Ask Adam

This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit your questions via email.

Q. What can we do keep in mind as new homeowners to maintain the value of the property? Are there things we should be thinking about twice? I’m just trying to be proactive now rather than looking back and wishing I had done XYZ, if you know what I mean?

Maintenance is the No. 1 thing that comes to mind. As a homeowner, you are tasked with a myriad of new responsibilities. Keeping up with these tasks will extend the useful life of systems and materials in your home. It will also help you avoid expensive surprises.  Below are the Top 10 maintenance items I often see get neglected:

1. Once or twice yearly servicing of heating and air-conditioning systems
2. Replacing HVAC filters as directed by the filter manufactures
3. Cleaning and staining of deck
4. Regular painting of all exterior trim
5. Regular painting or staining of wood exterior doors and wood garage doors
6. Sealing of granite or other natural stone countertops
7. Winterization of outdoor hose bibs
8. As-needed cleaning of gutters
9. As-needed trimming of trees and shrubs around the home
10. Maintaining proper water diversion away from home and retaining walls

Be sure to keep all your receipts so you can show potential homebuyers how well you have maintained the home. If you decide to make improvements to your home, I highly recommend working with contractors licensed to do the work you need them to perform.

You’ll also want to make sure that they are pulling and completing any permits required by Arlington County. Again, keep all of the paperwork for your records. If you are thinking about upgrading your home, I recommend doing so in time for you to enjoy it.  Not just to sell the home.  Even though the return on investment may justify the cost to upgrade, part of the value is your ability to enjoy it.

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013. Please submit follow-up questions in the comments section or via email.

Q. I bought a two-bedroom, two-bath house in Arlington in 2000. I see on Zillow that it’s listed as having one bath. Should I be concerned about whether the county has accurate records? Will this be a problem when I sell?

The information found on Zillow is far from perfect, but the good news is that you can update the details about your home. If you look up your home in Zillow there should be a summary of details in the upper left corner of the screen. Below that is a button labeled “Claim This Home.” Once you claim the home, you will be allowed to correct your home’s data so that there isn’t any confusion when you go to sell the home one day.

For some reason the Arlington County Real Estate Assessment webpage does not include the number of bedrooms and baths listed for the home. You can call the Department of Real Estate Assessment at 703-228-3920 to find what information they have on record. You can also have your Realtor look it up for you in the tax record portion of the MLS. If there is an inaccuracy, I recommend getting it cleared up prior to putting your home on the market.

Note: adding a bedroom or bathroom may cause your assessed value to go up, which will increase your county taxes.

This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013. Please submit follow-up questions in the comments section or via email.

Q. What’s going on with these “Coming Soon” signs? In my neighborhood, there’s one that has been saying that for more than a month, another that said that for about two weeks before saying “For Sale,” and another that was “Under Contract” in less than a week without going to “For Sale.” Is this some new marketing gambit? I assume you don’t use my name or email if you answer on ARLnow?

I want to assure you and anyone else that sends me a question… I will not use your name or any other identifying information in my articles.

In order to explain the “coming soon” phenomena, I need to discuss days on market (DOM). Once your listing goes live in the multiple listing service (MLS), it starts collecting DOM. As this number increases, it decreases the perceived value of the home. Potential buyers start to assume it is overpriced and/or something is wrong with it. Instead of being a hot new property that buyers will clamor and compete for, it starts to attract low-ball offers. Leverage in the negotiation essentially shifts from the seller to the buyer.

By marketing a home as coming soon, the agent can generate interest in the property and maybe even a contract, prior to gaining a single DOM in the MLS. Agents generate interest with a coming soon sign in the front yard and grassroots marketing through their website and personal network.

This strategy is particularly prevalent this time of year. A homeowner may have interest in selling as soon as possible, but does not want to risk exposing the home to more days on market during the slower real estate season. There is a house in my neighborhood that has been coming soon since November. My expectation is that it will go active some time this month as real estate activity kicks into a higher gear.

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013. Please submit follow-up questions in the comments section or via email.

Question: I’ve heard that spring is the best time to sell a home, but I am having a hard time finding any way to substantiate this claim. Can you show me numbers that indicate when the most homes are going under contract?  

