For Sellers/Owners

Great Chart On Credit Scoring; Check this out if your credit might be in danger

March 13, 2010 by Sasha Farmer · Leave a Comment 

I really like this chart on credit scoring- I receive lots of questions from potential buyers about credit, including how they can improve their credit scores in order to prepare for a home purchase.

Whether in the market for real estate or not, these are things that everyone should be aware of pertaining to their credit. If you are interested in learning more about your credit score or looking for ways to improve it, contact me and I will connect you with a lender who can help you through your questions!

[Credit: SpendOnLife.com]

City of Charlottesville to Hold Citywide Tree Debris Collection next week!

February 19, 2010 by Sasha Farmer · Leave a Comment 

From the Charlottesville Regional Chamber of Commerce ChamberBits newsletter….

Citywide Tree Debris Collection

The City Public Works Department will provide a FREE citywide collection of winter storm related TREE DEBRIS for City residents during the week of February 22-26.

City Residents may place tree limbs at the curb for collection no later than 7am of their scheduled trash and recycling collection day. Each street will be worked one time only.

Tree debris cut up by contractors for residents should be hauled away by contractors and will not be collected as part of this collection.

Questions may be directed to the Public Service Division at 970-3895.

Trying to Utilize FHA Financing? Check this List of Condo Communities to See if They’re Approved!

February 10, 2010 by Sasha Farmer · Leave a Comment 

If you’re planning to utilize FHA financing to purchase your next home, you have to use a little bit of caution when considering condos in Charlottesville, as not all of them are approved for FHA financing.

Check out the link below to see whether or not the condo you’re considering is approved for FHA;

HUD.GOV Condos with FHA Financing

If the condo community you’re considering is not on this list, you may need to check with your mortgage lender to see if you will be able to come up with an alternative type of financing. Additionally, if you live in one of the condos that is not able to provide FHA financing, you should be aware that it may limit the potential number of Purchasers who will have the ability to buy your home on the resale market!

Please give me a call if I can help connect you with a lender who may be able to help you find alternative financing, or get you pre-qualified!

[Photo Credit: http://www.radrounds.com]

Just Released! The Charlottesville Area Association of Realtors’ Year-End Market Report

January 14, 2010 by Sasha Farmer · Leave a Comment 

The Charlottesville Area Association of Realtors has just released it’s Year End Market Report this morning, and it includes some very valuable information that home buyers and sellers should really be aware of.

Click here to download and read the full report. 2009 CAAR Year-End Market Report

I will be doing a more thorough analysis this weekend, but until then, some of the salient points…

Some people have suggested that the first time home buyer credit hasn’t been effective, but I have completely disagreed with that, and while this data isn’t a clear indicator that the credit is working, it would suggest that more first time buyers (in the below $300,000 price range) have been in our market in Q4 2009, than we are typically used to.

As reported for the past two quarterly reports, significantly lower home prices (down 20% or more) are driving the pick-up in sales. In addition, the $8,000 tax credit for first time buyers supercharged the sale of starter homes (below $300,000) in 2009. 67.5% of home sales for the year were in this starter home category, which is approximately a 10% increase in this category.

- CAAR Year End Market Report.

One thing to be aware of is the average price per square foot we’re seeing across the different counties. This is one of the more profound ways to see that our pricing has returned to that of 2005 levels (at least), if not gone lower. My personal belief is that our prices are actually closer to what they were in 2004. Take a look at the $/SF analysis below to see how your county has fared.

Price Per Square Foot (Finished)

Another indicator that allows us to see the decline in home prices is a major drop in the price per square foot numbers. The average price per square foot of finished space in homes is not a scientific number, but a downward trend over the years clearly indicates a decrease in prices (and vice versa). According to the chart below, prices peaked in 2006 and have declined for the past three years. There has been a $28 per square foot drop since the peak in 2006. The current $143 per square foot is the lowest number since 2004.

- CAAR Year End Market Report.

According to the CAAR Year End market Report, our inventory of homes is slowly declining. Of course this was the main aim of the First TIme Home Buyer tax credit, and we are all anxious to see what will happen to inventory once it expires.

Inventory of Homes for Sale

“The inventory of homes for sale in the Charlottesville has continued to decline very slowly. As we have reported for the past several quarters, the excess of inventory is causing many of the problems with our local housing market. The decline in inventory is very encouraging, but we will still have too many homes on the market for the current demand. This could change very quickly going into the busy spring market.”

- CAAR Year End Market Report.

