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February 3, 2016
A home inspection is one of the most critical junctures in a real estate transaction. If a deal is going to fall through, this is usually the time at which it happens. The other critical issue that typically sinks real estate deals is financing.
It is highly recommended that every home buyer, first time or otherwise, order a home inspection on the property they are under contract to buy. In fact, it is typically considered a ‘Fiduciary Responsibility’ of the buyer’s Real Estate Agent to ensure their client does a home inspection so the client is protected from any unknown issues the home may have.
Further, almost all lenders also require a home inspection as part of their financing commitment when providing a loan to a buyer for the purchase of the property. Since the house is serving as the collateral on which the loan is secured, it is critical for the lender to understand the quality of that collateral. A home inspection helps assure them that the security for their loan is void of any major issues that will negatively impact the property’s value.
What should buyers and sellers focus on when looking at a home inspection report? Read on to find out…
Major Areas Of Concern On A Home Inspection
Individuals who are looking at a home inspection report in Washington DC should focus on major, high ticket items that come up as problematic on the home inspection report- such as the foundation, electrical system, plumbing system, and the roof. Since these are the most important systems in the home, and also the most costly to repair, these are what a buyer should be most focused on. ‘Small stuff,’ like missing screens, doors that stick, missing doorway thresholds, etc, are not usually anything to worry about. And the reality is, when asking for repairs from a home seller, it is best to be judicious with what items you ask the seller to fix- fewer items that are higher price point will often be received better than long laundry list of less expensive repairs.
This is probably the single most important potential problem that may be uncovered from a home inspection, as the entire structure of the home could be at risk with a major foundation issue. Typically, as long as floors, ceilings, and walls are straight, and doors open and close normally, any foundation problems that come up will be more minor- like cracks in the foundation. However, even with these minor issues, it could still cost somewhere between $5K and $15K if something like Helical Piers are needed to reinforce a settling corner of the foundation. A good rule of thumb that we use when renovating properties is that any small foundation issue will take around $10K to fix. If it’s a more significant issue, like a cracked or bowing wall, then the cost will go up dramatically.
On a house we renovated in Lanham, we had to completely tear down and rebuild a basement wall in a 1,000 square foot rambler basement, which ended up costing around $45,000. If any structural or foundation issue is uncovered by the inspection, the buyer will have the option to walk away from the deal using the home inspection contingency that is in almost every offer. Or, if the buyer would still like to buy the house, write into the inspection addendum that the issue must be evaluated by a structural engineer of the BUYER’S choosing, and any recommended repairs made at seller’s expense.
The best way to spot a leaky roof is to look inside the attic. Any worthwhile home inspector will go into the attic (make sure that the seller has provided some means of attic access), and will also often go on top of the roof. It is HIGHLY recommended to find an inspector with a long ladder that will always physically go onto the roof, as many issues can’t be uncovered unless the inspector is literally on top of the roof. If a roof leak is uncovered on a buyer’s home inspection, the buyer’s best bet is to write into the inspection addendum to have the roof further evaluated by a licensed roofer of the buyer’s choosing and any repairs made by the seller at their expense. If seller will not agree to this and will only agree to use their roofer, this opens the buyer to more risk, but can still be workable as long as seller provides a written report and proof of license from the roofer. Often, the best course of action if a roof has more than 1 or 2 leaks is to replace the entire roof, which can cost anywhere between $5,000 and $20,000.
There are 2 main electrical systems in the house- the main electrical meter and panel, which is where the power from the street attaches to the house and is the way all the power is provided to the house, and the internal system, which goes from the electrical panel to all the various outlets and switches inside the house. Any issues with the main electrical panel will be most costly to repair, while a few non working outlets or switches is usually not particularly costly and is something that most seller’s should have no problems with fixing.
Dealing With Major Problems Revealed On Inspection Reports In Washington DC
Those homeowners who find that that they have major problems with their property in Washington DC often decide to simply sell their real estate to an investor who specializes in such sales. The advantages of doing so are plentiful, real estate investors are able to complete the sale quickly, with cash, and allow homeowners a way out of their property without the stress and headache of costly repairs.
January 21, 2016
The Arlington VA Real Estate Market Expected to Remain Flat in 2016
The Arlington real estate market has been in a sideways trend over the last year and is expected to remain stagnant. According to Zillow, current median property values in the area are $604,000, a decrease of 0.4% on the year, while 2016 is projected to bring a 0.2% increase in value.[i] In addition, the average rental rates in Arlington are $2039, a decrease of $23 or 1.1% from six months ago.[ii] The good news is that development is taking over center stage, as there are a number of real estate projects in motion. What does this mean to homeowners, those looking to buy real estate, and those looking to move into Arlington in 2016?
