Vienna Real Estate agent Realtor Doug Francis at TTR Sothebys gives local insight on custom and new homes tips for people relocating to and near The Town of Vienna, The real estate market includes custom builders and new luxury homes on tear down lots. Home buyer strategy and seller strategy for move up or downsizing homeowners.
There is always something going on in Vienna during the summer… so don’t be surprised if you have two choices on the same day and have to make a tough decision.
Personally, I just realized that my annual neighborhood block party is the same day as The Beatles – White Album show at Wolf Trap. This show really sounded amazing and well produced. Ugh, I was really excited to experience a little 2018 Beatlemania.
What is Wolf Trap? Keep reading.
There are plenty of free events that the Town of Vienna sponsors too that will keep you busy.
Wolf Trap National Park for the Performing Arts
Wolf Trap is a year-round venue, but during the summer the Filene Center opens and a wide range of performances takes place almost nightly. The 2018 summer schedule has been published and it is worth looking at since some shows sell out quickly, even the lawn seats.
The Filene Center is an outdoor, covered amphitheater with a Broadway stage. Although it is a National Park, shows are booked by the Wolf Trap Foundation since you can’t get competitive bids when you book Tony Bennett or Ziggy Marley.
There are plenty of seating options inside, and most days you can drive to the box office or buy online.
And most days you can walk inside for a quick look.
If you live in Vienna and haven’t been in a while, then you should check out the performance list because you might be impressed with the new acts. About five years ago they brought in a new leader from L.A. with a bit of Hollywood Bowl experience, and the variety of shows has been updated… you’ll be impressed.
Parking is free.
Vienna Town Green
The Green is located just off the W&OD Trail and Freeman House, or the corner of Mill and Church Streets. A few years ago, the stage was rebuilt with a curved barrel roof to cover the stage which provides the performers far better acoustics.
Plan to sit on the lawn to watch performances. Alcohol is not permitted.
Starting on Friday, June 1, 2018, the Concerts on the Green season kicks off with the U.S. Navy Band at 6:30.
The final competition for Vienna Idol is scheduled for June 8th!
Special kids events include Rocknoceros on Wednesday, June 13th
Viva! Vienna! and other events on Church Street
Only after chili-cheese dogs at the Vienna Inn, people remember Vienna for the Memorial Day weekend festival. Over that three day weekend starting May 26th, carnival rides and food trucks roll in and set up along Church Street and the W&OD Trail for Viva Vienna!
There are rides and games for everyone, and the party rolls into the evening with musical acts, dancing, and a little romantic magic.
Vienna Farmers’ Market
Saturday mornings, head over to the Vienna Community Center at Cherry and Park Streets to pick up locally grown vegetables and other craft foods.
“When one door closes, another opens.” – Alexander Graham Bell
Breaking bad news to a client is the pits.
Imagine the call from the buyer’s agent saying, “after the home inspection or after reviewing the Homeowner’s Association disclosure docs, that the Buyer is declaring the contract Void.”
Then you have to call your client with the bad news. Hey, I’ve been on both sides of that phone call and it’s never easy.
Home Sellers, like Buyers, can get caught up in the excitement of multiple offers and bidding wars. Who wouldn’t?
But accepting the highest priced offer can also be accepting the offer with the greatest risk of not going to Settlement.
Emotions run high, and this isn’t HGTV where things always work out.
Imagine that you are the buyer and this is YOUR money, and you know that you can pull the plug on the deal for many reasons.
secure a Back-Up Contract right away
Home Sellers can eliminate much of the risk simply by designating the next best offer as the “Back-Up Contract”.
For example, the standard sales contract paperwork we use here in the Vienna real estate market includes an optional Addendum with Association approved clauses.
So, if the original contract becomes Void, then the Seller can send proper Notice to the Back-Up buyers which automatically makes their offer the Primary Ratified contract.
In most cases, these buyers will be super excited and the Seller won’t have to go back to square one cleaning up their house and getting ready for an open house.
95% of home buyers never consider this stealth strategy
This strategy can help home buyers in low-inventory markets like we almost always have in sunny Northern Virginia.
When you are house hunting and making offers, there is nothing worse than coming in second. Runner-up. Silver Medal. Yes, the bridesmaid again!
