U r b a n T r e k k e r

Do You Know Who Your Agent Works For - 'Exclusively'?

Image by Kathy McGraw via Flickr

We skip weekly roundup for this more important topic.. - dewita

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There are three types of representations (agency relationships) for buyers and sellers in any real estate transaction. 

Agency relationships in residential real estate transactions involve the legal representation by a real estate broker (on behalf of a real estate company) of the principal, whether that person or persons is a buyer or a seller. The broker (and his/her licensed real estate agents) then becomes the agent of the principal. [wiki]

Buyers: do you know if your agent "only" represent you exclusively, as your buyer agent?

Buyer agency can exist exclusively (where a brokerage firm chooses to only represent buyers and never sellers, as an exclusive buyer agent) or, in a full service company, by offering buyer agency to buyers who become clients. [wiki]

Or, does your agent also work for the sellers as their "listing agent?" Sellers: the same question goes to you.

If your agent is working both sides of the transactions, we call this 'dual agency' or 'dual representation'. Many states, including Virginia, allows dual agency. Most agents only represent one side at a time, but, there are agents out there who are doing both sides.

The 'dual agency' transactions might not happen so much in resale. But it's not so with the new homes.

Before you walk into any new homes' sales office, you need to understand this: that builder's sales reps work for the builder to represent the builder - and "not" you, the buyer! Their sales agents work exclusively for the developer to protect builder's interests. So, if a builder sales rep writes a sales contract for you, and you are not represented by any Realtor - that means you have "NO" representation - at all! Nothing. If they write contracts, they're just doing admin stuff for you. And they have no fiduciary responsibilities to you, other than "you are" the company's customers. Yup- you read that right.

 To put it in perspective, here's something worth reading. (I'm putting it in its entirety). Via MarketWatch e-newsletter (subscription):

When home prices are rising and houses are selling like hot cakes, realty agents don't have to worry so much about where their next commission check is coming from. In the boom times in the middle part of the decade, the market pretty much maximized incomes.

Not so today. Commission checks are much harder to come by and they are way smaller when they do come, given the drop in home prices across most of the country. That can lead to shenanigans among unscrupulous agents as they try to pocket as much cash as the can from deals, including the unethical practice of favoring buyer offers from their own clients or their brokerage-represented buyers, practices that let them keep both sides of a commission split.

That's why this is a good time to remind home buyers -- and sellers -- what the concept of agency means and why it is critical that you know who your real estate representative really works for. That's especially important when you are dealing with situations of dual agency, in which a broker is acting for both sides -- a situation ripe for abuse. (emphasis added)

Not that there weren't plenty of nasty tricks going on in the boom, too, especially in the sale of mortgages. But in the bust the financial incentive to stray can be boosted by desperation as well as greed.

-- Steve Kerch, assistant managing editor/personal finance

MetroWest is Back!

Fairfax Times reports that the MetroWest project, a mixed-use development up by Vienna Metro, that was approved in 2006 - is back on the table. This time there's plus and minus for this project asked by developer, Pulte Homes. Instead of more apartment units, because of market shifts, Pulte wanted to add more offices and drop the number of apartments build. Fairfax County told Pulte: Not so fast. They'll have to redo the transportation study before making the switch.

    

Interactive plan here.

More details about the story here.

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image: MetroWest

A Constant Reminder..

Read this story a few days ago, it is a few months old. However, it's still true to this day. The notion that you've got to pay attention to the builder's financial health. That's because builders of all stripes faced with the potential of cash flow gaps.. especially in this market. A few small builders in our area  have folded their tents. Drop in the Big Builder's Online occasionally just to check the lineup. It's very unfortunate.

Here is a message that 'really hits home': When builder folds it takes with it not only an 'unfinished home' but also your deposit.

From Washington Post.

Jane Hwang spent $120,000 and devoted five years waiting for her perfect custom home. Then in one brief phone call, she learned she might lose it all. The builder, Seville Homes, couldn't pay its bills, and its bank was seizing Hwang's nearly completed house.

