Author: krasihenkel

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Touring a new home subdivision with beautifully decorated model homes is exciting. Walking a vacant lot and imagining your home built on it is exhilarating. Not having to overbid, or hold your breath if your offer is accepted on a resale house can make the home-buying experience less stressful.

With low housing resale inventory, many buyers are turning to builders of new homes. But between falling in love with that magnificent model home and signing a contract, buyers should know these eight critical things:

  1. Research the builder’s reputation.
    Is this a builder who has a good reputation of delivering homes to many satisfied buyers? How are their reviews? Are there any lawsuits pending against them? 

  2. Does the neighborhood have an HOA?
    Is the house you are considering located in an existing HOA or Condo Association or will it be a brand new HOA? Who controls the HOA? Often the builder controls it until all lots are sold. Be sure to get a copy of the HOA/Condo Documents and review them carefully. Most jurisdictions provide for contract rescission within 3-5 days if for any reason the documents are unacceptable to the buyer.

  3. Understand the purpose of the deposit.
    While an earnest money deposit is made with a resale purchase contract, not all new home contracts take an “earnest money deposit.” Builders take a deposit. Some builders do not consider it an earnest money deposit, but a direct deposit toward the construction of the house, therefore it will be deposited in the builder’s operating account rather than in an escrow account.

  4. Are incentives offered by the builder?
    In certain situations, builders will offer free upgrades and/or closing cost assistance to the buyer. Be sure that you understand exactly what is being offered and that it is in writing with the exact terms represented by the builder’s representative. As in all real estate agreements, to be enforceable, terms, conditions, and promises must be in writing.

  5. What does the buyer have to do to qualify for those incentives?
    “Free recreation room” or “$10,000 in closing costs” or “Free Kitchen Upgrade” and many more iterations can be offered. Upgrades and closing costs are certainly appealing. What will be required of the buyer to qualify for the incentive(s)?

    Will the builder insist that the buyer finance with their lender and/or their title company? What is the actual cost of that requirement? Sometimes, the actual “cost” of the incentives exceed the benefit of the incentive. It is important to understand all costs and fees.

  6. What warranties and post-settlement services are included?
    In Virginia, a builder must warranty their construction for 12 months after settlement. Many builders offer 10 year warranties, 2-10 warranties, and/or pass on equipment warranties. All warranties are not the same. One question to ask is whether drywall imperfections post-closing are covered. Some builders will only correct drywall imperfections identified during the pre-settlement walk-through. Others will warrant drywall for extended periods.

    Will a list of the trades be available for ease of service, or must repairs/service be channeled through a central division of the builder? Is there a response timeframe? Be sure that all warranty questions are answered and verified in writing.

  7. Review the contract…then review it again.
    The builder’s contract has been written by their attorneys to be in their favor. Aside from contingencies specifically written into the contract, once the contract has been signed by all parties, it is an enforceable contract. The buyer should expect that they will settle on the sale. Before signing the contract, be sure that all terms are written as represented, all questions have been answered, and that you are prepared to move forward with the project. Know when (if) additional deposit(s) are due. Be prepared to attend inspections and builder meetings when they are called. While most builders want to be flexible, to be able to deliver a new home, schedules must be respected. Be sure to leave the contract signing meeting with a complete contract including all schedules and selections (to that point – more will be needed later).

  8. The model home decoration, appointments, & upgrades are for display purposes only.
    Your new house will come with plain walls, no window coverings, tiny landscape plants, and grass that you will have to water to establish.

    Depending on the builder, design choices can be included in the contract price. Design options can include flooring, shade/blinds, appliance upgrades, tile, counters and cabinets, faucets, sinks, lighting, and other options as available.

With many choices, state of the art equipment, and everything bright and shiny, it is easy to begin to believe that each option is indispensable. Be careful to keep within your budget and your lender qualification. Once options are selected and ordered, making changes can become very costly.

