The importance of a written agreement works for both sides of a real estate transaction.  Every detail of the transaction should be clear, concise, and in writing, from the money to the closing date and everything in between.  In fact the contract itself is a very strong reason for having a REALTOR® involved in the buying and selling process because not only does the REALTOR® have a formula to follow, the more experience he has the more complications he has seen, and the more prepared you will be throughout the process.

• An important aspect of your contract is the sales price, but beyond that the earnest money is important as well.  The higher the earnest money deposit is the more serious the buyer, which is important for both sides to keep in mind. We usually see 5% in Washington DC, 2-3% in Virginia and 5% in Maryland.
• Contingencies are another important part of the real estate contract, but too many contingencies might leave a seller thinking that the buyer wants to have many routes to escape the contract. In certain subdivisions of Washington DC, Northern Virginia and Maryland 35%-40% of the homes/condos are going under-contract within 0-6 days. You need a good agent to prep you with protecting yourself but at the same time making you competitive.
• Items that don’t pass inspection should be put in writing, as should the agreement as to what will be repaired by the seller and what the seller does not agree to fix.
• Another very important item to have in writing is a list of what items stay and what will go.  Many times sellers take everything but the kitchen sink and buyers move in alarmed to discover that they did not budget for a refrigerator, or a washer and dryer.

There are so many steps to a successful real estate transaction and being prepared and educated along the way is essential.  An experienced REALTOR® can go a long way to making the process an easy one, as well as assuring that everything you need to back yourself up is in writing.  Whether you are buying or selling it is extremely important to look out for your own best interests.

It is important for both buyers and sellers of real estate to understand the importance of an appraisal.  Let’s face it, the real estate market has been nothing if not erratic over the last few years and knowing exactly what a home is valued at is trickier than ever.

The clear answer to value is that a home is only worth what someone is willing to pay for it, but when you are trying to finance a home the bank will only lend based on what it sees the value of the home being. When you list a home you have to convince the buyer, buyer’s agent and appraiser.  Maryland properties have been a bit more difficult to establish value since the inventory has not been as large. DC and Virginia have had a bigger inventory and Northern Virginia has had 3 big price reductions within the last 3 years so sellers are more realistic.

I can be helpful for sellers to have an appraisal done on their property? But that does not make sense for all neighborhoods. U Street, Shaw, Logan, Dupont, Kalorama, Woodley, Georgetown, American University, Capitol Hill, Arlington, Alexandria and Bethesda are very strong markets and it is easy to decide on price if the real estate agent knows the market soundly.  Foreclosures and short sales have skewed the comps in many areas outside of the beltway and in depressed neighborhoods, which can make placing an appropriate value difficult.

An appraisal will let a seller know realistically what he can expect to get for his/her home.  If he prices a home too high and someone jumps at that price, great, but will the deal fall apart when financing cannot be achieved because of a low appraisal? But appraisals are not always the answer. There are a lot of appraisers out there and they all have good days and bad days. You can have 3 appraisals on 1 property and they may all come in at different prices.

However, preparation is key when trying to sell real estate in today’s market, where knowing what your local fair market value is of the essence.

Anyone considering financing real estate these days should consider the length of the loan, typically the biggest comparison is between 30 year loans and 15 year loans.  Historically the majority of home buyers opt for a 30 year loan, but these days, with such low rates, a 15 year loan could make more sense than ever. A lot of investors within the DC area market are going with a 15 year since the rental market is so strong.

The most obvious benefit to a 15 year loan is that your home will be paid off in half the time of a 30 year loan.  Having a home completely paid for by the time retirement rolls around is a goal for many home owners.  This goal is much easier to attain with a 15 year loan.

A 30 year loan offers lower monthly payments, which means less pain on your wallet each month.  In addition, many home buyers buy a home without having the intention of staying there forever, so paying off the loan is not a priority where lower payments might be.

If you are refinancing your home in today’s market taking advantage of low rates and switching into a 15 year loan could be a smart move.  With a little more paid each month your home could be paid off in a much shorter time frame.  Typically a 15 year loan offers a lower rate than a 30 year loan as well.

So, what type of loan works for you?  Only you can answer that, but if you plan on staying in your home for a lifetime a 15 year loan with such exceptionally low rates (currently 3.25%) is certainly tempting.

If you have any questions, feel free to email or call me.