The difficult truth is that a Seller can only sell their home once, and can anguish over selecting one choice over another.
In the event you are a runner-up on a home you really, really want, have your agent work to make your contract the back-up contract.
By positioning yourself and securing that role, you will have created an opportunity that 95% of home buyers never consider.
So, why haven’t they considered this strategy? Because their agent never suggested it.
Again, it’s a long shot and agents would rather sell you something else.
Across the country, real estate agents and home buyers are getting trained to follow only the newest listings, to see them quickly, and to submit offers before a deadline. It is exhausting and likely produces the same result.
My recommendation is to consider using the Back-Up Contract strategy, especially in low inventory markets.
When a home has inspired you to make an offer, keep your emotions in check and realize that being the bridesmaid may be a blessing in disguise.
Revised Vienna VA real estate tax rate for 2018
Town of Vienna Real Estate 2017-2018 fiscal year tax rate shall be $.2250 (or 22.5 cents) per every $100 of assessed value. This rate is unchanged from last year.
Real estate taxes are paid annually in two installments, due July 28, 2018 and December 5, 2018.
The town’s real estate tax rate is 22.5 cents per $100 of assessed valuation.
Town of Vienna homeowners also pay Fairfax County real estate tax of $1.13 per $100 of assessed valuation and homeowners will also pay a stormwater fee of 0.030 cents per $100 of assessed value.
In total, the tax is $1.38 for Town of Vienna homeowners in the tax year.
Insight: The Town provides services such as trash pick up, recycling collection, leaf pick up, street cleaning, snow plows, a police department, a parks & recreation department, and water and sewer services. The Town has an elected Mayor and Town Council.
Over the last decade, when home buyers were looking at mortgage rates there wasn’t a big difference between fixed rate mortgages and adjustable rate mortgages (ARM).
In fact, super-low 30-year fixed rates have ruled the market.
Although I don’t have a crystal ball, the tea leaves that I’m reading show a historic shift in the global bond market. With the U.S. committed to issuing staggering sums of debt and European regulators slowing fiscal stimulus programs, the marketplace must start increasing rates to attract investors.
This is the point when ARMs and Fixed Rate mortgages will start to meander in different directions.
Ask anyone who lives in Vienna or McLean, and they will tell you about the impressive number of new homes being built.
Many are custom homes being built for long-time owners, but more often it is an investor or builder scraping off an old house to build a new, semi-custom house to sell.
What is happening here in Vienna, McLean, or Falls Church, is an economy where there are far more employers than there were twenty years ago. Companies such as Capital One, Nestle, EY, Northrop Grumman, AWS, INOVA and Accenture have diversified the employment picture beyond just government agencies.
In sharp contrast to my clients in 1999 who considered long commutes okay, today’s home buyers prefer to live closer to their jobs skipping the nightmarish daily commute on I66. Sitting in bumper to bumper traffic negatively impacts their quality of life, and quality of life is of greater value to this generation of home buyers.
They have refined today’s housing economics which are heavily influenced by wanting to see their kids, having dinner at home before heading to an evening event in their community, walking the dog, a ride on the W&OD trail, or an after-work class at CrossFit.
Factors like dynamic tolling influence today’s new housing economics.
Another new economic factor is the trend towards dynamic tolling during rush hour which can be a family budget buster. For example, the new dynamic tolling on I66 adjusts during rush hour every six minutes charging tolls if only one occupant is in the car.
If used only twice a week, forty-two weeks a year then the impact will only feel like an additional car payment or three.
The resulting consequences have been good for land values. And the old adage, “location, location, location” is very applicable in the Vienna real estate market.
So, I work in an active market where older homes are sold for top dollar to make way for larger, modern homes. But where are they, and how do you buy them?
Builder’s Hidden New Home Inventory
The issue for home buyers either relocating to northern Virginia or already living here, is how to find these new homes to buy.
Most of my clients don’t have the time to search street by street like I do every week. They are busy either at work, traveling for work, or looking on websites such as Zillow when they have some downtime.
Vienna, McLean, or Falls Church are dominated by home builders who build five to twenty-five homes a year. They aren’t mass production builders Toll Brothers or K. Hovnanian who, rather these builders often live in the community and will meet with you personally during the project.