Single Family Home Prices In Arlington
The shinning beacon of light throughout the Arlington real estate market is single-family homes, as they are in high demand. 3 BR single-family homes have increased in value 4.8% on the year to $732,500, while selling in an average of 1.79 months.[iii] Those who are in a position to sell this type of housing should take action now, while there are plenty of buyers available. On the other hand, those looking to purchase real estate in Arlington might want to consider holding off on purchasing single-family homes due to their hefty price.
Condos in Arlington have dropped in value 9.7% since November 2014 to a median price of $375,000.[iv] Those looking to purchase a condo in Arlington should take advantage of the opportunity they have available right now. On the other hand, those looking to sell their condo may want to hold onto it for a while in hopes that their property value picks back up.
Rental Rates In Arlington
With rental rates at an average of $2039, real estate investors in the area are taking advantage of the market conditions. Those who are considering renting property in Arlington should be able to capitalize on relatively stable rental rates in 2016, as the overall market isn’t expected to move significantly.
Developments In Arlington
There are a number of real estate developments in Arlington that were recently completed, including the Maxwell Apartments, The Beacon, Columbia Place, Pike 3400, The Shell, Clarendon Apartments, Verde Point, and The Arcadia.[v] Since Arlington is bracing for a population boom, property values are likely to increase over the next 10 years.
Future Developments In Arlington
There are a large number of future development projects in Arlington that will likely support this real estate market over the long-term. Since most of these projects are focused on the residential rental market, expect people to move into the area and improve the region economically.
Arlington Real Estate Market
Real estate values are likely to remain stable throughout 2016 and increase over the next ten years. Overall the market is strong and is calling people into the area, allowing those who own or want to purchase real estate with an investment that carries very little risk.
[i] Zillow, Inc. “Zillow”. Zillow. N.p., 2015. Web. 31 Dec. 2015.
[ii] Rentjungle.com,. “Average Rent In Arlington, Arlington Rent Trends And Rental Comps”. N.p., 2015. Web. 31 Dec. 2015.
[iii] Getsmartcharts.com,. “Home | Smartcharts”. N.p., 2015. Web. 31 Dec. 2015.
[iv] Getsmartcharts.com,. “Home | Smartcharts”. N.p., 2015. Web. 31 Dec. 2015.
[v] Arlingtoneconomicdevelopment.com,. N.p., 2015. Web. 31 Dec. 2015.
January 8, 2016
Washington D.C. Real Estate Market Indicators Stay Strong Into 2016
The Washington D.C. real estate market has been on a steady climb since 2012, and 2016 appears to be more of the same. As 2015 came to a close, all real estate market parameters are inching up, suggesting that continued strength and price increases are on the horizon. Those who are considering purchasing real estate in Washington D.C. will face continued strong competition for property. Homeowners who are interested in selling real estate in the city should take advantage of the surge in sales activity and increase in property values as we head into the new year.
Increasing Sales Activity
According to market statistics, the numbers of closed sales in Washington D.C. in November 2015 were 8,603, up from the five-year November average of 7,937. In addition, the numbers of pending sales in November 2015 were 10,825, while the five-year average has been 9,548. This demonstrates that overall market is heating up throughout the metropolitan area, allowing sellers to connect with interested buyers.
Falling Real Estate Inventory Levels
Throughout Washington D.C., real estate inventory levels are dropping. As of November 2015, Washington D.C. had 4.1 months of supply, significantly less than the going five-year November average of 4.6 months. When a real estate market experiences falling inventory, there are either fewer sellers or more buyers taking properties off the market. In Washington D.C. buyer demand is heating up, while many homeowners are holding off on the sale, insisting on higher property values before listing their property on the market.
Increasing Median Sales Value
Since the amount of demand throughout Washington D.C. is greater than the supply, both the listing price and the median sales price are increasing throughout the city. Presently, Zillow has estimated that median property values are $500,300, a 7% increase over the year. According to Trulia, the median list price throughout Washington D.C. is $650,241, up 3.3% on the week and the median sales price is $510,000, up 5.2% from September. Over the course of 2016 alone, property values are expected to increase 3.1%, giving those who are interested in selling or buying real estate in Washington D.C plenty to consider.
Take Advantage Of The Washington D.C. Real Estate Market
Homeowners who are in a position to sell their house in Washington D.C. and are satisfied with their property values have every reason to take action now, as the market is favorable to them. Those who are looking to purchase real estate in Washington D.C. will face continued strong competition.
