richter group newsletter - june 2008

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We recently placed a home on the marketthat the owner was attempting to deed back to

his first trust lender while offering a cash settle-ment to his second trust lender. The home was

priced at exactly what the bank said it would

accept. We received multiple offers on the prop-erty and submitted each one to the two lenders.

Although we were promised a 48 hour decisionon any contract sent to them, we found that thiswas simply not the case.

We had contact persons at each institution,

but when the contracts came in, no one wouldreturn our many calls, e-mails and/or letters.The owner also called, wrote letters, and had his

attorney contact them. Still no answer.After 30 days, the purchasers withdrew their

contract as they wanted a solid purchase andcould not wait any longer. The listing was fi-nally withdrawn from the market as we received

no responses from either of the two lenders.Almost six months later the second trust lender

called and wanted to know if the buyer was stillinterested. The lender had no record of receiv-ing anything from us other than the contract.

In the mean time, the property has been va-cant since June. No maintenance or upkeep has

been done for over six months. Prices continue

to drop and our “as is” price is now the currentlist price for adjacent properties that are in good

condition and fully warranted. When will thishouse sell? It is hard to guess. Perhaps it will

go to auction and the new owner will fix it upand resell it or it will be another six months be-

fore the banks get serious about establishing policies and procedures that can quickly handleoffers that come in on properties. Until then,

we will all have declining properties in our neighborhoods, which will erode home prices.

For many, many years the traditional way toset a list price for property was to review both

neighborhood sales in the last six months andcurrent homes listed for sale. In a neighborhood

where there are different builders and multiple

floor plans, we normally looked at the taxrecord for the recorded square footage of the

house and then locate properties with similar square footage. As homes aged, we thencompared amenities such as finished basements,

updated kitchens and baths, and the age of

major home components such as furnace, roof,and AC compressor.

In today’s market, we have a new

phenomenon: short sales or foreclosures beingoffered for sale by the owner or their lender.

The pricing on these properties can range fromvery low – under market – to very high – enough net return to cover the current mortgage.

The pricing on these properties is based on whatthe owner or lender will accept, not on what the

real value of the property is. In addition, these properties are sold “as is.” That means norepairs will be done and you take the house as

you see it, which could be stripped of allinterior fixtures.

Often the home has sat vacant for six to ten

months with no maintenance or upkeep duringthat time. A recent analysis showed that several

of our local neighborhoods have as many as25% of adjoining homes for sale in the short

sale category.Today, home sellers are competing with

these drastically reduced properties. Buyers areoften afraid to buy a home “as is” because thatmeans that any repairs that need to be done are

paid for by the purchaser. Cash out of pocket isoften a problem for current home buyers.

Some banks are recognizing this problemand are offering mortgages that would cover

remodeling costs. However, banks andappraisers are under close scrutiny from thefederal government to refrain from over

inflating appraisals. To give the buyer moneyfor repairs, the bank has to insure the work isactually done and not pocketed by the buyer.

An experienced Realtor can help homesellers arrive at the correct list price and then

suggest marketing techniques to highlight thespecial features that make that property stand

out. Homes are selling when the price andcondition meet the expectations of current

buyers.

Many adjustable rate loans are due for an

adjustment in 2008 and 2009. Now is the time to

look at your old loan papers and determine what

your current rate is, the adjustment date for your

loan, and the index and margins in your loandocuments. You were given this information at

your loan closing. Here is an overview of the

terminology you’ll encounter on your loan papersCurrent Rate: The interest rate you are paying

today. Is the loan interest only or is the loan

fully amortized?

Prime Rate: The Prime Rate is controlled by

large banks and governs most equity lines, manycredit cards, and consumer loans. The Prime Rate

is 6% as of February 1, 2008.

Adjustment Date: The month and year your interest rate will be evaluated for adjustment

Index: The index on your loan determines the

interest rate when your loan adjusts. Somecommon indices are the 1 year T-Bill, 11

th

District Cost of Funds, Libor, etc. These indices

change as often as weekly.

Margin: The amount that is added to theindex to determine your rate, i.e. Index – 1 year T

Bill, current value 3.53 percent plus 2.50%

margin = 6.03% new rate.

