Archive for January, 2008
Earnest Money Depost - Why? Who? How Much?
January 29th, 2008 Categories: Alexandria Dirt, Arlington Dirt, First Time Buyers Club, McLean Dirt, Northern Virginia Home Buying, Real Estate 101, Reston Dirt
You’ve heard the term “good faith deposit” or “earnest money deposit” but what does it mean exactly? Who keeps it? What’s the purpose? Why does it matter? How much should it be? Let’s see if I can address all of these issues, bringing clarity to the importance of understanding the earnest money deposit.
What is it?
Here in Northern Virginia, when a buyer writes an offer on a property, our contract 
calls for it to be accompanied by an earnest money deposit of some amount – typically in the form of a personal check. This amount is usually a percent or two of the sales price… as a general rule of thumb. I’ve seen more - the higher the amount, the more seriously your offer is taken. This money belongs to the buyer, but it gets deposited prior to settlement usually with the real estate brokerage that is representing the buyer. However it is applied at settlement towards your closing costs or down payment.
Why do I need it?
The purpose of it is to show the seller that the buyer is serious about the purchase. It is the money that they are risking to lose should they default on the contract. Remember, I said “default.” If the buyer finds something with the home inspection or the association documents that they are unhappy about and can’t work out a solution, they can walk away under most circumstances and they will receive that earnest money back from the broker. However, if they walk away with no cause, or with no “out” from the contract — it’s default and they stand to lose that earnest money deposit and sometimes more. So it’s the money they’re putting forward in good faith indicating their intent to follow through on the contract.
Does it really matter how much I write it for?
From the seller’s perspective, if they received 2 contracts, one with a deposit of a few hundred dollars vs. another with one that was $10,000 - which do you think they’d consider to be stronger? Right, the one that’s higher indicating a higher degree of seriousness.
Now, it’s not all about earnest money - there are plenty of other factors that go into writing a good solid contract – but it is certainly a consideration that everyone should understand in order to be aware of the implications.
For professional guidance through the home buying process, give me a jingle! I’d be more than happy to help educate you on all of the ins and outs of good contract writing. Then, when you’re ready to move forward with your offer, you’ll be knowledgeable about the process and the process can move along smoothly!
Happy Tuesday!
Jennifer Klaussen
Serving all of your real estate needs in Arlington, McLean and the entire Northern Virginia Region!
Contact me today for a free home valuation! Spring is right around the corner!
| Discussion: 1 Comment »
Homeowners Insurance - the Ins and Outs
January 28th, 2008 Categories: Alexandria Dirt, Arlington Dirt, Falls Church Dirt, First Time Buyers Club, McLean Dirt, Northern Virginia Home Buying, Northern Virginia Home Selling, Northern Virginia Real Estate Dirt, Real Estate 101, Reston Dirt
One of the necessary things to plan for when making a real estate purchase is insurance. But what do you need? Well, I’m not an insurance agent (read: insurance expert), but I can tell you from a property ownership perspective the minimums that you should have… read on.
Condominium Insurance Needs
When purchasing a condominium, the association carries a master insurance policy on the entire building structure. This is one of the costs that your condo fee covers. However, you’re not off the hook. You should have insurance to cover your personal belongings, as well as personal liability, so if anyone ever injures themselves on your property, you’re covered.
Single Family and Townhome Insurance Needs
When purchasing any other type of property with fee simple ownership (when you own the ground and air above – exterior walls, fireplaces, roofs, etc…) then you need a full featured home-owners policy, sometimes called a hazard policy, covering the structure, contents, liability, etc. There are specialty riders as well. For example, here in Northern Virginia, we don’t worry too much about earthquake policies and not too many properties are affected by the 100 year flood plain (although there are some) and require special flood insurance.
What to do?
One of your first jobs once you have a ratified contract will be to contact an insurance agent or two, get quotes and make application for insurance.