For the most part, most of them are personable, interesting people who will be a part of the community after your sale.
One piece of this smallness is a hidden new home inventory that you aren’t going to find easily. Even for me who works in the new home or tear-down market, it is a full-time job keeping in touch with builders and following up on new lot acquisitions, permits, and approved floor plans.
It is important for consumers to know there is a wide range of quality craftsmanship which also makes it difficult to compare value. Unfortunately, not all these local builders deliver the same quality kitchen, flooring, or finished carpentry work which further distorts value.
There are two routes I see people taking. Often I take on clients who tell me they have spent a year running after builders or have been outbid on lots. They recognize that having a structured plan will help achieve their goal without the hassle or stress they have subjected themselves to… again, it’s a full-time job.
To sum this up, helping clients over the years through this process has taught me how to help them make smart decisions saving considerable time and minimizing unforeseen expenses.
Together, I help you make on-time decisions because I look at each project globally from start to finish.
Buy Rather than Build
I can talk about “new construction, tear down and building” topics at length and, just to let you know, I like to convey an accurate picture or dose of reality because buying a lot and building is a full-time job. There is often a higher cost because you need to factor in acquisition cost, tear down, removal, permits, and possible unforeseen issues like poor soil may add an extra $100k to this project.
Deciding to Buy rather than Build is a more efficient concept making the new home buying experience less stressful and much more satisfying.
If you have been navigating this process without success, then let’s talk or set an appointment to discuss what you have seen, want, and ultimately hope to move into and call home.
My focus and first-hand experience will help you accomplish your goal accessing the hidden inventory with me.
Selecting a Settlement Agent often comes down to a quick decision based on a recommendation from your Realtor.
A quick decision?
This is an interesting topic since home buyers, in Virginia, are given the option to select a Settlement Agent when they put together their offer to purchase. The idea is that they can compare fees and services, and ultimately can get the best price for title insurance.
But, you really need to know, there is much more to it.
I have seen Settlement Agents go far beyond expectations to make sure deals get done… like when the old mortgage from 1987 hadn’t been recorded as paid in full, or FedEx-ing the reclusive brother in Montana who needed to sign, or helping my blind client legally “sign” her name on the Deed.
Real estate transactions can deliver surprises, so, know it’s important to understand why there is a recommendation.
What is a Settlement Agent’s Job?
Each state handles real estate closings differently, and in Virginia the closing or Settlement happen at a designated Settlement Agent. The Deed are still written by attorneys, but Virginia allows non-attorneys to conduct the actual final paper signing.
The Settlement Agent has a complex role representing the real estate Sales Contract. They don’t represent either buyer nor seller, but play a critical role in helping both parties achieve the goal to complete the transaction.
The first step after a Sales Contract is Ratified is to deliver the Contract to the specified Settlement Agent. They may also be holding the Deposit funds in their Escrow Account so that check will be delivered with the contract.
They will collect contact information from the buyer, seller, buyer’s agent, seller’s agent, and specifics on the current loan and the future mortgage loan.
They are responsible for ordering a title search, also known as an abstract, to understand the chain-of-title and any recorded liens. If there are potential errors such as unreleased mortgages, or judgements against people with similar names then these issues will need to be resolved before a title binder can be issued.
An essential role is determining if the title is insurable. Mortgage lenders always require that title insurance is purchased to protect them against fraud in the land records, and buyers can add coverage for an extra premium.
Only structured workflow gets this job completed
They contact the current mortgage lender and request final payoff amount and instructions.
They will contact the Condominium or Home Owners Association, if necessary, to ensure the homeowner has properly paid their dues. And they will get instructions to collect any necessary dues required from the buyers on Settlement day.
They comply with requests from the new mortgage lender for specific legal information and jurisdictional transfer tax amount.
They will also double check on the transaction and if there have been any additional credits or adjustments made after a home inspection.
Communication between the new mortgage lender and the Settlement Agent is very important to ensure that documents, such as the Wood Destroying Insect (WDI) Report or Home Warranty, are accounted for on the Closing Document.
They will also make sure that the down payment funds and lender funds are in escrow prior to Settlement. Virginia requires sales to be fully funded and does not allow “wet settlements”.