Caps: Each loan will typically have anadjustment cap as well as a life cap. A typical

adjustment cap is 2%. Interest rates cannot rise or

fall by more that 2% per adjustment. A typical

life cap is 6% above your start rate. Therefore if

your start rate was 5%, your lifetime cap will be

11%.

If you have questions about your loan, call the

Customer Service Department of your current

lender. Start keeping track of your funds Index so

that you can decide if you should refinance or

stay with your current lender and pay the adjusted

monthly payment.

The Pat Richter Group ~ (703) 239-1234 ~ 1 (800) 455-7368 ~ www.richter1.com ~ [email protected]

THE PAT R ICHTER GROUP

Back: Nancy Ade, Amy Van Norman, Teta

Johnson, Jill James, Olga Drew. Front: Steve

Richter, Pat Richter, and Don Richter.

SPRING 2008 Volume IX, Number 1

Call

703-239-1234

Selling

Northern Virginia Area Homes

for the Past 30 Years

PRICING YOUR HOME

IN TODAY’S MARKET

DILEMMA OF A

SHORT SALE

R EFINANCING:

TODAY’S OPPORTUNITIES

Referrals are our major source

of new customers. Thank youfor referring the Pat Richter

Group when asked, “Who is

the best Realtor in the area?”



The Pat Richter Group (703) 239-1234 1 (800) 455-7368 www.richter1.com [email protected]

SPRING 2008 VOLUME IX, NUMBER 1

S O L D

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9005 Southpointe Dr.

Lorton

10629 Canterberry Rd.

Fairfax Station

Captain John Smith Ct.

Fairfax City

10819 Maple Street

Fairfax

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10451 Courthouse Dr.

Fairfax City

12602 Lake Normandy Ln.

Fairfax

12712 Kentstone Way

Fairfax

3931 Lyndhurst Dr.

Fairfax

INCREASED CLOSING COSTS BASED ON CREDIT SCORES

Some new changes have been instituted by Fannie Mae and Freddie Mac that will affect all new mortgages in our local area. Several

counties and cities in the state of Virginia as well as elsewhere have been listed as declining market areas. These are Alexandria, Arlington,Fairfax, Fairfax City, Falls Church, Loudon, Manassas, Manassas Park, Prince William, Stafford, and Fauquier. Conventional loans that

required a 5% down payment will now require 10%.

Borrowers with lower credit scores and high loan to value ratios will experience an add-on to the points as follows:

Below 620 credit score an additional 2% of the mortgage amount as closing costs

A credit score between 620-639 an additional 1.75% of the mortgage amount as closing costs

A credit score between 640-659 an additional 1.25% of the mortgage amount as closing costs

A credit score between 660-679 an additional .75% of the mortgage amount as closing costs

Buyers, it is important to determine your credit score before you buy a home so you know what your closing costs will be. Sellers, be

prepared to continue helping buyers with closing costs to offset these additional charges.

SELLER PAID GRANTORS TAX

For many years sellers have paid a one percent “Grantors Tax” when they sold their home. On January 1, 2008, this tax was increased to

5% of the sales price or assessed value of the home, whichever is higher. The additional four percent is being retained by the county/city

where the property is located as a Transportation Tax. There are some minor variations in the amount charged, so be sure to check with

your Realtor for the exact amount your jurisdiction charges.




SPRING 2008 VOLUME IX, NUMBER 1

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13504 Ellendale Dr.

Chantilly

46414 Esterbrook Cir.

Sterling

8235 Carrleigh Parkway

Springfield

8115 Winter Blue Ct.

Springfield

5703 Waters Edge Landing Ct.

Burke

10919 Carters Oak Way

Burke

5916 Cove Landing Rd.

Burke

4537 11th Street N.

Arlington

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IMPORTANT INFORMATION ON BURIED OIL TANKS

Oil furnaces were installed in many of the original homes in the Burke and Fairfax Station areas. Later many homes converted

to gas or electric heat pumps and left the oil tank in the ground or in the basement. Most of these homes were built before1970. A recent study has found that over 70% of small heating oil tanks are leaking or have leaked. The tanks were not

constructed to last over 30 years. The leaking petroleum may impact wells (for those properties with well water), storm drains,

and basements.

