Harris Interactive conducted a survey which provides some tremendous insight into the feelings of homeowners and renters regarding homeownership.  Below is a chart showing the percentage of homeowners and renters who agree with the following positive attributes of homeownership.

I’ll be back with more in the days to come.  Got a question about owning a home in Virginia?  I’m here to help!  Give me a call or send me an email at 703-403-0536 or patrick@patrickduffyrealtor.com.

Source: Harris Interactive Poll conducted Oct 6-14, 2010

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Put Your Home on an Energy Diet

First, we have to remember that real estate is hyper-local.  When we see national numbers in the headlines, we need to ask ourselves – what are the numbers like around here?

Well, the homeownership rate in the state of Virginia is 69.1%, which is a full 1% increase over the 1^st quarter of 2010.  How does that stack up against other states?  As you might expect, homeownership rates tend to be higher in more rural and suburban areas.  So, states like West Virginia (highest rate at 78.2%), Mississippi (77.5%) and South Carolina (76.4%) have relatively high ownership rates.  And states like the District of Columbia (lowest rate at 45%), New York (54%) and California (56%) have relatively low ownership rates.

Second, we have to ask ourselves – what does this homeownership rate mean, is the current rate good or bad?

So, the national homeownership rate came in at 66.9% in the 3^rd quarter of 2010, the same as the 2^nd quarter of 2010.  The last time the rate was this low was in 1999, when the rate was 66.7%.  To give you a historical perspective of the homeownership rate, consider that in 1960 the rate was about 62%.  Hop in your Delorian and take a trip to 1985 and the rate was at 64% and it remained there for about decade.  Usher in the Clinton and Bush administrations and the rate shot up to a peak of 69% in 2004 (during the housing boom).

The truth is, there isn’t necessarily a known ideal homeownership rate.  The ideal rate would likely flunctuate over time.  But, I think we’re in the midst of finding the sweet spot now.  We hit a national peak of 69%, which was probably too high.  We’re now hovering around the middle of the range we’ve seen over the last 15 years.  Maybe this is about where we need to be.  I’d love to hear your feedback or questions.

Stay tuned to my blog.  I’ll give you the local scoop in contrast to the national numbers.  If you have any questions, please feel free to contact me at 703-403-0536 or patrick@patrickduffyrealtor.com.

803 Monument Square

Prepare to fall in love again.  The renovation is now complete on this stunning home in a charming setting. Four bedrooms and three and a half baths in about 3,000 square feet, spectacular kitchen with stainless steel appliances, two car garage and hardwoods over half of this amazing home.  Situated in sought after Belmont Bay, this home’s new owner’s will be able to enjoy all of what this community has to offer.  A popular golf course, marina, walking trails, pool, tennis courts and more really set this neighborhood on the Occoquan apart from the rest.

Open House Sunday November 14, 2010 from 1-3 pm. Guests who sign in with have a chance to win a gas card!

Visit this property’s special web site for over twenty more pictures and tons more info!

List price: $459,900

13815 Gilbert Road

Wow, what a beautifully renovated home!  Five bedrooms and three full baths await new owners of the brick front single family home.  You’ll love the nicely appointed kitchen with all new stainless steel appliances and ceramic tile.  A nice flat yard backing to trees provides a nice setting for this home.

Stop by and see this home in person at my open house, Saturday November 13, 2010 from 1-3 pm.  Guests who sign in will have a chance to win a gas card!

Visit this property’s special web site for more pictures and tons more info!

List price: $279,900

Happy new homeowners

I’m so excited to announce a special offer I’m making to homebuyers!  We all have a cause or two that we support.  For me, it’s cancer research.  For you it may be Parkinson’s or maybe your son’s little league.  This is your opportunity to make your home purchase really count.  When you buy a home with me as your REALTOR®, I will donate up to $1000 to your favorite charity!

Check out my Web site for more info!

Up Front Mortgage Insurance Premium (UMIP) – One Hand Giveth
The first change the FHA made was to the Up Front Mortgage Insurance Premium charged on all FHA loans.  Prior to October 4, the premium was 2.25% of the loan amount.  From October 4 onward, the premium will be 1%.  So, this means lower closing costs when you purchase or refinance using FHA financing.  Awesome!

Annual Mortgage Insurance Premium (MIP) – The Other Hand Taketh Away
While the change in the UMIP offers a significant upfront savings for FHA borrowers, the change to the annual Mortgage Insurance Premium will cause an increase in borrowers’ monthly payments.  Prior to October 4, the MIP (which is charged monthly) for loans was .55% of the mortgage payment for loans with a loan to value (LTV – your loan amount divided by the value of your home) of 95% or higher and .50% for loans with an LTV below 95%.  From October 4 onward, the new MIP charged will be .90% for LTV’s of 95% or higher and .85% for LTV’s below 95%.  That’s a pretty big jump.

