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.

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, hello, hello everyone! And welcome to Real Estate Live, where we get together and obsess about houses...Yey! Oodles of questions as always, so I'll get started.

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Arlington, Va.: We just bought a house and now need to sell the current one we are in. Other than de-clutter and clean up the place, what else should we do? We have an open house coming up this month.

Daniela Deane: Agents say a lick of fresh paint can also work wonders. If you don't want to pay someone to paint it, get those paint brushes out this weekend....And yes, de-clutter, clean, put some fresh flowers around, make sure your windows are nice and clean, and your yard neat. Do some weeding!

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Arlington, Va.: As someone who lives in Fairlington and is quite familiar with Parkfairfax, I was surprised at your characterization of the two communities in your article on Sunday. The gist of the piece was, they are still affordable places to live, but not for long. Fairlington certainly was an affordable place when I bought my townhouse seven years ago - Parkfairfax even more so - but units like mine are now selling at three times what I paid, and property taxes have more than doubled. I'm proud of my neighborhood, and usually enjoy seeing it written up in print. But this piece, which relied heavily on the opinion of local realtors, seemed to be written with the agenda of further jacking up the values. When did a $400K condo become "grab-it-while-it-lasts" affordable? I count myself lucky that I'm not one of the naive buyers looking to you as a source of accurate information.

Daniela Deane: Wow, you're nasty!! Actually, if you look at local values, Parkfairfax is actually still what you'd call affordable..Although what is affordable here is outrageously expensive somewhere else...and Fairlington is already not that affordable....I said in my story that prices have soared --doubling and even tripling -- in hte last two years. Or didn't you read that part?

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Alexandria, Va.: Daniela,
As a recent purchaser in Parkfairfax, I want to thank you for the Parkfairfax/Fairlington article last Saturday.
One additional piece of info: at least one contractor is trying to get a movement going to convert to central air/heat in Parkfairfax. There are already at least 2 units that converted to central air/heat in the last several years.
Thanks again.

Daniela Deane: Thanks....That's one of the reasons that Parkfairfax is still "affordable" ... or not, judging by the previous poster....Saying anything is affordable around here gets you in trouble, as is obvious...Sigh.

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washingtonpost.com: Complex Analysis (Post - Sept. 4, 2004)

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Fairfax, Va.: How can I find out the actual recent sale value of houses in a particular neighborhood? Is there any county goverment website that provides that kind of information?

Thanks, Angie

Daniela Deane: Yes, county websites list home sale prices, so for you, that's the fairfax county site...The problem is they lag often months behind the sale.

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Arlington, Va.: I'm getting ready to buy my first house. I can either buy something close to what I want for a lot of money or spend about half as much on the house and renovate it to my dream place. Here's the question: How difficult is it to work with contractors, and what are the pitfalls I should know about? My preference is to renovate, but I'm worried there are hidden costs and problems that I'll get blindsided by.

PS. Where do you go to find a good contractor?

Daniela Deane: Gosh, it's hard to say....Working with a contractor can be a dream of an experience...or a nightmare. I've heard both scenarios many times. Some of the pitfalls: Costs can creep up (renovators often come up with other projects as they go along, contractors say), the project can take longer than they told you (that happens routinely), and a big renovation job where you're living can drive you crazy (it'd be great if you could afford to continue to live where you are while it's going on). The best way to find a good contractor is a reference from someone who's used them...Good luck!

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Washington, D.C.: We're looking to buy a house in Alexandria late this winter (i.e., February or so). First of all, is winter a good time to buy? And secondly, is it actually worth buying a house in the event that we plan to move in about 2-3 years? We would likely buy the smallest house possible (2 bedrooms or so) because it's just me and my husband. Is such a small place sellable?

Daniela Deane: Hi Washington....Winter can be a fine time to look for a place, although there might not be as much on the market as there will be in the spring. Lots of sellers wait until the spring market to put their homes on the market, more like March. People who are on the market in the winter tend to be serious sellers though and people looking in the winter tend to be serious buyers. Now whether you should buy....That's a pretty short time horizon you're talking about...There are a lot of in and out costs to buying real estate...To buy, you're usually looking at 3-5 percent of the purchase price more in closing costs. To sell, you're looking at more than that since sellers usually end up paying 6 percent in agent commissions alone. It may not be worth it for you to do all that if you're just planning to sell in 2-3 years. Real estate is a long-term hold. You usually need a longer time frame than that to make it worth your while.

