Real Estate Live

Welcome to Real Estate Live, an online discussion of the Washington area housing market, featuring Post staff writer Daniela Deane.

In her Live Online discussions with the audience, Deane discusses the specifics of the market, from condos and investment properties to contracts and mortgages.

Deane has covered real estate for The Washington Post since 1999 and has worked as a reporter for more than 20 years.

The transcript follows. Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.

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Daniela Deane: Hello everyone on this dreary, cold day in Washington. Thanks so much for joining me. I want to start off by saying thanks so much to all those buyers and sellers who emailed me after my last chat. Your real-life experience was invaluable to me.....and I always love to get to talk to some of you. To those people I didn't end up calling: I'm sorry I couldn't get to everyone. There's only so many calls I can make! I appreciate you emailing in any case and perhaps next time I will be able to talk to you. You don't know how much you all help me in my reporting. Your knowledge of the market humbles me every time. Now, I've got a lot of questions here (I swear I'm not just saying that!)...so without further hullaboo, I'll get started!

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Lanham, Md.: I plan to buy a house without the use of realtor, where can I obtain the necessary forms (e.g., sales contract form)

Daniela Deane: Lanham, I'm not sure why you would want to buy a place without the help of a realtor. I don't see the advantages in it, unless it's a private deal with a seller you know and that seller is giving you a break on the price because they will save on the realtor commission. Sellers pay the total commission. Buyers pay nothing (although, yes, the commission is figured into the sales price, buyer's agents are always telling me). I really don't see why you wouldn't want to use an agent to represent you. In any case, I guess you could get a sales contract at Staples or somesuch place...They sell a lot of forms, I know, including leases. Again, think about why you're doing this.

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Kensington, Md.: Hi,
Love your chat. We bought a 19 yr old townhouse in Kensington Heights near Wheaton. We might need to sell in about 4-5 years. Can you give me any reassurance about the appreciation rates in this area? I keep hearing about Silver Spring, but not much about this area. To me it seems amazingly convenient, walk to the metro and all kinds of shopping and ethnic eating places!

Daniela Deane: I can't give you any hard-and-fast reassurances, sorry....Please check out my most recent story on the market, which ran last Saturday. Many local economists are saying that galloping job growth, continued in-migration and a healthy local economy will keep the real estate market humming here for years to come. Others say that it's interest rates that has kept things going and that if rates go up too much, that'll kill it. One economist I quoted said that if rates go up to 7 percent, he can see prices flattening here or going down a couple percentage points. He said if they go up to 8, he can see a 5-10 percent fall in prices from peak to trough. Nobody sees interest rates going up anytime soon, though. 30-year rates averaged 5.69 this week, down for the fourth week in a row. My personal opinion is that job growth and in-migration will keep close-in areas in the Washington metro area from going down. I believe there will be continued appreciation in this area, although not at the level it's been at (which was too much frankly). Is that reassuring? Hey, I need to reassure myself too!!! I've invested heavily, as my chatters know....

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Anytown, USA: Daniela,
Two questions: My future fiance and I want to sell both of our homes next November (month planned to get married in) and buy a home together. How bad is November for buying and selling? I am worried.

A little off topic but...my boyfriend has renters living next door to him (single family detached). We suspect the owner of the home received it after death of parents and makes more money renting it than would if he sold it. The home needs several repairs and the family is clearly exceeding limits for number of persons in a home. My boyfriend is scared to do anything--works long hours and his home looks gorgeous--he has alot to lose if they retaliate. What can one do???
My next door neighbor received his home when his parents died. He lives there and aside from certain acts that are extremely private that he likes to commit in plain view (yuck!!!)--his yard needs tons of work. Aside from his empty promises--is there anything I can do to get him to clean up his act???

