May 22, 2009

Choosing a Real Estate Agent

Posted to Real Estate Tips & Info, Scott Dearnley

There is a common misconception that a real estate agent is someone who drives around in an expensive car, holds open houses, has a cool key that gets them into properties to show, takes listings which sell once the sign goes up and gets paid a truck load of money for doing these things. Understanding the true value of an experienced, professional real estate agent is very difficult. Given the yearly flood of inexperienced agents right out of real estate school, a strong argument can be made that a good, experienced agent who can get the job done is worth every penny of their compensation.

Basically, the work of a real estate agent can be divided into 3 main duties: functional, compliance, and fiduciary.

Functional Duties – This is the area that the public actually see the most… putting up signs, hanging a lock box, designing flyers, placing newspaper ads, measuring a house, etc. These activities could be done by an agent at any experience level.

Compliance Duties – A lot of this basically involves helping buyers and sellers navigate through the ever increasing web of paperwork and deadlines that are involved in a sale. Contracts, disclosure forms, lead based paint disclosures, homeowners association packages, and home inspections and related addendums are just a few.

Fiduciary Duties – Simply put, the fiduciary relationship is based on trust. There is an absolute duty of fairness, honesty, and competency. Accordingly, this means an agent must be well trained and understand all of the technical and legal nuances of the business.

Now that the areas of practice have been defined, here is what you should expect from an experienced, professional agent:

  1. Courtesy – At bare minimum you should expect your agent to be well-mannered, polite, patient, and empathetic. These attributes lead to effective communication which is critical to the agent/client relationship. Courtesy also extends to being prompt to meetings, returning phone calls quickly, and keeping any promises made to clients.
  2. Needs Analysis – Whether buying or selling, a good agent should take the time to conduct a thorough needs analysis to determine if they have the correct expertise to assist the client and to explain the buying or selling process so there are no surprises along the way.
  3. Strategy – Once the needs analysis is performed and you know what the various options are, you can form a plan for achieving the best option for you and your circumstances. The strategy is a step by step process for achieving your best option.
  4. Advice and Counsel - This area is often where the professional can provide the greatest value to a client. Agents have the experience and knowledge base and must use this to assist clients when making crucial decisions.
  5. Market Analysis – Especially in this market, pricing a home correctly can be the single most important factor that will lead to a sale. An overpriced home in a slow market is the kiss of death. If the price is too high, the best qualified buyers won’t see the home because they’ll be looking for homes priced in their spending range. Two factors help determine the price – similar homes which have sold in the previous 3-4 months and similar homes that are currently on the market (the competition).
  6. Estimate of Net Proceeds – This is the bottom line… what will I make (or in some cases not make) on the sale of my home. A Net Sheet has a breakdown of the sales price and all related sales costs (commissions, taxes, closing costs, etc.) that add up to the check that you will hopefully take away from closing.
  7. Managing the Escrow Period – There is a saying that the real work happens once a contract is signed. During the escrow period the first major hurdle is the home inspection. Your agent should help you negotiate the corresponding addendum that will result from this inspection. Inspectors are not always 100% accurate in what they deem to be a defect in the home so if you don’t agree with an issue, fight to have it removed from the list. Next is the appraisal. I always meet the appraiser with a list of comparables that help support the contract price. This is no real extra work since a market analysis was done when listing the home. Your agent should also coordinate all the paperwork that will go back and forth between the attorney, lender, and title company. It is always good to check with the lender on a frequent basis to know that the loan approval process is moving in the right direction.

At the end of a real estate transaction, you should feel that your agent was a trusted advisor and not a sales person. If that happens, then you most likely received excellent service. For any real estate related questions, please don’t hesitate to call me, Scott Dearnley, at 804-938-5277 or email me at scott.dearnley@joynerfineproperties.com.

Posted by:Scott Dearnley

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May 08, 2009

Farmers Market at Westover Hills and Forest Hill Park on Saturday Mornings

Posted to Neighborhoods, Richmond Information, Wayne Gauthier

On the south shore of the James River is Forest Hill Park nestled between Westover Hills and Woodland Heights. The Park’s spacious site hosts one of the impressive experiences in the area, the farmers market on Saturday mornings through December, 8:00 AM to 1:00 PM. Neighborhood and area gardeners and others bring their produce. Come see for yourself. I’m going this weekend for the first time. I keep hearing more and more folks talking about it. It was quite the topic of conversation at last week's Arts in the Park. For more details, visit their website www.themarketumbrella.com.