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Silver Spring, Md.: Hi there. Thought you'd find the following interesting. About 4 months ago, a small two-bedroom house around the corner from me that was listed at $275k sold for almost $400k. Meanwhile, the house across the street from me, which is about 4x the size, was listed at $525K, sat on the market for almost 3 months, and finally just sold two weeks ago for $450k. I'm still scratching my head, wondering if the buyer of the first house or the seller of the second house got taken. Maybe they both did. For what it's worth, this is in the 20910 zipcode, inside-the-beltway Silver Spring.

Daniela Deane: Thanks for sharing your story Silver Spring...The house that sat on the market for almost three months was probably over-priced, don't you think? Price is still a very powerful factor in speed of sale.

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Alexandria, Va.: Have begun the painsaking chore of looking for a new home closer to where we work in the Reston area. During our search, we found a contempory home that is UGLY from the outside and has ZERO curb appeal. However, the home is gorgeous inside and the back serves as a real oasis. We are hedging on the place due to the look of the home...should we overlook the front and overtime figure out a way to change the appearance? Or should we stick with our initial opinion and find a place we love from the street? Ahhh, what to do...

Daniela Deane: Ah, Alexandria, that's a dilemma...I'm not sure what to suggest here...I do want to say though that most houses are compromises...Very very rarely does a buyer find EVERYTHING they want in a house. Especially in a re-sale home. Decide what's really important to you and what is less important. Here are some other considerations: Would it be very hard, or very costly to change the front of this house? Do you already have an idea of how you could do that? Would you have the money to do something like that after you buy it? Are there some non-structural things (landscaping particularly) that you could do to improve the curb appeal of this house? I'm just throwing out some thoughts...After I bought my house in Arlington 7 years ago, I was depressed for months, thinking it met so little of what I wanted...Now I feel much better about it (Arlington appreciation has helped too!)

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Ashburn, Va.: Can you tell me briefly how you 'borrow against equity' for home improvements? We will be moving into a newly constructed home soon, and it has appreciated about $100k since we contracted on it. We would like to do some other things (new patio, finish basement), and I've heard people talk about this option. Thanks!

Daniela Deane: You get a home equity line or loan on your house. A bank gets an appraiser to appraiser your house at the present time. Then based on that, they decide how much more you can borrow above your current mortgage...It's basically a way of upping your mortgage by getting a second trust on the property...Does that make sense? Contact a mortgage broker, loan officer, or your current lender.

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Dupont Circle, D.C.: Could the Kennedy-Warren have converted its new wing to condos if it wanted to or were they stuck with being rentals. Think the area can support the prices I've been hearing? Will the Post do a story on the unusual addition to the old building?

Daniela Deane: Yey!!!!! I am working on a story right now about the Kennedy-Warren...We've been waiting for them to finish their renovations...I just talked to them yesterday and we think in a couple of weeks they'll be ready and I'll go over and do a story. So look for my story within a month...I don't know enough about it, but I bet they wanted their new wing to be rentals just like the rest of the building. Don't you love that building though? It was built in 1931.

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Renovating vs. Buying: I would say that it truly has a lot to do with the amount of money you have for the renovation. We bought our house thinking that it was a good deal that needed work to make it less 1950s and more us. We had a wake up call when we had a contactor come in to look at the small full bath (we just wanted to retile and replace things--not move plumbing or walls, etc.)and his estimate came to about $20k!; Perhaps my husband and I were just unrealistic. Needless to say, the original metallic wall paper and the pink and white tiles have grown on me!;

Daniela Deane: Oh my gosh....$20 K just to re-tile and replace fixtures?...One thing I've learned being a homeowner here: Everything costs more than you thought it would. Yesterday, I was at a source lunch and someone said we should be spending about 1 percent of our home's value in maintenance a year...I hear you on the pink...I've got one pink and yellow bathroom and one gray bathroom...!

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Former Parkfairfaxer: Just stopped in to say the article on Parkfairfax and Fairlington was really nice. I grew up in Parkfairfax, went away to college, came back and lived in Fairlington for 2 years before moving out of the area. The neighborhoods are a great find so close to D.C. and I'm surprised they hadn't been featured in the Post earlier.

