Real Estate Live

Welcome to Real Estate Live, an online discussion of the Washington area housing market with Post Real Estate editor Maryann Haggerty.

Maryann has been with The Post for 18 years and has served as real estate editor for the last five years. She's been a business and real estate editor and reporter for about 25 years. In all that time, she still hasn't figured out where you can find a lovely but inexpensive house in a charming neighborhood.

Haggerty is joined by Washington Post columnist Elizabeth Razzi. Razzi is the Local Address columnist for The Post's Sunday Real Estate section in Business. She's written about real estate and other personal finance topics for magazines and newspapers since the days of double-digit interest rates. She is also the author of two consumer-advice books, The Fearless Home Buyer (2006) and The Fearless Home Seller (2007).

Today, they'll discuss the local housing market -- from condos and investment properties to contracts and mortgages.

For more on local real estate, visit washingtonpost.com's Real Estate section.

The transcript follows.

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Maryann Haggerty: Thanks for joining us. This has been a very active week for housing news, so I think we'll just dive in and see what you want to talk about.

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Elizabeth Razzi: Hello, everyone! Glad to see you folks here on such a gloriously sunny day. Let's dig in....

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Southern Maryland: Is this a good time to negiotiate repairs on your home? I am thinking landscaping, new windows, hardwood floors, updating bathrooms and kitchens. Will contractors be a better deal today than three years ago when they had so much work from new construction even considering increased prices for fuel?

What landscaping do you like to see on a single family home to increase curb appeal? Is Pergo flooring OK for bathrooms and kitchens? What renovation trends do you see for 30+ years single family houses that I should consider? Thank you so very much.

Maryann Haggerty: Yes, this is a good time to consider renovations and bargain to get them at a fair price. Get multiple bids. You'll get a lot more phone calls returned than you would have 3 years ago.

Landscaping: Make it prtty/eyecatching. The exact details depend on your house/neighborhood/gardening abilities.

I have a Pergo kitchen floor and I love it. Yes, I know hardwood would have been classier, but I can be a messy cook. (I don't see it for the bathroom. Tile seems better for always-wet circumstances.)

Elizabeth Razzi: On the Pergo (or various other competing brands, check to see what's popular in your neighborhood & price range. Some folks really hate the clickety clackety sound heels make on Pergo and see it as a less-than classy move. (Sorry, Maryann... certainly not talking about you... And my vinyl kitchen floor makes no clickety clackety sound, btw.) Yes, contractors are willing to deal now -- but they may also be very strapped, financially. Your risk is that a contractor goes out of business before your job is done. It wouldn't be out of line to ask for references from his bank.

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Lifelong Renter: What is the point of PMI? If it's insurance, wouldn't it be used to help minimize some of the problems we are seeing in the housing crisis?

Elizabeth Razzi: Well, that was the point, but it hasn't quite turned out that way. PMI stands for private mortgage insurance. Lenders typically require it--to protect THEM--if buyers are making less than 20 percent down payment. The idea is that if the borrower quit paying, the PMI coverage would make up for the small amount of equity when the lender had to foreclose. But many people--way too many--avoided paying PMI by borrowing money for the 20 percent down payment. Those "piggyback" second mortgages are causing a lot of the trouble we're seeing now.

Maryann Haggerty: And PMI is indeed paying off on many of those loans -- which is draining the PMI companies.

And if a house goes to foreclosure and is worth significantly less (especially after expenses) than the loan -- well, that's still a problem.

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Washington, D.C.: Hello ladies, I'm a condo owner in Washington, D.C. and I could really use some advice because our condo developer is claiming to be out of money and they can't pay upcoming insurance premiums. Here is a very quick run down of my situation: -there are 12 total units in our condo association (3 buildings side by side with 4 units in each) -3 units have been bought and are being lived in. 1 other unit is finished, and the 8 remaining units are approximately 75-85 percent finished. -our developer has notified our acting property manager that they do not have any funds available to pay for upcoming insurance premiums. The developer also said their lender would not give them any more money. Since I moved into the condo in March there has been no work done on the 8 unfinished units. Since there are only 3 of us condo owners (25 percent occupancy) the developer is still in charge of the condo association, which, to me, seems to leaves us with few options. There has been talk with our property manager about doing a special assessment (for the 3 homeowners) to cover the insurance and repair costs. However, is it possible to have a special assessment that only applies to 3 homeowners? The developer still technically owns the other 9 units and I don't believe they should be excluded. We can't try to foreclose on the unoccuppied and unfinished units because we don't control the condo association. We are in the process of getting a lawyer and I know that might be our only option. Do you ladies have any other suggestions?