You’ll need to know such things as:
Wiring type
age of roof
# of layers on the roof (sometimes a new layer of shingles is nailed right onto the old layer)
distance to nearest fire hydrant
etc…
They will also run a C.L.U.E. report. The C.L.U.E. report (Comprehensive Loss Underwriting Exchange) will provide a 5 year history of losses associated with an individual and his/her property.
The home insurance policy will be paid for in full for the first year at the settlement table. Your lender will then begin to escrow 1/12 of your annual policy amount so that the beginning of year 2, they will have collected enough money from you to cover the premium that will come due at that point. IF for some reason you don’t go to settlement - say the contract gets voided because of an inspection item, or an appraisal issue – you’re not on the hook at all — after all, no service has been rendered. You simply call the insurance company and tell them the deal isn’t going through. They can sit tight until the next time!
Additionally, something many don’t realize, if you move to your new residence and have to leave a property vacant, communicating that to your insurance agent is very important. Since it’s obviously vacant, you won’t need to continue to insure the contents, but you will need to carry at a minimum a basic fire policy AND a comprehensive liability policy.
The key to good insurance is communicating with your agent. There are many great insurance companies out there - find one you’re comfortable with that offers competitive rates and you should be set. As always, if you want to talk further, don’t hesitate to give me a call or email.
Happy Monday!
Jennifer
Serving all of your real estate needs in Arlington, McLean and the entire Northern Virginia Region!
Contact me today for a free home valuation! Spring is right around the corner!
| Discussion: 1 Comment »
Keller Who?
January 25th, 2008 Categories: Alexandria Dirt, Arlington Dirt, McLean Dirt, Northern Virginia Home Buying, Northern Virginia Home Selling, Northern Virginia News, Northern Virginia Real Estate Dirt, Reston Dirt
Keller Williams – the BEST real estate company in the world, just my humble opinion. Many people in the DC area are not familiar with Keller Williams - so let me introduce you.
Gary Keller and Joe Williams began Keller Williams in Austin Texas in 1983 – yes, 1983. Today, Keller Williams is the 4th Largest residential real estate franchise in the country with nearly 75,000 agents worldwide with a sales volume of over $94 BILLION dollars.
Keller Williams encourages agents to see their business AS A BUSINESS - not a job. We are uniquely innovative in our approach! There are many systems and programs in place to help the agents become successful business people, thus raising the standards that we can provide to our clients. We’re committed to education, training, and quality of life. Never before have I felt my real estate brokerage was so vested in my personal success as I do now.
I am so very proud to be a part of this organization! So the next time you think real estate, think Jennifer Klaussen – I bring the knowledge, expertise and personality to the table to ensure that you have a successful transaction. I happen to have a great brokerage firm behind me and that means a lot!
Happy Friday!
Jennifer Klaussen, Keller Williams Arlington
Proudly serving all of your real estate needs in Arlington, McLean and the entire Northern Virginia Region!
Contact me today for a free home valuation or buyer consultation! Spring is right around the corner and I have all of the tools to help you buy and sell successfully in this market!
| Discussion: 1 Comment »
Buyer Agency - The Good, The Bad and the UGLY
January 24th, 2008 Categories: Alexandria Dirt, Arlington Dirt, Falls Church Dirt, First Time Buyers Club, McLean Dirt, Northern Virginia Home Buying, Northern Virginia Real Estate Dirt, Reston Dirt
Today’s topic is sometimes a sticky one – sometimes misunderstood – sometimes abused – but most of the time, it works out wonderfully for all parties involved.
Today I came across some information that really surprised me. I received a referral from another real estate agent this past winter and worked with
this particular client for 2 1/2 months to help them find their dream home under a buyer agency representation agreement. During that time, we wrote one contract that didn’t go through due to the presence of a better offer. In my estimation, we looked at somewhere between 50 and 60 homes together. That’s A LOT!!! At the end of those months together, they seemed exhausted and frustrated and decided to take a break - they told me they were renewing their lease for another 6 months and would resume their search thereafter. They thanked me for my diligence, my patience with their schedule and my hard work to date, promising to get in touch when it was time to resume the search.
