5 Things to know before investing in DC Foreclosures

So you have heard about the millions of foreclosures available...and you are thinking about investing. Here are a few things you need to know before embarking on this adventure:

1. Best Offer First:
-Always put your best foot forward! Banks do NOT accept escalation clauses and will NOT accept low bid offers. These properties are already priced under the market.

2. Bank Addenda is KING:
-Only after the bank accepts your offer will they provide you with the addenda and disclosures. Please read all addenda carefully! These bank documents override any and all buyer protections afforded to you by local real estate documents. For example, the buyer will NOT be able to sue the bank if the bank does not perform the necessary steps to sell the home, such as providing clear title.

3. Always get an Inspection:
-These properties are being sold As-Is! It is understood that the bank will not make any repairs to the property, but in rare case the bank should make repairs, they will only repair structural and/or mold issues in the home. Ask your inspector to always test the air quality and identify the sources of mold.

4. The 30-Day Rule
-On average banks revolve around the 30-day Rule when dealing with foreclosures. Every 30-days banks are requesting a price reduction. Every 30 days from contract ratification, the banks would like to sell the property. There is a misconception that purchasing a foreclosure will be as difficult as a short-sale. It is quite the opposite, the banks look at foreclosures as a liability and want to get rid of them immediately...providing the price is RIGHT!

5. Buyer pays 100% of property taxes
-So you have read that Federal law allows certain banks exemption from paying property taxes when selling properties (ie. Freddie Mac and Fannie Mae). Well, DC government does not recognize the exemption status of these banks and demand the tax bill be paid in full...in this case it is the buyer's responsibility. This is a growing trend by surrounding local county governments such as Prince Georges, Montgomery County, etc.


Call me at 301-452-4767 if you have any real estate questions!

Information about the DC First-time homebuyer tax credit

In case you were questioning if now was a good time to purchase a home in Washington, DC...look no further!

Despite the end of the Federal first-time homebuyer tax credit, DC has continued the $5,000 DC First-time homebuyer tax credit until the end of the year. Here is more information you need to know as follows:

Who qualifies for the DC tax credit?
The tax credit is aimed at people buying their first principle residence in the District of Columbia. This means that owning a previous primary residence outside of DC does not hurt your eligibility. If you haven’t owned a primary residence in DC, you qualify for the local tax credit, even if you’ve previously owned homes in other areas.

Also, you qualify as a first-time DC home buyer as long as you haven’t owned a DC home in the one-year period prior to the purchase of your home. The national tax credit had a stricter requirement; it required buyers to have no primary home ownership for three years prior to home purchase.

How much is the DC tax credit worth?
The credit’s value is the lesser of:

-Up to $5,000, if single, married filing jointly, head-of-household, or qualifying widow(er)
-$2,500 if married filing separately


What types of homes qualify for the DC tax credit?
The home must be your primary residence. It can be a single family home, houseboat, housetrailer, cooperative apartment, condominium, or other type of residence.

Are there any income restrictions for the DC tax credit?
The income restrictions are based on your modified adjusted gross income (MAGI):

If your MAGI is $70,000 or less ($110,000 or less if married filing jointly), you qualify for the full $5000 credit.
If your MAGI is between $70,000 and $90,000 ($110,000 and $130,000 if married filing jointly), you qualify for a partial credit; the more you make, the less credit you receive.
If your MAGI is over $90,000 ($130,000 if married filing jointly), you do not qualify for the credit.

Are there any other restrictions?
You do not qualify for this tax credit if:

-You acquired your home from certain related persons or by gift or inheritance. Related persons include, but are not limited to, your grandparents, parents, spouse, children, and grandchildren.
-You previously claimed this tax credit on a prior home purchase.
-You qualified for the national home buyer tax credit.

How do I claim the DC tax credit?
You must fill out IRS Form 8859 and submit it with your annual tax returns.



Call me at 301-452-4767 if you have any real estate questions!

IMPORTANT: New Mortgage rules makes it difficult for Condos

I know it seems like everytime you turn around, there are NEW mortgage changes affecting the real estate. Well, you are absolutely right!

This time with the NEW rules, it is more difficult to get mortgage financing for condos...as if it wasn't difficult already to purchase a home.

WHAT ARE THE NEW RULES?

The owner occupancy of a building must be at least 51% owner occupied to purchase with an FHA loan.

The owner occupancy of a building must be 70% for a conventional purchase.

For both FHA and conventional, the delinquent condo dues must be under 15%.

WHAT DOES THIS MEAN FOR YOU?

This means that more than ever, as an owner of a condo, you are financially tied to other owners in the building. If they are behind in their condo dues, it will be more difficult for you to sell your home. As an owner, your options might be limited for renting your home to move to bigger and better things, if your condo building is nearing or above the minimum investor ratio.

From a buyer's perspective, you will need to inquire about the condo association's investor ratio and delinquency rate before placing an offer on that PERFECT condo.



Call me at 301-452-4767 with any real estate questions!