Contracting for a home to be built can be exciting and rewarding, and can result in the house of your dreams. Done incorrectly, the process can become a nightmare. It is for the above and countless other reasons that having an experienced Realtor representing your interests can save you money and sanity.

At Properties on the Potomac, Inc. we have been helping our clients select and design beautiful new homes for more than 35 years. We know the builders, the lenders, the incentives, the warranties, and most builders’ process. We know where to look and the questions to ask.

Is a newly built house in your future? Take the first step and give us a call: 703-624-8333.

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“My house is the red brick one . . .”

Red brick is distinctive. It has commanded attention over the centuries and does not disappoint today. The Victorian red brick house dates back to the 1870s and was typically a sign of wealth among homeowners, as yellow bricks were far less expensive.

The Empire State building, completed in 1931, is faced with 10 million red bricks. At the time of its opening, it was the tallest building in the world. Why the choice of red brick instead of some other color?

All bricks are not alike. Bricks are classified by color, class, size, and purpose of use. The bricks used to face residences are typically “First Class Bricks.” These bricks are thoroughly burnt, and are copper, dark red, or cherry in color. The bricks should be free of cracks, flaws, or stones. Their texture must be uniform and not be able to be scratched or dented by a fingernail. When two bricks are struck together, they should have a metallic ring. They should not absorb water and lime must not be visible in a brick fracture.

Bricks are made of clay and earthen components. The clay or material used affects the color and class of the bricks. Additionally, the length of time of “firing” affects the color. Extra burning makes a browner brick. Red bricks have to be made “just right” to optimize color and important features.

Because of the careful process needed to create the red bricks, the cost increases accordingly. Lighter colored bricks will have sand or even cement in their mix. Sand based bricks are more porous, thus less water resistant. Those bricks require sealing to remediate water absorption. There was a building in Washington, D.C. constructed with a very attractive red brick façade. Its sides and back were covered with yellow brick. If heavy rains hit from a particular direction, the interior walls of that building became damp. The walls behind the red bricks of the façade remained dry.

In short: the color of brick chosen for a home makes a statement. With today’s technology in brick manufacturing, more colors are available that qualify as first class. And while red brick may no longer be considered prestigious, a red brick house typically sells faster (subject to many other criteria) than a lighter colored brick, or homes clad in other materials.

Looking for your perfect red brick home? Call or text us at 703-624-8333.

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The houses may look the same. The lots may all be the same size. In some communities, there may not be a lot differentiating one house from the next, at least not externally. But living on a cul-de-sac is different. A cul-de-sac adds value. And when it comes time to sell, houses in a cul-de-sac have the upper hand over their non-cul-de-sac neighbors. Here’s why:

  1. Instant community
    For a new buyer, living on a cul-de-sac means it might be easier to get to know your neighbors. It is often easier to share a refreshment, make introductions, and, maybe, find common ground.
  2. Security
    Quite literally, being at the end of the road makes it difficult for cars to speed past your home. It’s safer to walk and to congregate outside. Children can play, ride their bikes, skate, or play ball, while the windows of 3-4 homes overlook the area.
  3. Social activity
    On warm summer evenings, it is not unusual to see neighbors enjoying a beverage together on the cul-de-sac where children have played most of the day. It is a great place to invite children and adults alike to get away from screens and get some fresh air and human interaction.
  4. Relaxing environment
    Without having cars driving past your front yard, the noise and level of activity is greatly diminished. Relaxation comes with an absence of movement and noise. Yes, children might laugh and shout, but these are the happy sounds of life – not the road noise and speed of business life.
  5. It is a throwback to earlier times of children playing outdoors
    The cul-de-sac is where children of all ages can play together. It is heartwarming to see the older kids teaching the younger ones to shoot a basket in a hoop or to learn to ride a bicycle. It frees up parents to relax without managing children’s every activity. It stimulates sociability and friendship and expands energy for a good night’s sleep. “It is one of the last remaining ways to give children an old-fashioned childhood,” says Patricia Shannon of Southern Living magazine.