Posted by:Wayne Gauthier
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May 07, 2009

Spring Lawn Care Tips

Posted to Scott Dearnley

We are well on our way to another rainy Richmond April/May. As they say, April showers bring May flowers! True… but it also brings grass that is growing like it just took a dose of steroids. You can cut your grass, blink, and it will need to be cut again. With that in mind, here are some things to think about.

The average lawn rarely needs to be watered according to most experts. Some homeowners think they have to water their lawn just because their neighbors do it. Over watering is actually bad for your grass. It creates short, weak roots that can’t survive in dry weather. It can also lead to fungus in your lawn and provides a perfect environment for root destroying grubs. Unless you have just over seeded your lawn, there is no need to water every day. If you have over seeded, just a brief sprinkle will do to keep the seed moist. When you do water, make sure you water long enough to put down the equivalent of 1 inch of rain.

If you have an irrigation system, install a rain gauge. This device collects water and shuts off your regularly scheduled waterings once a certain amount of water is collected. Nothing bothers me more than when someone’s irrigation system is running in a downpour. This will save you money and is better for the environment.

Use the correct grass. For the Richmond area, fescues are recommended. Fescues are tough, require less water, and are very drought resistant.

Mow your lawn high. Set your mower in its highest position (3-4 inches) and never think about it again. This is the single most important thing you can do for a healthy lawn. Taller grass grows deep roots that absorb water and nutrients efficiently, collect more light, and crowd out weeds. Short grass is weak and needy.

Make sure that your mower blades are sharp. Dull blades leave a jagged top on your grass which will turn brown making your grass look tired and dull. If you ever have to turn your mower on it side to clean the bottom or remove debris, turn it so the air filter side of the mover is up. Otherwise oil drains out of the filter and the mower won’t start for a while.

I hope these tips are helpful. Happy mowing!

Posted by:Scott Dearnley
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April 16, 2009

Woodland Heights - Unique Mix of Urban and Suburban

Posted to Neighborhoods, Wayne Gauthier

In Woodland Heights, on Richmond’s South Shore of the James, one can still find affordable Historic renovations of classic homes in the area. 2519 Semmes Ave and 510 W. 26th Ave are examples of the quality renovations being completed in the area. The details being brought back to these properties will astound you. We walked through these homes with the construction supervisor and admired the choice in finishes and the level of detail. With the benefit of being close to Downtown and near shopping, these homes are offering the architectural interest many are wanting along with all the features of newer homes.

Woodland Heights offers Forest Hill Park to the West and the James River Park System to the North for all the outdoor activity one may want in the area. Cross Roads Coffee, Celito Lindo, Maldini’s, O’Tooles and The Forest are just few blocks away offering a real mix of dining experiences too.

To find out more about the Woodland Heights neighborhood, click here.

Posted By: Wayne Gauthier

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April 14, 2009

First Time Home Buyers: BUY NOW Before Mortgage rates Increase

Posted to Lacy Williams, Real Estate Tips & Info

Many people are afraid to buy now because prices may drop even more than they already have. However, this may not be the best strategy. Mortgage rates are at a 40 year low. We know that as soon as the number of sales starts increasing, the mortgage rates will start to creep back up. In the graph below you will see that if we have a $200,000 loan at an interest rate of 4.5%, the monthly payment would be $1013. If prices go down by 2.55 and the interest rate goes up by only ¼%, you will be paying a higher monthly payment. If the interest rate goes up a point and prices drop 10$, You will also be paying more. The only thing that makes sense is to BUY NOW!!!!!

The total real estate commission is paid by the Seller. You don’t have to pay any of it… You get representation for Free!! So why would you not use a Buyer’s agent to represent you?

Buying a home is the most important decision you will ever make. Do you want to do it alone? Do you want to have the Seller’s agent representing you? That’s like being sued and having the lawyer of the person suing you represent you!! Or like getting a divorce and using the same lawyer that your spouse is using!!

Your real estate agent will help you through the entire Buying process in many areas.

  1. Market Knowledge – Your realtor will help you make a smart buying decision. Factors to consider include not just what you like but also factors such as:
    1. Neighborhood
    2. Price
    3. Style of home
    4. Resale value

  2. Negotiating – A professional Realtor is experienced in developing and negotiating competitive offers.

  3. Inspection – Your realtor is experienced with identifying and resolving issues with the home.

  4. Advocacy – Your Buyer’s agent will do everything he/she can to find your home and represent YOU throughout the entire process.

  5. Questions – Your realtor will answer your questions throughout the buying process.
When you go to the doctor, you hire a professional. When you file your taxes, you hire an accountant to help you. Hire a professional to help you find your first house!

