Buyers seeking homes in upscale neighborhoods may have to come up with a higher down payment, since jumbo loans aren’t available in the amounts that they used to be. “You used to be able to borrow up to $729,750 in high-cost areas inside the Beltway, but now the maximum is $625,500. If you exceed the limit for the area, your loan becomes nonconforming,” said Catherine Smith of First Home Mortgage in McLean. “There are fewer sources for that money, and interest rates are higher.”
Documentation of income and reserve funds is required of all loans, but the process is more stringent for securing a jumbo loan. “Lenders want to make sure the borrower can handle unexpected expenses, loss of income or other financial bumps in the road after closing,” said Debbie Polcyn of First Savings Mortgage in Bethesda.
2. A buyer’s market? Not entirely.
Home prices and mortgage rates are down, but buyers might not be in the catbird seat in some sought-after neighborhoods, where properties are worth almost what they were between 2005 and 2007. In August, median sales prices of houses in the District reached almost 88 percent of their peak value, prices in Northern Virginia rose to nearly 80 percent of their high and those in suburban Maryland climbed to nearly 67 percent, according to the George Mason Center for Regional Analysis. But within each county and, indeed, each neighborhood, there can be a lot of variation.
“Inside the Beltway, it is somewhat balanced between a buyer’s and a seller’s market because there are fewer buyers out there and less inventory,” said agent Jamie Koppersmith of Century 21 Redwood Realty. When priced right, he said, homes can still attract multiple offers. Confirming this reality is agent Anslie Stokes Milligan of McEnearney Associates, who said she fielded seven offers earlier this month on a rowhouse near Dupont Circle.
3. Sellers, don’t put off those remodeling projects.
Call it the “HGTV effect.” The proliferation of home improvement shows on cable television has increased buyers’ expectations of finding homes in move-in-ready conditions. Except for do-it-yourselfers intentionally looking for a fixer-upper — with a lower price to match — buyers want older homes to look like new.
They now expect sellers to have renovated older kitchens and bathrooms, replaced windows and refinished floors. “There is intolerance among today’s buyers for properties that haven’t been updated appropriately,” said realtor Morgan Knull of ReMax Gateway. “Granite on countertops is no longer an upgrade — it’s an entitlement.”