While there are exceptions to all of these, my 37 years of serving clients has proven that cul-de-sacs are a great place for building friendships, relaxing, and hours of safe play for children. Historically, homes on cul-de-sacs command higher resale values. Why? Limited supply with greater demand (as listed above) boost value. The cul-de-sac is a special place.

Is a new home on your list for this year? We know where the cul-de-sacs are. Call or text us at 703-624-8333 to help you find the perfect setting.

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“We plan to list in spring.”

Most people believe that selling their homes in spring (after March 21) is the best time. However, that is not real estate’s “spring” market.

Real Estate in no longer just regional, but national and even global. What happens in one area affects many others. Our properties in the Washington, D.C. Metro area are affected accordingly. Making decisions that affect one of your largest assets must be made with all of the best possible information. With this in mind, below are the five reasons to consider listing your property for sale now:

  1. We are not in last year’s market. There are no guarantees of unlimited buyers.
  2. The economy and corresponding interest rates are volatile.  
  3. In our decades of professional experience, the BEST time to sell is January, February, and March.
  4. Buyers have been planning their moves before the holidays and purchase after the holidays.
  5. Because most people count on the later market, the serious buyers have already made their decisions and purchased; leaving the inventory of listings to increase while the pool of buyers declines.

An example is from the post-2007 recession market: a client was being relocated to another state. They had to sell their home. We recommended listing it in February. After completing their presale activities, we put the house on the market in February. The first three groups who toured the house made competitive offers. Our clients made their move according to their best plans. Several months later, their neighbors listed their house for sale. Their house remained on the market for considerably longer than our clients’ property; selling with a single offer for slightly below my clients’ price.

In volatile markets such as this, delays can be costly.

If you are planning to sell your property this year, please contact us today so that we can help you make your best plans. Call or text us at 703-624-8333.

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Here we are – the beginning of 2023 ! You have been waiting to make decisions and commitments until the holidays are over. Now what?

If you are thinking of moving – up, down, around, or away – here are a few tips to help you structure your activities:

  • Decided whether you want to sell or keep your current real estate. Either way, consult a competent real estate broker. The possibilities are endless and your investment and risk are huge. Be selfish and work with the best (that would be us – read our website and see for yourself).
  • If you plan to sell, list long before you want to go on the market. That way pre-marketing excitement can bring the best buyer.
  • Go through all the nooks and crannies of your home (that includes closest that you often use). Start with all off-season belongings first. Decide whether you will keep, toss, or donate.
  • If you have a home of 2000+ Square Feet, know that it will take you several weeks to complete the culling and packing.
  • Be smart and not impulsive. There are many garments and things, that due to the current circumstances ,have remained unworn or unused. Do not throw away anything on a whim. It doesn’t matter if it makes you happy if you will need it later. You will buy it back for more money and of lesser quality. Keep your stuff. Your happiness will compound with lower bills. Be a good steward.
  • Do not make capital investments in your current home unless it will be a coat of paint and some flooring. Keep it simple. Do not replace appliances with stainless steel.
  • Chose a smart real estate agent who knows what sells and what brings in the most return for your investment. – Again, that would be us – not bragging, just the facts.
  • In 2022, our listings sold for 105% of list price and our buyers paid 95.5% of list price. How is that? Ask us.
  • We’ll be happy to show you how you can benefit from our 35 years of experience in all sorts of markets.

Looking to make a move in 2023? Give Properties on the Potomac a call at 703-624-8333!

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Should You Invest in Real Estate? Shakespeare Did!

Shakespeare’s Birthplace in Startford upon Avon. When he inherited this property, he developed it
as “mixed use” – residential, commercial, and a pub.

William Shakespeare penned the famous words for his play, Hamlet, sometime between 1599 and 1601. He was already a successful poet and playwright because in May 1597, he purchased the 107-year-old “New Place” to be the home for his wife, Anne, their daughter Susanna, and twins, Hamnet and Judith. He was 33 years old when he purchased the enormous 20+ room house with five gables, two orchards, and two gardens.

