"Close First, Then Splurge" From the WSJ

Close First, Then Splurge

The Wall Street Journal, By Jonnelle Marte

June 13, 2010

The mortgage was approved and the closing date is set. Now you can go shopping for those new appliances and furniture, right?

Wrong. More mortgage lenders are pulling last-minute credit reports before the closing date, sometimes even the day before. And sudden changes to credit balances and assets could delay a closing or bump up an interest rate.

That means home buyers -- especially those trying to meet the June 30 deadline to qualify for the home-buyer tax credit -- should keep their credit profiles and liquid assets as unchanged as possible in the time between an initial mortgage approval and a closing, mortgage analysts and credit experts say.

Lenders don't want to see you take on new debt, so hold off on major credit-card purchases -- those that reduce available credit by 5% or 10% or more -- says John Ulzheimer, president of consumer education for Credit.com. So if you have a credit limit of $25,000, keep purchases below $2,500.

Don't apply for new credit cards or other loans. The credit inquiry a lender makes when you apply shows up on your credit report and can affect your credit score.

Also, avoid substantially tapping liquid assets, such as checking and savings accounts and certificates of deposit, says Keith Gumbinger, mortgage analyst for HSH.com, a publisher of consumer-loan information.

Financing frustrations after the storm

So April was a HUGE month for DC Real Estate. Home sale numbers went up as buyers scrambled to get the tax credit. Well priced homes sold quickly and for great prices. While sellers were thrilled in April, they are less thrilled in May as many of the buyers' loans are not getting approved by the financing deadlines due to mortgage lenders and underwriters scrambling to service the influx of loans. Lenders are working on loans according to settlement date, hoping to have everyone approved and funded by their contractual settlement date, NOT the financing contingency date. At Prosperity Mortgage, the Long and Foster subsidiary of Wells Fargo, they have implemented forced overtime and working weekends for the underwriters. Unfortunately in cyclical businesses, there are times when the lenders and appraisers are simply going to have a larger backlog of work, and you can't hire more people just for one busy month. What I would tell sellers is this: be patient, you benefited from the robust Spring market because your home went under contract, and now it is time to ride out one of the frustrations of a busy market.

New website for basement renters and landlords

DCRA has started a new website for DC basement rentals www.rentmydcbasement.com. The website contains great information about safety issues and proper licensing of basement rentals. The comments section allow readers to ask questions and so far it looks like most people have been answered or directly to the appropriate resource. I wish more DC agencies would have such easy to use and helpful websites!!

Maryland's new tax incentives for developers to convert rather than build

Maryland's green version of historic tax credit bill becomes law
Washington Business Journal - by Daniel J. Sernovitz

A Maryland tax credit program aiding developers in finding new uses for older buildings got a new infusion of green Thursday. Gov. Martin O’Malley signed a bill earmarking $10 million for the state’s Sustainable Communities Tax Credit. The program replaces the state’s Heritage Structure Rehabilitation Tax Credit and expands eligibility to buildings across the state that are being rehabilitated but aren’t old enough to qualify as an historic structure under the old designation.

The historic tax credit, which was set to expire if not reauthorized, has come under fire from legislators across Maryland because it has favored Baltimore City more than other jurisdictions. That’s in large part because the city has more historic buildings than other counties in the state.

The revised tax credit encourages rehabilitation projects around transit lines and those projects that are tied to the federal Base Realignment and Closure plan. “The investments we make in our existing communities, towns and cities today significantly influence economic prosperity and sustainability in those places tomorrow,” O’Malley said in a statement.

The compromise should help main streets in places like Howard and Montgomery counties, while still fueling projects in Baltimore, said developer Donald Manekin. Manekin has benefitted from the credits for two of his projects in the city, Miller’s Court and Union Mill, rehabilitations of former industrial buildings that wouldn’t have been economically feasible without the aid, he said.