You have likely found that most of the sales data available online is limited to when homes have sold. For your analysis it is more important to understand when homes are going under contract. I’ve been tracking this data and have put under contract sales for 2012 and 2013 in the following chart for you to review.

In both years the Arlington real estate market peaked in March, April and May.  As probably expected, the slowest months were January, February, November and December. That said, there were still 100 or more sales taking place during each of these slower months.  And, the sellers probably had fewer listings to compete with than if they had put their home on the market in prime selling season.

An argument can be made for selling during just about any given time of year if you are looking at things from a macro level. I suggest considering the trends for your neighborhood or condo building. For example, maybe your particular neighborhood sees the bulk of its sales as soon as yards come back in bloom or when schools let out for the summer.  If you own a townhouse in Ballston or Clarendon, you may find that sales are strong all 12 months of the year.

You’ll also want to take into consideration any current events that may affect your sale. For example, last year the government shutdown slowed homebuyer activity in the last quarter of the year. The coast appears clear at the moment, but you’ll want to keep abreast of local and national news.

There are some very knowledgeable realtors in Arlington that are engrossed in the real estate market 365 days a year. I recommend establishing a realtor relationship early in the decision making process. They can lend their expertise in helping you determine when and how to sell your home in order to maximize your return.

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013. Please submit follow-up questions in the comments section or via email.

Question: I’ve been noticing “walk scores” listed in the description of homes for sale lately.  Can you tell me what that is?

Walk Score assigns a numeric grade between 0 and 100 to measure how walkable a given location is. Points are awarded based on the proximity to amenities such as restaurants, coffee shops, bars, grocery stores, parks, schools, shopping and entertainment.

The scores earned are described as follows:

• 90-100 = Walkers Paradise (daily errands do not require a car)
• 70-89 = Very Walkable (most errands can be accomplished on foot)
• 50-69 = Somewhat Walkable (some errands can be accomplished on foot)
• 0-49 = Car Dependent (most errands require a car)

We can use the Arbour Realty office address in Ballston as an example (875 N. Randolph Street). It earns a Walk Score of 94. According to Walk Score, the nearest restaurant is .06 miles, the nearest grocery store is .03 miles, the nearest park is .2 miles, etc..

Home buyers are generally willing to pay more to live within a walkable community. That is one of the reasons why homes along the Orange Line in Arlington have a higher average cost per square foot than anywhere in Northern Virginia. If consumers are paying for the convenience of living in a walkable community, it makes sense to show off your Walk Score when it comes time to sell.

You can input your address here to find out what your Walk Score is:  http://www.walkscore.com/

As a convenience to buyers, we include a home’s Walk Score in every MLS listing on our website:  http://arbourrealty.com/northern-virginia-home-search/

According to Walk Score, Washington D.C. is the seventh most walkable city in the U.S. Arlington was not included in the rankings, but with its average Walk Score of 67 it would have made the top 10:

1. New York – Walk Score: 87.6
2. San Francisco – Walk Score: 83.9
3. Boston – Walk Score: 79.5
4. Philadelphia – Walk Score: 76.5
5. Miami – Walk Score: 75.6
6. Chicago – Walk Score: 74.8
7. Washington DC – Walk Score: 74.1
8. Seattle – Walk Score: 70.8
9. Oakland – Walk Score: 66.2
10. Baltimore – Walk Score: 66.2

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This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013. Please submit follow-up questions in the comments section or via email.

Question: Do you have any last minute advice you can give us to spruce up our house before we put it on the market? 

It’s time to get your Martha Stewart on! The closer you can get your home looking like a model home, the greater your chance for creating emotional appeal and therefore maximizing the sales price. Below are three items I recommend for any home that is not being sold as a fixer upper or tear down.

Spic and span — Whether you are going to do it yourself or hire professionals, make sure you deep clean your house. This includes cleaning windows, dusting trim, bleaching grout & caulk, dusting blinds & ventilation grills, cleaning the oven & microwave, sweeping the garage… basically the ultimate spring cleaning. While you’re at it, replace old shower curtains and decorative towels. They will look crisp and smell new.

Schedule additional cleanings on a weekly basis until the home is under contract.

