Buy Alexandria Real Estate: August 2007

When you are buying or selling a home in Northern Virginia, if everything goes smoothly you will find yourself at a closing or settlement table either in a lawyer's office, or more likely at a settlement or title company.  If you've followed my buyer's or seller's flowcharts, you see that the final step is the settlement.

Many Northern Virginia homebuyers and some sellers are confused about what occurs at settlement and have misconceptions of the procedures.  Some people picture a crowded room with buyers, sellers, attorneys, Realtors, mounds of paperwork,  lions, tigers, and bears, oh my!  

How long does a settlement last?  Who is involved?  Where is it held?  What paperwork is signed?  What must you bring with you to settlement?  When will the seller get the proceeds of the sale?

Real Estate Settlements in Northern Virginia

WHO?:  In Virginia, the following parties are typically together in the room at settlement:

• Seller(s)
• Buyer(s)
• Listing Real Estate Agent
• Buyer's Real Estate Agent
• Settlement Officer or Settlement Attorney

Unlike some states, it is not necessary to have your own attorney present to represent you at settlement, though if you expect major problems to arise, it may be wise to have your own counsel.  One thing to note is that the Settlement Attorney does not represent either party in a home sale transaction, but rather represents the transaction.

Many local lenders will also attend settlements with their clients to assist with any financing questions that may arise.  Especially with first-time homebuyers, I have found that the presence of a loan officer at the settlement can ease some of the buyer's anxieties. 

WHAT:  Many documents will be signed at the closing.  The buyer will have much more paperwork than the seller to sign, and usually the settlement officer will run through the seller's side of the transaction first, so that the seller can leave while the buyer finishes up their lengthy paperwork.

1. Seller's Documents:

• Deed -- seller will sign the deed which conveys the property from them to the new owners
• HUD-1 Settlement Statement -- seller signs this important document which details all of the important financial details of the sale transaction including price, closing costs, taxes and fees
• Payoff Authorizations -- seller will sign authorizations for the settlement company to payoff their mortgages from the proceeds of the sale
• Tax Forms -- seller signs IRS tax forms to report the sale for federal income tax purposes

      2. Buyer's Documents:

• Deed -- buyer signs the deed recognizing the conveyance of the property
• HUD-1 Settlement Statement -- buyer signs this document detailing the financial details of the sales transaction
• Note -- this is a document which evidences the mortgage loan
• Deed of Trust -- this document is secures payment of the loan
• Truth in Lending Statement -- lender discloses all the finance charges
• Survey -- shows all easements, property boundaries, encumbrances on the property, etc.
• Mortgage Application -- buyer signs copy of the original mortgage application ensuring no changes since application was made
• W-9 -- IRS tax form authorizing mortgage interest write-off and reporting purchase
• Termite Inspection Report -- buyer signs report detailing whether or not there were any wood-destroying insects or damage.
  

The Settlement Attorney or Officer will go through all the paperwork with both parties explain each document's purpose, answer questions, and make sure each party signs and initials where applicable.

What must you bring with you to settlement?  All parties signing documents will need their photo identification (driver's license, passport, etc.) so that the documents can be properly notarized.  The buyer must bring a cashier's check for the appropriate amount payable to the settlement company, and a seller should bring a canceled check or deposit slip so they can have their proceeds wired to their bank account.  Sellers should also bring the keys to the home which are required to be exchanged at settlement.

WHEN:  Most closings are held Monday through Friday during normal working hours from 9 a.m. to 5 p.m.  Some settlement offices will hold after hours closings, but typically you should expect to make yourself available during the weekly work hours.

The length of a settlement depends upon the complexity of the transaction and if there are any issues that need to be addressed.  However, the average residential real estate settlement lasts about an hour.

When is the money due?  When do sellers get their proceeds?  Funds for the purchaser are required to be at the settlement office for closing.  That means the money from the lender should be wired to the settlement company and the buyer brings a cashier's check for the down payment and closing costs to the table.  In Virginia, sellers do not get their proceeds immediately at the closing table.  This is different from some other states.  In Virginia, the deed must first be recorded at the courthouse which does not happen until after settlement.  In addition, Virginia's Wet Settlement Act provides that the settlement must disburse fund to the proper parties within two business days after all the funds are collected and deposited in the settlement company's trust account. 