Posted By: Lacy Williams

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April 06, 2009

Humidity Levels in Your Home

Posted to Real Estate Tips & Info, Scott Dearnley

Typically, the humidity in your home should be between 35-50%. It is at these levels that the average person feels the most comfortable. Keeping your home in this humidity range will help save money and will reduce your maintenance.

In the winter, the humidity in your home generally goes down as your heating system works to keep your home warm. Too little humidity and extreme dryness in your home can cause chapped skin and lips, sore throats, runny noses and even damage you furniture and cause problems with electronic equipment.

On the flip side, if your humidity is too high it can cause condensation, stains, and mold on your windows, ceilings, and walls. From a health perspective, it can trigger allergic reactions and make ongoing allergies flare up.

How do you tell what the humidity in your home is? If your home is not equipped with one, you can purchase a hygrometer at your local hardware or home improvement store for around $10-$50. Moisture can build up in your home in a number of ways. In addition to exterior humidity infiltrating your home, some humidity is created from within from cooking, showering, drying cloths, and washing dishes. Simple biological functions such as perspiring and breathing can contribute as well.

To control the humidity in your home, you can have a whole house humidifier and/or dehumidified installed directly to your existing HVAC system. For suggestions on a qualified heating and air contractor to install a system for your, please email me at scott.dearnley@joynerfineproperites.com or call me at 804-938-5277.

Posted By: Scott Dearnley

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March 30, 2009

Spring Cleaning

Posted to Real Estate Tips & Info, Scott Dearnley

Finally, winter has faded away and spring is here! I’m sure that thoughts of warmer weather, longer days, and spending time outside are on your mind. It is also time to remember to do your spring cleaning. Here are a few things to keep in mind:

  1. Windows – You can use Windex or another purchased cleaner, but a solution of warm water and vinegar works well too (mix as equal parts). Do not clean widows that are in direct sunlight. If the window is too hot, the solution will not have the proper time to dry which causes streaks. Also, when washing the inside go one direction (up and down) and when washing outside to the other direction (side to side). This way, if you do get a streak, you will know if it is on the inside or the outside.
  2. Dusting – Tip of the day… work from the top to the bottom. Dust hard to reach places like the top of the refrigerator, over the kitchen cabinets, ceiling fan blades, window and door casings, and bookshelves. Remove all books and items form the shelves and dust them as well. Don’t forget your walls. These often need a light dusting as well.
  3. Doormats – Over the winter you wiped your feet on the doormats countless times so make sure to give them a good sweeping and washing.
  4. Carpets and Upholstery – Take your sofa cushions outside and give them a good beating to get the dust out. If your carpets have any staining, rent a rug shampooer or hire a professional to give them a good steam cleaning.

I hope these tips are helpful. For more home and real estate related tips, please visit my website at www.ScottDearnley.com. Enjoy your spring!

Posted By: Scott Dearnley

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March 25, 2009

Home Related Tax Tips

Posted to Scott Dearnley

As I mentioned in a previous article, I am a CPA as well as a Realtor, so tax time has a special (or should I say “not so special”) place in my heart. Home ownership is still the source of some your biggest tax deductions each year. April 15th is getting closer by the day so here are a few deductions to make sure you take advantage of:

Mortgage Interest Deduction – The Obama administration if looking into reducing this all important deduction for families earning over $250,000 but, for the time being, this full deduction is in tact for everyone. Because mortgage payments are principally comprised of interest in the first several years, this is usually a very large reduction of your taxable income.

Property Tax Deduction – If you itemize deductions (most homeowners due because of the mortgage interest deduction), you may offset your state and local taxes against your income on your federal return.

Points Paid at Closing – If you purchased a home or refinanced your home, you may deduct any points that you paid to lower your interest rate.

If you use a professional tax preparer (I highly recommend this), he or she should pick up on these deductions. If you have a simple return and prepare it yourself, make sure you include these important deductions.

Here are a few other tax tips. If you purchased a few years ago during the boom and your home value has declined, request that your locality re-assess your property if they have not already made the appropriate adjustments in your tax assessed value. You will have to show proof of recent comparable sales in your area or provide an appraisal, but this effort could well be worth your time and effort. If you have sold a home, remember that your gains up to $250,000 if you are single and up to $500,000 for married couples are tax exempt if you have lived in the home for 3 of the past 5 years. When calculating your gain, make sure you add to your cost basis any money you have spent improving the property.

Good luck with your taxes! Hopefully, you have a LARGE return coming!

Posted By: Scott Dearnley

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March 16, 2009

Know your financial ratios?