Declutter –– The object is no longer about function so put away all the small kitchen appliances and miscellaneous items on your kitchen countertops. You want them to feel as spacious as possible. Do the same for bathroom counters. Box up any unnecessary knick knacks and personal photos. Organize your closets and box up anything not being used for this season. Walk through each room in your house and collect anything that may be considered clutter. If necessary, rent a storage pod for items you do not have room for.

Walls and Floors — In case you were wondering… it is almost always better to paint and address the floors than to offer a credit. If you are selling your home as move-in ready, potential buyers want to see the full potential. A credit sounds nice, but it is not as powerful as a well presented home. Paint the walls if necessary. You can get away with touch-up paint or use a magic eraser if there are just a few minor scuffs. If the carpet is just lightly soiled then try a good steam clean first.  If the carpet is worn down, then it needs to be replaced. If the hardwood floors are scratched or worn, then sand & refinish them.

This may be more work than you were hoping for, but I guarantee it will be worth the return on investment. If you are on a tight budget, most of these items can be done yourself.

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013. Please submit follow-up questions in the comments section or via email.

Question: In Arlington, Alexandria, and Fairfax a large portion of the residential single-family home market is comprised of older homes that have been renovated. If one is interested in buying one of these homes, is there any way to check whether the work was approved by the local government? If the renovation work is listed in the tax assessment (ex. added bathroom) can it be assumed to be permitted? What are the risks of buying a home without knowing this information? Can the local government come after you once you own the home to obtain the necessary permits or are there grandfather clauses that can protect you?

Virginia is a caveat emptor state, so the buyer needs to take responsibility for researching a renovated home he or she is considering for purchase.

Zoning permits for a particular address may be found at http://permits.arlingtonva.us/ or by calling Arlington County Inspection Services at 703-228-3800.

I’ve been told by a zoning official of Fairfax County (and I think you can safely assume the same for Arlington County) that the tax record is not always accurate when it comes to the actual number of legal bedrooms and bathrooms. It is a good idea to contact the zoning office in the county that the property resides.

The homeowner inherits and is responsible for any work that was done without a permit. However, the county does work with homeowners on resolving issues and obtaining permits that may arise from work that is not permitted.

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

This regularly-scheduled Q&A column is sponsored by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit follow-up questions in the via email.

Question: We’ll be selling our home and buying a new one in Arlington this year. What do you see on the horizon in 2014.

As I did at the beginning of 2013, I’ll provide you with 5 predictions and we can see how they unfold over the next 12 months.

1. Boost to luxury market — In 2013, buyer demand was greater than housing supply in many segments of the Arlington market. Competition for homes placed upward pressure on home prices.

I expect that rising prices will start to make it more attractive for current homeowners like yourself to consider selling this year. The trickle up effect should spur additional sales in the upper price brackets.

*Free tool for evaluating what your home is worth: http://Ask-Adam.SmartHomePrice.com/

2. More competition for the jumbo market — As the real estate market improves across the country, I am expecting more investors and banks to offer “jumbo” financing, or loans over the Fannie Mae & Freddie Mac loan limit (currently $625k). As more companies offer this financing, greater competition is expected, most likely translating to such consumer benefits as better rates, more frequent approvals and improved customer service. This will be especially important if Fannie Mae and Freddie Mac decide to reduce the loan limit of conventional loans back to $417k.

With the average sales price in Arlington currently at $564,541, keeping jumbo loans affordable is highly important for the ongoing health of our local real estate market.

3. Continued investment purchasing — Contrary to a prediction made by Trulia, I don’t expect investor activity to slow down in Arlington in 2014. Prices are certainly no longer at the bottom of the market, which would be the ideal time to purchase an investment property, but I don’t expect that to hold back investors who are forecasting continued growth. Just as investors purchase stocks at all phases of the market.

4. At least one condo conversion — You probably remember in 2006 when would-be-condos like Joule, IO Piazza, Zoso, Vista and Palatine all converted to rental apartments. As large investors take notice of demand outpacing supply for condos in Arlington, I expect at least one rental apartment building in Arlington to convert to a condo in 2014.  If this happens, others are likely to follow.

5. South Arlington sales take off — There are two new townhouse developments and a condo building on Columbia Pike that are getting ready to begin sales. I expect both of these developments to sell as quickly as they are willing to release homes to the market. Not to mention growing demand for neighborhoods like Penrose that are becoming a hot alternative for buyers who want a house, but can only afford a condo along the Orange Line. Could the volume of sales in the 22204 zip code outpace popular North Arlington zip codes like 22207, 22201, 22203, 22209? I think so.