WHERE:  Settlements are held either in a settlement attorney's office or at a settlement or title company.  With special arrangement, some settlements can be held at the home or other location with a traveling settlement agent.

95% of real estate transactions go very smoothly and everybody shakes hands at the settlement table.

To start your journey towards buying or selling a home and ensuring a smooth settlement, call Brian Block at 703-626-0715 or contact me by e-mail.

Summer is a lovely time in the Cameron Station community in Alexandria where ice cream socials are held at the main gazebo, children are playing baseball on the fields at Ben Brenman Park, and homeowners are out walking their dogs around the neighborhood.  Add to that the Cameron Station pool, blooming gardens, and a stop for an iced mocha at Cameron Perks coffee shop and it's a recipe for a relaxing summer weekend.

Update on Available Cameron Station Real Estate 

As of the end of August 2007, there are 40 homes on the market in Cameron Station ranging in price from $305,000 for a 1 bedroom 1 bath condo on Brenman Park Drive (known as "Main Street") to $1,099,900 for a 5 bedroom 4 bathroom single family home on Cameron Station Boulevard.  

The average listing price of currently available Cameron Station homes is $560,528.

Of the homes on the market, there are 17 condominiums, 22 townhouses, and 1 single family home.

Cameron Station Sales -- Last 30 days 

There have been 7 home sales closed in the last 30 days from July 29th through August 28th at an average sales price of $624,083.  These sales happened extremely quickly at an average of only 14 days on the market!

Additionally, there are 21 homes in Cameron Station that are currently under contract and pending sale.

Here are the homes that have sold in the past 30 days:

CLICK HERE TO SEARCH FOR A HOME IN CAMERON STATION

You never expect it to hit you!

Saturday night around 9:30 p.m., my condo building Alexandria Knolls West in Alexandria, Virginia was struck by lightning.  The lightning struck the roof and started a fire.  The smoke went down through the elevator shafts causing much of the hallways in the building to fill with smoke.  The fire and lightning shock destroyed an major electrical panel on the 8th floor causing it to explode through the wall and causing severe damage to a unit on the 8th floor of the 18 floor building.  The residents of the building were evacuated and not let back into the building until after midnight.  Many stayed in area hotels or with friends and relatives.  Several people including 6 firefighters were brought to the hospital for smoke inhalation problems.  Thankfully, nobody was seriously injured and everyone was able to exit the building.  Read more about the Alexandria Knolls condo fire.

Fortunately, I was out of town on a camping and whitewater rafting trip.  Unfortunately, my wife was not.  She was in the building when the lightning hit.  We live on the 16th floor and she said that the noise when the lightning hit was as if it were a bomb exploding.  Thankfully, we live right next to the building stairway and she was able to exit without too much hassle, though she did complain about a slight amount of smoke inhalation and coughing, but was able to go about her evening and spent the night at her parent's house down by Mount Vernon, just 20 minutes away from our home.

I returned home yesterday around 2 p.m.  The electricity was back on, but the building still smelled of smoke, the elevators were not functioning (that's a problem when you live on 16 and it's 90 degrees), no air conditioning, and no hot water. 

To top things off, I have two condo units in the building going to settlement this week.  One is my listing on the 1st floor and the other is a unit on the 4th floor where I am representing the buyer.  Neither unit suffered any damage, and I've called both buyers to make sure the deals are still on (surprisingly neither of them had seen the news).

While leaving the building yesterday afternoon to head down to my in-laws house for the night, I was interviewed by Fox Channel 5 regarding the Alexandria Knolls condo fire. 

Thank goodness Alexandria Knolls West is a very well constructed concrete building.  People are working around the clock to get the building back into working order.  I understand that the elevators should be functioning by this evening.  Fans have been placed around the building to get rid of the smoke odors.

Alexandria Knolls West is a great building in the West End of Alexandria and a terrific place to live.  The most important thing is that nobody was seriously injured.  Thank God! 