The owners of a property with a leaking tank are typically responsible for necessary environmental cleanup. Buyers of

properties with buried oil tanks should have the tanks properly inspected prior to purchase to insure they are not “buying” into a

problem. In addition, while the tank may not be leaking, oil may have spilled when the tank was filled over the years and the

soil around the tank could be contaminated.

The Virginia Department of Environmental Quality recognizes that leaking fuel tanks can cause significant damage to propertyand the environment. They have established the Virginia Petroleum Storage Tank Fund to provide financial assistance for

environmental cleanup. This fund will reduce owners’ out of pocket expenses for correcting the problem.

Be aware that if the tank has leaked, owners must report the leak to the VDEQ. The second regulation is the State Building/Fire

Code, which states that an underground oil tank that has been out of use for more than one year shall be removed or abandoned

according to certain specifications. Typically a County permit and inspection by the local fire marshal is required.

For more information go to www.oiltanks.net or call (800) 761-3299.



Super Service Resource CenterSuper Service Resource CenterSuper Service Resource Center


5361 Burke Center Pkwy, Suite 1

Burke, VA 22015

(703) 239-1234

(800) 455-7368

DisclaimerThis newsletter is not intended as advice on legal or tax matters.Distribution is not meant as a listing solicitation for the properties

currently listed with another broker. This is a paid advertisementand is not the expressed view or opinion of Residential PreferredProperties or The Connection Newspapers.

Is it Time to Change Property Is it Time to Change Property

Management Companies? Management Companies?Are your fellow homeowners complaining about your property

management company? Is the trash not picked up on time? Are

the HOA rules not enforced? Is there little or no oversight in

your community? Call Richter Management at (703) 503-1234

and see how an experienced property manager can make a

difference in your community.

ATTORNEY Law Offices of John F Richter, PLCJohn Richter (703) 239-0650

MORTGAGE LENDERS SunTrust Mortgage, Inc.Frank Donnelly (202) 624-1245

PROPERTY MANAGEMENT Residential Management ServicesSteve Richter (703) 503-1234 ~ e-mail: [email protected]

ASSOCIATION MANAGEMENT Richter ManagementAmy Van Norman (703) 503-1234 ~ e-mail: [email protected]

HOME STAGING Home Stage and Design Teta Johnson (703) 743-5611

R EAL ESTATE SALES The Pat Richter Group (Residential Preferred Properties)(703) 239-1234 ~ Fax (703) 239-0958e-mail: [email protected]

R EAL ESTATE EXCHANGES PTE Exchange LLCJohn Richter (703) 239-0650 ~ e-mail: [email protected]

TITLE COMPANIES Provident Title & Escrow LLC / T/A RGS Title

Burke Office: (703) 239-9600Lorton Office: (703) 495-9600Springfield Office: (703) 451-6600Chantilly Office: (703) 961-1750

Any time of the day or night, see inside all of our listings bygoing to the Pat Richter website at www.richter1.com andclicking on Virtual Tours. Not only will you see exterior photos, but you will also receive a complete guided tour of the property.

If you are buying or selling your home, think about theadvantage your home will have if buyers all over the worldcan see your home both inside and out. A Virtual Tour is a

benefit offered to all of our selling clients.

Our tours average over 707 views a week. Think of theadded exposure your listing will receive. Want to knowwhat other benefits the Pat Richter Group offers? Call ustoday at 703-239-1234.

V V V I R T

U A L T o u r

We offer a specially designed commission program for home sellers in

the Northern Virginia area. The program was designed to meet the

needs of home sellers and acknowledges the current market conditionsin the area.

Sound interesting? Here is how it works. Call us about selling your home and / or purchasing a new property. At the first meeting we will

show you our “Sweet Deal Program for 2008.” Everyone wants to

reduce the cost of selling his or her home. Our commission schedulewill save you dollars at the settlement table.

Our Sweet Deal Program

The Pat Richter Group is on the Move!

Buy or sell with The Pat Richter GroupThe Pat Richter GroupThe Pat Richter Group and

receive use of our courtesy moving truck.

richter group newsletter - june 2008

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