I found out today that 11 days after they told me this, they SETTLED on another property in a neighborhood we’d been looking in. When I contacted them today to ask them what happened, they were surprised to hear that I felt that compensation was due, not to mention that the buyer agency agreement that they signed said it was due. Imagine – they felt that they found the property and consummated the deal without my assistance so therefore I was not due any compensation. What about the 2 months that we worked together? 2 or sometimes 3 days/week – 5 and 6 houses at a time? Missing family events, running out on short notice, quickly previewing new listings and actively chasing down possibilities that weren’t even on the market in their “dream” neighborhood? Hmmmmmm
Obviously feelings are involved, at least on my part – I worked hard, put their needs first, helped educate them, both on the housing market and on lending options, helped them explore different neighborhoods, communities, home styles, etc… my feelings are hurt that all of this effort was not rewarded with compensation. Their feeling is that it’s the nature of the business and I should just deal with it and move on.
Signing a buyer agency agreement is putting in place a contract hiring a qualified, competent real estate agent to work for you. That agent is putting in the time with an agreement that at the end, compensation will be earned. What other business can you think of where someone works for free on the hopes that it all works out? This is very much of a relationship built on trust. The beauty of buyer agency is that the SELLER PAYS THE COMMISSION!!! This is the way I put food on my table for my family – it’s not something I do recreationally for the pleasure of serving others. Don’t get me wrong, for the most part I enjoy each and every one of my clients and we have built long lasting, solid relationships because it’s a mutually 
rewarding and respectful relationship. But it’s how I earn a living.
I’d love to work with you - but please respect me and my time. I will give tirelessly in the pursuit of the perfect place for you to purchase – but I look for mutual commitment. Like I said in the beginning of this post, 99% of the time, buyer agency is a beautiful thing!
Happy Thursday
Jennifer
Serving all of your real estate needs in Arlington, McLean and the entire Northern Virginia Region!
Contact me today for a free home valuation! Spring is right around the corner!
| Discussion: 4 Comments »
7 Truths You May Not Know about Buying a Short Sale Property
January 18th, 2008 Categories: Alexandria Dirt, Arlington Dirt, Falls Church Dirt, McLean Dirt, Northern Virginia Home Buying, Northern Virginia Real Estate Dirt, Reston Dirt
In the past, I’ve spent a lot of time helping unravel the myths about dealing with short sales, foreclosures and bank owned properties – as a result, here are the top 7 reasons why, as a buyer, you may want to steer clear:
1. Competitive Pricing… In this soft market, short sales are not always priced competitively - sometimes equal to or higher than other similar available properties
2. The Bank calls the Shots… as it relates to the terms of the contracts; they can (and most often do) override certain terms of our Regional Sales Contract and can change terms mid-stream![Images[3]](http://northernvirginiarealestate.files.wordpress.com/2007/09/images3-small.jpg)
– and believe me, these changes and overrides are NOT in favor of the buyer!
3. Property sold as-is… meaning there are generally no home inspection repairs or credits allowed; NOR will any walk-through items be repaired; WYSIWYG
4. The Bank holds the $$… generally in a transaction, the brokerage representing the buyer holds the earnest money deposit. However, in these cases, they will generally ask that the seller (or BANK) hold the money – not a great scenario in my book…
5. Delays? Unexpected and unexplained delays are common. Even settlement dates can come and go without any communication on status – I’ve even heard of delays up to 30–60 days… even when everyone is ready at the settlement table - loan funded and everything ready to go.
6. Closing Costs? Forget it… very few short sale situations will agree to chip in to cover any buyer closing costs…
and…..
7. HOA/Condo violations or delinquencies? Sometimes the seller is unwilling to remedy and this leaves an enormous exposure for the buyer.