Average Days on Market

One piece of information that I always want future sellers to be acutely aware of is the average days on market. The days on market is a measure of homes SOLD BY AN AGENT THROUGH THE MLS, and how long they’re taken on the market being actively marketed before they have sold. This number does not include some very high days on market numbers for all of the homes that never sell, it only calculated DOM for solds, so it is artificially lower than days on market of ALL HOMES. If you are thinking of selling your home in the near future, you need to be acutely aware of the average days on market for your county and be sure to give your real estate agent a reasonable amount of time to accomplish your goals.

Will be elaborating more on this report later, but would love some questions from all of you!

Pantone Says Turquoise is the Color of the Year! We’re Safe Until 2011!

January 3, 2010 by Sasha Farmer · Leave a Comment 

Much to the excitement of my husband who has already spent back-breaking hours painting our whole house with me, Pantone has just named turquoise of the color of the year! Luckily we have enough turquoise in our house to fill a turquoise interior decor shop, so it’s nice to know we have at least another year to sit pretty!

From the Pantone website…

Even better? Turquoise is noted to be universally flattering, making it a top choice for home furnishings and decor worldwide. Whether paired with mustard accents or deep reds, turquoise is both versatile and glamorous in every setting. Ready to infuse a bit of turquoise in your home and jump-start the trend? Here are a few of our top picks!:  

1. Danya B. Cut Glass Votive Set, $20, Sears
2. Shine Citrine Pendant, $600, Candelabra
3. Circles and Stripes Pillow, $50, Jonathan Adler
4. Table Runner, $25, Not on the High Street
5. Fiesta Dinnerware, $7 – $45, Dinnerware USA

[From Pantone Unveils Color of the Year: Turquoise is Sooo 2010! - Shelterpop]

Photo Credit: Pantone Website

Just in from CNNMoney; Trial Loan Modifications DO Hurt Borrowers' Credit

December 29, 2009 by Sasha C. Farmer Realtor · Leave a Comment 

Only weeks ago, I published a post with updated information from an advanced education class I was taking though the CRS (Certified Residential Specialist) program for Realtors, that was discussing different types of distressed sales and loan modifications to your mortgage, and how they would impact your credit score. In that class, we learned that borrowers were being told that taking advantage of the government HAMP (Making Home Affordable) program should not negatively effect their credit score, and that we should encourage borrowers to strongly consider this option before looking down the road of a short sale or foreclosure. Today, CNNMoney exposes several stories from people who have utilized the program, and whose credit scores are mysteriously dropping.

For some, a drop would be completely expected. For those who are behind on mortgage payments and who take the new mortgage arrangement, it is reasonable to expect that their credit would have already been damaged to some extent, just from the mortgage payments that had been missed. However, many other people have been encouraged to look at the HAMP program to re-arrange their mortgage and reduce their payments, even before they are behind on a payment. It is these people who have been squeaking by, trying to make ends meet and who have been making payments, who were being told (even by mortgage officers themselves) that their credit would not be effected. One of those stories is followed in the article today;

Axelrod, a municipal employee who lives outside Chicago, entered a trial mortgage modification program this spring.

He had not fallen behind in his mortgage, but he was finding it harder to make ends meet after his overtime was cut and his property taxes skyrocketed. Told it would not hurt his coveted 750 score, Axelrod secured a $565 reduction in his monthly payments.

Eight months later, Axelrod is still stuck in the trial modification, trying to satisfy his loan servicer’s endless requests for documents.

And to his horror, his credit score has plummeted to 644.

“It’s completely destroyed my credit,” said Axelrod. “If I had known it would affect my score, I would have never entered the program.”

Representatives at JPMorgan Chase (JPM, Fortune 500), which services Axelrod’s loan, are instructed to tell applicants that entering a modification could impact their credit histories, a bank spokeswoman said.

Despite his weakened credit score, there is at least some good news for Axelrod: After being contacted by CNNMoney.com, JPMorgan Chase said his permanent modification had been approved.

[From Trial loan modifications hurt borrowers' credit histories - Dec. 28, 2009]

According to CNNMoney;

The coding alone can impact credit scores, which measure a consumer’s financial health and range from 300 to 850 under the FICO system. The severity depends on how many payments the borrower missed before entering the program. Those who were current in their mortgages could see their scores fall up to 100 points, according to the Treasury Department.

[From Trial loan modifications hurt borrowers' credit histories - Dec. 28, 2009]

For now, it sounds as though a mortgage modification may still certainly have its benefits over a short sale or a foreclosure, if you want to keep your home. However, it is important for everyone to know that for what we can tell, it does not come as “risk-free” as it may have been advertised. This is sure to be a topic we’ll be hearing about more soon, but until then, please be sure to consult your tax advisor and your attorney for advice before beginning a mortgage modification program.