Daniela Deane: Thanks! I used to play in Fairlington when I was a kid at my best friend Becky Rios' house! (Don't tell me Becky's out there? )

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Washington, D.C.: I have no plans to sell my condo on Capitol Hill (I think of it as my little gold mine), but if I did, how do sellers cope with pets? I have cats and can't imagine having strangers in my house with them. The cats could get out, and there is always the litter box issue ... What have other people done?

I should mention that when a neighbor had an open house, she and her cats spent the afternoon with me. That is a good one-day solution, but what if the unit (or house) is on the market for a while? Thanks!

Daniela Deane: I would say you definitely have to find a place for your pets if you're doing an open house....That's all part of the considerations of selling with animals, I guess. Has anyone found some creative solutions to this problem?

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Annandale, Va.: I live in an apartment. Should I buy a condo, even if I don't like living in an apartment - if there's nothing else I can afford?

How does closing & closing costs differ for condo purchases from houses?

Daniela Deane: If you've decided you want to become a homeowner, all you can do is buy something you can afford, isn't it? Condos are no longer the dirty word they used to be; condos have appreciated faster than single family homes in many parts of this area over the past couple of years. It's because so many people have been priced out of sf homes and townhouses into condos. So, yes, if you do want to buy, you shouldn't rule out buying a condo. Because otherwise you'll rule out becoming a homeowner period.

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Centreville, Va.: I live in Virginia. I have two questions relating to community property. I have owned my home for 8 years; my now-wife has owned her home for 10 years. We were recently married, and then she sold her home; we're living in my home. Her profit from the sale of her home is solely hers, right? Were we to divorce before buying another home jointly, I would have no claim to her money? Second question. We get married, and we refinance my home putting her name on the mortgage. She still has all of her money from the sale of her home. She continues to work but does not (refuses) to pay her share of the mortgage, we divorce. Is she entitled to half (or some other percentage) of what was my house before we got married?

Daniela Deane: Oh my gosh....I think you need to discuss all this with a lawyer....Sounds like you've got a problem brewing here with her keeping all the proceeds of her house sale and you feeling resentful about it. I don't know enough about divorce law to get into this...Or maybe you need some counseling now?

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Sterling, Va.: What is the best way to buy a home when my boyfriend and I have our own condos? We found a townhouse we'd like to purchase, but need the money from the condos to get it. Thanks!

Daniela Deane: Well, you've got a few options here. You could sell both of the condos and use the proceeds as a deposit on your townhouse. You could sell just one of the condos and keep the other one as an investment rental property. Or you could keep both the condos as rentals and tap into equity you've built up in them to get your deposit. Owning two properties gives you lots of options. Bravo.

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Washington, D.C.: I've seen over 150 open houses in Maryland and know neighborhoods and schools. I can dig up an inspector and a title attorney for settlement.
Is a real estate agent or 'buyer's broker' necessary/required? If I want to make a realistic offer on a house in Maryland, can't I cut 3% off the 'asking' price simply because I don't have a broker whose 3% fee the seller would normally pay? How do I avoid the seller's broker trying to grab that fee for themselves?

Daniela Deane: Have you found a house you want to buy? It doesn't sound like you do need an agent, although you may want one anyway since the seller will be paying their commission. Do you know how to write a contract? A lawyer I know recently got a condo by writing his own contract and then attaching a letter to the seller to it saying he had no agent and would therefore be saving the seller 3 percent of the purchase price. He got the property.

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RE: The reluctant condo buyer: Buy, just so you can get some equity, and in a few years, use that equity to trade up to something you want. I'm watching friends who put off buying now getting creamed in the bidding wars, and they're realizing they're going to have to settle to get an initial toehold. Your first place does not need to be your dream house. Mine wasn't.

Daniela Deane: ...and in many cases, not even your fourth house is your dream house! So many purchases involve a compromise. You'd be amazed how many.

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RE: Money matters: I think you should sell your house too and buy a new one together, with both your names on it with both of your money.

Otherwise, you may not want to put her name on your house unless she is willing to contribute major money to renovations, joint retirement accounts, etc.

Do not refinance while this is unresolved. You have bigger problems in your marriage than money.

