Headlines: Best October in 9 years; how to woo first-time homebuyers

Headlines: Best October in 9 years; how to woo first-time homebuyers
Here's a look at what's happening in real estate in the District of Columbia and beyond. 

The key to fueling first-time homebuyers

Purchases by first-time homebuyers fell to the lowest level in nearly three decades—just 33 percent this year, down from 38 percent a year ago, according to an annual survey of homebuyers by the National Association of Realtors released last week. The long-term average, dating back to 1981, shows that 4 out of 10 purchases are by first-time buyers. − CNBC

Millennials need to be wooed

Millennials need to be wooed. They need to be shown that, despite their student loans, there’s a massive incentive for them to put money aside to buy, and there are large swaths of the millennial generation that are making far more money than their elders. − Inman News

20% down payment takes 12 years on average

First-time buyers have a whole lot of saving to do — possibly more than a decade of saving for a home purchase. It can take, on average, 12.5 years for first-time buyers to save a 20 percent down payment based on a current personal savings rate at 5.6 percent, according to new research by RealtyTrac.  Realtor Magazine

DC area home prices reach highest October level in 9 years

The region’s median sales price rose to $400,000, an increase of 5.3 percent over 2013. Every jurisdiction in the area experienced price growth, with Fairfax City (14%) and Prince George’s County (13%) leading the annual gains. P.G. County has now seen price increases for 32 straight months. In D.C. proper, home sales prices rose almost 10 percent to $500,000.  Urban Turf

Southwest Waterfront: Born of change, about to change again

A forest of cranes crisscrosses the sky and piles are being driven for the first phase of construction. Condominiums, apartments, offices, hotels, music venues and shops are on the drawing table. − Washington Post

Falls Church still leads Washington in housing market

While there are pricier neighborhoods in Washington, Falls Church City continues to lead median prices by jurisdiction, at $615,000 last month, up 4.2 percent from a year earlier. − Washington Business Journal

Headlines: The case of the incredibly shrinking first-time homebuyer demographic

Here's a look at what's happening in real estate in the District of Columbia and beyond.

First-time homebuyers hit lowest level in nearly 30 years

The U.S. economy is improving, employment is growing and home prices are recovering, but first-time homebuyers are not returning to their normal, historical levels of homeownership.  CNBC

Where have all the first-time homebuyers gone?

"Rising rents and repaying student loan debt makes saving for a down payment more difficult, especially for young adults who've experienced limited job prospects and flat wage growth since entering the work force," says NAR's chief economist.  Washington Business Journal

1,700 residential units coming to Bethesda

Of the residential units in the pipeline in Bethesda, roughly 400 of then are condos. Additional apartments and retail space are also on the horizon.  Urban Turf

Congruency in design can sustain home's value

Consistency doesn't mean that every room should have the same finishes or materials.  Rather, it means that there should be a general congruency throughout the home.  Washington Post

How I stopped being a victim after I was attacked

If I were to give any advice to anyone in our community of REALTORS®, it would be to listen to your gut more. We’re all so eager to get the next deal; we’re not listening. Even as our gut is screaming, we think it won’t be us. — Realtor Magazine

Survey confirms yard signs, open houses taking back seat to mobile

After rising from 8 percent to 40 percent from 2001 through 2011, the percentage of buyers who found their homes on the Internet has remained steady at 43 percent for two years in a row. — Inman News

Scheduling a settlement date is a contractual obligation for homebuyers

An often overlooked provision in paragraph #6 of the GCAAR Regional Sales Contract provides that the "Purchaser agrees to contact the Settlement Agent within 10 Days after the Date of Ratification to schedule Settlement and to arrange for ordering the title exam and, if required, a survey."

Homebuyers and their agents should pay particular attention to this requirement.

Recently our office was notified that a seller had declared the purchaser in breach of contract due to purchaser's failure to schedule settlement within 10 days from the date of ratification.

While the purchaser had ordered a title exam with our office, neither he nor his agent had scheduled the settlement date.

Through email notification, Federal Title reminds homebuyers and their agents to schedule the closing with our office within this time period. Unfortunately, in this particular instance, our notifications were ignored.

Supplemental tax bill catches some Maryland homebuyers off guard

When people purchase a home, especially for the first time, many practice their due diligence and find out the amount of the present tax bill and proposed insurance in order to calculate their closing costs and future expenses in addition to their proposed mortgage payment.