[Hat tip to Lani Rosales at Agent Genius for pointing out this important article.]

Does all this snow hurt my lawn?

December 28, 2009 by Sasha C. Farmer Realtor · Leave a Comment 

I have had several clients ask about the damage that our recent snowfall is doing to their land. I am definitely not the expert on this, but found a really helpful answer on Turf King-Hamilton- Lawn Care.

Some plants will benefit from a little extra snow during the winter. Snow around the rose bushes will provide some insulation from the sap-chilling deep freeze of this past week. Bitterly cold temperatures for prolonged periods of time will result in more roses biting the dust this winter.

On the lawn, a thick layer of snow will not harm it, provided that there aren’t leaves left on the surface. The snow and leaves combine to prevent air from the foliage. This is likely to lead to accumulation of water under the leaves which in turn will lead to putrefaction. If the grass is cut short in the fall, the lawn is less likely to get diseased by the longer leaf blades being smothered. The last mowing should always be a little shorter. (the problem I’ve had is that autumn doesn’t seem to know when to quit, and I end up with 2 or 3 last cuts. Don’t cut the lawn too short of course, as this makes it more susceptible to frost damage if there is little snow.

Grass that has been cut too short, on the other hand, is susceptible to frost damage.

If you walk on the lawn regularly during the winter, it is also advisable to remove the snow from these paths. Snow that is hard packed by foot prints on the lawn could lead to damage to the grass plants. (it could also lead you down a garden path)

[From Turf King- Hamilton- Lawn Care: Does all this snow hurt my lawn?]

I would love additional input on this from anyone with first-hand experience. Unfortunately my lawn probably won’t even notice the difference!

January is National Radon Month!

December 28, 2009 by Sasha C. Farmer Realtor · Leave a Comment 

For those of you who aren’t yet familiar with radon, it is an odorless gas that is undetectable by humans. As described on the EPA website;

Radon is a cancer-causing natural radioactive gas that you can’t see, smell or taste. Its presence in your home can pose a danger to your family’s health. Radon is the leading cause of lung cancer among non-smokers. Radon is the second leading cause of lung cancer in America and claims about 20,000 lives annually. Learn how you can protect your family. Test Your Home for Radon — it’s easy and inexpensive. Fix your home if you have a radon level of 4 pCi/L or more.

[From Radon | Indoor Air Quality | US EPA]

In Charlottesville, the standard is to test for radon when you purchase your home during the inspection period (and some people will opt not to test at all) but for most people, that is the first and only test for radon that they will do on their home. There are many areas in Charlottesville where radon gas is present in homes, so if you’ve never checked- now is a great time!

Testing for radon is easy and inexpensive, and the EPA Radon site has lots of local and national links to help connect you with how to purchase a self-test, connect with someone locally to administer a professional test, and find people to mitigate a radon problem should you have one.

Locally, one of my preferred home inspectors, John Handloser with Pillar to Post Home Inspections, will be happy to administer a professional radon test in your home- call him a few days in advance to schedule him to come out.

Before beginning a new home improvement project- Check this list!

December 23, 2009 by Sasha C. Farmer Realtor · Leave a Comment 

Before choosing which home improvement project you will take on next, check out this list for a national survey on which improvements are the most valuable and will produce the highest return on investment. The survey is broken down region-by-region and then parsed into large metropolitan areas; the closest to us in terms of size, location, and economy being Richmond. Take a look, you may be surprised at what you find!

2009 Remodeling Cost vs. Value Report

What is a strategic default?

December 23, 2009 by Sasha C. Farmer Realtor · Leave a Comment 

As defined by Wikipedia…

A strategic default is the decision by a borrower to stop making payments on a home mortgage despite having the financial ability to make the payments. Usually this occurs after a substantial drop in the house’s price such that the debt owed is considerably greater than the value of the property, and is expected to remain so for the foreseeable future. Such borrowers are called “walkaways.”[1]

[From Strategic default - Wikipedia, the free encyclopedia]

As discussed in CRS Course-111 on Short Sales and foreclosures, a strategic default will likely effect your credit score negatively by 140-150 points and will also result in 5-7 negative marks on your credit. This is likely going to be more detrimental than going through the process of a short sale or a loan modification, but is said to not effect your credit score as negatively as filing for bankruptcy.