Daniela Deane: Hi! First your second question. I don't think there's a lot you or your boyfriend can do if your neighbors aren't breaking the law or creating a public nuisance. Obviously if someone is breaking the law (indecent exposure), you can call the police. Or you can call your county officials. If it's just annoying, you may just have to live with it. Many people endure neighborly behavior or habits they don't like. First part of your question. I would say, from my recent reporting, that if you don't need to sell now, it's probably better to hold off until early spring. Check out my recent story on the market. Basically, there's more for sale out there and fewer buyers. Sellers -- especially those with grandiose prices -- are having to make price reductions in this market, especially houses priced at $700,000 and over. Less expensive houses are selling better. But inventory is up across the board. It's not a bad time to be a buyer though, certainly better than it was in the spring.

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Washington, D.C.: If I find a place to live by myself through the paper, do I still need a Real Estate agent for the transaction? This is my first time buying a place, but I don't see that giving 3% to someone for doing little work. Thanks!

Daniela Deane: You're not the one who is going to give the 3 percent commission...The seller pays the total commission: the 3 percent to the listing agent and the 3 percent to the buyer's agent representing you. Buyers pay no commissions, although the total commission price is usually taken into account when coming up with the sales price, i.e. you pay it in the price. So there's not a lot of point in not having an agent if you're a buyer, as far as I can see.

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RE: Lanham, Md.: You can always go to a discounter, which has a menu of services. But, since the buyer pays nothing, I don't understand why you'd want to this yourself, either.

Daniela Deane: Yep.....

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Washington, D.C.: Hi Daniela--I'm in the market for a new condo. I've found a near perfect one (everything except a parking spot) for $350k. I'm concerned that a $350k one bedroom won't appreciate much. It's in a vibrant, well established D.C. neighborhood, yet I'm concerned that if I need to move in the next couple of years I'll lose out. What do you think?

Daniela Deane: Amazing that a one-bedroomed condo without parking would go for $350, huh?...Is it a real possibility that you might be leaving in two years? If so, I would really think about it. Real estate is a long-term hold, something I've said so much I puke myself at the sound of it. Two years isn't very long....If you're looking more at a five-year horizon, I would say that probably it would behoove you to buy it, especially since you seem to really like it. If it were me, I would look long and hard at my timeframe and decide based on that. If I was leaving for London in two years, I wouldn't buy, I'd just enjoy the freedom of renting. If I was staying, I would definitely buy. I hope that helps.

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Upper Marlboro, Md.: With a surplus of buildable land close to D.C., do you see Prince Georges County beginning to attract more home buyers that get priced out of Montgomery County?

Daniela Deane: Yes. Prince George's County hasn't seen much of a slowdown in this market at all, if any. And that's because it's the most affordable close-in county in this area. And more and more people are being priced out of other areas. So I answer a wholehearted yes.

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Centreville, Va.: Will we still see appreciation in our homes, even if rates go up?

Daniela Deane: Depends on how much they go up....This one economist I talked to recently made a very interesting point: That all this job growth means a stronger economy means higher rates. (Not that that has happened yet). Rates are still incredibly low...5.69 this week. Their low-low-low of this period was 5.20. Rates are not going up yet, although I think people were spooked by the Federal Reserve raising sort-term rates twice recently.

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Arlington, Va.: Do you expect the new D.C. Major League Baseball team and stadium to impact home prices in surrounding Md./Va. areas?...I would think this is yet one more BIG boost for our local economy...and indirectly a boost for home prices...your thoughts?

Daniela Deane: Yes, I do think the arrival of major league baseball will be a boost for this city...and this area. Things just keep looking up for Washington, don't they? (and it's about time)....We're on a roll. That's how it feels to me.

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Gainesville, Va.: Hi, Daniela. I read your article about the market softening up a bit and was wondering if your crystal ball says to sell our house this fall/winter or if we should wait until next March (to get top dollar). Usually the market is a bit more brisk in the Spring, but I'm concerned about interest rates. Thanks!

washingtonpost.com: Market Takes a Breather (Post, Oct. 16, 2004)

Daniela Deane: Ah, my producer has provided the link here to my market story, so I'll post it. If I were you (and I'm not), I would wait to sell until the spring...and just enjoy the holidays....AND...start packing up all that clutter you've got!) That's the subject of my next story: Staging your house and getting it ready for sale. Someone told me yesterday that there's the 50 percent rule: get rid of half of it! Here's your project for the next few months until you sell: Declutter, clean and organize....And you'll be glad you did...