This is not as easy when purchasing a newly renovated or built home. Yes, you can estimate taxes based on the purchase price of the property, but people are often blindsided by a supplemental tax bill. Not all jurisdictions have supplemental tax bills, so it is wise to check the jurisdiction in which you are buying to be certain.

What is a supplemental tax bill?

A supplemental tax bill is a bill that is issued when a property is reassessed during the current tax year. Often the supplemental bill will be for a specific period, i.e., a quarter, half or three-quarter tax period. This bill is an additional bill that is sent directly to the home owner and is paid directly by the owner.

Tax escrows that are collected by the mortgage companies as part of the servicing of a loan do not contemplate supplemental tax bills. In fact, most mortgage companies will have you sign a document at closing stating the borrower/home owner will be responsible for paying any supplemental tax bill directly.

What "triggers" a reassessment of a property?

Typically, major renovations or improvements added to a property will trigger a reassessment at time of completion.

What constitutes completion?

Usually, completion is when all permits are closed, certificate of occupancy is issued, and/or the property is sold as an improved lot.

Why would this affect a new home buyer?

At time of purchase of a new home, the real property taxes are often based only on the assessed value of the lot. The sale itself triggers a reassessment. Although this can be contemplated for purposes of an escrow account by estimating the taxes based on the purchase price, there is no way to know what the new actual assessment will be and when it will be actually done.

It is prudent for a new home buyer to put money aside based on the timing of closing and the estimated amount of taxes based on the purchase price. In Maryland, the fiscal year runs from July 1 through June 30 of the following year. So for example, if you purchase in September you should expect to get at least a three-quarter supplemental bill.

Whether you are a first-time homebuyer, first-time new homebuyer or just someone who likes to do the homework – remember to consider supplemental tax bills when looking at not only the closing costs but future carrying expenses for your new home.

For further information, feel free to contact Catherine Schmitt at Federal Title & Escrow Company.

How to choose a really good real estate agent

The idea of buying a home is simultaneously enchanting and daunting. For instance, it's fun to daydream about color palettes and kitchen / bathroom renovations and coming home to your very own Home Sweet Home. It's less fun to think about what the transition from daydreaming and dream home entails.

A really good real estate agent can walk you through the steps of homebuying and even help you negotiate an offer that might lower your upfront and ongoing costs of home ownership.

Really good real estate agents are familiar with the neighborhoods where you'd like to live. They know how long houses have sat on the market and can tell you the difference between listing prices and recent purchase prices.

The question is how do you find a really good real estate agent?

Talk to friends & relatives

Whether through Facebook or other social media platforms or (gasp!) face-to-face, ask your friends and relatives who've had recent homebuying experiences what real estate agents they recommend. And find out why.

Was their agent especially skilled at contract negotiation? Did he or she have encyclopedic knowledge about the local market? What about their communication skills? Did their agent return phone calls and emails in a timely manner?

These kind of details will help to paint a colorful picture of what it's like to work with a real estate agent. And presumably, if it's coming from your friends and relatives, it's coming from a source you know well and one you can trust.

Read online reviews

If you don't have friends or relatives with recent homebuying experiences in your area, the Internet may be the next best thing. Sites like Angie's List (paid subscription required) and Yelp (no subscription necessary, but be sure to check the "filtered reviews) have tons of reviews about local real estate professionals.

Real estate sites like Redfin, Zillow and Trulia post agent reviews as well. The downside of online reviews is you most likely don't know who the source is. More than likely the review is bias, but reading multiple reviews should allow you to get a fairly balanced picture.

Contact top prospects, interview them

Once you've made a short list of prospects, call them and ask more questions. For added peace of mind, find out if your prospective agents have additional references.

Pick their brains about the neighborhoods where you'd like to live. Find out, on average, what percent of the listing price do their clients typically pay. Obviously a real estate agent who negotiates deals for less than the asking price is someone you want negotiating your home purchase.

The more research you do at the beginning of the agent selection process, the better your chances of finding a really good real estate agent and having a pleasant homebuying experience.

Once you've made it through the all the steps, consider posting your own agent review to give future homebuyers an idea of what it was like to work with your agent selection.

And if these tips don't help to ease your mind about how to select a real estate agent, feel free to reach out to our office and ask for even more agent recommendations. We closed roughly 1,500 deals last year, so we know a lot of real estate agents (mortgage lenders, too).

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