Now, I’ve fed you a lot of different percentages here.  So, what does this mean in real life terms?  Here is a comparison of before and after October 4, assuming a loan amount of $250,000 with an LTV of 96.5% and an interest rate of 4.5%.

As you can see, you will save $3,125 in closing costs which is great news!  In exchange for that, you will see an increase of $56 in your monthly mortgage payment.  For some, this may not sound like much, but it can have an impact on the loan amount for which you will qualify.

Other Less Significant Changes
In addition to the changes in Mortgage Insurance Premiums for your most heavily used FHA loans, FHA has made a change to its credit score requirements.  Prior to October 4, the FHA did not state a minimum credit score requirement.  From October  4 onward, the minimum credit score required for loans with an LTV of 90% or below is 500 and loans with an LTV up to 96.5% is 580.  This change is not as significant as the FHA does not make loans, they insure lenders against losses in the event of default by borrowers.  Lenders must fulfill FHA’s minimum requirements to have the loans qualify for FHA, however they may apply more stringent requirements.  While FHA will allow credit scores down to 500, the vast majority of lenders require a minimum score of 620-640.

Another change is significant in-and-of itself, but it will not impact nearly as many borrowers.  Reverse Mortgages (HECM’s) have changes, too.  While the UMIP remains the same, the annual MIP has changed from .50% to 1.25%.

As always, contact your mortgage professional for a detailed mortgage payment analysis, including taxes, insurance and the mortgage insurance premium specific to your loan amount.  Please feel free to contact me anytime with questions at 703-403-0536 or patrick@patrickduffyrealtor.com.

So, how as a buyer do you protect yourself?  For the purposes of this post, I’m going to go beyond your typical forms of protection such as a home inspection contingency.  I want to focus on a few items which, while rare, should be brought to your attention.

Meth Lab Operations
A home in which methamphetamines have been produced is one which presents significant health risks.  Once the chemical residue is in the walls, floors and air ducts, it’s there for good –that garbage is permanent.  Health risks include breathing problems, skin problems and migraine headaches.

Here are a few ways to dig up some more information about a home you are considering to see whether the prior owners have left this home in an unhealthy state due to their illegal activities:

• Visit the DEA’s National Clandestine Laboratory Register for a list of lab seizures at http://www.justice.gov/dea/seizures/va.pdf.  The list contains properties where a drug operation has been busted.  Keep in mind though, that this list is not comprehensive.
• Contact the local police department and ask them for information about the property.
• Have the property tested with a test kit from providers such as http://www.methwipe.com or http://www.inspection-perfection.com

Sexual Offenders
Let’s face it, even if you don’t have kids, you’d probably rather not live too close to a sex offender.  These offenders come in many forms, from the more benign to extremely violent.

To find out more information about registered sex offenders in your area, visit the Virginia Sex Offender Registry at http://www.sex-offender.vsp.virginia.gov.  Here, you can enter a Zip Code, County or City and see a list of sex offenders including where they live and work.

Chinese Drywall
This problem has just recently been in the public eye and it not only poses significant health risks, but it can damage the home as well.  Bad Chinese drywall emits a gas which not only smells, but can damage plumbing, wiring, A/C units, appliances and cause respiratory problems.  In Virginia, the Tidewater region was the most affected, but bad Chinese drywall has turned up in Loudoun County as well.
Signs of bad Chinese drywall include: the smell of rotten eggs, tarnished copper or silver and homes built between 2001-2008.  A proper test may take 2-4 weeks to complete.  If you are considering a home with bad Chinese drywall – run, don’t walk.  The only way to repair this problem is to replace the drywall and other items affected such as plumbing and electrical systems.

This is by no means an exhaustive list of items about which you should be aware when you’re buying a home.  Please feel free to contact me anytime for more information at 703-403-0536 or patrick@patrickduffyrealtor.com.

UPDATE NOVEMBER 16, 2010: A circuit court judge in Florida has relieved builders of some liability for defective Chinese drywall.

The answer is, yes. Allow me to explain.

Why is this important?
Well, insurance claims on a home can affect the insurability and rates for a home which means you could have difficulty getting a policy and/or you could be looking at a more expensive premium. And, wouldn’t it be nice to know a little more about the history of the home? Think of it like getting a CARFAX Report on a used car you are considering.

C.L.U.E. Reports can only be ordered by the homeowner
A word to Sellers – for about $20, here is an opportunity for you to make your home more marketable by giving the buyer added piece of mind.

A word to Buyers – consider including a C.L.U.E. Report contingency in your offers to purchase.

For more information, please don’t hesitate to contact me at 703-403-0536 or patrick@patrickduffyrealtor.com.

Sample C.L.U.E. Report

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The C.L.U.E. Report and Its Importance to Buyers and Sellers of Real Estate

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