Enter Kim’s Big Johnson Basketball Tourney!

March 8, 2010

It’s once again that time when people all over the country stop doing what they are doing and feverishly consider their picks for the NCAA Basketball Tournaments so they can enter the EIGHTH Annual Big Johnson COED College Basketball Tournament Classic, sponsored by yours truly, on ESPN.

Stick It To The Man – that’s me! A prize of untold delight – as yet undecided, frankly, but it will be something nice, though definitely not an iPad – awaits the winner of EACH of the Men’s and Women’s Big Johnsons! (YOUR gender is irrelevant. I am referring to the separate basketball tournaments.) And as usual, anyone who gets more points than The Man will win something. Probably chocolate . . .

It won’t cost you anything but your sanity . . . and not even that, if you simply choose the higher-seeded team in each matchup, and then pick the eventual Final Four winner based on their mascot or school colors. How difficult can this really be? Well, there might be upsets. Or not. And gee, there are only – uh, lessee, 64 teams in each tournament – okay, 126 total games.

And it takes a special kind of person to enter BOTH the Men’s and Women’s tournaments. Yes, I mean you!

FRIENDS ARE WELCOME, and Significant Others, too!

The brackets are being set by the NCAA (Men’s Sunday March 14; Women’s Monday March 15). The men’s first round games start on Thursday March 18 (we don’t do the men’s “play-in” game on Tuesday), and the women’s first games are on Saturday March 20 – and the brackets are locked shortly before the first game of each tournament. That doesn’t leave you much time, so GET GOING!

The Group Name on ESPN is “Big Johnson” for each tournament, and the group password is: kimsentme. That’s right, kim sent me, one word.

You can get there through the following URLs:

I know some of you like to fake out ESPN with an alias and throwaway email, but please be sure I can identify you from your name or the name of your entry. Otherwise I will keep your prize, ha ha.

After you create your entries, be sure to join the Big Johnson group in each tournament! And, if you create your entry before the brackets are set, be sure to return in time to choose your winners before they lock. Most people will wait until March 18 or 17, but don’t forget! You will be humiliated as your entries with zero points sink inexorably to the bottom of the group . . .

ESPN tracks your points as the tournaments progress. I will weigh in every now and then with a Big Johnson update.

Best of luck to everyone!

Buyers, Get Serious Now

March 4, 2010

If you are sitting on the fence (ouch!) about buying your first home, it’s time to get off and get serious. The $8,000 tax credit expires soon – you have to be under contract by April 30, and believe me, it takes a while to get to that point. Do not think you can waltz out the door in early-to-mid-April to begin your home search, because it ain’t gonna happen.

The availability of homes for typical first-time buyers has been dwindling for months. A spring rush of homes coming to market may or may not materialize, but it is almost certain that they will be in high demand.

Not only that, but if you expect to use FHA low down payment (3.5%) financing, you have to be under contract (have the FHA case number assigned through the lender) no later than April 5 to avoid the of 0.5% increase in the up-front FHA insurance funding fee (1.75% to 2.25%). On a $300,000 mortgage, this is $1,500. Why pay it if you don’t have to?

Blitzin’ Them Potholes!

February 25, 2010

Governor Bob McDonnell today directed the Virginia Department of Transportation (VDOT) to focus efforts during March on patching the thousands of potholes giving motorists bumpy reminders of the hard winter Virginia has endured. This winter’s repeated historic blasts of snow, ice and rain coupled with colder-than-average temperatures have resulted in a proliferation of potholes on Virginia’s roads.

VDOT will make pothole repair its top priority between March 1 and March 31. The agency will use state crews and contractors to conduct a pothole blitz aimed at quickly identifying and repairing roadway hazards. VDOT is also asking for citizen help to identify potholes as they form to speed repairs.

To report a pothole, citizens should visit www.VirginiaDOT.org or call VDOT’s Highway Helpline at 800-367-7623 (ROAD).