“This is seen as an important economic development stimulant and it plays an enormous part in the work we’re trying to do in and around the Baltimore area,” Manekin said in a telephone interview. Manekin’s Union Mill project benefitted from $2.9 million in tax credits, equity the developer can use to leverage more money to fund the $20 million project. Once it’s completed, the 86,000-square-foot mill will be converted into 54 apartments and 30,000 square feet of office space.

Chinese Drywall

What is Chinese Drywall? Why is it in the news? Do I need to be concerned?

Chinese drywall was imported by the US from 2001-2006 due to the large amount of construction taking place and builders needing to import extra materials. The drywall from China emits dangerous levels of chemicals that are making people sick as well as corroding metals such as copper wiring and air conditioning coils. Homes with this Chinese drywall emit strong sulfur odors. Recently Hud and the Dept. of Consumer affairs has instructed homeowners to gut the houses if it was built with drywall. Senator Nelson from Florida (a state with a large construction boom in the early part of the decade and hence many unhappy homeowners) is calling for the Chinese government to step in and pay for the damages. It will be interesting to see how this plays out with the economics of rebuilding thousands of homes. Here is a good article on the drywall and the recent developments.

Note to sellers: take the weird stuff down!

Yesterday I visited an open house in Arlington that clearly belonged to two movie buffs. The house itself was very cute but the basement was outfitted as a movie theater (complete with purple and brown VELVET wallcovering) and some framed displays of movie collectibles. I had to snap pictures on my camera because it was just beyond bizarre. I would highly recommend taking anything unique like this off the walls before you put your house on the market because if it was distracting to me I can only imagine a buyer's reaction!

New Vacant Property Tax Regulations & FEES

Just got this e-mail blast from the Washington DC Association of Realtors urging us to fight Mayor Fenty's new vacant property registration fees...under the new rules, homes listed for sale or rent are NOT EXEMPT.

Starting this week, the District Council will begin hearing testimony on Mayor Fenty's Budget proposal to create a new $250-$5,000 Vacant Property Registration Fee.

The initial registration fee will be $250.
The renewal registration fee for the first renewal year will be $500.
The renewal registration fee for the second renewal year will be $1,000.
The renewal registration fee for the third renewal year will be $2,500.
The renewal registration fee for the fourth renewal year will be $5,000.

The revenue created by this potential fee is staggering - almost $8 million in just over 4 years.

The following existing exemptions WOULD BE ELIMINATED in the Mayor's proposals:
For Sale properties, For Rent properties, newly-constructed properties, properties under active construction, properties that are subject to probate, and properties subject to fire, flood, or other casualty.


Now, I know that DC is struggling for funds (I've never ever gotten a speeding ticket in the 8 years I've lived in the DC area and I've gotten TWO camera tickets in April...BE CAREFUL DRIVING OUT THERE) but this is a tax on listings in a city where a lot of people are already losing money on their sold properties. I understand the city wanting punish owners who leave properties vacant to become unsightly rundown houses with overgrown lawns, but if someone's house is on the market (and it sometimes will take over a year or two to sell unfortunately) it's not fair to require a fee or for them to take a tenant.

DC starting "pay by phone" parking meters

This is very exciting!!
From a DDOT press release:

DDOT Launches Pay By Phone Parking Meter Pilot

Cashless Payment Service Will Begin April 12

(Washington, DC) –There’s a new way to pay for parking in the District, and all you need is a mobile phone. The District Department of Transportation (DDOT) today launched a Pay by Phone pilot program that will eliminate the need to carry change for the meters or run back to your car to add more time. This cashless payment option will be offered at 700 parking spaces in three areas: Dupont Circle, Union Station, and downtown on K Street, I Street, and New York Avenue, NW.

“This service will greatly improve the parking experience for many of our residents, because it’s so simple to use,” said DDOT Director Gabe Klein. “No one likes to carry a lot of change, but almost everyone has a cell phone, and all it takes is one call to pay for a meter.”

DDOT will begin operating the service on April 12, but motorists can sign up today at paybyphone.com or by calling 1-888-510-PARK (7275). Drivers will need to provide their mobile phone number, license plate and credit card number.