Maryann Haggerty: Start with the lawyer. You're in a pickle, and your developer is on the path to bankruptcy court. Yes, the associaiton (ie, the developer) is required to have the insurance -- but if they don't have the money, you have a problem. So you also want to talk with an independent insurance agent (look for one who specializes in condos -- your lawyer should be able to recommend one. ) to make sure you personally are OK.

Elizabeth Razzi: Yours sounds like just about the worst-case situation -- and legal advice is definitely called for. Is anyone else out there in a similar situation? If so, please drop me an email to razzie@washpost.com

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Arlington, Va.: We are about to sell a house in NE D.C. (near Catholic) in "as is" condition. Nothing major; one safety repair. Is that possible in this market? It's a gorgeous 1940s row house and we did a little work inside.

Elizabeth Razzi: Why are you wedded to the "as-is" idea. To buyers, that screams out, "bid low!"

Maryann Haggerty: Also, DC law is highly hostile to "as is." You have to do a LOT of disclosure. It's not Virginia.

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Really Over the Entitlement Attitude: The people who keep pointing their fingers at people who are facing foreclosure should just shut up. "Why should we pay for their bad decisions?" That's all the ask. It's driving me crazy. It's shameful and demonstrates a great level of selfishness and ignorance. First, most people facing disclosure are very much ashamed. Do you actually think they wanted to be in this predicament? Case in point, a woman in Taunton, Mass., committed suicide because her house was going on the auction block.

I am not a home owner. I refused to spend $400,000 on a 2-bedroom condo really only worth $200K. People who knowingly over priced their homes, just because a little piece of paper overvalued their home are just as guilty as those people who listened to banks, lenders, mortgage companies, etc. that they could afford X and the financing would take care of it.

Get over yourselves people. Learn about the real causes of the housing crisis (corporate fraud, investor malfeasance, etc). People in foreclosure are going to end up taking responsibility for their actions. You just don't get to rub their noses in it.

Elizabeth Razzi: Emotions have been running really high on both sides of this argument.

Maryann Haggerty: Yes, they have.

And so have the distorting effects of the Internet echo chamber, I'm afraid. I often find that people jump to kneejerk conclusions without any comprehension of what it is that they're reacting to.

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Gaithersburg, Md.: Hello ladies -- do you have any information regarding the $7,500 "first-time" buyer tax credit that Bush signed into law yesterday? Does it have to be repaid? Thanks.

Maryann Haggerty: It's a credit to first-time home buyers (those who haven't owned in three years) of up to $7,500. (Depending on income and house price.) And YES, it must be repaid--it's more of an interest-free loan than a gift. It's repaid over 15 years, unless you sell the house or it is no longer your principal residence, in which case, it is repaid more quickly

Elizabeth Razzi: And, though I see you're in Gaithersburg, folks thinking about buying in the District should know that if they -- or their spouse -- has ever qualified for the first-time buyer credit in Washington, D.C., they won't be eligible for the new federal credit.

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Arlington, Va.: My husband and I happily sat out the real estate frenzy of the last 5 years, but now we feel ready to start looking for our first home. As first-time home buyers with minimal debt, we should be a bank's dream. But what first? My thought is we go to our bank, our credit union, and USAA and compare the packages each offers. Then we pick one and get approved, then we find a buyer's agent. Am I missing any huge step? Any other recommendations other than Home Buying for Dummies (which I obviously need) -- but seriously, is there a good book I should check out? Thanks for any first-steps advice.

Maryann Haggerty: First step: Just check that credit rating and make sure it's as good as you think. Credit reports are prone to errors, and checking them is free. (Look at web sites of experian, trw and transunion.) Then straighten up any stray debts you have.

Otherwise, sounds good -- except you have missed one other step. Get out there and look at neighorhoods/houses and see what you like and don't like.

Elizabeth Razzi: Very first step should be to go over your checking and savings accounts for the past two years. Develop a realistic budget for your down payment and monthly expenses. Quicken and a bunch of web sites have calculators to help you figure out hypothetical payments. Then get pre-approved from a lender. Try all of the ones you mentioned. And then, by all means, get out on foot, bicycle, skateboard, whatever & investigate neighborhoods. Go to coffee shops there...get a feel for places. Then start your home search. And... well.. there is one other book out there by somebody called Razzi that you might check out.

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Alexandria, Va.: Hi and thanks for considering the question... First-time home buyer in the local market. Prices are down and interest rates seem manageable (at least today, though I understand they are rising). My question is on down payment. I don't have debt but I also don't have 20 percent down. 10 percent is stretching it, but probably I can manage if I look into my retirement account. It's clearly a different market than 2 years ago. I'm conservative and won't take off more than I can chew. However, I'm tempted to take out a modest loan from one of my three 401k accounts to add to a 10-15 percent down payment. It would knock down the mortgage insurance and I wouldn't have to consider FHA. I guess my question is, should I consider FHA or consider a loan to myself? Thanks in advance for your help.