After all documents have been signed or Notarized, the Settlement Agent is responsible for making sure the sale is recorded at the Courthouse.
Only after the Deed has been recorded at the Courthouse, then the Seller’s proceeds can be dispersed… typically by a wire transfer.
What I consider when recommending a Settlement Agent
Agents are often asked to recommend a Settlement Agent or two when they are putting together an offer.
I always consider the geographic location.
Because I have been a Realtor for a long time, I know Settlement Agents across Northern Virginia. I like to recommend a Settlement Agent who is near the property or at a location convenient for all parties, such as having a Vienna settlement agent for a Vienna real estate sale.
Although this sounds obvious, it isn’t always the case.
Communication style is very important because when issues arise all parties must be aware and everyone must take action.
Being available to talk on the phone to the processor or attorney, if necessary, is also important to me when there is an issue.
Although a Settlement Agent’s fee should also be important, buyers need to know that those fees are always competitively priced.
My company does not have an ownership interest in a Settlement Agency. They do not compensate me for referrals and do not incentivize business with free home warranty’s.
New Homes and Multiple Offer Situations
If you are buying a new home then selecting a Settlement Agent may not be an option for a home buyer.
Often the Settlement Agent has done considerable title work beginning when the builder bought the property.
When the market gets hot again and every home has multiple offers, I typically contact the listing agent to discuss the Seller’s situation to give my client any edge possible. If the Seller is planning to buy another property, then it may be beneficial to your offer to have the same Settlement Agent.
That’s just one of my strategies.
As I mentioned at the start, each state is different and Virginia has its own process to buy and sell real estate. Make sure that the Settlement Agent you select is reputable doing a Google search, and discussing with your Realtor the benefits of the recommended Settlement Agent.
Before we tear down older ramblers or splits in Vienna, there is a period of time when contractors will take houses apart so anything of value can be recycled.
But many people don’t think about wood boards being recycled too.
When I remodeled my home and built an addition, I remember the day when the carpenters were excited to tell me that they found a Pacific Lumber Company logo on one of the joists that they were removing. This old growth 2 x 10 had a tight grain unlike most of the boards they see today.
Yes, it was a geeky moment for them.
Pacific Coast Hemlock Lumber
The real gold (for the carpenters) are the long boards, and these are typically found when a roof truss is dismantled. The boards that go from the peak to the side of the house (the heel) can be 18′ or more.
Recently when the guys were cutting out the boards, known as the Top Chords, I looked through the pile for logos and stumbled upon one from the West Coast Lumber Inspection Bureau. Although the mill number isn’t identifiable, the “Construction” grade stamp on the board is clearly visible.
Vienna’s building boom in the 1950’s delivered houses appropriate for that generation, but today those homes are often functionally obsolescent and the land value is far greater than the old structure.
50 year old lumber
This house on John Marshall Drive NE in Vienna had been built in 1959, and these Pacific Hemlock boards are still straight and usable. Anyone who has been to the Pacific Northwest has probably seen photos of the old growth forests where these boards likely came from, and wondered where all that lumber went.
Some went across the U.S. and into building 1950’s Vienna, VA.
Better yet, the recycled lumber likely will receive a higher grading and appreciation when they are sold again.
Next Steps | Today’s Community
Although I always like to assure families when we buy a home to tear down that there is value to the components, and that I understand every house has a history and was a home full of memories.
Vienna has a long history and I like to discuss with the sellers what will happen to the old family homestead… often sending them photos after the new home is built (if you want).
It is exciting to see a property transform into the modern age for the next generation of families who call Vienna home.
My clients will remember when I said, “Don’t go out and buy his and her BMWs until after you are finished buying the house!”
Those days were so simple.
Innocent really, almost charming.
All that has changed after the recent hack of Equifax essentially exposed everyone’s personal financial information to a remote outpost on the Dark Web… where some dude will make $20 flipping your good name to a cyber gangster.
At least they don’t have your 23andMe lab results!
Know these Numbers
If you plan to buy a home using a mortgage anytime soon, it’s a good idea to check out your credit report(s).
Don’t assume your file is okay – take a look at Equifax, Experian, TransUnion or FreeCreditReport.com . When YOU review your credit report, it does not reduce your FICO Score.