Once they are signed up with a free pay by phone account, users just follow these simple steps to make a payment:
1. Call the toll free number from their mobile phone
2. Enter the location number that is posted on the meter or nearby signs
3. Enter the parking time desired.
The appropriate total will be charged to their credit card. A history of transactions is viewable any time the user logs into their account.
When paying by phone, motorists may also select the option to receive a text message reminder minutes before their time expires and can also call back to add additional parking time remotely from any phone, provided they won’t exceed the parking time limit. That feature greatly reduces the chance of a parking violation.

Restaurant Review- Tackle Box in Georgetown

Tackle Box opened almost two years ago and billed itself as a "lobster shack" in the city. I had been hesitant to try it because I am totally spoiled when it comes to lobster and nothing compares to buying them live to cook for dinner at my grandparent's house and packing lobster rolls the next day for a beach picnic. A friend of mine bought a "groupon" coupon and wanted to try it so we went last Sunday night for dinner. It's a little bizarre to have a fish shack in the middle of M Street that doesn't have any outdoor seating; and while DC is a friendly town, I didn't love having to share a picnic table with other diners. Tackle Box's menu has different meal combos and you chose one entree, one or two sides, and then a sauce. I was going to go for scallops until the cashier told me they were fried...so I asked for the grilled trout instead and got a side of mac and cheese. The mac and cheese was good and gooey and the trout was okay but nothing was exceptional. One friend got a side of sweet potato fries that were stringy and soggy and another got the lobster roll with friend green tomatoes. The tomatoes were good and she said the lobster roll was as well but not worth $20. Overall I think Tacklebox is a bit of a tourist trap and I'll stick to authentic fish shacks even if I have to drive a ways to get to them!

FYI- FHA funding fee increasing

It sounds like a big increase but if you look at the actual monthly change it's not going to matter to most buyers...

From Ryan Dailey at Prosperity Mortgage:

Please be aware that, effective April 5th, the upfront mortgage insurance on all FHA loans will increase from 1.75% to 2.25% of the base loan amount. Case numbers must be ordered before the 5th to avoid the increase. Case numbers are ordered when the appraisal is ordered.

Since buyer's finance this fee by rolling it into the loan amount, this will not increase the cash required for settlement.

Examples:

Current Scenario
300,000 loan amount + $5,250 funding fee = $305,250 total loan. Monthly payment $1,638

Scenario Effective April 5th
300,000 loan amount + $6,750 funding fee = $306,750 total loan. Monthly payment $1,646

The monthly payment went up by $8/month.

Under Contract! 11236 Edson Park Place #30 $415,000

My client fell in love with this wall of windows and loads of light in this Rockville condo that lives like a townhouse. Wood floors and a fireplace add lots of warmth and the location across from White Flint Mall and walking distance to the metro was a real draw. More pics here.

DC's best rummage sale this weekend!

This weekend is the Junior League's annual fundraiser "Tossed and Found" in Crystal City. It's a fantastic rummage sale with really quality items that are DIRT CHEAP. Lots of furniture, books, home goods, designer clothes, etc.. For more info on the sale, location and hours, click here.

Under Contract! 1750 Euclid St NW #1 $599,000

A buyer of mine got a contract on this lovely listing in Adams Morgan. It's spacious and sunny 2 Bedroom condo in a converted townhouse. Lot's of charm with a fireplace and back patio. Pics are here.

Smallest Kitchen I've Ever Seen

This just made me laugh when I saw the picture of this kitchen in a Dupont circle studio (priced at $185,000) It's a nice studio/jr. 1 bedroom with a massive walk-in closet but with this kitchen I would think you would have to get used to eating take-out every night!

With Foreclosures- We'll Take Any Good News!

Foreclosure rates up by smallest amount in 4 years
By ALAN ZIBEL (AP) – 2 hours ago

WASHINGTON — The foreclosure crisis isn't over, but the pace of growth may finally be slowing down.

RealtyTrac Inc. said Thursday that the number of U.S. households facing foreclosure in February grew 6 percent from a year ago, the smallest annual increase in four years. On the state level, foreclosures declined on a monthly and yearly basis in the hard-hit states of Nevada, Arizona and California, but still grew rapidly in Florida.

