North Stafford Previews

I looked at 6 North Stafford homes today and found 2 gems, both convenient to Quantico if you are transferring in due to BRAC.  Good locations and clean as a whistle.  2 of the others showed well but the floor plans were not efficient and had wasted space.  Call me for a showing of these 2 outstanding homes.

Are We Entering a Seller's Market?

Good news for seller's in the North Stafford Real Estate market.  After years of declining prices and properties languishing on the market, it seems as if the market is about to turn. 

MRIS, which operates the multiple listings service for metropolitan Washington reports that active inventory on the market has declined again to 4.8 months supply.  5 to 6 months is considered normal.  There is a diminishing supply of homes for sale.  It is not uncommon for there to be multiple offers on homes in good condition listed at current prices.

Also, the National Association of Realtors reported that Washington, D. C. prices rose 4.17% last month.  Only San Jose, California had a higher percentage rise.  The North Stafford Real Estate market tracks the D. C. market closely, and whatever happens there usually happens here.

Could it be that we are about to see a turn around?  Maybe, but if a flood of foreclosures hit the market that will exert downward pressure on the market again.  I'm not going to try to predict the future, but now, in the spring of 2012, sellers may be in a better position than they have been in for quite a while.

Should You Refinance Your Home?

Interest rates continue to be at historically low levels.  Naturally this has prompted many people to consider refinancing their home.  Often it is a good idea, but there are a number of things to consider before you do.

First, how long do you plan to stay in your home?  If the answer is a year or two, then you probably would not benefit from refinancing.  There are costs associated with refinaning such as  lenders fees, title work, inspection, appraisal and other fees.  These costs are paid up front.  If you are leaving soon, you wont be there long enough to get the full benefit of lower interest rates.

Second, Do you owe more on the home than it is now worth?  If you do, good luck finding a lender to refinance your loan.  Banks have been notoriously difficult about helping homeowners who are "underwater" on their property, even when the bank stands to loose money on a foreclosure.

But if you have equity in the property and intend to stay for a while it could pay you handsomely to refinance. 

Fredericksburg Real Estate - FHA Loan Changes

This video discusses new and upcoming changes to FHA backed mortgages.

Appraisals, Assessments and Market Value

For buyers and sellers this can sometimes be a confusing subject, but once you understand the differences you will be more comfortable.

An assessment is a value placed on a property by the Commissioner of Revenue's office in each locality.  It is the dollar value that the property will be taxed on.  Some localities assess every two years, some assess yearly.  Either way, the tax rate passed by the Board of Supervisors or City Council is multiplied by the assessed value to arrive at your tax bill.  Assessments are supposed to approximate market value and often do, but market changes between assessments and lag time from assessment to assessment can mean that sometimes an assessment is out of line with the current market.

An appraisal is a value a lender places on a property.  Their purpose is to protect their investment (loan on the property).  Different types of loans have various loan to value ratios.  For example, an 80% loan to value ratio would allow a bank to loan $160,000 on a $200,000 property.  A 95% loan to value ratio would allow a $95,000 loan on a $100,000 property.  The lender wants to know that they have loaned less than the property value so if something goes wrong they have a reasonable chance of recovering their money.    

Market value is what an able and willing buyer will pay for a particular property. 

Sometimes these three things are very close in value. Sometimes they are not.  If a property is assessed for $300,000 but a bank will only loan $175,000 they both can't be right.  A person wanting to purchase this property would need to have enough cash to make up the difference in the offer price and the loan amount.  This is an extreme example intended to demonstrate the practical differences in these values and the disparity is usually nowhere near the one shown here. 

As a general rule, assessments tend to be high because local governments collect more tax money that way.  Appraisals tend to be low because lenders want the extra margin of safety.  Remember that in the final analysis, a property is worth what a willing and able buyer will pay.