Scared of losing her investment, Hwang pounced into action. She went to the auction on the Fairfax County courthouse steps and outbid a bank for the house.

"For five years I have been fixated on this place," said Hwang, a real estate agent. "I planned my retirement, I put all my life in there. I had to grab that house.

The poor woman not only had to buy her "own" house at an auction but also had to spend extra money (to fix property related problems) than she'd originally intended! I don't understand how the builder could get away using deposits to fund its business operations instead of using it to build homes. Don't get it. Is it because builder uses its own-customized-sales-contract?

This is a big problem in new home is when a builder goes under. How do you protect yourself - before and after the delivery (like dealing with warranty)?

So, protect yourself and have your ammo ready, just in case..

McMansion Homes No More in Alexandria

image: Cameron Station

Over in Arlington, Alexandria City, Fairfax City, Fairfax, PG County, MD - either has regulations already in the books or in the works - for infill development of McMansion or Super-sized homes. The amendments include: height, front setbacks, garages, floor area ration (FAR), tree coverage and teardowns on substandard lots.

Alexandria City recently passed three amendments to address the super-sized homes issues. Three amendments approved by the City Council, via Update (subscription-only):

1. For houses that are 'too big.'

- Alexandria imposes Floor area revisions (FAR) for both residential and commercial. Removes exclusion on areas under 7'6" ceiling heights. Attic under 5' excluded. Vaulted ceilings over 15' shall be counted twice, and those over 25' counted 3 times FAR.

2. For houses that are 'too tall.'

- Dwelling height calculation is set at the greater of 25 feet or average building ht on the blockface plus 20%. Special permit is needed if owners looking to build homes that exceed those requirements.

- Front threshold heights. It's a permanent approval given to interim regulations. It limits the front threshold and by extension the first floor height. The new limit is average of front threshold height on the blockface + 20%.

- Measuring building height. This is how Alex. City would measure it: Building height will be measured from the lower of the pre-construction grade or post-construction grade to prevent cheating (for lack of better word) when builders using dirt along the foundation that gives the impression of decreasing building height. Other def are added for mansard and gambrel roof types. (sample of restoration of a gambrel home in Virginia).

image: gambrel roof (via Wiki)

image: mansard roof (via Wiki)

 

3. Curbing the growth of out-of-character houses.

To preserve neighborhood characteristics, the City gives incentives for front porches, detached garages.

- Open porches up to 240 s.f. is excluded from FAR calculations.

- Rear yard garages will be excluded from FAR measurements. Garages can only be used for cars (no more junks store in the garages).

More details, after the jump....

Land Use Task Force Recommendations for Future of Tysons

With the coming of four metro stations part of Dulles Rail slated for Tysons Corner, Tysons Land Use Task Force envisioned the creation of a liveable and vibrant urban place for people to live, work and play. Fairfax County sees Tysons population predicted to swell from 17,000 to 100,000 denizens and from currently at 105,000 to 200,000 jobs by 2050. A lot of growth in a very short time. That's why the plan for Tysons' future growth is concentrated in areas within 1/8 of a mile from a metro station. And this translates to: higher density.

In a nutshell, this is how they see the future of Tysons Corner:

• Tysons 1700 acres will be divided into eight mixed-use districts.
• Ninety-five percent of the new housing will be transit-oriented-development or TOD within 3 minutes of walk (pretty ambitious, you think) from station and from buses. Then there is a plan for circulator which connects the four metro stations with areas not served by metrorail.
• It put emphasis on high environmental standards. New buildings must be green construction standards and all buildings must be LEED silver certified by 2013.
• Strong focus on affordable and workforce housing. The plan requires 20% of residence be set aside as work force/ affordable housing. Fairfax's median income for work force/ affordable housing is between 60 to 120 percent of area median income.
• 160 acres of green and open space throughout the hood which effectively would double the existing green space.