Daniela Deane: I tend to agree.....Money is such a big spoiler of relationships...And you sound like you're ripe for problems already.

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RE: 20K Bathroom: I would do some more research on people to retile you bathroom. Home contractors are still very busy and if the project is not worth thier time, they will throw out some extremely high number to make you go away.

Did you check Home Depot or a similar shop?

Daniela Deane: Good advice.....Heck, I'll do it for $10K! (you wouldn't want me...)

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RE: Bathroom renovations: That is so, so, so true about bathroom renovations. Friends of ours did their small bathroom (circa 1980 in a 1930's flat): new tiles, new tile floor, new bath, toilet and sink, and it was $15k, and that was 4 years ago.

As for big renovations, other friends have cape-cod-like house, and they want to punch out the back wall. Expand the galley kitchen, build a family room, and upstairs, a bedroom and bathroom. The price tag? $250K, way more than they had thought. They're still saving money to do it.

Daniela Deane: My pink and yellow bathroom is looking better by the minute.....

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Silver Spring, Md.: Re: Pink Bathroom - My husband and I also bought a small 1950's era house with a small pink-tiled bathroom. We knew we couldn't live with the pink, but the tile was in good condition, so we had a company come in and resurface the tile with what is basically a white expoxy. It's been over a year and it still looks great and best of all - it only cost about $500.

Daniela Deane: There's an idea.....

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Arlington, Va.: With regard to finding contractors and renovating, you may want to mention that the big hardware superstores are now offering more and more contracting services. I have not personally used the service, and I have no idea how well the big orange store's contractors are. Still, if you hire them as your contractor, you're at least eliminating the oh-so-frequent problem where the contractor disappears and the homeowner can't even reach them by phone.

And don't let the naysayers get to you. People will always say, "this area used to be affordable, but not anymore." I predict that in 2009, people will be saying, "well, sure Parkfairfax was affordable in 2004, but it's not today."

Daniela Deane: Thanks on Parkfairfax....I know that saying anything is affordable around here these days just gets people's backs up....and rightly so...And good advice on the big superstores....I get everything at that big orange store these days....

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Fairfax, Va.: Re: Selling with pets - I'll probably get yelled at for this, and it certainly wasn't a cheap option, but I put our two semi-large dogs in a kennel while the house was for sale. First off, even though the house was clean and smell-free, I didn't want buyers to be put off by the idea that the animals had somehow tainted the property. Second, it would have been very stressful for the dogs to have people coming in and out of the house while we weren't home. We visited them at the home away from home often, the house sold, and all is well.

Daniela Deane: That sounds very sane....I think some people would be put off by the idea of pets living there in just a knee-jerk kind of way...Also, some people might worry about allergies and such.

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Re: Cats: You have to clean the litter box at least twice a day (every time you notice anything in there). Clean up after them constantly if they are messy eaters, and have your agent put something in the listing notes about the cats (especially if they have antisocial tendencies like my sister's cat who will bite strangers.)

Most cats will hide under a bed when stranges are in the house.

Daniela Deane: I think antisocial cats who tend to bite people may have to go to a kennel for awhile!!! Are we trying to sell this place or what?

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RE: The cat person: I'm highly allergic to cats and cat dander -- I would love to not have to see cats while looking at a place.....

Daniela Deane: How about biting cats? Like them?

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Washington, D.C.: We are thinking about replacing the very old, drafty, wood windows in our OT Alexandria town house. The problem is that because we are in an area denoted as an historical district (our home is not from the 1700s, more like early 1900s) the Architectural Review board will make us put in some very expensive wood windows, at least in the front, not the cheaper, vinyl windows we would prefer to install -- even these will be a considerable cost (why they are so concerned about what windows I have on my well-kept town house in a neighborhood where some houses/establishments look like crack dens, I guess I will save for another forum).

So, here's the question. We will only be in this house for another 6-12 months. Will we recoup the costs when we sell? I say we either have to put in all expensive windows or not bother. My husband thinks we could put the approved windows at the front and use the cheaper vinyl windows for the rest. This will result in a different style of windows in some rooms to others, but not two different style windows in one room.

What are your thoughts? Is this worth the investment? It only is a bother in the winter, and I can survive another one. We didn't look very closely at the windows when we bought (first time buyers) - - do others?