Posted to Real Estate Tips & Info, Wayne Gauthier

In this economy, I am working with clients who are making investments in their futures by investing in their homes. Many of us hear the news that getting a mortgage is difficult. And the fact of the matter is my clients are finding it is, but they are prepared. Knowing your ratios of debt to income is essential when applying for a loan today. Underwriters review what you can reasonably afford from a statistical perspective. Think about your ratios and talk about them with your Agent or your Mortgage Lender and make sure your purchase keeps you below the guideline limits. You may find you have a much easier flow through the financing process for your new home.

Posted By: Wayne Gauthier

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March 03, 2009

American Recovery and Investment Act of 2009 - What is in it for me? How will it affect my mortgage?

Posted to Scott Dearnley

Whether you were for or against it, the $787 billion American Recovery and Investment Act of 2009 has been signed into law. Now many Americans are wondering how this will affect the housing market and their mortgage. The legislation is designed to assist two groups of homeowners:

  1. Homeowners who are current on their payments, but can not refinance into lower interest mortgages because of the decline in their home’s value.
  2. Homeowners who are at risk of loosing their home.

The Act also provides another $200 billion for Fannie Mae and Freddie Mac to purchase mortgages from financial institutions which will free them up so they may continue to lend. Here are a few examples of the provisions, and how they will assist homeowners:

First Time Homeowner Tax Credit
A tax credit of 10% of the purchase price of a home up to $8,000 is available to first time home buyers that close on the purchase of a home from January 1, 2009 to November 30, 2009. A first time buyer is defined as someone who has not owned a home in the last three years. For more information on this credit, please see the other articles that I have written regarding this specific subject.

FHA Loan Limits
This bill reinstates last year’s loan limits for FHA, Fannie Mae, and Freddie Mac loans with a maximum cap of $729,750 in high-cost areas. By reinstating these higher loan limits, mortgages in high-cost areas will be easier to obtain which will help reduce inventory and improve liquidity in the overall mortgage market.

Simplified Refinancing
Borrowers with less than 20% equity in a conforming loan (guaranteed by Fanny or Freddie) may now refinance up to 95% LTV without purchasing private mortgage insurance (PMI).

Reverse Mortgages
The new bill will raise the reverse mortgage limits to $625,000, 150% of the Freddie Mac loan limit. This will allow older Americans access to more of their home’s equity to help supplement their retirement income of offset investment losses. During the past six months, the federal government has now raised the limits on reverse mortgages twice and reduced and capped origination fees.

Neighborhood Stabilization
A $2 billion fund has been established to help neighborhoods that have been ravaged by foreclosures. These funds can be used to purchase, repair, and resell foreclosed and abandoned properties.

Low Income Housing
States will receive financing for the construction and rehabilitation of low-income housing.

Rural Housing
100% financing will be made available for rural housing loan programs.

Energy Efficiency Benefits
Tax credits for energy-efficient upgrades will be extended through 2010.

Foreclosure Protection
A $75 billion program has been developed to help homeowners “at risk of imminent default” even if they are current on their mortgage payments, as well as those who are already delinquent. It will only apply to mortgages at or below conforming loan limits.



Posted By: Scott Dearnley

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February 25, 2009

Did you move in 2008? Your expenses may be tax deductible!

Posted to Real Estate Tips & Info, Scott Dearnley

As a licensed CPA as well as a Realtor, taxes are a subject near and dear to my heart.  As you start to think about preparing for that dreaded day in mid April, you don’t want to miss any allowable deductions!

The IRS does allow tax deductions for some of the costs for JOB RELATED moves.  If you leave Maine for South Beach because of your preference for sand over snow, you are out of luck.  If the move is to accommodate a job in a new location, TWO tests must be satisfied for these costs to be deductible.

  1. Distance Test – 50 miles is the key here.  The formula is a bit hard to follow but here it goes… the distance between the old home and old work minus the distance between the old home and new work must be greater than 50 miles.   For example, if the old commute to work is 5 miles from home, the new job must be 55 miles away from your previous home in order to meet this test.  If you have to move prior to securing a job in the new location, it is a bit simpler.  The new job must be at least 50 miles from your previous home.
  2. Time Test – 39 weeks is the key here.  You must work at least 39 weeks in the general area of the new workplace during the 12 months after the move.  There are exceptions and other rules for folks who are self employed.

Congratulations.   You have passed both tests.  Now what exactly can you deduct?  Here are some examples of items that qualify:

  1. Costs of packing and moving your household items
  2. Up to 30 days storage and insurance for these items
  3. Transportation and lodging expenses (no meals)

These are the general guidelines.  By all means, if you think you qualify for these deductions, please consult your tax advisor or visit the IRS website, Publication 521, and Form 3903 for more details prior to filing your return.