Click here to read “Mortgage Rates Finish 2011 Near Historic Lows” from Realty Times.

Visas could be used as a dangling carrot for real estate investors.  Legislation is in the works to attract foreign investors into the US real estate market to help boost the economy.  A similar program to boost jobs has been in operation for years.

A little publicized program, the EB-5 Regional Center Program that has been in existence for a little over 20 years.  The program allows wealthy foreigners to invest a minimum of $500,000 in areas deemed as high unemployment areas, and a minimum investment of $1 million in more stable areas.  In return for the investment the investor can obtain permanent green cards after a two year period, if at least 10 jobs were created and still in existence.

In today’s economy the EB-5 program is being revisited by many communities as a way to bring in money, development, and jobs.  Regional investment centers must be approved, and the process is not easy or seamless, but when it works it can be extremely helpful for a community’s economy.  This is, in essence, allowing wealthy immigrants into our country legally, using their money to create jobs, and accepting their money into our economy.

A new bill being introduced in congress is similar to the EB-5 program but is intended to boost the nation’s real estate market.  The goal is to offer visas to foreign investors who buy a primary residence of at least $500,000 in value.  The home-buying bill is supported by the US Chamber of Commerce and is seen as a way to entice wealthy foreign investment to communities across the nation.  The bill would require investors to live in their US homes for at least 180 days a year.  At the same time, if the home is sold the visa is no longer valid.

Foreign investors who have money to spend on US real estate also spend money in the communities in which the real estate is located.  Many of these investors are not intending to work in the US but they certainly will be spending money in the US, something which could add significant aid to our languishing economy.

Keep it in mind if you are looking/living in Washington DC’s real estate market.

Click here to read more about the home-buying bill.

Your home can be green and act green during the holidays.  Let’s face it, the holidays can turn a home into an energy tornado, not to mention a killer of mother nature by using up all the evergreen plant life possible.  But there are many steps that can be taken to reduce your home’s holiday carbon footprint and help you end the year on a good note.

As far as Christmas greenery goes, there are artificial options that can make sense but they are not always the best option.  Many fake greens are somewhat toxic, made of PVC and often emitting fumes, so it is best to make sure there is plenty of ventilation in tight spaces.  Also, many believe that fake trees and wreaths save countless trees each year, but many of these products are made overseas and in fact taking business away from local purveyors.

Most Christmas trees are grown on tree farms, specifically for this time of year.  These trees are great for the environment as they process carbon dioxide and add oxygen to our air.  Check your tree lots and make sure you are buying local trees, the farther away they come from, the more fuel is used for transportation.

Old City Green in Shaw/Logan Circle near the Convention Center at 9th and N Street has local trees.

There are countless ways to enjoy the holidays throughout your home and still save the planet!  Click here to read “Solar Christmas Lights: Should You Make the Switch?” from House Logic.

Happy Holidays!

Buying real estate with cash has been come more commonplace since the recession, allowing investors the opportunity to swoop in and get even better bargains buying properties with cash as opposed to credit.  Of course not everyone has the choice to make, but if you had enough cash lying around to buy a home without securing a loan would you? With competition in a lot of areas, such as, LeDroit, Bloomingdale, Shaw, U Street and Columbia Heights – investors or people looking to rehab properties have to go cash to get the house.

Buying a home with cash has certain advantages, the least of which is a quick transaction.  Sellers are drawn to cash buyers because there is no loan contingency in the contract.  Many deals fall apart at the last minute these days due to the inability of buyers to secure a home loan, so a cash deal is really seen as a Golden Goose for sellers.  Sellers will often accept a lower offer for a cash deal.  Another bonus of buying with cash is the overall savings over time.  No interest paid can add up to a great deal of savings.

Of course, as with anything, there are disadvantages to buying a home with cash.  The most notable difference between buying a home with cash versus buying a home with a mortgage is that when you pay with cash there is no mortgage interest write-off come tax time.  Buying a home with cash also may deplete your bank account.

If you are debating buying real estate with cash versus securing a mortgage to buy a home then you are in a much better position than many people.  Weigh the pros and cons of the decision and remember that there is the option to finance your home after its purchase.