Daniela Deane: If you're leaving in 6-12 months, I wouldn't bother replacing all the windows now...If you must, your husband's suggestion doesn't sound bad...But do you really need to go through this hassle if you're leaving so soon?

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Frederick, Md.: Daniela, Help! We just moved in to a beautiful new SFH in Frederick, but I am not happy at all with my commute to Gaithersburg which takes an hour or more. Ugh. If we decide to sell the new house and move closer to work, I understand we will be subjected to capital gains taxes. We made about $178k profit from selling the old TH. Bought new house at $450 (most of $178k went to downpayment). Will we be heavily penalized for selling the house if we stay less than a year?

I have quickly realized that a large, beautiful new, shiny house can NOT make up for other things that affect quality of life--like commuting!!

Daniela Deane: Oh, Frederick, I feel for you....This is why I counsel people to drive to work during rush hour a few times from a place they're considering buying to check out the commute. Anyway, too late for that. If you stay two years, you won't have to pay tax on any capital gains up to $250K for a single person and $500K for a married couple. You're not going to have a lot of capital gains now anyway, since you've owned it such a short amount of time. Beyond the capital gains, though, there's the money you spent getting into the property in closing costs and the money you'll spend getting out of the property in commissions, etc...It's likely you'll lose money if you sell this quick. Can you chalk it up to one of those inevitable compromises we make when choosing a property and stay awhile? Or do you hate it so much you just have to go? ... Only you know the answer to that.

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RE: Window replacement: I wouldn't bother...save the money to replace the windows at your next place, where you can enjoy them.

Daniela Deane: Yeah...I agree.

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Crystal City, Va.: Enough with the cats already!!!

Daniela Deane: You're the last with the cats!

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Washington, D.C.: Hi Daniela!

When buying a new-construction condo, when does the buyer actually put down the down payment, if the building is not built yet? For example, I technically have the down-payment for a condo that is going to be built but I would be much more comfortable with my financial situation (would have more "reserve fund" build up) if I could sign the papers but not put down the actual cash until the building is done six months from now. How does that work?

Thanks so much for your help!

Daniela Deane: This is the way it tends to work: You put down a deposit (say $10,000) when you get a ratified contract, i.e. at the beginning of hte process (before anything is built). Then while it's being built, you're usually asked to come up with a total of 5% of the purchase price, some of which can come in upgrade option payments (like for a fireplace or somesuch). Usually that's all you pay -- 5 percent -- until the condo is built and the developer is ready to hand it over to you. That's when you come up with the rest. In many of these cases, then, all you have to pay is 5 percent for maybe 2 years while it's being built. When the market is going up (like ours has been) this can be a very lucrative proposition since you get to buy a condo for two years from now at today's prices...The theory goes that when the condo is built and delivered, it could be worth substantially more than the price you agreed to pay. That scenario works if the market is going up. If it's going down, it can all backfire. In this area, investors, agents and the like have all made money buying condos like this off the plans. Whether that continues we'll have to see.

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Alexandria, Va.: Hi, Daniela. I read your ParkFairfax/Fairlington piece with great interest--partly because I rented there for years (enjoying the avocado kitchen so like the one I grew up in). I looked to buy in both Fairl and ParkF this spring. Great location, great community upkeep, but at $250K+ for the frankly "eh" 700-sqf Fairlington 1-BRs and $220-240K for downright shoddy 680-sqf 1-BRs in ParkF, I found that they offered less-than-great value for a single-income buyer like me. (I eventually bought a gorgeously renovated 980-sqf 2-BR condo in Alexandria's Auburn Village...the new frontier of the last bastian of affordability!) How about the plight of the close-in single-income homebuyer as an upcoming subject?

Daniela Deane: Congratulations on your purchase! I think I may have to do a piece on just the plight of the buyer around here, huh? (or have I done that already?) ...This lunch I went to at Freddie Mac yesterday, an economist said they're looking at 10 percent appreciation in this area next year, fueled by job creation and population growth...I asked (for you guys), how long can this go on?? can home values continually outstrip income growth? .. Their answer was that this area may become increasingly unaffordable for people...DUH!!!

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Daniela Deane: Folks! I gotta go! Thanks for joining me! See you in two weeks! and don't bring your cats!

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