Shakespeare purchased New Place, the second largest real estate holding in Stratford upon Avon

In 1601, Shakespeare inherited his parents’ house, his “birthplace.” He enhanced and added on to it and turned part of it into an income producing pub.

In 1602 he purchased 107 acres of land from which he received handsome rental returns. Stanley Wells, professor and editor of the Oxford Shakespeare, is quoted in an April 18, 2014 Financial Times article by Annie Maccoby Berglof, “He bought New Place; a lot of land in 1604; a cottage in Cottage Lane. For much of his life, he was investing in property,”

In Shakespeare’s society, using “other people’s money” was well accepted. He used a mortgage with which to buy the Blackfriars Gate House in 1613.

In addition to being a savvy real estate investor, Shakespeare invested in other profitable ventures as well as in his performance and theater companies.

To recap, for most of his professional life, Shakespeare invested and acquired real estate. He made his initial capital from acting and writing plays. Then he diversified.

“Money buys lands, and wives are sold by fate.” Merry Wives of Windsor, Act V Scene 5


Why does this matter and how does this translate to our lives today?

Mark Twain and/or Will Rogers are credited for saying, “Buy land. They are not making any more of it.”

Did you know that more than 90% of today’s wealthiest people made their fortunes in real estate?

You can enjoy tremendous benefits by investing in real estate –

  1. Appreciation
  2. Favorable tax treatment
  3. Leverage
  4. Borrow more through refinance
  5. Others repay your principle
  6. Income
  7. Land always has value

There is nothing new under the sun in 425 years!  Should you consider diversifying and adding real estate to your portfolio?

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Dear Friends:

This is a message written just for you because we care about your future and your economic welfare.

As most of you know, I am not a spring chicken and I have been a student of real estate markets since 1963 (no, I’m not that old, but that experienced). Markets have come and gone and for the most part, my clients who worked with me have done well regardless of market conditions. For better or worse, based on the data that I use (not from biased associations or the media), I have been able to accurately anticipate the 1989 and 2006/7 market declines and the 1996 and 2013 market recoveries.

The recent world events have opened a Pandora’s box of potential economic fallout. Your real estate is a major part of your economic portfolio. To put this matter in perspective, prior economic downturns were national with some international repercussions. Today’s situation is global.

What does this mean for your real estate?

  1. Today IS 2007 (the peak of that market). Property values might be at their peak.
  2. There are over 2 million mortgages in forbearance now.
  3. If you have been thinking about selling your property THIS might be your best opportunity – why?
    • There is a scarcity of inventory (available properties),
    • Interest rates are very low,
    • Buyers still want to buy,
    • Many agents lack the experience to anticipate economic events with which to advice their buyers,
    • Putting your sale proceeds in the bank (or wherever you like to put it) puts you in a brilliant cash position. Why is that a good thing?
      • If, as I expect, property prices decline, you will buy much more for less, and
      • You will be helping a seller get out of trouble.

We cannot predict the future but can use past experience as an indicator.

The point of this message – If you are thinking of moving up,  down, or around – now might be your best opportunity.

If you want to discuss this matter in greater depth, please reach out to me.

Wishing you good health, prosperity, and a minimum of inconvenience.

Krasi

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Have you decided that 2020 will be the year that you upgrade or change your residence?

If you are like most people, you plan to put your house on the market in the “spring.” Spring begins on March 19 this year. This makes sense since winter weather is unpredictable. Who would looks at houses in bad weather?

Because I have been actively involved in the Metro real estate market since 1986,  a curious phenomenon takes place in the winter – houses sell, quickly. In fact, inventory that had not sold the prior summer and autumn sell in January and February. along with the new listings. Another interesting observation is that houses that listed for sale in April and onward, took longer to sell.

Since properties sell in January, February, and March,  this also means that some of the best properties will also sell before “spring.”

While this might seem soon, if you are serious about your new home, sooner will be in your best interest.

We are prepared to help you have a great real estate experience.  The first step – give us a call and let’s discuss your hopes and plans.