I wish you all a wonderful 2014! You can look forward to my articles on a weekly basis this year so please keep the questions coming. Email is always the best way to send them to me.

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

This regularly-scheduled Q&A column is sponsored by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit follow-up questions in the via email.

What changes are on the horizon for mortgages in 2014?

I posed your question to an expert in the mortgage industry, Paul Nagel at First Home Mortgage. He had the following to say:

Every year, the mortgage market changes and evolves, and 2014 will be no different, and may even see more changes than might occur in a typical year. There are three major types of changes we expect to see next year:

1) Interest rates are expected to be higher for several reasons:

(a) Federal Subsidy Program: The Fed has been actively keeping rates low through a kind of subsidy from the government, and this subsidy is expected to be reduced or eliminated. As this subsidy has been estimated to have lowered rates by 0.25-1.0 percent in rate, one would expect rates to increase by that amount once the subsidy is eliminated. No one knows exactly when or if this will occur, but it is very likely to occur.

Takeaway: When watching/reading the daily news, look for signs that the economy is improving, especially with regard to employment. As employment (specifically) and the economy (in general) improve, the likelihood that this subsidy will be eliminated increases, which would cause rates to go higher.

(b) Overall economic conditions are expected to get a bit better over 2014. Rates tend to increase when the economy improves and rates tend to decrease when the economy gets worse.

(c) Fannie Mae & Freddie Mac announced that, in the first quarter, they will increase the cost of mortgages for most credit scores and down payments less than 20 percent. A week later (this past Monday), they then reversed course and announced that the implementation of this rate increase will be put on hold and that the increase is under further review. As of the writing of this text, it is unclear what will occur. It is important to note that, should this be implemented, it does have the potential to increase rates on many borrowers an additional 0.125 percent and 0.5 percent.

Takeaway:  The best strategy for a buyer is to keep in touch with their realtor and lender, as well as keep abreast of the daily financial news. While no one knows what will happen, the more information you have, the less likely you will be surprised if this change does become a reality. In addition, it’s recommended to be more educated how to optimize one’s credit score, as should this increase be implemented, the higher the score, the better your rate will be.

2) Dodd-Frank Changes:  As a result of the mortgage market crash in 2008, the Dodd-Frank financial reforms were passed and many of these related to mortgages will become enacted in 2014. It eliminated programs where principal could rise, many (if not all) interest-only loans and loans of a greater term than 30 years. These programs had effectively gone away since 2008 and this is not expected to impact the housing market much, if at all.

It is expected that loans will be evaluated with a bit of a higher standard than years past, so if a buyer may have barely enough income to qualify for a home, perhaps they may not qualify in 2014. That said, many buyers purchase homes well under what could be approved, so this impact is not expected to be widely felt.

The wild card with the new regulations is whether the government will implement something that just cripples the lending industry, either through a new regulation or an unintended unforeseen consequence of something being currently implemented. While I agree that such a scenario is a possibility, please know that the housing market is such a large component of the economy, that Congress cannot and would not allow something catastrophic to continue for any extended period.

Takeaway: Much of the new regulations will create changes, but these changes are not expected to have a huge adverse impact. Should such a scenario occur, it is extremely likely that such an occurrence would be short lived.

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This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013 & 2014. Please submit follow-up questions in the via email.

Our family is growing and we are in serious need of a larger home and don’t feel the one we are currently in is worth adding on to. Our preference is a new home, but having visited a number of open houses, we are not very impressed with what we are finding. Should we consider building a custom home?

A major advantage of a new home already constructed (often referred to as a “spec home”) is that it is move-in ready and the headaches of construction have been managed for you. You also get to see exactly what you are buying.

Two downsides to a spec home:

1. You are stuck with someone else’s design choices.
2. You are paying market value for the home, which may be more than the cost of building a custom home.

When deciding between buying a spec home or building a custom home, keep in mind that there is not much extra land sitting around Arlington that is just waiting for you to build on. You will be lucky to find anything desirable if you search the MLS for land in Arlington. Good teardowns can attract competition from builders and investors who are able to pay cash. So even if you have the funds and inclination to build a custom home, finding a lot that suits you may be easier said than done.

