Posts Tagged ‘Washington DC realty’

Foreclosure Crisis in DC

Friday, March 2nd, 2012

Have you wondered why the inventory of “shells” and investment properties are in such short supply in DC?  It is because of standoff between the title insurance companies and the DC government over foreclosure laws.  The standoff has caused an artificial increase in property values because the supply of “shells” and houses that could be renovated and put into the stream of commerce is so low.

In 2011 there were only 10 or so residential foreclosures. Unless there are changes TO the law, the number in 2012 will remain the same.  It might even be worse. The reason for the low number is that DC modified its foreclosure law at the end of 2010 to include a mediation process on all residential foreclosures.  Maryland has also added a mediation component to its residential foreclosure process. The problem with DC’s process is that the mediation certificate issued at the end of the process does not have the force of law equal to an estoppel certificate and, therefore, no title insurer will issue a title insurance policy on a foreclosure sale.  The title insurance industry has been trying to persuade the District of Columbia to amend the law, but to no avail.  This standoff between the title insurance underwriters and the District of Columbia has caused a de facto moratorium on foreclosures and, thus, foreclosure sales.

To make matters worse, DC passed an amendment to the law last fall that requires any property that has any residential units (up to 4) to go through the mediation process.  It does not matter if a unit is owner occupied or not.  This also includes mixed use properties.

This amendment means that a commercial building owned by a limited liability company in Georgetown that has a shoe store on the first two floors and a tenant-occupied residence on the third floor—and has a commercial loan on the property—can only be foreclosed by going through the mediation process Thus, you cannot foreclose on the commercial loan because no title insurer will provide title insurance when you complete the foreclosure.

A more glaring scenario would be a corporation buying a single-family dwelling for renovation and investment purposes in DC.  Because the loan would be for investment purposes, it would be made by a commercial lender with a commercial promissory note.  If the corporation defaults on the loan, the lender cannot foreclose—even though it is a commercial loan taken out by a corporation—because the property is residential, and no one will insure the trustee’s deed out of foreclosure.

Amazingly, lenders continue to make loans on residential properties in DC despite the lenders’ lack of recourse on loan defaults.  It is entirely likely, however, that lenders will become increasingly aware of this issue, and then DC’s foreclosure law will have a chilling effect on new loans for residential properties.

In conclusion, DC’s foreclosure law is having a huge impact. Very few foreclosures are taking place, and the DC housing market is suffering as a result.  Even in the case of some commercial loans, DC’s new law have had a chilling effect on foreclosures, and might soon have a chilling effect on new loans for residential properties.

Steven M. Buckman, Esquire, managing member
BuckmanLegal, PLLC
buckman [at] BuckmanLegal.com

Preparing For A Real Estate Transaction in 2012

Friday, December 30th, 2011

Happy New Year everyone! With just a few days before we say goodbye to 2011 and welcome 2012 with open arms, I thought we would spend a few minutes talking about what you can do to prepare to buy or sell a home next year. Buying and selling real estate often takes many months of preparation and getting started now can make the process that much easier.

Start with evaluating your credit score. You have certainly seen commercials on television, heard others talking about it and read numerous articles about the importance of your credit score when buying a home. This remains true. It is always a good idea to review your credit report from all three credit reporting bureaus annually, which makes the beginning of a new year the perfect time — it’s an annual reminder that will not change.

Evaluate your credit history with each company to ensure accurate information is being reported by current and former creditors. If you do find an error that could negatively impact your ability to obtain a mortgage, you will have plenty of notice and time to fix the problem. Nothing would hurt your chances of buying your dream home faster than the inability to secure a mortgage for your dream home — especially when other offers may be on the table.

Consolidate expenses where possible, and save the money. Many companies offer “bundle” packages for their services that will allow you to receive the same services at a lower price. Saving the extra money for a down payment on a home allows many first time home buyers to secure a lower interest rate and may even eliminate the requirement for private mortgage insurance, or PMI.

Research the areas you think you want to buy a home in before you begin house shopping. Even though it can be fun to browse through homes until you find the perfect one for your family, imagine the frustration when it turns out your dream home comes with a tax bill you cannot afford, or that you are unhappy with the school choices in the area. Knowing what to expect from the area and community before you choose a property is the easiest approach.

For more tips or if you have questions, just give me a call and I’d be happy to help!

Have a safe New Year’s Eve and a happy new year. I look forward to working with you soon!

~ Michelle

Using Social Media To Sell Your Washington, D.C. Home

Friday, July 29th, 2011

Hi everyone! Hope you all are handling the sunshine and high temperatures without too much pain and suffering. I was just talking with my friends in the Trinidad neighborhood last week and we quickly agreed we shouldn’t complain about the weather. We wait all year for summer to get here, and when it does, we complain about being too hot. I guess we just can’t be made happy these days. : )

But back to the subject at hand. Unless you live in a cave or under a rock (and obviously that’s not true – you have Internet access!), you are aware of the growing popularity of social media. Social media is the general name given to online tools such as Facebook, Twitter, LinkedIn and various other products which encourage collective collaboration and sharing of information. Even though most of the products started out as a way for people to interact with family and friends around the world, they have quickly become powerful marketing and business tools as well.