I know I’ve painted a pretty gloom and doom picture – but the message is clear – if you can stay away, at least for now, the climate is not friendly for buyers who want to purchase these properties. I’m hopeful that as more flood the market, the banks will ease up and realize that they don’t want to be property owners, or property managers – just sell them and be pleasant!
Tread carefully!
Happy Friday!
Jennifer
Serving all of your real estate needs in Arlington, McLean and the entire Northern Virginia Region!
Contact me today for a free home valuation! Spring is right around the corner!
| Discussion: 4 Comments »
Gourmet Burgers in McLean! A New Hot Spot!
January 17th, 2008 Categories: Local News, McLean Dirt
Welcome Joe’s Burgers!
McLean has long needed a great burger joint – and here it is. For a month or so people have been telling me of this great new place in McLean for lunch called Joe’s Burgers – knowing, of course, that burgers and fries are 2 of my staple food groups! So yesterday I finally had the opportunity to go and see for myself.
The inside is quite small - but accommodated the diners quite nicely. There were 5 tables for 2 and 2 tables for 4 and a bar that seats 3. That’s it – nice ambiance!
The menu is simple – burgers, Kobe beef burgers, ostrich burgers, and a few chicken sandwiches - and everything comes with fries. Coke, Diet Coke, Sprite and Iced Tea (and of course, beer/wine - but not at lunch, at least not for me) are the beverage choices – nice and simple and reasonably priced. The service was super friendly, too!
My FAVORITE part is that you can add mushrooms, bacon and/or carmelized onions for FREE!!! Yes, you heard it, nada, zip, zilch, nothing, FREE. Not $1.30/extra topping!
So don’t go if you’re on a diet because it’s delicious – wonderful grilled beef, fresh buns, shoestring fries… YUM!
So stop in next time you’re in McLean and hungry. And if you’re interested in McLean real estate, give me a jingle!
Happy Thursday!
Jennifer
| Discussion: No Comments »
Taking your (financial) Health Into your own Hands…
January 16th, 2008 Categories: Alexandria Dirt, Arlington Dirt, Falls Church Dirt, First Time Buyers Club, McLean Dirt, Northern Virginia Real Estate Dirt, Northern Virginia Real Estate Finance, Real Estate 101, Reston Dirt
Yes, today we’re talking about health. Had a checkup lately? Have you 
visited your family doctor? Well, all that might be interesting, but I’m talking about your financial health. YES, have you had a checkup lately? Seen your practitioner?
There are a few basic things one should do especially if preparing to enter into a real estate transaction anytime soon:
Run Your Credit
You are given the opportunity once each year to run your credit “free” so to speak. Here is a great article on the process, how it works, where and whom to contact, etc…
Address any Credit Issues with a Plan
Sometimes your credit report will reveal things you’re completely unaware of. You might find that a credit card or account you thought you “closed” years ago is actually still active with the company even though there have been no charges in a very long time and the cards have been long cut up. It will help your credit scores to methodically go through and, in writing, cancel any unused accounts.
Sit down with your Accountant
If you’re considering selling, be sure you understand how a gain could affect your tax situation. Be sure you understand how much you stand to gain from the sale of your home and how much you’ll be able to put towards your next purchase. (a qualified real estate agent like myself can run through scenarios to create a net sheet for you to use).
IF you’re considering buying, especially for the first time, you need to understand how the mortgage interest (and property tax) deductions work and how they increase your take home pay. Many first time buyers come to me understanding how much they currently pay in rent and trying to make a comparison – it doesn’t work the same way. It’s at this point that I would point you to a qualified lender to help walk you through the approval process.
Most of these are common sense – but all great things to do on a regular basis. There are also some great books out there to help take you through a financial check-up and lead you to financial freedom. So, take care of your health, financially, and the rewards will be great!
OF COURSE, if you want to talk real estate, I’ll look forward to your call or email.
Happy Wednesday!
Jennifer Klaussen
Serving all of your real estate needs in Arlington, McLean and the entire Northern Virginia Region!