More than 308,000 households, or one in every 418 homes, received a foreclosure-related notice, the Irvine, Calif.-based foreclosure listings company reported. That was down more than 2 percent from January

Elephants coming to DC!

(and no I don't mean Republicans...)

The circus is kicking off it's DC shows with an elephant parade from SW to the Verizon center next Tuesday March 16th. For info on the route, click here.

Can the city require recycling?

D.C. to require cardboard, plastic recycling

By: Michael Neibauer
Washington Examiner Staff Writer
February 26, 2010

All property owners in the District -- commercial and residential -- will be required to separate cardboard and plastic containers from their regular trash under overhauled recycling regulations being proposed by the Fenty administration.

The revised rules also quadruple in some cases the fines for commercial property owners who repeatedly fail to properly recycle. Penalties for homeowners, generally $25, are not slated to change.

The amended regulations are an attempt to broaden the District's recycling collections and to discourage repeat commercial violations by holding down penalties for the first and second offenses, but hitting violators hard for subsequent wrongs.

The Department of Public Works in 2008 expanded the types of products it could recycle to include wide-mouth plastic containers, plastic toys, plastic lawn furniture and milk and juice cartons. But the agency only requires that newspaper, office paper, yard waste, metal and glass containers are separated from the regular garbage.

Plastic containers and cardboard can be tossed with the regular trash, for now, though some D.C. residents say they recycle those commodities today.

"I already do," said Tenleytown resident Beverly Sklover. "I would do it anyway. I think it's fabulous."

The District's fiscal 2009 residential recycling rate -- recyclables collected versus total trash thrown away -- was about 24 percent, according to DPW. But homeowners are responsible for only 30 percent of the District's trash.

The revised regulations target businesses, the most prolific trash producers, for more rigorous enforcement.

Amended fines for owners of commercial and apartment buildings would run from $200 for a first offense to $600 for a second within 60 days and $1,500 for a third within 60 days. Current penalties range from $25 to $1,000 per violation, depending on the size and type of building.

The District is right to save its harshest penalties for those who prove unresponsive to the rules, said W. Shaun Pharr, senior vice president of government affairs with the D.C. Apartment and Office Building Association. The size of the building, he said, "is completely unrelated to whether you've been making an effort to comply with the law."

The proposed rules are expected to be made available for public comment on March 5

DC residents rank 2nd on "well being"

Washington Business Journal - by Jeff Clabaugh Staff Reporter


Among big-city populations, Washington area residents have the second-best feeling of well-being in the nation, according to a Gallup poll released Monday.

The Gallup-Healthways Well-Being Index is based on results from 350,000 respondents who answered more than 40 questions about the current state of their lives. Gallup said questions ranged from how they feel physically and emotionally, to the state of their social and professional lives and their outlook for the future.

Among the nation’s largest cities, Washington ranked No. 2, topped only by San Jose, Calif. Raleigh, N.C., Minneapolis, San Francisco, Boston, Seattle, Virginia Beach, Va., Atlanta and Kansas City, Mo., rounded out the rest of the top ten.

“The index differs from every other measure out there, in both scale and scope,” said Ben Leedle, CEO of http://images.bizjournals.com/email/cwatch/w.gifHealthways Inc., a well-being management company. “It looks beyond mere physical health … to encompass total well-being, all of the various facets of our lives that interweave to make us who we are, healthy or sick, happy or sad, productive or nonproductive.”

Boulder, Colo., was ranked as No. 1 among all cities, regardless of population size. In that overall listing, Washington ranked eighth. When well-being was measured by statewide surveys, Hawaii ranked No. 1.

DC's record breaking snowfall

A local YouTube user set her camera to take a picture of the falling snow every 5 minutes.

Decorating on a budget

Using resourceful designers, craigslist, ebay, and elbow grease this Brooklyn couple re-did their bedroom with a budget of only $1500! See NYT article here.