Lousy Agents, Lousy Brokers, Lousy Systems

February 15, 2010

I’ve been stewing over this post for a few weeks now, and I’ve given it a little extra time to cook before committing it to the Interwebs. But now it’s done, so let’s serve it up:

Wouldn’t it be wonderful if we could all be proud of all our colleagues and our professions? I have met, during my relatively short real estate career, a large number of agents and brokers whose knowledge and abilities I admire. Yet I am dissatisfied with the impression of the profession that I get from too frequent encounters with agents of lower quality. Oh, let’s not bandy words—I am fed up with lying, non-compliant, incompetent, discourteous, unprofessional and unethical agents, and the “supervising” brokers who condone them. I’m furious about paying nearly $700 a year for access to our regional MLS database—MRIS—that is seemingly incapable of enforcing its own data entry rules, permits errors and omissions by the truckload when simple edits could prevent them, and doesn’t force correction of errors and omissions even when they are specifically pointed out to their so-called “compliance” department.

Cases in point, from merely the last month of funsies:

(1) Lying agents: She ignores my calls and emails asking for the basic information that I need to present a good offer on her short sale listing. I finally write the offer as best as I can, and send it to both of her email addresses, and fax it to her office, requesting acknowledgement. Two days later (Wednesday) I call (and she actually answers the phone!) and she acknowledges that the offer was received and will be “presented with other offers on Friday.” The very next day (Thursday!) the property’s status is changed to Under Contract. Huh? I ask her broker to investigate whether my offer was presented—no response. A week later I repeat my request, and receive only a belated call from the agent to tell me another offer was accepted. No sh*t, Sherlock.

(2) Non-compliant agents: Our MLS rules require that when an offer is accepted in writing, the property must be updated in the system to reflect that fact. It cannot be kept in ACTIVE status. I notified an agent two days after we had a ratified agreement that he had to change the status, and he refused “because my client doesn’t want me to change the status. He wants more offers.” So I reported it to the MLS, and even sent them a copy of the ratified contract. Did anything change? No. I’ll bet he won’t get fined, either. This agent’s supervising broker is . . . himself.

(3) Incompetent agents: In Virginia, there is a legal requirement that the seller “disclose” certain things about the property on a specific form promulgated by the Real Estate Board. It’s rather silly, because in fact there is really very little that has to be disclosed under the law, but the form is nonetheless required. Three times in the past month, I have had my buyers’ offers accepted by the sellers without the sellers providing the form either before or after acceptance. I haven’t said anything, of course, because right up until settlement occurs, my buyers can get out of the contracts scot-free by simply giving notice that they never received the form, no matter what contingencies may or may not exist. D’oh!

(4) Discourteous agents: I’d been eyeing a listing for a few weeks that was a little higher than my clients wanted to go, but was in a neighborhood they like. Finally I convinced them to take a look, and after checking the MLS that morning to make sure it was ACTIVE, I met them there. The lockbox the listing noted was to be on the house was not, and I couldn’t reach the agent or the alternate agent on the phone, so I left a message on voicemail. An hour later the agent called back—she was in a listing appointment with the alternate agent—and explained that they have had a problem with lost keys. She gave me the combination to another lockbox, and I told her that I will be taking my clients back that afternoon. I asked if there are any offers, and she said they were “working with” one. Later that day we returned to the property and were surprised to find a home inspection going on. The buyer’s agent showed me a contract that was ratified several days before. When I got home I checked the MLS again, and the listing agent had updated the listing to CONTRACT 30 minutes after I spoke with her. She couldn’t call me? I complained to her supervising broker, but he’s her alternate agent—and husband. No apology; in fact, no response at all.

(5) Unprofessional agents: Anyone with access to the internet can confirm the widespread lack of professionalism simply by looking at any one of dozens of websites that access the MLS. Observe the numerous listings with no photos, out of focus photos, oddly tilted photos, and photos that clearly lack any sense of good judgment; or if you like a good chuckle, consider the rampant misspellings, typos, inaccuracies and omissions. No tax record on a 30-year-old property? No list of conveying appliances? No directions? If there’s no basement, are those just decorative windows peeking out under the first floor? Are any supervising brokers awake out there? How can any agent claim to be earning a commission with such inexcusably crappy “marketing?”

(6) Unethical agents: My client offered $301,000 on a $260,000 listing but, “Sorry, my clients accepted another offer.” Later I see the final sale show up—same FHA loan, but the net sales price was $264,000—$37,000 less! Gee, what could possibly have convinced the sellers to take such a low offer instead of ours? Why, imagine that—the selling agent was the listing agent, too! What a coincidence! That, folks, is what we call a “double-dip,” where the listing agent gets double commission, and I would say it’s pretty likely that my client’s offer was not presented at all. This agent’s supervising broker is . . . herself.