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Silver Spring, Md.: Hi Daniela,
I read your article from Saturday and though I'm not an
economist I agree with the expert who said it's interest
rates fueling the housing market frenzy. While our
employment outlook may be rosier than other areas,
income is not keeping up with housing cost appreciation.
A lot people can barely afford their houses with interest
rates less than 6%. Shoot, my husband and I gross over
$120,000/year which should be able to get us out of our
townhouse and into a SFH but in this area 120K is a
pittance. If we did move up I wouldn't be able to stay
home with the baby were hoping to get pregnant with
soon. So we sit and wait. Btw, our townhouse has more
than doubled in value since we bought it 5 years ago and
I'm happy about that. But I'm not so happy I can't afford to
move and I think there are too many others like me out
there.

Daniela Deane: Yes, that economist made some very very good points. And I think that is true: So many people here are at the limit of affordability right now. If rates go up even 1 percent, that affordability has been eroded...That's one of the reasons condos are still hot: Buyers can't afford anything else. It'll be very very interesting to see what happens when interest rates do go up...Nobody is predicting they're going to go up that much that quickly though...I know what you mean about how much people make around here too. I always thought my husband and I (he's a cameraman) made decent money, but we are the poor folk on our street...It's kinda depressing....

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Silver Spring, Md.: Hello,
Nice article last week! I've noticed the market in Silver Spring 20902 really picking up in the past month. Homes between $300k - $500k have been selling within days or a few weeks, while in the summer and early fall they were sitting for a while. The one new development is fair pricing for the size, condition and location of the home. Despite any macro-level things going on (interest rates, etc) it appears that people are pricing their homes more reasonably in my area, which may be leading to a snappy market.
Thanks!

Daniela Deane: I'm glad you mentioned this...Most of the slowdown I saw was in higher price ranges: The price ranges you mention are still very very sought after. It's all about value. When buyers see value, they still jump. And a house for $500K in this area is value these days. Some of the properties that are sitting are simply over-priced, with sellers just getting big green dollar signs in their eyes...(I would too if I were selling, of course!)

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RE: P.G. County: Just a quick note to reiterate what someone said last week. Compared to Va., P.G. County still has affordable housing and is very close to the beltway. We are buying a brand new home and the exact model in Virginia (where we live now) starts at $100K more than we are paying with all the upgrades! And, with the new National Harbor being built, it is an area ready to blossom. Although as a Virginian I swore I would never move to Maryland...here I come!

Daniela Deane: Yey P.G. County! Let's here it for Prince George's today....

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College Park, Md.: Somebody please tell me I won't have to leave the area (or get married) to buy a house...I just need to hear it, even if it's a lie.
Am I the only person who wants a house regardless of appreciation rates, or what it will get me in the undetermined future?

Daniela Deane: No, you're not the only person in this boat, College Park. And I feel for you. Please persevere. Go looking right now. It's better than it's been all year out there. (that doesn't mean it's good...it's just better than it was in April...)

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Wheaton, Md.: Hello,
I disagree with the poster who said that $120k is a pittance, and keeps people from affording a house. My wife and I gross about $55k and yet we were able to recently purchase a nice Cape Cod in Silver Spring, with a 10% (Luckily we had some savings), a 7-year ARM, and no personal debt.
I think people need to understand that income isn't the only factor, but lifestyle costs and budgeting, debt levels, and savings.

Daniela Deane: Yey!!!!! You're the man! Or the woman! Or whatever! We love you today....