**Disclaimer: I am a licensed real estate agent and cannot provide legal consulting or tax advice. For counsel on either of these things, please consult your tax accountant or attorney.

Before making any decision to pursue a short sale, a foreclosure, a strategic default, or to file for bankruptcy, it is in your best interest to consult with a licensed Realtor, your tax accountant, and an attorney.

Answer these questions to determine if purchasing a bank owned home/foreclosure is right for you…

December 23, 2009 by Sasha C. Farmer Realtor · Leave a Comment 

Please read carefully through the following items when trying to determine whether or not you are interested in looking at REO (Real Estate Owned) and Foreclosure properties.

1. Would you be okay with a delayed closing? Purchasers of foreclosures may have to wait for a significant amount of time before closing can occur. Are you on a tight deadline to get out of your lease? Are you attempting to take advantage of the Home Buyer Tax Credit (in which homes must close by June 1, 2010?) If so, this may not be the best choice for you.
2. If closing were delayed, would you be okay with re-applying for your loan and possibly losing your current loan lock? All during the time that we are awaiting closing, mortgage rates will be fluctuating, and if the loan lock deadline passes, you will have to re-apply for the loan and incur any related charges.
3. If closing is delayed, will you be able to adjust the timeframe for your date of possession? It is very unlikely that we will be allowed to occupy the property prior to closing, so you would need to have a backup residence in mind, in case of any delays. If this is your primary home, some sort of temporary living arrangement would need to be made, and it may include moving twice- from your current home to the temporary residence, and the temporary residence to your new home.
4. Even if the property is priced extremely competitively, do you have other funds that may be necessary for updating, cleaning up, and repairing the property? Sometimes REO and foreclosed homes will require a significant cash investment just to bring them up to standard living conditions.
5. Are you comfortable purchasing a home “as is”? Most REO and foreclosed homes will come in “as is” condition. A handful of them will not allow any sort of home inspection prior to purchase at all, however most allow a home inspection for information only. Would you be comfortable making any necessary repairs yourself (or with a contractor, of course) and after closing?
6. Would you be willing to sign addenda that heavily sways negotiations in favor of the Lender/Bank who owns the property and overrides most of the standard protections granted to the buyer? Most of these forms override rights that we outline in the standard Virginia Association of Realtors Residential Contract to Purchase. Oftentimes, the lender will allow no revisions to be made to these documents. Some of the changes that are often arranged in the addenda; tougher restrictions on the Purchaser, shorter timelines for the Purchaser to secure a loan, conduct a home inspection, etc, a larger deposit, deposits to be held in the escrow of the lenders choice, and very few provisions that will allow for the Purchaser to get out of the contract and many ways for the lender/seller to walk.
7. Would you be okay with getting up to the week of closing, only to find that the lender received another offer and has chosen to take that offer and void their contract with you? Many of the packages of documents that the lenders have you sign will include a provision allowing for this.
8. Would you be comfortable with your earnest money deposit to be escrowed with a escrow company or attorney of their choice? This money will not be accessible during the time that the property is under contract.
9. Are you prepared to do a title search and purchase title insurance? You will want to verify that the lender does hold title of the property (not all homes transfer from the previous sellers right away). You will also want to make sure that any liens that may have been held against the previous owners (who may have had difficulty paying many bills, aside from their mortgage) have been released and you will have the ability to purchase the home free and clear of liens and encumbrances.

If these items would not cause a major inconvenience for you, then you may be a perfect candidate to purchase a REO or foreclosure property- there are some incredible deals to be had!

Any more thoughts/additions to this list from others who have had bank owned/foreclosure homes?

Please do not hesitate to contact me if you’d like to be set up on a search that will send you foreclosure and bank-owned homes that might meet your search criteria!

How Much Will A Short Sale/Foreclosure Hurt My Credit?

December 23, 2009 by Sasha C. Farmer Realtor · Leave a Comment 

I have had a couple of people over the past few months mention that they may consider a short sale, so that they can just get out from under their homes and move on. While the ramifications of a short sale or foreclosure seem to be getting slightly more lenient in light of all of the predatory lending that has occurred in the past several years, they are still significant.

Here are some general credit score ranges (as provided by the National Association of Realtors CRS Course 111);

• 990: highest calculable credit score.
• 900: 15% of borrowers have a credit score at 990 or above.
• 740: a rough number around which people are usually able to get a good, competitive loan.
• 680: the average credit score.
• 501: lowest calculable score.
• 500: 18% of people have a credit score of 500 or below.