If there are old accounts or errors that need correcting, then know it may take a month or two to correct them. Starting today is a smart step that could save you thousands (explained below).
The ideal credit line is one that has aged well. Like a Capital One card that you got in 2003 with a $16,000 credit line and a balance below $5,000 and no late payments. It’s okay, really.
The FICO algorithm factors in the ratio of the maximum and actual balance. It’s the ratios that are really important.
Ratios are really important. Do NOT close accounts.
When you review your credit file, take a look at your account balances because getting them down will improve your score.
A smart step is to set up a two-step authentication on your credit. Which means, when you apply for any new credit, mortgage, car, furniture, and possibly insurance, Equifax will need to contact you and confirm with you first in a manor you have instructed them to ahead of time. Yes, they will even call you.
It’s like when Microsoft or Google texts a code to you when you log in from a new location.
I set this two-step process up on my Equifax account about ten years ago after reading an article in BusinessWeek. It seemed smart especially since I have published a ton of personal information on the Interwebs.
It was also when I decided to get serious about managing any credit balances and hold myself accountable like I was preaching to my clients.
At that time, I added the Automatic Fraud Alert to my account. You should do this too.
The Automatic Fraud Alert requires Equifax to contact me when I apply for new credit. For example, when I bought my VW TDI (that’s another dark story) I was contacted by Equifax and required to confirm my identity with a PIN. After VW bought back my super-polluter TDI, I bought another car triggering the same two-step authentication.
Maybe it is a freeze on my account, but hopefully, it makes my credit a little harder to hack.
The FICO Score is baked into our lives.
The FICO Score is baked into the life algorithm of America.
Want insurance? Your rate depends on your FICO Score.
Want to finance a car? Your rate depends on your FICO Score
Looking for a new job? They will look at your FICO Score.
Hoping to get a mortgage? They will look at your FICO Score.
The role that Experian, TransUnion, and Equifax play is monitoring your open credit lines, payment history, and ratios. And they have information such as your previous addresses, current and past employer, and any criminal activity (including unpaid parking tickets or Court convictions).
All that information gets plugged into the FICO Score algorithm generating a number ranging from 300 to 850. You want a high number.
That FICO Score will 100% determine what happens to you and how much you pay for a wide variety of things. FICO is totally baked into the U.S. financial system.
Home Buyers… Start Here
When you are buying a home and are working to get a mortgage, you really have to control what you do. Such as not buying new BMWs, adding a new line of credit at Ethan Allan, or saving 20% at Target with a new Target Card.
Any new credit line additions are really bad decisions, and break Doug’s Prime Directive for buyer clients.
Mortgage lenders pull your file when you apply for your loan. But, it is critical to know that the lender will pull your credit one more time just before Settlement.
If you have added any new credit or a fake account shows up… then they will see it. And, your FICO Score may be impacted.
Start right now:
look at https://www.equifax.com/
look at http://www.experian.com/news/data-breach-five-things-to-do-after-your-information-has-been-stolen.html
look at https://www.transunion.com/equifax-data-breach-faqs
When you apply for a loan, your mortgage lender will ask for permission to review your credit. They order a tri-merge credit report seeing all three reports, and see your FICO Score.
A higher FICO Score will allow the mortgage people to offer you a better rate saving thousands of dollars every year. That is why I want you to spend time now taking the effort to improve your score.
$500,000 loan amount at 3.75% on a 30 year loan has a Principal and Interest payment of $2,315 vs.
$500,000 loan amount at 4.25% on a 30 year loan has a Principal and Interest payment of $2,460
After 30 years… that’s $52,200 more!
So, I hope you understand why it is really important that you check your credit file and your FICO Score especially if you are planning on buying a home. The myth that pulling your credit negatively impacts your score is wrong, totally wrong.
When you review, check for errors, you will see easy opportunities where you can improve your debt ratios.
With a little work now, you will improve your ability to buy a home in 2018.
Sitting at their kitchen table while explaining the sales contract and putting together a competitive written offer, I was asked…
“What’s the earnest money deposit formula in Virginia?” this Vienna home buyer studiously asked.
