visualizing furniture and belongings in a home that doesn't look 'lived-in'. In the past, and with the clients best interest in mind I have recommended staging their home and typically, we will pay for the staging until settlement. Given it does cost a bit more but you have to ask yourself 'would you rather stage your home for a few thousand dollars or risk having your house sit on the market for possibly months longer.





If you have any questions regarding staging or tips about how to stage your home please feel free to email me at jesse@jessebkaye.com

FROM DC, MD & VA, ONLY MANASSAS AND WOODBRIDGE ARE AMONG THE TOP 500 ZIP CODES FOR FORECLOSURES

Foreclosures: Hardest hit ZIP codes - Jun. 19, 2007

An article was recently published on CNNMoney.com reporting on the top 500 zip codes across the US for the highest foreclosure rates and the only two in our metro region were the cities of Manassas and Woodbridge (Woodbridge has two zip codes, 22193 & 22191). Fortunately enough the rest of the area seems to be handling the market slowdown. What does this mean, if you are in the areas of DC, MD or VA, your home values should remain rather stable.

TWO BUILDINGS I CANNOT EXPLAIN!!

I thought I would write two blogs on two different buildings that have recently undergone condo conversion that have been sitting...and sitting...and sitting...





The first of the two is 1626 5th st NW. Its a four unit conversion, each with 1200+- sq ft, two bedrooms & two baths. The interiors are attractive and the layount is generic...you walk into the living room/dining room combo, the kitchen is on the left about a third into the property, to the right is the hallway leading back to two baths and two bedrooms both on the left side of the unit. On the top of the building is a somewhat amazing roofdeck. The fact is that the property has been on the market close to a year now and the prices have been reduced by $150k a piece since they first came on the market. I can only remember when I first showed this property to a good friend of mine, Jen L. She was in the market for a two bedroom, two bathroom unit in the $450k and under range. (We found a great property for her near the intersection of Missouri and Georgia in Petworth) It was about three weeks after that HEAVY rainstorm we had for three days straight towards the end of last year. So we go inside the first unit...aka the basement unit...and it was a MESS. The water from the rain has poured inside the unit and flooded the first two feet of the unit. You may be asking yourself how I knew that. Well upon first entering the unit all of the floors were buckled from the water saturation and the corners were bent up and edgy. That was the first sign. The second sign was the thick, dense MOLD growing on every wall two feet above the ground. It was frightening.


So Jen decides the basement isnt for her (and I dont recommend the basement unit to many people, just ask the owner of the basement unit in Melanie Moses' building). So we head upstairs to the first floor unit and everything looks fine. The unit is well set up, its clean, the place is well kept etc. Second floor; the same. As we head around the common area staircase to the third floor, we immediately notice our second problem. The roof was leaking where the staircase joined the levels, and it was leaking badly. The drywall tape was hanging off the ceiling nearly 3 feet after being finished and to make matters worse, there was still water dripping from the floor above. I can only wish that the developer took the time to build and drain the foundation correctly because they have a mess on their hands. To this day all four units are still on the market. To my estimates, if they borrowed hard-money they are paying around 15k a month in holding costs and I dont see the properties going anywhere fast.

P.S. none have parking!!! Ill have another blog on condo's without parking!!!


The second of the two is 726 8TH ST NE. This one is a two unit conversion. One of the units is a single floor basement unit and the second unit is a bilevel top floor unit with a fantastic roof deck. Parking is available. So the big question, as of now both units are approaching their 250th day on the market and why havent either sold. To be as frank as possible, this building is probably one of the poorest examples of workmanship I have seen in my career. It was my experience that floors were unlevel, countertops were linoleum and looked really cheap, hallways were too narrow and I wouldnt be surprised if the roofdeck on the top floor wasn't built with a permit. Upon entering the building with my clients several months back all I can recall is that the stairway to the roof was barely 24 inches, it didnt have a handrail (god forbid a client falls while viewing the property, can someone say lawsuit city) and if a handrail was added, I dont think I would have been able to get up to the roof. Thats right...none of the steps were level either, all leaned forward, down the stairs. I dont know what else to say. I feel bad for the developer and the agent to be quite honest. Had the develper done their work right & to code they wouldnt be in this mess & its nobody but the agents job to market the property... lets just say it will be on the market for quite a while longer if its not permanently used as a rental property.