Maryann Haggerty: As always, crunch the numbers. But without doing so, my gut feeling is try FHA. I don't know how old you are, but those 401k loans can wreak havoc with your retirement planning.

Elizabeth Razzi: Why the dread about dealing with FHA? You can make as little as 3 percent down. Avoid borrowing from your 401-k if at all possible, even for a home. Now is a particularly bad time to tap a 401-k that's invested in stock mutual funds. The values are low now! If anything, make just a 3 percent down payment on the house with FHA and ADD to your 401-k contributions, if possible. Ten years from now you'll almost certainly have more overall wealth.

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Maryann Haggerty: Questions seem to have slowed down a bit here, so I wanted to throw a couple thoughts out:

--Make sure you see Steve Pearlstein's column and chat today on the NACA loan workout event that was held here in DC this week. (But wait until we're finished here, OK?)

--Did you skip a home inspection during the boom in order to seal a deal. What are your thoughts now? If you're willing to talk with a reporter, drop me a note at haggertym@washpost.com.

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Northeast D.C.: As of late there have been many articles written about declining home sales and falling home prices, how does this affect the D.C. area? More specifically, are housing sales and housing prices in D.C. falling slower or faster than the rest of the nation?

Maryann Haggerty: Do you mean the District or the region? Regionally, we're not as badly off as California/Florida, not as unaffected as many other places.

Elizabeth Razzi: I'm hearing from a lot of folks in the local real estate business that there are starting to be more sales now -- at greatly reduced prices--in the outer suburbs where foreclosures have been the greatest, locally. Places like the Manassas area, for example. But George Mason University's Center for Regional Analysis said recently that foreclosures are climbing more steeply in some parts of the region now -- including closer-in neighborhoods. We'll try to get you a link.

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washingtonpost.com: Foreclosures Spur Real Estate Market

Maryann Haggerty: Here's the link to Center for Regional Analysis report on local foreclosure trends...

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Elizabeth Razzi: If you happen to be in a chatty mood, today's a good day to get your voice heard.... A lot of our regulars seem to be on vacation. I hope they bring back fudge...

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Fort Washington, Md.: We keep reading that home sales are slumping, but the articles never really say what kinds of sales. Is the decline across the board? Mostly among higher-priced houses? Or mostly in blue-collar areas?

I have a nice, but older, house I may need to sell soon. It has a big fenced yard in a settled, pleasant neighborhood with easy access to D.C., Alexandria and Metro. In 2005 I could have listed it for $250,000, maybe even $300,000. Today I'd like to get $180,000 to $200,000, and not have it sit on the market very long.

But the articles I read give me nothing to go on in figuring out whether my location and price range is likely to be harder or easier than average to work within.

Maryann Haggerty: It's difficult for any given article to tell you exactly what YOUR house is worth. It's a matter of a lot of things -- the house itself, the neighborhood, etc.

In order to find that out, you need to go a step farther. Real estate agents have always prepared comparative market analysis forms for clients--ie, a rundown of recent comparable sales. If it appeals to you, you can also dive into the many Web sites that allow you to do very number-intensive analysis. Around these parts, I would start with the market stats at mris.com -- they're broken down by county, by price range, etc. Real estate sites such as Redfin, Zillow, etc., also have tools for running all sorts of stats and comps.

Elizabeth Razzi: So much depends on how much competition you see nearby. Spend this weekend pretending you're a buyer in the $180,000 to $250,000 price range. Visit open houses. Look at listings and photos on web sites. Then come back home and take as detached as possible a look at your own home. Then replace anything shabby, dated, frumpy, broken or dirty. Make your home the absolute most-appealing house for the money. That's the only way to get a sale these days.

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Gaithersburg, Md.: My husband was laid off a few weeks ago and we have talked to a couple of Realtors about selling our house. We are able to pay the mortgage and live frugally in order to stay here until early next year -- maybe even early spring. One Realtor says sell now, the other says wait. What do you think?

Maryann Haggerty: Where are you going to live? And what will it cost you to move there?

If it were me, I would review my budget, tighten up everything else and keep the house if I could. At a bad time like this, you don't need more disruption, and you don't need to risk homelessness until things get worse. Your husband (and you, if that's in the cards) need to concentrate on finding a new job and keeping your head above water.

And all that stuff it would cost you a bundle to move? Maybe you sell it at a garage sale or on ebay now, while you have the time.)

Elizabeth Razzi: Good idea on eBay... Before you sell, you'd need to look at where you'd live afterward, and how much that would cost. Also, what are the prospects for your husband or you to get other employment, even outside your usual field of work? Maybe renting a room out might help with the budget? Give yourself a few more weeks to sort out your long-range budget. If you decide to sell, you might try an aggressive attempt just after Labor Day. If you don't get a good offer, take it off at the end of October and try again in Spring. Or... if you can... hang in there and ride out this rough patch, employment-wise. Good luck.