Property of the Week: The Metropole

LOCATION
The Metropole is a 90-unit condo building in the vibrant Logan Circle neighborhood. This mixed-use building is located on the 1400 block of P St. NW at 1515 P St. NW, and is home of VIDA Fitness, BANG Salon, etc. The building towers across from the Whole Foods, CVS, and old Duron Paint store. Metropole is surrounding by some of the city's best Zagat rated restaurants and a few blocks from metro and White House.





AMENITIES
The Metropole was developed by Metropolis Development (MDC), which also built Cooper-Lewis, Lofts 14, and Langston Lofts. Architecture by RTKL and interior design by Cecconi Simone offers a loft-style condo: with 20-foot high floor to ceiling windows, Exposed ceilings and ductwork, Bosch stainless steel appliances standard, large private terraces on all top floor units.





PRICING
The pricing of one bedroom units start at $485,000 to two bedroom starting at $700,000 - $2 Million.





Call me at 301-452-4767 if you have any real estate questions.

Living in DC: Dupont Circle

When looking at DC neighborhoods to reside, there are many options to choose from depending on your living criteria. One such residential neighborhood is the Dupont Circle, a historic district in the Northwest part of the city.



"Dupont Circle is located in the "Old City" of Washington, D.C. — the area planned by architect Pierre Charles L'Enfant — but remained largely undeveloped until after the American Civil War, when there was a large influx of new residents. The area that now constitutes Dupont Circle was once home to a brickyard and slaughterhouse." (Wikipedia)

SHOPPING AND RESTAURANTS
Dupont Circle is a local hub of activity with numerous retail stores, coffeehouses, lounges, and restaurants enjoyed by many residents and visitors. The two popular corridors of commerce are Connecticut Ave. and 17th Street with stores such as GAP, Victoria Secrets, etc. The variety of restaurants range from sit-down French Bistro to five-star Sushi restaurants. There are no shortage of happy hour venues such as Bar Dupont, Gazuza, One Lounge, and Circa.





VICTORIAN ROWHOUSES
Dupont Circle is well-known for its elegant style rowhouses. These Rowhouses were primarily built prior to 1900 feature variations on the Queen Anne and Richardsonian Romanesque revival styles. These rowhouses start at $1.5 Million.



DUPONT UNDERGROUND
Dupont Underground is an abandoned streetcar/trolley terminal and tunnel, which is located underneath Dupont Circle but above the Metrorail tracks.





The streetcar tunnel was completed in 1949. The Arts Coalition for Dupont Underground recently launched a campaign to reopen the station and tunnels as a gallery for the arts community. The Arts Community proposes a new gallery space below Dupont Circle near many existing above-ground galleries. Earlier this year, the District began seeking developers to take on this project.





Call me at 301-452-4767 if you have any real estate questions.

FHA Loan Changes and what it means to YOU!

FHA loans has been the primary source of home financing over the past 2 years. There are some changes over the next few months that homebuyers need to be aware of if thinking about purchasing a home.

FHA MORTGAGE INSURANCE PREMIUM
The increase in FHA Up Front Mortgage Insurance Premium (effective April 1, 2010). UFMIP went up from 1.75% of the loan amount to 2.25% of the loan amount.

WHAT DOES IT ME FOR YOU?
Higher up front and/or monthly expense if the fee is financed.

FHA MORTGAGE INSURANCE
Mortgage insurance is a policy that protects lenders against some or most of the losses that result from defaults on home mortgages and it's required primarily for borrowers making a down payment of less than 20%. There is a planned increase of FHA Monthly Mortgage Insurance.

WHAT DOES IT ME FOR YOU?
Buyers with tight debt ratios will qualify for lower loan amounts. It will be an increased monthly expense to consumers.

SELLER CONCESSIONS
The sellers in today's market attract many buyers by offering to contribute monies toward the homebuyers' closing costs, known as seller concession or closing help. FHA will be decreasing the maximum seller contribution from 6% to 3% of contract price.

WHAT DOES IT ME FOR YOU?
The homebuyers who depend on seller contributions will no longer be in a position to purchase a home, which will negatively affect sales in some markets.



Call me at 301-452-4767 if you have any real estate questions.

Property of the Week: The Lacey

LOCATION
"The Lacey is a 26-unit condo development, located at 2250 11th Street on the corner of Florida Avenue and 11th Street. The development sits on the border of Columbia Heights and the U Street Corridor. It is about three blocks from the U Street/Cardozo Metro station on the green line, and about five blocks east of Meridian Hill park.



DESIGN
The Lacey was designed by Division1 Architects, a DC-based architecture firm founded in 1994 that also designed The Drost, a condo development at 2106 10th Street NW, and Lima, a restaurant and lounge at 1401 K Street." (dc.urbanturf.com)





PRICE
The building is now FHA approved with 1 bedrooms starting at $495,000 and 2 bedrooms starting at $575,000. The condo fees start at $345 per month. The building is pet-friendly, but alas NO fitness center or rooftop deck. For more information give me a call at 301-452-4767.





Call me at 301-452-4767 if you have any real estate questions.