July 7, 2015
How often do you pay for convenience and speed? People often pay convenience fee to pay bills instantly online or purchasing movie tickets in advanced through the online kiosk. How many times have you paid to use the express lanes on the highway to avoid that nasty traffic during the rush hour? What about paying double or triple for shipping services like UPS and FedEx to receive or send a package few days earlier? There are many more instances where people spend money to buy convenience and speed.
Then why do some people give real estate investors a bad rap as sometimes trying to “low ball” home owners on their offer to buy their house? Real estate investors sometimes have a reputation of being seen as “cheap” or “unfair” with their offer, but is that really the case?
It is true a real estate investor offer is typically lower than what a Realtor will list an owners house for, but when you take into consideration the fact that if a property needs a lot of work there is a high chance the home owner will not be able to sell their property at the market price, an investor can often be the best option. There are also the extensive costs associated with selling a house on the open market with a Realtor that most owners don’t take into account.
How do investors come up with an offer on a house? When investors make offers to a homeowner for what we can buy their property for, they do not come up with random numbers to offer, but rather analyze the comparable sales within the given area with houses that are similar in size and format. Many real estate investors are licensed realtors, which also give them access to sources that have much more accurate prices and values of properties.
There are also expenses that people who sell their homes on the market with a Realtor do not usually add into their equation such as the remodeling cost of anywhere from $0 to $20,000+, real estate agent commission of 6%, closing costs of 2-4%, inspection repair costs, and weeks or even months of time spent on the market waiting for a buyer.
There is also the time and potential aggravation of having open houses for people to view the property, conducting dozens of one off buyer showings, etc while you’re waiting for an offer to sell your house.
House buying services like 4 Brothers Buy Houses offer to buy the house fast and in cash, while saving people the trouble of going through all the hassles mentioned above. The cash offer may not be as much as what they would get by selling with a Realtor, but after all the above expenses are taken into account it is usually close. Most importantly though, what we offer to home owners is a convenient and fast way to sell their house with very little hassle.
June 24, 2015
People may wonder why anyone would need to sell their house FAST or AS-IS instead of selling it traditionally through the real estate agents and putting it up on the market. People might think this process occurs usually when people are ready to move out to a new house. In a sense, it is true. However, there are many other reasons why people have the need to sell the house or even consider “getting rid of it.”
Why in such hurry?
One can be going through a divorce process and need to quickly clear the names off of the house and move on with their life. A house could have been inherited but it is unwanted or too difficult to manage so it is in the owner’s best interest to liquidate the asset without hassle. There are more in depth explanations on the divorce and inheritance situations at www.4brothersbuyhouses.com. Some people get behind on payments; whether it’s on their mortgage, which results in them going into default, or on smaller items like property taxes or even HOA association dues. In those cases, people often can’t financially afford to be in the house anymore and so wish to sell quickly so they can move on to a property that will be more financially comfortable for them to own.
Another reason why an owner might need to sell a house fast is due to an impending bankruptcy filing, be it chapter 7 or 13. Other common causes are various life changes, like an owner who may want to move to a smaller home quickly due to a change in income that was caused by unemployment or shortened hours. Changes in financial conditions can often lead an owner to want a home with a more manageable monthly payment.
Perhaps managing a rental property is becoming too difficult and want to just sell the house. Ultimately, regardless of the reason of selling the house, people may struggle to afford to fix up the property to even put up on the market or do not want to go through weeks or months worth of hassle.
Let’s say someone has enough funds to fix up the house and use a real estate agent to put it on the market. People claim that time is money. Saving time can be critical in certain cases and that is why people would consider using services like 4 Brothers Buy Houses to quickly go through the process of selling the house. Convenience is also another huge factor that comes into play. Some people need to go through their attorney, home owners association, real estate agents, remodeling contractors and loads of paperwork. Even after all the hassle and finally putting it up in the market, there is no guarantee it will be sold right away! It takes time and effort to leave the house open for people to come by and visit to look at it. People should always consider their alternative options to sell their house fast and as-is to alleviate the problem of not having enough funds or not wanting to go through a hassle when they are in time sensitive circumstances.
March 19, 2015
For April of 2014, the Montgomery County real estate market has continued to remain strong, with a median sold price down just a fraction of a percent from April 2013 to April 2013 to $400,000 flat. The number of new listings is virtually unchanged from last year, up 2.3% to 1,840, while the number of closed sales has decreased significantly from 985 in April 2013 to 871 in April 2013.