An often overlooked factor in determining pricing of homes for sale is to examine expired listings, or the homes that have NOT sold during a particular period in a certain area.  Analyzing the homes that have not sold can be an important step in pricing your home for sale properly.

Why don’t homes sell?  In Northern Virginia, as elsewhere around the state and the country, most homes that do not sell were overpriced from the start.  As a home spends more and more time languishing on the market, sellers eventually reduce the price, but oftentimes in vain, as they are lagging behind the market instead of catching the crest of the pricing wave.  (See my article on this topic: “We can always reduce the price later” – Price Reductions are NOT A GOOD MARKETING PLAN for Northern Virginia Homes).

Alexandria, Virginia Homes that did NOT sell August 13^th – August 20^th

To illustrate this issue, I compiled a brief case study analysis of the homes in Alexandria, Virginia that expired from the Multiple Listing Service unsold during the past week.

7 Alexandria home listings expired in the last week and have not been re-listed:

Here’s a look at the pricing history of each and a comparison to those that actually sold in the same areas:

• 5927 Quantrell Avenue:  Listed on May 10 for $213,900.  No price reductions.  3 comparable units are on the market and 2 under contract at an average list price of $204,980.  OVERPRICED
  
  
• 412 Armistead Street #T-3: Listed June 15.  Short sale auction listing.  Auction was scheduled for July 10.  Listing expired on August 18.  3 comparable units have sold since June for an average sales price of $261,667.  While this particular unit was priced lower, it should have been significantly lower to attract more attention for the auction.  When I listed a property for auction last summer, we advertised the auction with a starting bid about $100,000 under the comparable sales and ended up selling for quite a bit above asking price a week after auction.  This unit was OVERPRICED FOR AUCTION.  Auction attendees expect a deal.
  
  
• 307 Yoakum Parkway #215: Listed April 14 at $287,900 reduced to $278,900 on June 4, expired on August 14.  Average price of 2 comparable sales during same time period was $254,000.  Price reductions never caught up with the market.  OVERPRICED
  
  
• 6300 Stevenson Avenue #515:  Listed May 10 for $284,900 with no price reductions.  6 units sold in this building since May at an average sales price of $260,083.  OVERPRICED
  
  
• 3519 Valley Drive #709:  Listed on June 24 for $364,999, reduced July 11 to $354,000 and again on August 9 to $340,000 before expiring.  The 16 comparable sales from June through today sold for $339,700.  This property was reduced almost to market price, but too late.  TOO LITTLE TOO LATE.  PRICE REDUCTIONS DID NOT WORK.
  
  
• 1610 Suter Street:  Listed on October 8, 2006 for $479,500 reduced on November 20, 2006 to $469,500.  Expired on April 1, 2007.  Re-listed April 19 at $449,900, reduced July 23 to $439,950, and again to $419,950 on August 13.  The 3 comparable homes sold during this period averaged $447,667.  Price reductions were too far behind the market.  PRICE REDUCTIONS COULD NOT SAVE THIS SALE
  
  
• 4529 Peacock Avenue: Listed on February 15 for $675,000, reduced to $665,000 on March 4, $650,000 on April 27, expired on June 16.  Re-listed for $600,000 on June 21 and expired on August 16.  5 comparable homes sold during this time with average price of $561,5000.  OVERPRICED AND NOT REDUCED ENOUGH

Conclusion

A proper pricing analysis, known as a comparative market analysis (CMA) should include information on the comparable properties that have sold, are under contract, active on the market, AND those homes that have NOT SOLD.  In all of the above examples, other comparable homes sold during the same time periods in the same areas.  Proper pricing of your home is key from the beginning.

Contact Brian Block for more information on what has not sold lately in your neighborhood or click here for a preliminary e-mail CMA.

Condo living is a necessity for some who cannot afford the higher priced townhouse and single family homes in Northern Virginia.  However, for many Alexandria residents, condominiums are the home of choice, with the appeal of low maintenance and easy access to public transportation, shopping and restaurants.  The most popular areas for condos in Alexandria are in Old Town Alexandria and in the West End "Condo Canyon."  