Let’s imagine that you have a credit score of 740 and own your home, but are having trouble making your payments (which may actually be causing your credit score to drop in the meantime). Here are a couple of different options, and their effects;

• A loan modification is said to have no negative impact on credit score.
• A short sale is estimated to impact your credit score between 120-130 points.
• A strategic default will likely impact your score by 140-150 points.
• A foreclosure is said to impact your score by 200+ points.
• Filing bankruptcy is likely to impact your credit score negatively by 355-365 points, putting even most prime borrowers below a score of 500. We are being told that it is still remaining on credit scores for up to 10 years.

Another crucial point to remember is that Virginia is a recourse state, which means that a short sale or foreclosure debt that is not forgiven by the bank, can be pursued later. This may result in credit collectors calling on you for years to come, to collect any remaining debt owed.

Let’s do what we can to help you avoid either of these results if possible. A really interesting fact to be aware of; According to the 11/03/09 issue of USA Today, only 9% of eligible homeowners have had their mortgage modified. There may be better options for you than a short sale or a foreclosure.

**Disclaimer: I am a licensed real estate agent and cannot provide legal consulting or tax advice. For counsel on either of these things, please consult your tax accountant or attorney.

Before making any decision to pursue a short sale, a foreclosure, a strategic default, or to file for bankruptcy, it is in your best interest to consult with a licensed Realtor, your tax accountant, and an attorney.

New Tax Credit for Current Home Owner's Making a Home Purchase and the Extended First Time Buyer Credit

November 7, 2009 by Sasha C. Farmer Realtor · Leave a Comment 

Today, President Obama signed off on the Extended Home Buyer Tax Credit, now to include a credit for current Home Owners.

This new initiative will continue the current $8,000 first time home buyer credit to eligible participants until 2010- July 1, 2010 to be exact, which is when all closings must have occurred. In order to be eligible for this credit, you must have the property under contract no later than April 30, 2010.

It has also expanded the credit to current home owners. Anyone who has used their residence as a primary residence consecutively for 5 our of the last 8 years are also eligible for a tax credit when making their next home purchase. This is a $6,500 credit and the same deadlines still apply; April 30, 2010 for homes to be under contract, and July 1, 2010 for the sale to have closed.

Many of the details are explained in the following PDF document- please contact me with any specific questions!

Click here to download the November 7, 2010 Extended and Expanded Tax Credit.

Short Sale Debt Could Follow You (And Often Does in VA)

October 4, 2009 by Sasha C. Farmer Realtor · Leave a Comment 

If you are considering selling your home as a short sale, and are choosing a short sale instead of a bank foreclosure, you should make sure to read this Washington Post article about short sale debt.

It is very important to know that the debt from a short sale may follow you.  Since we are still early in the history of short sales, we haven’t seen how too many of these will play out, but there is a high likelihood that creditors will come back around to slowly collect the loss over time, so that you end up paying off the short sale debt eventually.  This is one ramification that will occur during a short sale, but that you will not experience if you go into bank foreclosure and then declare bankruptcy.

If you are considering any of these items, you should immediately contact your Realtor, and your tax advisor and/or CPA.

http://www.washingtonpost.com/wp-dyn/content/article/2009/09/24/AR2009092405361.html

Charlottesville Home Inspectors

July 19, 2009 by Sasha C. Farmer Realtor · Leave a Comment 

There are many home inspectors in Charlottesville, and one of the great ways to distinguish them from one another is by looking at which have their ASHI certification. ASHI is the American Society of Home Inspectors.

A few tips about scheduling the home inspection;

• Within 24 hours of a ratified contract, a PURCHASER needs to choose a home inspector that they’d like to use and schedule the home inspection.
• Inspectors most often work typical M-F business hours, and are often booked 3-5 days out.
• The PURCHASER should plan to attend the inspection and also schedule it for a time when their REALTOR can attend as well.
• Do not schedule a home inspection until your contract has been ratified.

Here are the ASHI certified home inspectors that I recommend in Charlottesville;

John Handloser
Pillar To Post Home Inspections

27 Tanglewood Road
Palmyra, VA 22963
(434) 589.5199
(434) 531.6660
http://www.pillartopost.com/piedmont/
john.handloser@pillartopost.com

Jim Gannon
Gannon Home Inspections

Lovingston, VA 22949
(434) 263.6521
(434) 996.4401
http://inspectwithjim.com
inspectwithjim@verizon.net

Buddy Carlisle
Carlisle Home Inspection Service, Inc.

(434) 293-3606
(434) 293-3578
Cell: (434) 531-1985
http://www.charlottesvillehomeinspector.com
cvilleinspector@aol.com

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