Using social media to sell your home – whether in Washington, D.C., Palisades, Trinidad or NW DC – is a great idea. The ease and availability of these tools allows information to pass from one person to a countless amount in a matter of mere moments. All it takes is a click of a button and your friends can share the information about your home to their friends, who can pass it on to their friends and this can continue forever. The marketing capabilities of these networks is nearly unmatched. Even though the results may be somewhat hard to quantify on paper, if it sells the house – that’s a pretty steadfast confirmation of its power.

I use social media tools in both my personal and professional lives for this very reason. When I have a property listed that I think is perfect for a particular person, I’m quick to jump on Facebook and share the info. And I always make sure to tell that person to pass the information on if they know of anyone in the market to buy a home in Washington DC. This is just one more tool in my tool box of ways to get the best and quickest results possible for my clients. It’s this attention to detail I hope will turn my clients into faithful and long-time clients.

Find me on Facebook or follow me on Twitter for the latest news and trends in the Washington DC real estate market. Plus, as always, a little fun as well.

~ Michelle

The Perfect Time For Buying A Washington, DC Home

Thursday, February 10th, 2011

Is there a perfect time for buying a home in the Washington, DC area? Simply, yes. But the answer is probably not what you expect.

I advise my clients on this issue all the time with the same answer: “The perfect time to buy a home is when it makes financial sense.” That shouldn’t be taken as an avoidance tactic, because honestly, if I don’t sell properties, I do not earn an income. But rather than telling every client “NOW!” is the perfect time to buy and letting the consequences of the transaction fall where they may, I prefer my clients only purchase a home if the decision is right for them. The right time should be based on an overall financial approach rather than the tempting offers of a mortgage lender or the state of the housing market today. Forward thinking is important when buying a Washington, DC home.

There are considerations to make before buying a home; considerations that likely will only improve your financial circumstances and stability when handled appropriately.

First, prospective home buyers should think about how long they intend to live in the home. Individuals planning to live in home for five or more years can typically be comfortable purchasing a home, regardless of the housing market. In five years anything can happen and the housing market could be booming once again. If the house is to be consider a temporary dwelling, then chances are the time is not right to purchase the house.

Talk to a mortgage lender, bank or credit to secure pre-approval status before you actually begin looking for a house to purchase. Knowing what you can realistically afford can give insight on whether now is the time to buy. If you are pre-approved for a lower amount that you thought, you may not be able to purchase the quality of home you had hoped for and waiting may improve that – assuming your financial circumstances change as well.

Research and understand all the options available for mortgages. Read the fine print on every mortgage offer and determine if now is the appropriate time to obtain a mortgage. All mortgages are not created equally, and if currently you only qualify for a high interest rate then perhaps it would be better to wait something has changed. Perhaps a credit card with a large outstanding balance is the problem and paying it off would improve your credit score enough to qualify you for a better mortgage.

Think about more than simply the monthly mortgage payment when looking at your overall finances. While the mortgage payment should always be a large consideration, think also about the other home-related expenses you will be responsible for. Taxes, maintenance, general repairs, insurance and other household expenses add up quickly and may push you over the financial breaking point.

I’m always happy to discuss these topics and others with clients, so if you would like additional information on this topic, please let me know. I’m here to help!

~ Michelle

A Culture of Convenience: Chevy Chase – Bethesda, Maryland

Tuesday, July 13th, 2010

While looking at a Washington DC Metro map over the weekend, something dawned on me: what other area in the United States can you hop on local public transportation and conveniently travel across two states lines?  One of the many stops along Washington DC’s Metro line is the community of Chevy Chase-Bethesda, Maryland.  Home to nearly 120,000 residents, Chevy Chase-Bethesda is a great alternative commuter community for those who wish to avoid the, at times, overwhelming ebb-and-flow of Washington DC without sacrificing convenience and culture.

In June 2010, the International Downtown Association awarded Downtown Bethesda with the prestigious “Downtown of the Month” award.  This accolade does not surprise me in the least.  Downtown Bethesda is littered with small bookshops, boutique retail stores, antiques, and art galleries featuring local artist talent.  The downtown area is also home to some of the area’s greatest restaurants.  From July 23 – August 1, 2010 Chevy Chase – Bethesda will be hosting their annual Restaurant Week.  I suggest you use this time to get familiar with the area, if you already aren’t.  I guarantee you will quickly realize that Chevy Chase-Bethesda is one of the areas most unique and vital neighborhoods.

Ranked as the #1 Top-Earning Towns by Money Magazine, Chevy Chase-Bethesda, Maryland’s residential real estate is actually quite diverse.  Condominiums, in the form of high-rises, are aplenty and represent a convenient and affordable alternative for young or first time buyers.  The area also offers an increasingly sizable inventory of apartments for students and young professionals.  I’m a firm believer that no matter what your budget, Chevy-Chase-Bethesda has something to offer the young, old, and in-between.