Condos are scattered throughout the City of Alexandria in garden style, mid-rise, and high-rise buildings. 

How much do condos in Alexandria cost? 

In July 2007, there were 103 sales of condos in Alexandria at an overall average price of $327,745.

Of the 453 condos currently on the market, there are:

• 145 one bedroom condos at an average listing price of $264,494
  
  
• 254 two bedroom condos at an average listing price of $359,984
  
  
• 55 three bedroom condos at an average listing price of $490,374
  

Here is a detailed cost summary of the asking prices for the most popular condominiums in Alexandria broken down by number of bedrooms and style:

Garden Style Condos (1-4 floors):

Mid-Rise Condos (5-8 floors):

High-Rise Condos (9+ floors):

FIND AN ALEXANDRIA CONDO TODAY.

INFORMATION ON AVERAGE ALEXANDRIA CONDO FEES

To the uninitiated, the homebuying process can seem daunting.  For first time homebuyers, it can be like learning a whole new language: what's PITI? (principal, interest, taxes, and insurance)  How about an ARM? (adjustable rate mortgage), what does DOM mean? (days on market).  People living in the Washington D.C. area with the abundance of government employees and military may be used to acronyms and abbreviations, but real estate truly has many of its own.

Even those who have bought and sold homes before may not remember all of the steps in the sometimes lengthy process.

To make things easier, I have created a graphical representation of the home buying process which I explain thoroughly to all of my clients at our initial meeting.  My wife loves flowcharts and I think it helps to explain the process in an sequential, organized fashion.  I've known many of my clients to take this flowchart and post it up on their fridge so they can follow along as they move down the path to purchasing a home.

SEARCH FOR A HOME IN NORTHERN VIRGINIA OR D.C.

To discuss your home search, give me a call at 703-626-0715 and I'll help you move along the flowchart towards finding and purchasing your new home. 

One of the most frequent questions that I get from clients is whether sellers are willing to contribute towards closing costs.  I recently wrote an article with a detailed breakdown of purchaser's closing costs in Virginia.  Depending on several variables including lender's fees, location of the sale, price of the property, and settlement service provider, closing costs can amount to 2-3% of the final sales price.

To a homebuyer who is scrounging up every last dollar to pay for a down payment, moving costs, new furniture, etc., learning that they have to come up with extra cash for closing costs often comes as a shock to their wallets.  Several years ago at the height of the seller's market, it was almost sacreligious to expect sellers to contribute anything towards a purchaser's closing costs.  For cash strapped buyers, every bit of help from the home seller makes it easier for the buyer to purchase the home.  And for motivated sellers, offering to contribute to a purchaser's closing costs can facilitate a faster sale and open the property up to more potential buyers.

So the question remains, "Can a Homebuyer Get Sellers to Pay Closing Costs in Today's Northern Virginia Market?" 

My attorney background and legal training teaches me to answer every question like this with the answer:

It Depends. 

Depends on what?  It depends on a seller's motivation to sell their property, how long the property has been on the market, how much money a seller is making on the deal, but most of all it depends upon the price range of the sale. 

To answer this question, I performed a thorough analysis of the seller subsidies recorded for all the home sales in Alexandria for July 2007.

Closing Cost Analysis 

I divided up the sales into three price categories:  1) Under $400,000;  2) $400,000 to $750,000; and 3) $750,000 and up.

Under $400,000

In July 2007, there were 93 sales with an average sales price of $290,342.  In 67 out of 93 of these transactions, or 72%, the seller contributing something towards the purchaser's costs.  The average subsidy was $4,672 representing a 1.6% seller contribution.  

$400,000 to $750,000

92 sales with an average sales price of $549,647.  41 out of 92 transactions, or 42% involved a seller subsidy.  The average subsidy was $3,306 representing a 0.6% seller contribution.

$750,000 and above

Of the 28 sales averaging $1,040,257, only 5, or 18%, had any subsidy at all.  The average subsidy was only $813 representing a negligible seller contribution.

Lower Price Range Closing Cost Analysis

After seeing these figures, I further subdivided the lower priced category into three sub-categories: 1) $100K-$200K; 2) $200K-$300K; and 3) $300K-$400K.