You mentioned that your current home is not worth adding on to, but you may want to consider whether it is a good teardown candidate. There are a number of terrific builders who specialize in building on your lot. Depending on your tastes and requirements, you may find this to be quite an affordable option.  Items to consider:

• How will the new home blend into your existing neighborhood?
• Will the upper end of home prices in your existing neighborhood support the total investment you are considering?
• Will the size and shape of your lot support the home you want to build?
• Are there any Arlington County zoning restrictions that may get in the way of your plans?

If you decide to build a custom home but do not use your current lot then I recommend working with a REALTOR® who has experience with finding lots and set a realistic timetable.  In the meantime, it is a good idea to start interviewing builders. I know of a few good builders that tend to have a portfolio of lots, which could be a home run if you like their work, pricing and the lot(s) they have available.

You’ll also need to explore construction financing. This niche service tends to be dominated by the local banks and the terms have become increasingly convenient. Some programs allow you to wrap into one loan, the cost of the lot and construction. I’ve even seen down-payment requirements as low as 10%.

Builders almost always have a number of models for you to choose from. It’s usually less expensive to go with one of their existing options than to start from scratch.  Some will also allow you to customize the floor plans as well as the finishes. You may not get many chances in your life to build your own home, so I recommend pushing for what you really want. Maybe you will get lucky and find an existing model that works great for you, but if not, don’t be afraid to customize if you can make it work with your budget.

Feel free to contact me directly to discuss your plans in greater detail. Even if we don’t work together, I’m happy to recommend builders and lenders that fit well with your needs. I can also turn you onto homes currently under construction that are not yet on the market, like this one:  http://228Cleveland.com/

If someone is reading this that owns a potential tear down lot, I would love to hear from you as well.  I’m always on the lookout for good lots in Arlington, Falls Church and McLean.

The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of ARLnow.com.

This regularly-scheduled sponsored Q&A column is written by Adam Gallegos of Arlington-based real estate firm Arbour Realty, voted one of Arlington Magazine’s Best Realtors of 2013. Please submit follow-up questions in the comments section or via email.

Question: Are you concerned about a ‘new’ real estate bubble forming — and popping — in the Northern VA/DC area? Obviously the rest of the country is still recovering from 2008 (at best) but we dodged a bullet… but given the unlimited QE by the Fed/etc., this bubble is going to have to pop eventually… thoughts? This area is obviously insulated about as much as possible given all the $$$$$ in the area, but still.

I’m certainly not an economist by any stretch, but I can share my personal thought based on my professional experience as an Arlington real estate broker.

I think we can all agree that real estate home values have been rising throughout 2013.

• RBI is reporting that the median price of sold homes in Arlington is up 6% from this time last year.
• The Case-Shiller index reports a 7% home price increase for the Washington DC area over the last 12 months.

Buyer activity has increased in 2013. Some of this is due to a release of pent up demand from would-be homebuyers that have been waiting on the sidelines for the real estate market to stabilize or the price of their current home to reach a point where they could afford to sell and buy something that fit their current needs.

Another factor leading to an increase in prices is the low supply of housing inventory. New home development is still in hibernation. The rental market has been strong enough that many would-be home sellers are opting to rent their homes rather than sell them because of the favorable rental income they can generate. Other homeowners are either happy where they are or have not seen the value of their homes reach a point where they are motivated to sell.

So if prices are rising, does that mean we are in a bubble? No, but having been through the bursting bubble of 2006/2007 we are all on high alert. I would even go so far as to say that some of us have been conditioned to feel that increasing prices will inevitably lead to a housing market bubble.

Looking back at what happened leading up to 2006… prices were rising at a much faster speed. You may remember zip codes in Arlington experiencing greater than 20% appreciation in 2003 and 2004. Prices are rising again, but at more reasonable pace. An important (but subtle) difference is that home buyers are not depending on rapid appreciation.

You’ll also remember the infamous mortgages that people were obtaining, which they would never qualify for under the current standards. Today’s growth is happening on a more stable base of financing where homebuyers are bringing equity to the closing table and having to meet higher standards for qualification.

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