From here the plan goes to Planning Commission and Planning staff for comprehensive plan text before coming up with the final version. So, it'll be months before we see anything close to the final touch.

CROSSPOSTED at In Tysons Space

source: Fairfax County

Potomac Yard Transfer of Density (Update-1)

So I poked around the City of Alexandria proposed amendment for the redevelopment plan of Potomac Yard. This is the adjacent site next to Potomac Yard shopping mall where it housed some of the big box retailers like Target, Barnes and Noble, PetSmart, Old Navy, etc. (Previous posts here and here).

Via New Homes Trekker.

Two nation's big developers, Centex Homes and Pulte Homes, teamed up to redevelop the former railroad tracks off Route 1 a.k.a Jefferson Davis Highway within the City of Alexandria boundary. It will be a mixed-use development sits on approximately 167 acres, south of Potomac Yard shopping center. The famous Del Ray neighborhood is walking distance from this project. The proposed plan will offer a combination of retail, office, residential and a hotel with 300 rooms. This project will be one of the largest projects for the City with 1.8 million square of office, 135,000 sq. ft. of retail.. this is in addition to 600,000 sq. Potomac Yard shopping center, 1,973 residential units and a hotel with 300 rooms.

The redevelopment plan is divided into 8 land bays with target of residential 1,927 units, commercial and office space 1.9M s.f. and retail 720k s.f.

The focal point for Potomac Yard will be a town center much like Reston Town Center, Shirlington Village, with variety of uses for people to meet, gather, and offices. The plan is for taller buildings along the street corridors. From proposed amendment plan also reallocate office use. There is a plan to transfer 765k s.f. of office density to land bay (LB) H (see plans above) from LB J and LB H. Along with it, it will designate LB H as a mixed-use and allow up to 110' height for four buildings and 82' for the remainder.

The most important part of all this, is the traffic analysis. Route 1 is going to be the major road for this development. Even now, some days traffic backs up from passing through traffic on Route 1. On the existing plan, the analysis shows that there would be an est. 1624 peak hours car trips AM and 1954 cars during peak hours PM. The proposed amendment calls for 1625 cars peak AM and 1955 cars peak PM. (That sounds like a lot of cars). The solutions looking to use traditional grid pattern with intersections. The plan shows there is a total of 16 intersections slated for this new neighborhood.

Everything looks nice and dandy, except there's nothing in the proposed plan mentioned about feeder buses to and from Metro stations, or other alternative plans for transportation. The last thing residents want is to spend extra 15 mins just to get out of the complex. They've got to make it easy for workers, residents and shoppers alike to go in and out of the neighborhood.

What they're counting on, really, is to get Metro to agree for a possibility of extending the line to Potomac Yard. Financing it is the stumbling block. (But, with everyone trying to save money on gas, think Alexandria has a case.) If that's the case, they're looking at a possibility of taking 15% of external traffic density.

With gas prices skyrocketing, the use of mass transit or other alternative method of transportation like car or bike sharing, the City should encourage the use of alternatives.

** UPDATE: A reader Route 1 Transit commented that Arlington county and Alexandria teamed up to provide bus services along Route 1. The Federal Transit Administration has approved the transit improvement in Crystal City and Potomac Yard. See map here.

images: City of Alexandria

 

Fannie Deletes Higher Payment

Months ago, Fannie Mae decided that buyers should come up with higher down payment (DP)  in what they call 'declining markets.' (Read about it here). Maybe it's such a bad decision because it helps put on the brakes home buying especially for first-time buyers.

According to AP, Fannie decided to scrap the plan. So now only 3%-5% down is needed regardless of local market conditions (declining or not) which our area, DC metro region, is one of the 'declining markets.' We're now back to 97% or 95% loan-to-value ratio.

Via Fannie Mae.