The decrease in number of closed sales can be attributed to a decrease in inventory of available homes for sale as the competition for the existing homes continue to remain high.
This fact is reinforced by the average days on market and average sold to list price ratios, which both remain well above their 5 year average. Average days on market is down significantly from 50 in April 2013 to 44 in April 2014, and well below its 5 year April average of 62. Average sold to list price ratio remained high- near it’s April 2013 figure at 97.8%, and above the 5 year average of 95.9%.
Forward looking inventory remains tight with the number of active listings at 2,414, which is significantly below the 5 year April average of 2,821. This would indicate that comptetion for existing homes will likley remain high- keeping upward pressure on sales prices and downward pressure on average days on market. This is continued good news for sellers, who have begun to respond to increasing buyer demand by listing their homes for sale, but will result in a continued diffcult environment for home buyers.
In terms of specific zip codes to point out within Montgomery County, the 20854 zip code in Potomac, MD continued as one of the highest priced zip codes in the DC area with median sales price up 1.2% over last year to $842,500, and average sold price down slightly at 3.4% to $978,510, which is based on 49 closed sales in the month of April. The highest volume of closed sales were in 20906- Silver Spring, 20878- Gaithersburg, N Potomac, and 20874- Germantown at 76, 71, and 67, closed sales respectively.
June 17, 2014
Landon’s mother passed away in January of 2014 at her home in Silver Spring, Maryland. His father had passed years before and his sisters lived out of state. Even though Landon’s siblings came back for the funeral, Landon was left with the burden of funeral arrangements and later on, handling his mother’s estate and will.
There was only one problem- Landon’s mother had previously named his sister, Angela, as executor. Basically, this meant it was Angela’s legal responsibility to settle the estate, including going through the probate process and figuring out what to do with her mother’s house. The average probate- the legal process of passing on a deceased person’s estate to his or her heirs- takes about one year. Neither Angela or Landon had a lot of free time to work on this so they were quickly overwhelmed.
Angela had a full time job and two kids of her own in North Carolina and was not able to spend much time in Maryland and Landon, though residing in Maryland, was not the executor so could only do so much without Angela being there.
Toward the end of February, while sorting through paperwork, Landon realized his mother had built up considerable debt during the last few years of her life. Seeing that this would fall to him and his sisters, the need to sell the house was even more pressing than before.
With the probate process just getting started, Angela in North Carolina, and the discovery that his mom was still paying off the mortgage at the time of her death, Landon knew he needed to sell the house fast but feared how complicated the process might be. That was when he noticed a letter in the mail from 4 Brothers Buy Houses.
It was a cash offer for his mother’s house.
Since this was not the house Landon and his sisters grew up in, they had no hesitations about selling the house quickly. He decided to call the number on the letter to see what the offer was.
After hearing a preliminary offer, Landon got the OK from his sisters and decided to work out the details with 4 Brothers Buy Houses. He was worried about the legal stipulations surrounding the sale since he did not technically own the house and since his mother did not own it free and clear when she died.
We told him we could help.
After working through the probate process with the Montgomery County probate court and negotiating a number of liens that were on the property- including an old HOA lien- we helped Landon get clear title to the property and were able to buy his mother’s house in less than a month.
If you own an inherited house and aren’t sure how to approach the probate process, how to sell the house quickly, or how to sell a house with title issues, give us a call and see if we can work something out.
May 8, 2014
Anna and her husband David separated in January, 2012. David, who was in the military, took a permanent position overseas leaving Anna the house in Bethesda. The following spring, Anna moved in with her mother in Frederick because she did not want to live in the Bethesda house by herself. Although it was mostly paid off at the time of their separation, the home’s property taxes were still fairly high, over $4,000 a year. Anna realized that she would have to sell eventually.
She knew that she wanted to sell the house, but was overwhelmed by the whole process. The idea of cleaning out the house and removing everything David left behind was painful for Anna and she put off the sale for as long as she could.
With David overseas and other complications, the divorce didn’t go through officially until August, 2013. The house was officially hers.
That was when Anna saw a sign for 4 Brothers Buy Houses. She had seen these types of advertisements before, but never really knew what they meant. Would she have to clean the house? How long would the process take? Would she need a realtor?
She decided to give us a call.
We listened to her concerns and after giving her a preliminary cash offer and assuring her that she would not need to step foot in the house to do any cleaning or hire a realtor, we agreed to look at the house and finalize our offer.
The house was in better shape than we expected so we offered to pay the closing costs as well as put all of her and David’s old possessions in a storage unit so she could take a look at them when she was ready.
We closed on the deal less than two weeks after Anna first called.