Posted By: Scott Dearnley

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February 23, 2009

Richmond Area Occupancy Rate

Posted to Real Estate Tips & Info

I keep hearing from various folks that Yahoo has stated that there is a 23% vacancy rate in the Richmond area. I’m truly puzzled. Joyner Fine Properties Property Management division is in the 90% and above occupancy range for its single family and multi-family rentals. The Central VA Apartment Association just put out the numbers from its survey which shows that all responding properties are in the 90% and above occupancy rate.

Doom and gloom, from my perspective, is a bit premature.

Posted By: Cheryl Hamm

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February 19, 2009

Purchasing Investment Properties

Posted to Real Estate Tips & Info

Wow! Come March us investors will be able to purchase more than 4 investment properties – now we can consider 5-10. Yeah, BUT, there is a catch. Fannie Mae is putting some pretty stringent restrictions on the purchaser such as down payment, credit worthiness, proof of credit, two years worth of taxes and SIX MONTHS of principal, interest, taxes and insurance for the purchased property in reserve. That’s harsh, but it will probably still attract serious investors with experience. Let’s hope that this gives impetus to reducing the number of foreclosures and short sales on the market. We need to see the inventory shrink so that we can start to normalize.

Posted By: Cheryl Hamm

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February 19, 2009

Are you wondering what happened to that new listing you saw online and loved?

Posted to Real Estate Tips & Info, Wayne Gauthier

Chances are that it has already gone under contract. If the homes are in great shape and priced right, buyers are moving swiftly to take advantage of the deals.

The typical spring real estate market is gearing up earlier than expected this year. I have been out looking at a lot of properties with clients. On multiple occasions we have seen really nice looking properties come on the market and waited to see them, but haven’t been able to. They have gone under contract in less than two weeks. Several agents have even resorted to writing Escalator Clauses to try and help their clients win. So you heard that right. Some properties are going for over list price in this market.

Looking for your next home in Richmond… now is truly a great time. But be prepared. Have your pre-approval letter in place with a lender. Don’t wait to see the property because you think it will be there next weekend. If you like what you see, remember others are looking too. We are helping our Buyer and Seller clients in this market and are available to help you as well. Please give me at call at 804-377-3091 and let me help you achieve your real estate related goals this year.

Posted By: Wayne Gauthier

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February 18, 2009

First-Time Home Buyer Tax Credit - Changes to Original Program

Posted to Real Estate Tips & Info, Scott Dearnley

In 2008, a first-time home buyer tax credit was passed by the Bush Administration. Unfortunately, it did not have much of a stimulative effect on the housing market due to numerous poor provisions in the legislation. As part of the economic stimulus package (The American Recovery and Reinvestment Act of 2009) that was just passed by the Obama Administration, many changes have been made to this program. While the final bill did not have the $15,000 credit for all buyers that most people in the housing industry had wished for and was passed by the Senate, at least there are improvements to the original program.

Here is an overall look at the NEW program:

New: 10% of purchase price up to a max of $8,000 tax credit for first-time home buyers
Old: 10% of purchase price up to a max of $7,500 tax credit for first-time home buyers

New: This credit DOES NOT have to be repaid
Old: The old credit was really in interest free loan to be repaid over 15 years

New: The program is available for purchases through November 30, 2009
Old: The old program only ran through June 30, 2009

What if you purchased in 2009 prior to the enactment of this legislation?
You are safe. The bill covers purchases from January 1, 2009 through November 30, 2009.

What is the definition of purchase date?
The purchase date is the date when CLOSING occurs. Simply having a property under contract at November 30th is not good enough. It must be closed. If a purchaser contracted to have a home built, this does qualify and the purchase date is measured as the date of occupancy.

What is the definition of a first-time home buyer?
A first-time home buyer is defined as a buyer who has not owned a principal residence during the 3 year period prior to the purchase. For married taxpayers, the law tests the ownership history of both spouses. In other words, both husband and wife must each qualify.

Are there any income phase outs?
The credit begins to phase out at a modified AGI of $75,000 for an individual and $150,000 for couples and is completely phased out at $95,000 and $170,000, respectively. This is the same as the old program. No changes were made in this area.

These are just a few highlights of the bill and answers to a couple of the most frequently asked questions. For a more in depth look at this legislation, please visit www.federalhousingtaxcredit.com or call Scott Dearnley at 804-938-5277 with any questions. In addition to the Federal program described here, there is talk of a $5,000 Virginia credit on the State level. I do not know much about this at the moment, but will report on this as more information becomes available. Good luck and happy house hunting!

Posted By: Scott Dearnley

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