"... Starting June 1, 2008, Fannie Mae will accept up to 97 percent loan-to-value ratios for conventional, conforming mortgages processed through its Desktop Underwriter^® (DU^®) automated underwriting system, and 95 percent loan-to-value ratios for loans underwritten outside of DU, in all geographic locations in the United States. The new national down payment policy will supersede the policy the company adopted in December 2007 that required higher down payments in markets where home prices are declining.

"As another part of our 'Keys to Recovery^TM' initiative, we are today announcing that we will be equalizing the down payment requirements for borrowers in all parts of the country, regardless of local market conditions," Marianne Sullivan, Senior Vice President, Single-Family Credit Policy and Risk Management, said. "This new down payment policy reinforces our goal to support successful home-owning, not just home-buying, as we seek to bring liquidity to all communities and help the housing market recover."

The new national down payment requirements of 3 or 5 percent will apply to loans for purchase of single-family, primary residences. Down payment requirements will vary for other occupancy, property and transaction types. The company will implement systems and operational changes over the summer to accommodate the new national policy. [emphasis added]

That's just the down payment part. Other restrictions still apply.

UPDATE: This announcement was so 'new' (announced this am) that even the loan guy in my office was not aware of this :-)

FURTHER UPDATE: Not clear if condo included in the new policy? It doesn't say about it anywhere in the context, it refers only to "..single family, primary residences." Does primary residence extends to condo? We have yet to see how this going to play out soon.

 

Dunn Loring New Homes

A while back, when I just get started tracking new homes for New Homes Trekker blog, the first post was this.

It looks like new homes will be built on this site sometime soon. I don't know exactly how many acres of lot. There are a couple of houses next to this one that's been bought out in addition to this house.

The site is about a block away from Merrifield Metro. Wonder what type of homes will be constructed on this site. Condos? Townhomes? Single Family Homes? There's no information available yet as of now.

Merrifield is part of Fairfax County Revitalization project and one of the fastest growing condo communities in Fairfax. Easy access to Metro, the Beltway, I-66 and Tyson's Corner helps fuel the going condo trends over here.

Fast forward a few years, there are two communities across the street from each other, Dunn Loring Chase and Dunn Loring Glen. Both of these communities are within walking distance from Dunn Loring metro station. That's why they name it Dunn Loring - and - something. Two different developers, Brookfield Homes and Dittmar Company, working the area across from each other's site. The constructions for single homes is an unusual move by Dittmar, because their core of business is rentals. The last condo they built in Arlington was converted to rentals.

Brookfield had done clearing the bigger land and ready to build 18 new single homes on the site. Not sure how many homes sit on the land before it was bulldozed to build the community. Across the street from here, Dittmar has already subdivided their (smaller) land for 7 homes.

DUNN LORING CHASE (by Brookfield Homes)

image: Brookfield Homes

Over here, Brookfield plans to build 18 Craftsman-inspired homes that offers 3,400-7,900 s.f. of living space and up to 7 bedrooms and 7.5 baths. The standard is 4 bedrooms, 3.5 bathrooms, and 2 car garage. Nothing has been built there yet. According to the sales rep, it'll take anywhere from start to finish 6-8 months after contract data. There are five different models (with different elevations): Chadwick, Dudley, Edgemont, Halley, and Meridia. It seems that the Dudley model offers the largest living area among these five models.

Each home comes with fully equipped kitchen, luxurious baths and energy-saving features. Few of the things you'll find in the kitchen: GE Profile Energy Star appliances, granite or silestone countertops, 42-inch oak cabinet, butler's pantry, kitchen island, morning room and hardwood flooring. Some of the features in the bathroom: ceramic tile floors and bathtub surround in bathroom, garden soaking tub (not sure I have seen this before) and separate shower in the master bathroom, private water closet.

There's only a few communities in our area that have build 'truly green homes.' At the most, you'll find Energy-Savings features. Here is some of the 'good energy savings' features.