If you are going through a divorce or another tough situation such as a death in the family or career change and need to sell your house fast for cash, consider giving us a call to see if we can help.
April 14, 2014
Selling a Problem Rental Property
When Jessie found out she was going to the University of Maryland after her 2011 high school graduation, her dad saw what he thought was a great investment opportunity. He recently inherited a sum of money from his parents and decided using it to invest in real estate would be a safe bet. His idea was to buy a three bedroom house in College Park and have Jessie live in one room while renting out the other two rooms.
Jessie wanted to live in the dorms where most other freshman lived but after some convincing from her parents, she agreed to live in and help manage the house. Her dad was excited.
Not being a landlord or a homeowner previously- he had no idea what he was getting himself into.
They were able to close on a home in August, which actually had four bedrooms, just in time for Jessie to move in and find some roommates.
After two semesters of homeowning and landlording nightmares- including late payments, parties, and damage to the house- they decided that the house was not such a great investment.
Jessie’s parents ended up putting all of their revenue from tenants right back into the house and actually had to dip into their savings to deal with house related issues.
While studying for exams at the close of the spring semester, Jessie was very distracted because of issues with her latest roommates who had not yet paid that month’s rent. She googled “How to deal with bad tenants” and found a few good websites and blogs. But what was more interesting was an ad on google which read “We Buy Houses Fast for Cash!” They never considered selling the house before but after overcoming some initial skepticism, Jessie decided to call the number on the ad, just to see what the offer would be.
So she dialed the number for 4 Brothers Buy Houses and spoke with Jon. After describing the house over the phone, Jon was able to give her a ballpark offer on the house. Even though he mentioned the number might rise or fall after a home inspection, Jessie went to her parents with the idea. Her dad was surprised that Jessie even considered such a strange advertisement, but after hearing the cash offer, decided to speak with Jon himself.
After a short conversation in which Jon explained that 4 Brothers Buy Houses would buy the house quickly for cash, pay all closing costs, and takeover tenant management, Jessie’s dad decided to go for it.
A short ten days later, they closed on the sale and Jessie moved home for the summer.
Real estate investing can be tricky and many people jump in too quickly. If you are managing or living with bad tenants and don’t know what to do, consider calling 4 Brothers Buy Houses. You never know, we might be able to offer more than you would expect.
April 8, 2014
According to NBC News, there are over 22 million homeowners in the United States that currently cannot sell their homes without having to pay deficiencies or come out of pocket to pay closing inventories. While the economy in Washington DC is certainly better than most areas nationwide, there are still distressed property owners who are looking to sell their houses fast in Washington DC, but cannot afford to come out of pocket to pay.
An underwater home can be described as when a mortgage is greater than the value of the house, even if you have a small percentage of equity, it may not be enough to pay the closing costs. If you are considering a short sale, there could be drawbacks that your need to be aware of. For your own protection, all property owners should seek legal advice from a competent real-estate lawyer.
If you are considering the option of a short sale, you should:
Contact the Lender
Get in touch with your financial intermediary and request to speak with the “Loss Mitigation Department” of the bank. It is likely that the bank will be very firm at first and may be hard to deal with, but be direct, to the point and they will loosen up and prepare to deal with your situation.
Preliminary Net Sheet
Your financial intermediary will want to see how much money they are going to net with your offer. Providing them with a Net Sheet with your offer will provide the bank with all the details and numbers they need to see.
Proof of Income and Assets
It is best practice to be open and honest when it comes to your financial situation and disclosed assets. Lenders will request to know if you have items such as money market accounts, negotiable instruments, stocks or bonds, cash or other property or assets of tangible value. Essentially lenders require assurance that the debtor cannot repay any of the debt that it is forgiving.
Copies of Bank Statements
Present your statements to your bank and be advised that if your statements show unaccountable large deposits or withdrawals it’s a good idea to explain each of these line items to the lender.
Purchase Agreement & Listing Agreement
The lender will require a copy of the listing agreement and a fully execute offer accepted by the seller. Be prepared that the bank will most likely negotiate all fees, home protection policy, etc.
When you originally purchased your home, you most definitely did not picture yourself in this situation. Unforeseen circumstances, such as a unemployment, readjusting mortgage rates and illness to name a few examples, can put you in such an undesirable position you never imagined. It is never more important that you look at all your available options, including bankruptcy, foreclosure and the short sale before you select the one that will work best for you.
At Capitol Home Buyers we are LOCAL buyers looking for homes in the DC area and are prepared to make you an offer today on your home. Get in touch with us today for a quote on your home in 24 hours.