We have a laudable code of ethics, and ethical grievances can be filed with the local Realtors association, of course, but the burden of proof is rightly on the accuser. Unfortunately, much of the documentation one would need to make a case is usually in the hands of the accused, and there is no such thing as a subpoena in grievance proceedings. So, except in the most obvious and egregious cases, the best one can do is keep a (hopefully short) sh*tlist of brokers and agents with whom one avoids doing business, if possible. And believe me, I have one.

Now that I’ve had my rant, I guess it’s time for me to consider applying to serve on the local or state boards so that I can follow the same advice I give to my clients about their HOAs: if you want to have a good organization, get involved with it.

Governor Supports Formula Change for Fairfax County Schools Funding

February 8, 2010

A few weeks ago I blogged about the biennial budget proposal for the state of Virginia that would have frozen the Local Composite Index (LCI), a key component of the formula determining the distribution of state funding to schools. The LCI for Northern Virginia dropped relative to other areas of the state, which, by the formula used for decades, should have meant more money for those school districts. The proposed freeze would have done Northern Virginia out of $128 million in funding, of which Fairfax County’s share is $61 million.

The governor of Virginia has today decided to update the LCI, or at least to “support” updating it, which will require a change to the already introduced budget. It remains to be seen what actually happens in the legislature.

Governor McDonnell’s press release:

Governor Bob McDonnell announced today that he will support updating the Local Composite Index (LCI), the formula which determines state and local education funding responsibility, in the upcoming budget. The move will mean another proposed change to the introduced budget, which froze the LCI at its current level. The LCI has historically always been adjusted every two years to account for changing local economic conditions. The proposal to freeze the Index was unprecedented, and would have cost certain localities in Northern Virginia $128.3 million in state education funding.

Speaking about his decision, Governor McDonnell stated, “For nearly forty years, the Local Composite Index has been an impartial means by which to determine state and local responsibility for education funding in Virginia. The application of this Index has always been done in an objective manner, using the most recent fiscal data to most fairly apportion state resources. For many school districts, particularly in Northern Virginia, the biennial update of the Index has meant far less funding from the state than that received by school districts in localities experiencing lesser rates of economic growth. Accordingly, I will not support the proposed freeze in the budget introduced by the previous Administration. The Local Composite Index must be applied to all localities, at all times, in the same objective and fair manner by which it has always been utilized.”

McDonnell continued, “The decision to continue to update the Local Composite Index is one that I reached after extensive meetings with my finance staff, legislators, and local government officials. I thank all these individuals for their input and thoughts during the process. Ensuring that we have a fair formula that is implemented without regard to temporary or political considerations is the best means by which to appropriate education funding in the Commonwealth. Every time the Index is readjusted some school systems gain funding, while others receive less. This has occurred for nearly forty years, and local officials understand the routine and objective biennial implementation of the Index.”

In announcing his decision to undo the proposed freeze of the Index, McDonnell also identified specific budget savings to account for the additional state spending required. The update will cost the state $29 million in FY 2011. To cover this increased funding, McDonnell will recommend to the General Assembly the transfer of $13 million from Literary Fund balances; $8 million through the use of available balances in the Health Insurance Fund to reduce state health insurance premiums; $5.2 million will be found in Real ID savings and an available $3 million will be captured in additional Non-General Fund balances. Budget recommendations will continue to be made and communicated to the legislature in the coming days.

Bravo. Let’s see what happens next.

Update On Springfield Town Center

February 4, 2010

From the Springfield Connection’s report on a Jeff McKay Lee District Town Hall meeting on January 30:

McKay gave an update on the Springfield Mall renovations, saying that the 10-year plan to rehabilitate the mall is underway and is making good progress. Phase one, which includes a new food court, movie theater and indoor renovations has been revamped, he said, and construction should begin in April or May.

“The news is good for the Springfield Mall,” McKay said. “The first phase is the most important part because what we really want out of the mall is quality retail and entertainment and that is what is going in, in the first phase.”

Further update – in his newsletter today, Supervisor McKay said,

Redevelopment of the mall has been a priority and we have successfully worked with the mall owner in planning a transformation into a modern, pedestrian-oriented mixed-use town center . . . The new mall and town center will include a grocery store, dog park, tot lot, athletic courts, fitness center, and state-of-the-art movie theater. Other community investments that are part of this case include an artificial turf field for Lee High School, financial contributions to the Lee District REC Center, Springfield Regional Road Fund, the TAGS circulator bus system, and improved access to Metro from the Mall.

