With so many homes on the market now in Northern Virginia and Washington D.C., there are a lot of deals out there. Some of these deals are short sales and foreclosures. However, most people don’t know what each entail. Yeah, the price looks incredible and you can’t wait to put an offer in. What you don’t know is that these types of homes are not a typical real estate transaction. How are you suppose to know? I mean all you care about is that it’s $100K less than the house selling down the street. To start off, I’ll dip into short sales.

About 99% of the time, the home listed as “short sale” or “third party approval”, has an attractive price that has not been approved by the bank.  In order for a distressed seller to do a short sale or sell their home in an “upside down” scenario, means that they are asking the bank to accept an amount less than what’s owed on the loan. People choose this option if they are unable to continue making payments. This method doesn’t affect your credit as bad as a foreclosure does. So let’s say a home has a real attractive price tag on it and there are 10 offers on it already submitted. The goal of the seller is to get as many offers as possible in hopes that they will keep outbidding each other. Once all offers are in and maxed out, the seller will choose one to send to the bank for approval. This process usually takes about 4 - 6 weeks. Plan on sitting around for a while twiddling your thumbs. The worst part about short sales is that after that 6 weeks, the bank can reject the offer and you have just wasted 6 weeks of searching for a home as a buyer. One more thing, the home is sold “as is” meaning that the seller does not have to fix anything that you want repaired. If you have the time to wait around, then you may want to look into short sales.

Foreclosures or REO’s (”Real Estate Owned” by the bank) are a different story. These are properties that have been acquired by the bank after they have failed to sell at a foreclosure auction. The price on the home will most likely be accepted if you submit an offer for it for full price. The amount of time it takes for these to close is approximately the same as a normal real estate transaction, 30 - 45 days. Although these homes may look great from the outside, more often than not they need some major TLC (tender loving care). In other words, like in a short sale, you have to purchase these homes in “as is” condition. This isn’t always a bad thing though. If you invest some money for new paint and carpet, you’d be surprised how much of a difference it makes. You’ll need to have an imagination when you walk into a home that turns you off right away. What I mean by this is, look around the house and see if there is any damage to the foundation, water damage or mold. If there is only cosmetic damage, it’s an easy fix. You can really take advantage of turning a huge profit if you know what you’re doing. I would only suggest buying a DC metro area foreclosure if it’s in good condition, you’re an investor, handyman, or ready to hire a contractor.

Now are you ready to search for short sales and/or foreclosures?  In Northern Virginia and the Washington DC metro region start here!

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Alright, if you have been on the search to buy a home, it’s time to buckle down and pull the trigger. You will want to lock in your rate now. The interest rates have spiked in the past 10 days and there is a potential danger that it could get worse. The average interest rate on a 30-year fixed loan has soared to 6.02% from 5.82% in just a week. The cause of this is the rising inflation fears that have sparked a jump on the long-term government bonds.

That means on a $300,000 mortgage, your monthly payments will increase $38 and the total interest on the life of the loan will increase $4,000. You can still get some good deals as there are a few lenders out there offering rates below 6%, but not many.

No one knows what is in store next, but if you find a reasonable deal, don’t think twice about putting a deposit to lock the rate in for a month or two if you are able.

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The real estate market in Arlington VA continues to be one of the strongest markets in Northern Virginia Real Estate, check it:

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Foreclosures are not what they used to be. Since the lending extravaganza, more and more Northern Virginia homes are falling into foreclosure because homeowners cannot afford to pay their mortgage. What does this mean? Well for starters, there are some bargains out there. Rewind a few years ago. You see, during the hot market, a lot of buyers got in over their heads. They thought because sellers were making big profits on the sale of their home, they would be able too as well. However, these sellers had purchased their properties when they were priced low. These homebuyers that purchased at the peak of the market had no idea it was the peak. Lenders were giving out loans to anyone during this time without proof of income or work history. Most of the homebuyers took out ARMs (adjustable rate mortgages) that would expire a few years later. These homebuyers had no idea that they wouldn’t be able to sell their home for a higher price in a few years. Fast forward a few years later. The ARM loans are adjusting and the mortgage payments are increasing thousands of dollars. What do the homeowners do that purchased at the peak who had ARMs? Some of them don’t pay their mortgage and the home goes into foreclosure. So with that being said, there are foreclosure homes that are fairly new out there. These foreclosures are in more desirable areas than observed in the past, and are getting scooped up by responsible buyers.

The increase in foreclosure homes can also hint at the bottom of a real estate market. Whether you live in the DC metro real estate market or plan to move there, a real estate professional can examine statistics to track the lowest foreclosure sales. Of course not every foreclosure is in a great neighborhood. You will find some of the best foreclosure deals in neighborhoods with new construction that sold in 2005-2006 that were priced above the median home price for that area. Most of the foreclosures in Northern Virginia are popping up in the suburb counties of Prince William, Loudoun and Fairfax, Virginia.

If you keep an eye out on the foreclosure market, it will give you a good idea of how well homes hold their value in your market. Who knows, you might find a great deal.

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Not everyone can resist a great deal when they see it. However, when one is put right in front of our face, we have a tendency to not believe it. It’s out of human instinct that something inside of us needs reassurance. It’s those of us who recognize and take advantage of the bargain that are the real winners. So as home prices have fallen in the Northern Virginia real estate market, those people on the fence who are thinking of owning a home are beginning to notice.

The stars are aligning and different factors are making this a good time for first-time buyers to consider owning a home because they don’t have the issue of selling their home to buy another one. With that said, home prices are low and there is a plethora of inventory to choose from. Some people even say it’s been too difficult because of all the choices they have. People are often finding three or four homes they like and are stuck on making a decision. Another factor that comes into play right now is the relatively low interest rates surrounding us. Not to mention the increasing number of foreclosures and bank-owned properties out there. Now you can afford more home for your money with these types of property.

Even with everything pointing in buyers favor, there still is that fear issue. You have people concerned that prices will keep falling. That little thing inside make them uncertain. Something has them scared about 1% depreciation in the next year. You have to look at the long-term appreciation for this kind of an investment.

The best advice for those first-time home buyers looking to own a home is go talk to a lender about financing and then contact a HomeZill agent for any questions you may have. If your credit score is low then you’ll end up paying a higher interest rate and if you plan on living in the home for 2-3 years then maybe you should postpone buying a home. But first look into an FHA insured loan which does not have a credit score requirement.

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By now you have all heard that the real estate market has been the slowest in recent years.  However, this is not a bad thing.  It means that there are nicer houses for the DC Metropolitan area buyers. 

The area that is pulling down the national economy is Northern Virginia.  The home prices are being affected by the increasing number of foreclosures.  This means that there are homes that are priced well below what they are worth.   It’s been hard for homeowners to sell their home because the foreclosure next door is $80,000 less and is in the same condition or at least close to it.  The median home price around the region in 2007 was $420,000.   DC Metropolitan area home prices were down 11% in a year ago in January according to the Standard & Poor’s/Case-Shiller index. 

Each of the numbers are measured differently.  Case-Shiller and similar indexes use statistical models to determine how the prices of physically similar houses change over time.  However, median price data shows actual sales prices disregarding any physical characteristics. The difference between the two types of price measurements suggests that buyers were likely to be spending about the same amount as they would have in the recent past but were getting more home for the money. The region is still one of the most expensive in the country, even with slow home sales. The priciest jurisdiction last year was Arlington, where the median price of a single-family house or townhouse was $580,000, up 3 percent. Medians in neighboring Alexandria and Fairfax County also remained above $500,000, though they were down from 2006.

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