Contact me today for a free home valuation! Spring is right around the corner!
| Discussion: No Comments »
Arlington County Sales Figures for 2007 - And What a Year it Was…
January 10th, 2008 Categories: Arlington Dirt, Market Stats
Well, I’ve just finished compiling sales figures for Arlington County for the year end of 2007. It was a mixed year – a year with a lot of media hype, a lot of consumer panic, a lot of deals to be made and a lot more inventory than we’ve seen in a long time. Here’s how December looked compared with December of 2006:
There were 2 sales that drastically affected the days on market for 2007 (notice 154) which is out of normal – but other than that, Unit sales were down across the board, Days on Market were fairly stable in the condo market, but up in the single family market, and average selling prices were UP… go figure. As I have continued to say every single month, looking at one month in a vacuum is not telling of the current market conditions.
This brings me to the overall comparison of 2007 to 2006 – To listen to the local media, you would think it’s all gloom and doom, but here are the facts:
What I notice about this is:
- Condo sales are UP in units, Average Sales Price (barely, but still…) and flat for days on the market
- Single Family for all of Arlington: Down in unit sales by roughly 5% but UP in Average Sales Price and up for Days on the market
- Single Family just looking at the 22207 zip code: UP in unit sales, UP in Average Selling price and only up slightly for days on market
So there you have it. We also look at absorption rates, i.e., how long at the current pace would it take to sell through our current inventory:
Not too shabby. I believe we’re headed for a great 2008 in the Arlington County real estate market.
If you have any questions at all or would like to discuss the possible sale of your home and/or the purchase of a new one, I invite you to call me to chat at your convenience.
Happy Thursday!
Jennifer
| Discussion: 1 Comment »
New Year - New Tax - Well, maybe…
January 2nd, 2008 Categories: Alexandria Dirt, Arlington Dirt, Falls Church Dirt, McLean Dirt, Northern Virginia Home Selling, Northern Virginia Real Estate Dirt, Reston Dirt
Happy New Year! I wish all of you a tremendously successful, prosperous, healthy and happy 2008!!!
A little history: As many of you know, the Virginia General Assembly last year granted 2 Transportation Authorities in Virginia the right to impose a 
special new tax to help relieve traffic congestion. One here in Northern Virginia and the other in the Tidewater Region. It’s an addition to the Virginia Grantor’s Tax that has always been collected. The kicker is that this new tax represents a 500% increase over what a seller would have paid had they settled in 2007.
What does this mean? For example, when selling a $500,000 property in 2007 (or years prior) the Grantor’s Tax collected at settlement would have been $1/$1000, or $500. However, The Virginia Transportation Authority in 2007 decided that an increase would take place of an additional $4/$1000 bringing the total now to $5/$1000 or a whopping $2,500.
So many sellers were trying to get deals done at the last moment in 2007 to save this tax increase. What many don’t know is that there is a group in Virginia who feel that it is unconstitutional to grant a non-elected body the right to impose a tax – so the case is being brought before the Virginia Supreme Court next week and it’s trying to be overturned.
Now who really knows what will happen… The Tidewater Transportation Authority has decided to delay the collection of this tax increase saving themselves an accounting nightmare if the Supreme Court in fact rules that this body cannot impose the tax. Here in Northern Virginia, they are moving forward with the collection of this new tax. As it stands, many in the know say this is not likely to be overturned and we should just get over it and live with this expected increased tax. At least it wasn’t the increase of $9/$1000 that they originally proposed!!! Whew…
What do I think? I think we have to wait and see. If you’re a seller - you just have to figure it into your costs and move forward with your transaction if you’re fortunate enough to get a good contract. If you’re a buyer - it has no impact on you whatsoever.
I’ll certainly keep my readers informed as to the direction the supreme court rules and what we can expect as an impact. Meanwhile, let’s start talking about buying and selling. No time like the present!
Happy Wednesday!
| Discussion: 3 Comments »
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