Loic Prichett
Pritchett-Simunek Team of TTR Sotheby's International Realty
Helping Buyers & Sellers in VA,DC& MD
Top 1% Nationwide
www.loicpritchett.com
www.ustreetliving.com
202-550-9666(cell)
loic.pritchett@gmail.com

Energy efficiency matters when it comes to real estate. It was a huge feature in selling my listing at 1209 W Street. The seller made the house efficient and the buyers picked up on the upgrades and conscious to being an efficient home. While reducing your carbon footprint has always been a matter of choice, now the more energy efficient your home could mean more borrowing power for you. A new bill being put forth wants to add a home’s energy consumption into the formula that determines its affordability.

The proposed bill would mean, in simple terms, that the more energy efficient a home is the more affordable it is and the more desirable it may be on the open market. The bill is meant to help those who are close on securing a loan, as well as helping to make energy efficiency more of a priority in new homes and homes that are being remodeled.

While tax incentives for energy improvements are always changing, expiring, and being reinvented, the SAVE Act is meant to provide overall incentives, a bottom-line desire for home owners and builders alike to improve the efficiency of their homes.

When a home’s affordability is linked directly to its energy efficiency then the drive to improve its interior functionality is greatly increased. Whether the SAVE Act is approved now or in the future, only time will tell. Regardless, this is a sign of what is to come with regards to Washington DC’s real estate and future design trends.

This lovingly cared for home was completely deconstructed and rebuilt to fit the needs and tastes of today’s buyer. The workmanship and finishes are impeccable and reflect prominently in every detail.   All systems and utilities have been replaced and upgraded. Special consideration was given to energy efficiency- high efficiency windows and HVAC system, tankless water heater, Energy Star appliances, and spray-foam insulation in all exterior walls. The open layout on the main floor showcases the wood-burning fireplace and exposed brick.  The dining room leads into the gorgeous kitchen, which has been designed for entertaining and  finished with  exquisite granite counter tops, full-height Reico cabinets and stainless steel appliances. The house boasts 2 full bathrooms on the upper level and a 1/2 a bathroom on main floor. The master bedroom has its own private bathroom with walk-in tile shower, ample customized closet space and southern exposure for great natural lighting. This intelligent floor plan has new gleaming hardwood floors which grace the main and upper level. Do not worry about parking on the street, there is parking potential in rear yard. Two blocks from metro, shops and all of the U Street corridor has to offer.

Green is much, much more than a color these days, as living green has become a way of life for many of us.  There is so much talk these days of going green, choosing green, and being green, that we may even lose sight of what living green actually means.  Simply put living green is reducing your impact on the environment that you live in. U Street and Logan Circle have had many homes and developments change in favoring the environment.

Part of living green extends to real estate, where building, remodeling and design trends are now offering a variety of choices and options to reduce your carbon footprint and reduce the stress that you make on the environment.  From paint and flooring to counter tops and appliances everyone has an opportunity to live green.

A recent article from House Logic “Green Kitchen Countertops: 3 Eco-Friendly Choices”, shows how choosing a counter top can be a green choice.  A green countertop is one made from sustainable materials, recycled materials, or manufactured in such a way that there is little to no toxicity involved.  Green counter top options include recycled paper, reclaimed wood, and recycled glass.

Going green with your real estate may involve some creativity, but more and more products are coming out every day that are attractive and environmentally friendly. Washington DC has many outlets and people invested in this green movement.  There are some great options to consider when building or remodeling your home.

Take the stress out of selling your home.  Stress has surfaced as a way of life these days in the Washington DC area as people do their best to ride out a shaky economy and those which are trying to sell their homes in these trying times seem to have an added dose.  However, selling doesn’t have to be quite such a burden and can be completed in a quicker time frame if you, as the seller, follow the sage advice of selling experts.

First and foremost, don’t let your guard down.  Sure, you may have had 25 showings already and you are tired of keeping your home immaculate and organized, but you must approach each and every showing with the attitude that this could be the one.  Keep your home in tip top shape, its condition being a factor that you have control over.

Stay connected with your real estate agent.  Talk price, talk location, talk condition.  Most importantly listen.  Does your agent say that your home is priced right for your market?  Does your agent feel that your location is a desirable one?  Does your agent think your home looks its best?  Don’t let ego get in the way of selling your home.

If your home’s flaws are keeping it from selling then you may have to adjust its price in order to attract a buyer, it is the unfortunate nature of the beast.  Stay positive, listen to the advice of professionals, and you will get your home sold.