$100,000 to $200,000 

9 sales with average price of $173,072.  7 out of 9 (78%) involved seller subsidy averaging $3,722 or 2.15% seller contribution. 

$200,000 to $300,000

37 property sales with average price of $252,205.  30 (81%) involved seller subsidy averaging $5,209 or 2.09% seller contribution. 

$300,000 to $400,000

47 sales at average price of $342,727.  30 (64%) involved seller subsidy averaging $4,244 or 1.23% seller contribution. 

CONCLUSIONS: 

If you are buying a home in Northern Virginia in the under $400,000 price range, chances are high that the seller will contribute something towards your closing costs, sometimes even paying all the closing costs to get the home sold.  In the middle price ranges, seller contributions still exist but are not as common and much smaller.  Seller contributions to closing costs are phased out almost completely in the upper price ranges. 

This study confirms the reality that most purchasers in the upper price ranges will not need to ask for seller contributions in order to purchase the home because they will often have quite enough cash to complete the sale without the assistance.  First time buyers and those buying in lower price ranges will be those most likely to require closing cost help from sellers and those most likely to receive it.

Overall, 53% of Alexandria home sales in July had some form of seller subsidy.

My advice for Northern Virginia homebuyers in this market is to ask for some closing cost help from sellers -- it's a negotiating item, you never know what you will get or what the seller's motivations are, and if you don't ask, you won't receive. 

Looking for fresh produce and fun?  Why not visit one of the many local Farmers Markets held in Arlington or Alexandria!

Usually thought to be territory for those early-risers on the weekend, there are actually local farmers markets that have extended morning hours and even afternoon hours and during the week as well.  You can usually get some of the best fruits and vegetables as well as some crafts at the Farmers Markets and get to spend some time outdoors.  Many of the farmers drive several hours to participate in the market, and it is important to support our local farmers.

Here is information on the locations and times for some of the more popular Farmers Markets:

ARLINGTON, VIRGINIA FARMERS MARKETS:

Rosslyn Farmers Market: Thursdays from 11 a.m. to 3 p.m.  Located at Metro Park, between North Moore and North Lynn Streets.  Includes fruit, herbs, baked goods, vegetables, and jams and jellies. Call 703-228-1850 for more information.

Ballston Farmers Market:  Fridays from 11 a.m. to 3 p.m.  Located at Welburn Square at Wilson Boulevard and Taylor Street.  Includes cooking demonstrations, live music, organic produce, chickens and eggs, apple products, homemade fruit pies and pesto.  Call 703-528-3527 for more information.

Arlington Farmers Market: Saturdays from 9 a.m. to noon.  Located at North Courthouse Road between North 14th and North Uhle Streets.  Includes meat, dairy products, fruit, vegetables, bread, mushrooms and honey.  Call 703-228-6423 or www.arlingtonfarmersmarket.com for more information. 

Columbia Pike Farmers Market: Sundays from 9 a.m. to 1 p.m.  Located at Columbia Pike and South Walter Reed Drive.  Includes fruit, vegetables, plants, baked goods, jams, meat, dairy products, coffee and more.  Call 703-892-2776 for more information. 

ALEXANDRIA, VIRGINIA FARMERS MARKETS:

Alexandria Farmers Market: Saturdays from 5:30 to 10:30 a.m. (for those early risers).  Located at Market Square, 301 King Street in Old Town Alexandria.  Includes meat, dairy products, fish, fruit and vegetables.  Call 703-838-5006 for more information. 

West End Farmers' Market:  Sundays for rest of summer from 9 a.m. to 2 p.m.  Located in the parking lot of Ben Brenman Park (at the end of Somerville Dr. near the railroad tracks) adjacent to Cameron Station. 

Can't make it to the Farmers Market? 

For good produce, try shopping at the Whole Foods Market in Old Town Alexandria or the one in Clarendon.  Also good are the local Harris Teeter Supermarkets in Alexandria and Arlington.

LOOKING FOR A HOME IN ARLINGTON OR ALEXANDRIA?