This really isn’t an uncommon question because most buyers are reading websites written by mortgage lenders, product marketing, or media companies. Their professional content people (we used to call them writers) write to fit this topic into digestible chunks that people can read on iPhones while crossing a busy street in DC.
Essentially, professional content creators oversimplify every strategic piece of the typical negotiation process. If you ask me, they can make anything sound like it’s not a big deal because, after all, it isn’t their $10,000!
Earnest Money Deposit amounts aren’t formula based
Deposit amounts need to be strategic, and not considered a secondary item when you are planning an offer.
This year, specifically, I have seen a lot of inbound offers from agents which have allowed me to collect research data on what consumers are hearing from their agents, the Web, Dad, Uncle Ted, or watching The Property Brothers™.
Home buyers really need to understand that buying someone’s house isn’t like buying a car. Often there is an emotional connection to a home or other subtle influencing factors.
Showing Strength, not just 1%
A Deposit will be credited toward your down payment at the Settlement.
In Northern Virginia, Deposits are put into an Escrow Account within five days of Ratification (agreement).
So what you need to decide is how much you want the house? Is it the one?
If you have decided that it’s the one, then it is critical to make a strong offer since there may be another competitive offer on the table too.
Showing your financial strength is critical, and your Deposit amount needs to reflect that strength.
“Don’t they have any money?”
There were offers that I saw this year when eager home buyers, in multiple-offer situations, attached Deposit checks that were 1% of the sales price.
Needless to say, 1% is a half-baked strategy, and in my follow-up calls with desperate agents, they did not get the concept that allowing a client who includes a 1% Deposit when their offer has a 20% Downpayment offer is a poor strategy.
Anyone looking for a home to buy knows what to do when their smartphone vibrates signaling a new listing.
What most home sellers can’t grasp is the immediate impact a new listing has on home buyers.
Tech savvy home buyers quickly open up the alert and flip through the photos, see the basic stats like which school it attends or if there is a screened-in porch. These photos tell a make-or-break story that will result in a miracle weekend.
These home buyers are making the decision right now if they want to rush over and make an offer this weekend (or sooner).
Preparation for the big leagues (and Miracle Weekend)
Achieving Miracle Weekend bragging rights realistically won’t happen without considerable effort leading up to hitting the market. Yes, there are some niche markets where even the dumpiest of homes will sell immediately, but as prices continue to rise like we see in the Vienna real estate market even those tear downs may need a little prep-work to get a miracle offer.
Last weekend I held an open-house at new listing on Sunday afternoon.
Typically a colleague will want to do it, but I was in town and decided to schedule the open house in our MLS database.
When that scheduling is done, home buyers get an extra “ping” that a new listing is holding an open.
Case in point…
At this open, one of the first people in the door was a couple who had seen “seen over 100 homes” over the past few months.
These folks really knew the market and there was a real sense of urgency to get inside. Their internal checklist of must-haves and must have-nots helped them place it somewhere on their list, but their feedback was extremely helpful for the future of the listing.
What I saw were home buyers who were too overwhelmed to make a choice or make an offer. Some people get caught up in the “grass is greener” conflict when they feel a better-looking place must be around the next corner.
The Ping of a new listing is totally intoxicating.
The Ping of a new listing can be suffocating too.
Days on the Market and Price Adjustments
There isn’t a buyer out there who isn’t looking at each home’s DOM number. Anything over 30 days likely isn’t going to get anyone’s heart pumping.
“Must be something wrong, let’s see that new one” a buyer will say.
So, how can a home seller jump start the excitement? Resuscitate their homes appeal to the buyers almost like it was a new listing?
Real estate agents may have many tips and I feel that 98% of them need to get done.
The list may include painting, removing wallpaper, cleaning, eliminating clutter, cutting back overgrowth, changing door handles, removing personal items, replacing carpets, sprucing up a bathroom, and adjusting the price.
Doing a laundry list of items (that should have been done before going live) and adjusting the asking price will introduce a new buyer pool who may have dismissed your house. They will get the “Ping” on their smartphones that will generate another important miracle event!
I’m always interested in the apps my clients use to search for homes. Let me know which one you use and why?
And, if you have already bought a house and still get alerts everyday… it’s time to stop and get on with your life. Maybe start painting!
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