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Silver Spring, Md.: Hello Daniela--

I love your chats--very interesting and informative! I thought I'd see your advice on my eighty-something mother-in-law's condo--she has one up in Leisure World, a 2bd, 2 ba, but will be moving out of state soon, and will rent an apartment in a much less expensive location. My husband and I will also be moving overseas soon. My husband and I contributed about a 1/3 share of the purchase price of her condo, and are joint tenants on the condo. She's asking me whether she should rent or sell the condo--I'm figuring that if she rents it out, she will clear $3-400 a month after she pays her own rent and the condo fees. What do you think she should do? Thanks!

Daniela Deane: Hmmm....Well, since neither of you are going to be here, remember you're going to have to pay a property manager to manage it for you....Also, do either of you feel like hassling with this long distance? ... Considering your mother's age and the fact you're going overseas (for how long?) you may want to just sell it, divide up the money (you guys get your money back) and be done with it. It's cleaner somehow....Anyway, that's just one way to look at it. I'm right now trying to decide whether to sell my own elderly mother's condo...and I think I've decided that come next spring, I will sell it. (Save capital gains tax for her, for just one reason...)

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Anonymous: Comment about $350,000 condo in D.C. without parking.

Includes everything but a parking space. Now therein lies a great story in and of itself! I have 2 indoor parking spaces in downtown Bethesda. They are worth so much more per square foot than my actual condo unit! Go figure. Point being - figure that the parking is usually a needed selling point for many condo owners in this Metro area even with good public transportation, especially as we age. Rock On!

Grateful for parking in Bethesda!

Daniela Deane: Amazing, huh! A parking space is now worth between $30-$40K in the city....and that can be outside! It's this great automobile society we live in!

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Re: Going without an agent: If one is buying a FSBO, then a buyer without an agent could be able to offer a more mutually attractive deal than a buyer working through an agent. The buyer can offer slightly less as a the purchase price, while the seller still comes out better off because she won't have to pay any commission.

Admittedly, though, the prospective buyer who wrote in to you didn't give me confidence that he had enough knowledge about the process to take advantage of such an opportunity and carry it off properly.

Daniela Deane: Yes, that's true....You can be more attractive to a seller if you don't have an agent....But in general, there's not a lot of reason for a buyer not to have an agent.

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D.C. metro area: Can a single income family afford to buy a house within thirty miles of D.C. anymore?

Out in the far reachs of Prince William county, new single family homes are half a million dollars. I can't imagine any family with a single or modest income ($50-$60k) affording that. Which makes it really hard as a single person to imagine that I'll ever be able to move up in the world. If I had to buy the place I own today, I could never afford it.

Daniela Deane: Single income lobbyist? ...Just joshing....(not that funny, I know)...Look at some of the areas people have suggested on my chats. Every chat, I get people telling me about areas that are more affordable than you'd think....Cheverly was one area everyone was going nuts about awhile back....Read some of the back transcripts. Don't give up though. Please.

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Washington, D.C.: Reason for a buyer not to use an agent:

My understanding is that if the buyer is not represented and the seller is, the seller's agent collects the entire commission (often 6%) - paid by the seller. However, if it is a for sale by owner (FSBO) and you're a buyer competing against other buyers with agents, your offer will be more competitive. A smart FSBO seller will do the math and realize that a $200,000 offer from an unrepresented buyer is worth more than a $200,000 offer from a represented buyer who requires a commission.

Of course, this assumes that the FSBO seller is willing to cooperate with agents. I just wanted to point out an instance where a buyer would be better off w/o an agent. And, that's not to say that the buyer doesn't require other assistance, such as a lawyer.

Daniela Deane: You make some good points....And yes, for a FSBO seller, a buyer without an agent can be more attractive, definitely...Somebody get a lawyer though, please!

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District Heights, Md.: Hi Daniela-

I am expected to purchase a home within the next two years. What do you think about these 'no interest loans?' Seems like this is a new concept or I could just be behind the times.