• Energy Star appliances
• Clean and green recycling center
• Dual-zone gas heating for maximum efficiency
• 75-gallon, high-efficiency gas hot water heater
• Maintenance-free low-e, double glazed, insulated, double-hung windows with tilt-in sashes
• Insulated entry door
• Insulation in roof ceiling, overhangs, vaulted ceilings, exterior walls and basement walls
• Air infiltration prevention system
• Attic ridge vent system
• OSB with house wrap

The insulation in roof, overhangs, ceilings, exterior walls and basement walls plus the low-e double glazed windows and vent system - would help you maintain a lower energy bills, keep the house warm in the winter and cool (comfortable) in the summer.

Homes are priced from the low-$1 million.

DUNN LORING GLEN (by Dittmar Company)

model home

There are only 7 homes planned to be built in this community. One of them is already been completed, that's the house they use as a model home. Size of lots approximately 0.25 acre per home with finished homes from 3,600 to 6,500 s.f.

Each home features designer kitchen, luxurious bath finishes, and energy efficiency. Designer kitche features granite countertops, stainless steel GE appliances package, walk-in pantry, butler pantry with sink and wet bar. The energy-efficiency shares some similar features as Dunn Loring Chase even though not as comprehensive as what they have to offer here:

• Andersen thermal pane windows and sliding doors
• Efficient forced air gas heating
• Dual zone central heating and cooling
• 75-gallon 'quick recovery' gas hot water heater
• Tyvek insulated house wrap
• R-15 exterior insulation, R-38 attic insulation

There are two models available: Albermarle and Brentwood.

Homes are priced from low-$1.3 million.

Schools: Stenwood ES, Thoreau MS, George Marshall HS. Community info, here.

Crossposted at New Homes Trekker

Energy-Efficient Windows

I didn't realize there are so many variables build into choosing regular windows let alone the energy-efficient windows.

Why energy-efficient windows?

1. It saves money and energy. Low E-coatings, gas fills and insulating spacers and framers can significantly reduce winter heat loss and summer heat gain.
2. Protect from the winter and sun while also reducing condensation and interior fading. Frame and glazing materials that resist heat conduction do not become cold and this result in less condensation. Coatings on glass or plastic films within the window can significantly reduce the UV and other solar radiation which causes fading of fabric and furnishings.
3. Keeps your home cooler in the summer and warmer in the winter. Windows temperature are more moderate and there are fewer cold drafts. Discomfort from strong summer sunlight is reduced.
4. Rebates and credits for energy-efficient windows, doors and skylights.

The federal tax incentives for energy-efficient windows, doors and skylights, which is only good till 2007. But Congress will be voting to extend the provisions for residential energy-efficient property credits (when they return from President's day recess) on HR5351 - 'The Renewable Energy and Energy Conservation Tax Act of 2008.' None of the utility companies operating in our backyard of DC-MD-VA gives any rebates or incentives to name a few like in California, Colorado. The Federal tax incentives, via efficient windows collaborative.

• 10 percent of purchase price (not including installation cost)
• Must be installed in primary residence (not your second home)
• Max. credit is $200 for windows and skylights, $500 for doors - total max is $500
• Windows must be installed until Dec.31.2007 to qualify
• ENERGY STAR windows and skylights qualify, doors need manufacturers' statement to qualify

Tax credit is not the same as tax deduction like your 401(k) rather it is credited or use to offset tax owed, which works better than deductions.

There are important variables in the windows of the world.

• Each state have its own building code requirement. Depending on where you live, you might want to check out a couple of websites for more of the codes' information, 1) Energy Star and 2) Efficient Windows Collaborative, and 3) National Fenestration Rating Council.
• Understanding labeling: U-Factor, Solar Heat Gain Coefficient, Visible Transmittance, Air Leakage, Condensation Resistance. For explanation of the labeling terms, here.

• Energy Star windows has its own chart of key product criteria based on climate zone. Click on image to enlarge.

If you are still confused, to start with check out EFC website, where you can use the toolkit to compare energy savings and all the good criteria in choosing energy-efficient windows, even though it's designed for builders and designers. And go from there.