And yet another update – I heard from McKay’s office in the midst of all the snow:

The website that you referenced was taken down, but only so it could be updated. We had received many complaints about how outdated the site was, so Vornado decided to take it down and put “Under Construction” on the page for the time being. We are in difficult times right now and just have to understand that projects are all being slowed a little bit, on what we can visually see. However, Vornado continues to make progress on building permits and site plans with the County and hasn’t given us any reason to believe they won’t be moving forward.

More updates as I see them!

What You Can’t Park On The Street In Fairfax County

February 2, 2010

I always tell my clients to be careful what they wish for when they get excited about a home with “no HOA!”  (homeowners’ association). I’ve seen many neighborhoods with incredibly ugly remodeling jobs, disgustingly messy and unkempt yards, and all kinds of commercial vehicles on the streets, including taxis and limos. Now Fairfax County has done something to at least help with the parked vehicle problems.

Yesterday (Feb 1) changes to Section 82-5-7 of the Fairfax County Code, which prohibits parking of commercial vehicles on streets in residential districts, became effective. The changes better define “commercial vehicles” and should improve parking enforcement of large/commercial vehicles parking on residential streets. (Parking in private driveways is not regulated by the County, but may be covered by homeowners’ or condominium owners’ rules or covenants.)

Here is a summary of the changes:

  • All taxicabs and limousines must be licensed and registered in the Commonwealth of Virginia as a taxicab or limousine, and only one may be parked by each household.
  • “Commercial vehicles”  include:
    • Any vehicle licensed as a common or contract carrier or limousine (except as above).
    • Vehicles that exceed any of these size and weight limits:
      • 21 feet long, or
      • 8 feet high including appurtenances (e.g. ladders), or
      • 8 1/2 feet wide, or
      • weighing 12,000 pounds.
      • Vehicles exempted from these size and weight limits are: commercial vehicles used by public service companies (including cable), vehicles for propane gas service, watercraft or motor homes, school buses, vehicles driven by or used for transporting persons with disabilities, moving vans (for 48 hours). These vehicles can park in a residential area unless restricted elsewhere in the Code, e.g., boats and motor homes are not allowed to park in areas that are Community Parking Districts.
    • Vehicles carrying commercial freight in plain view.
    • Trailers or semitrailers except camper, boat or single axle utility.
    • Any vehicle with 3 or more axles.
  • Where a service road is adjacent to a residentially zoned area, parking restrictions apply to the side of the service road that is adjacent to the residential area except as otherwise provided in section 82-5-37(5). This allows prohibiting commercial parking on that side of the street which is zoned for a use other than residential to further the residential character of the abutting community.

The restrictions do not apply to commercial vehicles when temporarily parked while performing work or service.

Useful Links:

Even More Important FHA News

January 21, 2010

The Federal Housing Administration (FHA) just announced a set of policy changes to strengthen the FHA’s capital reserves, which have declined to dangerous levels. FHA will take the following steps: increase the mortgage insurance premium (MIP); update the combination of FICO scores and down payments for new borrowers; reduce maximum seller concessions to 3%, from the currently allowed 6%; and implement measures to enhance enforcement of FHA policies on lenders.

The changes directly impacting home buyers and sellers using the FHA program include:

  • The mortgage insurance premiums (MIP) will be increased to build up capital reserves.
    • The first step will be to raise the up-front MIP by 0.5% to 2.25% and request legislative authority to increase the maximum annual MIP that the FHA can charge. If this authority is granted, then the second step will be to shift some of the premium increase from the up-front MIP to the annual MIP. This shift will allow for the capital reserves to increase with less impact to the consumer, because the annual MIP is paid over the life of the loan instead of at the time of closing. The initial up-front increase will go into effect on April 5, 2010.
  • Update the combination of FICO scores and down payments for new borrowers.
    • New borrowers will now be required to have a minimum FICO score of 580 to qualify for FHA’s 3.5% down payment program. New borrowers with less than a 580 FICO score will be required to put down at least 10%. This allows the FHA to better balance its risk and continue to provide access for those borrowers who have historically performed well. This change will be posted in the Federal Register in February and, after a notice and comment period, would go into effect in the early summer.
  • Reduce allowable seller concessions from 6% to 3%
    • The current level exposes the FHA to excessive risk by creating incentives to inflate the appraised value of the home. Private lending standards have limited seller concessions to 3% for many years. This change will be posted in the Federal Register in February, and after a notice and comment period, would go into effect in the early summer.