Daniela Deane: Hi District Heights. We wrote a story about zero-interest loans recently in the Real Estate Section. My producer is looking for it now and will post the link if/when she finds it. A lot of mortgage people are touting these loans these days...They're more affordable yes, because you're not paying off any principal...and that's the problem too: You're not paying off any principal. Even though we don't pay off a lot of principal in the early years of a mortgage, you still pay off some. That's one of the ways you build equity, by paying off principal. You're basically giving up one of the ways you build up equity...The other way is through appreciation. My producer will find it, I'm sure.

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Maryland: Thanks for all of your informative sessions. I've been reading for a while and I've finally been pre-approved to buy a home. I'm very happy but the problem is I don't make a lot of money and can only pay $170K. Do you or anyone have any ideas where I can look for a place with at least 2 BRs in this area?

Daniela Deane: General rule of thumb: The farther out you go from the city, the cheaper property gets. Other rule of thumb: When you're in the city, look eastwards.

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Washington, D.C.: I was thinking of purchasing in D.C. to ease my commute but can only afford far N.E. (Deanwood) and some areas in S.E. Are these areas seeing positive growth?

Daniela Deane: The eastern quadrants of the city have seen price appreciation, but not like Northwest. Also, check out Southwest, the smallest quadrant in the city.

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Washington, D.C.: Hi Daniela,
I just came fom a Condo meeting where a proposed budget draft was presented. In this budget they proposed increasing our reserves 122.97% in one year by increasing our condo fees by %34.89 I am outraged and very upset. My fees are alredy exhorbitant ... over $800 a month for 1150 sq ft, 2BR condo, no pool, no store the only ammenity is an inefficient 24 hour front desk. the increase would mean condo fees would exceed $1100/month The claim is that the funds are needed for misc. "deferred" repairs including new HVAC and window replacement. We already have had 4 special assessments in the past 7 years. This building like many on Cathedral Avenue was built in the 40s-50s (I think).
What recourse do I have? Is there some sort of group I can contact?Can prior management be sued for not saving for inevitable replacement such as the worn out HVAC? Surely the condition and maintenance of operating systems should be provided for in a budget.
How do these outrageous fees affect the total cost of my property? (estimated at $300,000)Can I refuse to pay the increase?Should I insist on a special assessment to keep the fees where they are? Once fees go up the seldom come down.

Help! any suggestions welcomed.

Daniela Deane: Ouch, Washington....I feel your pain as a fellow condo owner...And I don't know the answers to your questions. BUT...I think I'm going to suggest a story on this so I can find them all out. At one of my condos, a similar (although not quite as bad) situation happened recently...And because a lot of these condo buildings are older, I think it's a timely subject for me to tackle. Can you email me at deaned@washpost.com with your contact number so I can call you....(I can't do the story right away...I have others on my list I have to get through). But I think it's a good story.

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Washington, D.C.: Thanks as always for an informative chat!;

I have a question about timing in real estate. I am trying to get my Dupont condo ready for sale. I had new wood floors installed and have now ordered new closet doors (absolutely had to be replaced), which are not scheduled to arrive until late October. Once they arrive, I will need to schedule installation, which could take several weeks.

If I cannot get my condo on the market by the second weekend of November, shall I even bother? Does the winter market die so completely once Thanksgiving arrives that I would be unlikely to get top dollar for my unit?

In other words, will people still be looking? Realtors just want to get the listing and not wait until the spring - - Please tell me how you see it.

Many many thanks!;

Daniela Deane: Condos are still selling like hotcakes....So you may be able to sell it very very quickly in November...BUT...maybe it would be good to wait until next spring to see if you can get another little price bump from the spring market? That's what I'm going to do with my mother's condo. Just a suggestion.

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Daniela Deane: Folks! It's time to get back to work for me (instead of just having fun here with you!) Thank you so so much for joining me. I'll be back November 4, same time, same place. I'm sorry if I didn't get to your question...Maybe next time. And thanks again for your help on my market story. I love you guys!

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