Factsheet: Selecting Energy-Efficient Windows in DC, Maryland, Virginia [pdf]

Sources: Efficient Windows Collaborative, Energy Star, National Fenestration Rating Council.

 

Technorati Tags: energy-efficient windows windows,doors,skylights,efficient windows,high performance windows,energy-star,energy savings,tax credit,rebates,remodeling,fenestration,energy-efficiency

N.Va Homes Sales Lowest Since 1998

Houston, we got a problem. The total number of homes sold year-to-date for 2007 is the lowest since 1998.

Here's what we've been hearing over the years: The best market happened in 2005. The year 2005 might be the best year as far as prices is concern, but not the number of homes sold.

click image to (+). data: NVAR

Looking back 10 years, we can see how the total number of homes sold between the period of 1998-2007 was actually peak in 2004 with 33,193 homes changed hands. Y-to-Y from 2004 to 2005 homes sold declined by 8% to 30,480 homes. The trend has been going downhill since then.

What's more, number homes sold this year were almost half from its peak in '04 to a low 16,843 in November. Between 2006 to end of November 2007, the total number of homes sold declined by a 'whopping' 32.8% from 22,377 to 16,843 homes, while prices remain flat.

This year monthly trends indicated that we do have a big problem at home. The number of homes sold in most of the jurisdiction in our backyard declined by steadily after the end of second quarter in June. [chart]

Entering winter season, the number of homes sold in Fairfax county declined from its peak of 1,423 in June (technically it's the end of Spring season) to 765 by the end of November. The same is true with other No.Va jurisdictions. In Alexandria, homes sold declined from 228 (June) to 127 (Nov). For Arlington, the total number of homes sold dip from 308 to 149 homes. Loudoun county also faced with the same problem. Homes sold there, declined from 466 to 285 homes.

click image to (+). data: NVAR

Reality Check

The challenges we have today, coming from different directions. The two big things are inventory and financing.  Speaking of inventory. Look at how long will it take to sell all homes at different jurisdiction in Northern Virginia from its current level at the current market absorption rate, without adding new listings and new homes to the pipeline.

data: NVAR, GCAAR

• Washington DC: 7.3 months.
• Alexandria: 10.2 months.
• Arlington: 8.3 months.
• Fairfax: 9.3 months.
• Falls Church: 17 months.
• Loudoun: 11.9 months.

The absorption rates pointed to an overwhelmingly 'strong' buyers' market for Northern Virginia...and Washington DC.

To reduce market inventory, sellers would need to help buyers buy their properties. As simple as that. Whatever works. One of the solutions would be to come down in prices. This is probably a 'wishful thinking.' Because of new mix of products like foreclosed properties, bank-owned, short sale - that were scarce during the heyday of housing market have already  started to blend in with the regulars.

The blending in of unusual products mix made the gap in prices vary widely. You have banks seeking to 'unload' their inventories pronto, like yesterday. Some of them already got burned with subprime. They need to move forward [read: sell now]. They are the type of sellers who are in the position to make deals happen. Sales of new homes hit the lowest in 12 years. That's why home builders have been offering all kinds of incentives along with cutting home prices aggressively to survive. They too, are also in the position to make deals happen.  And then, we also have sellers who are still 'dreaming' wanted get their home sold with 2005 prices. The latter is the slow mo group of sellers.

Going in to 2008. So, what's this market has in store for you?

With the glut of inventory, this current market condition is 'very' good for buyers. Somehow these homes need to be sold one day. These are opportunities waiting for those who are ready, willing and able.

Just make sure that you get the money part straighten up first before out shopping. Because things won't happen without the money thing.. unless of course, you have cash.

Moving on. Have a prosperous and healthy new year.

Technorati Tags: nvar,subprime,citibank,nahb,new homes,mris,gcaar,bank-owned,reo,foreclosed properties,short sale