The increased enforcement on FHA lenders includes, for example, publicly reporting lender performance rankings, enhanced monitoring of lender compliance with FHA guidelines and standards, and enhancing  the enforcement of indemnification provisions. This would require all approved lenders to assume liability for all of the loans that they originate and underwrite.

What does all this mean for homebuyers? Well, first off, if you don’t want to pay the higher mortgage insurance premium, buy before April 5! Check with your lender, but my understanding is you have to have a property identified before a FHA case number can be assigned, and that’s the critical action to beat the April 5 deadline. As for the FICO score minimum of 580 to get the 3.5% down payment, most FHA lenders already require scores of 600 to 620. And, allowable concessions from the seller being reduced to 3% really just reflects the realities of the Northern Virginia market – sellers are not going to accept such an offer, because they know that the appraisal will be too low to support the higher sales price they would have to get to compensate for it. And if you need a low down payment, you probably don’t have the cash to waive the appraisal.

FHA Waives 90-Day Flip Rule!

January 21, 2010

In an effort to stabilize home values and improve conditions in communities where foreclosure activity is high, HUD and FHA announced a policy change that will expand access to FHA mortgage insurance and allow for the quick resale of foreclosed properties. This is great news for both buyers and sellers.

The policy change will permit buyers to use FHA-insured financing to purchase HUD-owned properties, bank-owned properties, or properties resold through private sales (known as “flips“). This will allow homes to resell as quickly as possible, helping to stabilize real estate prices and to revitalize neighborhoods and communities. FHA borrowers have often been shut out from buying affordable properties. This action will enable more buyers, and especially first-time buyers, to take advantage of this opportunity.

As a result of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers. But with certain exceptions, FHA has prohibited insuring a mortgage on a home owned by the seller for less than 90 days. Often, and especially in Northern Virginia, these are homes acquired by investors through auctions, bank resales, or “short sales,” that have been upgraded and repaired with the intention of making the investors a profit on the resale.

FHA found that acquiring, rehabilitating and reselling these properties to prospective homeowners often takes less than 90 days. Prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition adversely impacts the willingness of the sellers/investors to allow contracts from potential FHA buyers because they must consider holding costs and the risk of vandalism associated with allowing a property to sit vacant over a 90-day period of time.

The waiver begins February 1, 2010 and is effective for one year, unless otherwise extended or withdrawn by the FHA Commissioner. To protect FHA borrowers against predatory practices where non-rehabilitated properties are quickly resold at inflated prices to unsuspecting borrowers, this waiver is limited to those sales meeting the following general conditions:

  • All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
  • In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender can document the improvements and repairs justifying the selling price.

Other details of this new policy are in the text of the waiver, available on HUD’s website.

This is likely to further increase the use of FHA over conventional mortgages with less than 20% down, because most lenders still have the “flip rule” on their own minimum down-payment programs.

Northern Virginia Real Estate Sales December 2009

January 21, 2010

1,349 homes sold in December 2009, an 11% decrease from December 2008 home sales of 1,510. I believe this was the result of two specific circumstances: (1) there was a huge push for buyers to complete their purchases by November 30 under the $8,000 tax credit act (which was extended at a very late date to the end of April 2010) and (2) the available homes for sale (“inventory”) is astonishingly low.

Active listings decreased by over 29% from last year, with 5,421 active listings as of December 31, compared with 7,688 homes available in December 2008. In fact, it’s the lowest end-December inventory we’ve seen since December 2004’s ridiculous 1,645. And I suspect, with the tax credit extended (and a new credit available for move-up buyers), we are going to see hot sales and low inventory numbers for the next 4 months at least. If interest rates (see historical chart) stay under 6%, buyers are going to be facing even more multiple-offer situations than we have now, which would be saying something.

The average days on market for homes in December 2009 decreased by 38% to 57 days, compared with 92 days a year ago. No surprise there. And 58% of homes sold in under 30 days.

Sales prices rose compared with last year. The average sales price in December increased by about 12% to $474,104, and the median price also rose in December to $385,000, an increase of 13% from last December’s $340,000.

I cannot emphasize this strongly enough – those who need or want to sell must get their homes ready and on the market no later than March.

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