Old Town Alexandria is one of the most popular areas in Alexandria City for homebuyers.  Occupying zip code 22314, Old Town's charms include the Potomac River, the Torpedo Factory Art Galleries (inside of what was once an actual torpedo factory), and the many great restaurants, boutique shops, historic homes, and businesses which make Alexandria a local center of activity.  

The Washington Post reports on "A New Look Of Prosperity in Old Town". Among other things, the article states that:

    "The city is preparing to unveil a set of banners that will help give the area a more unified feel"

    "More than 36 restaurants have opened outdoor seating in the past three years, adding to the area's foot traffic on warm evenings" 

    "Several retailers have set up shop, including Old Original Bookbinder's seafood restaurant, Bruegger's Bagels, Conrad's Furniture Gallery and Diva, a designer consignment shop in a Victorian house on South Pitt Street" 

The article reports that the opening of the National Harbor convention and hotel center across the Potomac River is expected to bring an additional 500 to 1,000 tourists to Old Town each day, and retailers and residents are gearing up.

Old Town Alexandria Home Sales:

If home sales in Old Town Alexandria provide any indication, things are definitely moving upwards.

In recent MRIS statistics, home sales in Old Town Alexandria totaled 68 for July 2007, holding steady from the 69 units sold in June and a 21% increase from the 56 sold in July 2006.

Sales prices are also significantly up from the prior month.  The average sales price in July 2007 was $617,302, more than $35K higher than the average June sales price of $581,422.

Here's a chart comparing July 2007 and June 2007 sales data in Old Town Alexandria:

Homes in Old Town are taking slightly longer to sell, and buyers are able to negotiate better deals on these properties, but overall sales are up as well as prices.

Old Town Alexandria Homes on the Market:

There are currently 239 homes on the market in Old Town Alexandria ranging in price from $182,000 to $3.9 million with an average listing price of $754,820.

In love with the "Old World" charm of Old Town Alexandria?  Try one of these on for size:

6 homes on the market in Old Town Alexandria are 200 or more years old.  The oldest house currently for sale is at 215 Royal Street (just a block away from our Old Town Alexandria RE/MAX Allegiance office).  It was built in 1760 and is 247 years old -- currently listed for sale for $1,295,000.  Authentic Old Town!

On the other hand, do you want to live in the Old Town vicinity but have the pleasures of a brand new home?  There are several still under construction at the popular Potomac Greens neighborhood. 

CLICK HERE TO START YOUR SEARCH FOR AN OLD TOWN ALEXANDRIA HOME 

Whether it is because people are on vacation or it's just too hot to be out searching for homes, the number of homes sold in Alexandria in the month of July slipped from previous months.

Total sales in Alexandria for July were 192 homes.

This is down from 238 in June, 220 in May, and 207 in April.

Single Family Homes:

27 single family homes sold in Alexandria in July 2007 at an average price of $838,437.

This is almost a 50% reduction in sales from the prior month of June when 52  single family homes sold at an average sales price of $858,151.

The most active Alexandria neighborhood for single family home sales in July was Beverley Hills.

Currently there are 130 single family homes on the market in Alexandria representing a 4.8 month inventory at July's sales pace.

Condominiums: 

92 condos sold in Alexandria in the month of July at an average sales price of $322,035.  

This represents just a slight decrease from June when 105 condominiums sold in Alexandria at an average price of $323,823.  So not much change in price month to month.

The most active Alexandria neighborhood for condo sales in July was Park Fairfax where 10 condos went to settlement during the month.

Currently there are 461 condos on the market in Alexandria, a 5 month supply at the current sales pace.

Townhouses: 

This is the one area of sales in Alexandria where prices are up and inventory is very tight.

72 townhouses sold In Alexandria in July at an average sales price of $604,143.  The number of sales is slightly down from June's 83 sales, but the average price is up $30K from June's average of $574,943.

The most active condominium sales areas in Alexandria for July were Cameron Station and Old Town Alexandria, with 7 and 10 townhome sales respectively.

Currently there are 214 Alexandria townhouses on the market, reflecting a tight supply of only 2.97 months inventory.

FIND YOUR HOME IN ALEXANDRIA