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McLean, Va.: So have D.C. market area prices fallen back to 2004 levels? I recall a discussion of about 18 months ago in which someone said that would never happen.

Elizabeth Razzi: Oh, good, you're back... You're right, I did not think the D.C. area would have the magnitude of price decline that we've seen. At least I didn't think so until we hit that financial-market meltdown last August. That changed everything, turning a home-price correction into a financial crisis that threatened the world economy. We haven't seen this kind of widespread financial trouble since the 1930s.

Maryann Haggerty: However, even Case-Shiller index numbers don't show that prices have fallen all the way back yet. The April 2008 index for the metro region was 201.21 (on a scale where Jan. 2000 equals 100). The April 2004 number was 176.62. Looks like it's back to October 2004, though, when index was right at about 200

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Silver Spring, Md.: Thanks for taking my question. Enjoy the chats.

Our mortgage company is on the list of "problem banks." Putting aside the questionable validity of such a list, what does happen to mortgages when the company that holds them fails? Do they get taken over by another company? Do they mature immediately (yikes)? Do they vanish into the mists? (OK, probably not that last one, but it would be nice.)

Elizabeth Razzi: Mortgages don't get called immediately nor do they vanish. Your mortgage is considered one of the bank's assets (assume you haven't quit paying). Those assets get transferred to another bank -- which will gladly accept your payments.

Maryann Haggerty: Not only will it gladly accept them, it will insist on receiving them!

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I guess I can give my ancedotal evidence of the : market. It has reverted to some what of a balance and the first rule of real estate applies: location, location, location.

In our neighborhood, about 1/2 mile from the Metro in NOVA. Three houses almost all identical all sold for approximately thier list price in about 2 weeks (One even had a seller drop out and had another over a day later). However, a street over a very busy road the house has languished for 3+ months at an other priced level which might have sold easily 3 years ago.

Elizabeth Razzi: Thanks for a report from the field...

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for Gaithersburg, Md.: For the poster whose husband just lost his job: Talk to your mortgage lender NOW. Make them aware that you can use your savings to pay the mortgage, but that it only goes so far. To avoid losing money long-term, they may be able to come up with a gentler payment plan (perhaps a slight negative amortization) to tide you over for longer and keep you in your house until your husband finds work again. But, be proactive and contact them now while you are still in good standing. If you wait until you cannot sell the house and are in arrears on your payments, sometimes it is harder for them to help and most of what they can offer is too little, too late. Advance planning can make all the difference between just getting over this rough patch to foreclosure, bankruptcy and homelessness.

Pick up the phone and call today.

Elizabeth Razzi: Good advice.

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NoVa: My spouse and I are ready to buy our first house close-in to D.C. We found a neighborhood we really like, and last week our Realtor sent letters to a bunch of the homeowners telling them we're interested if they're considering selling. How long should we wait for a response? In other words, if we get no responses, how long until we give up and shop in another neighborhood? (P.S. to potential sellers out there: buyers are out there! Some close-in places are still selling quickly! Please consider selling!)

Maryann Haggerty: Wow. Haven't seen the letters-to-neighbors-in-target-area one in a long time.

Unless it's one of those places that NEVER turn over -- there are some -- be patient. Wait AT LEAST until summer is over (nothing happens here in the summer), and then maybe a bit more.

But who knows? You may get a nibble. I once sold a house in response to one of those solicitations, because it came at a good time...

Elizabeth Razzi: It's true... we're headed into the August doldrums. Also, you might want to identify yourself on these letters. When I see them from real estate agents, I tend to dismiss them as just another form of marketing. "Buyers are standing by....."

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Laurel, Md.: Well, after 27 months, we have finally sold our old house and gotten out from under double mortgage payments. Fortunately, we owed very little on the old house, but we have finally gotten our equity out of that house and can put it in to the new house!

Some tips. These days, buyers can afford to be picky. There are tons of forclosure "great deals" out there, so you need to be more attractive than them. If you are not selling way below marketable value like the foreclosures, here are the tips that make the most sense.

Buyers who are not buying foreclosure types of "as is" are looking for move-in ready. Spend money on anything that a NEW owner would not want. For example, a new owner does not want to move into a house with bathrooms that require any type of work, so replace those fixtures (tub, commode, sink) or tiles that need to be replaced. Put a new shower curtain up. Replace light fixtures that don't work for the space. Clean up and brighten up the kitchen. You'd be surprise what replacing laminate countertops will do. Replace dated, worn or stained carpets. Patch peeling or fading wallpaper. Replace window treatments. We completely changed the look of our old guest room with $35 worth of new window treatments and it looked like new. Imagine that you were inspecting this home to move in. What would be acceptable or unacceptable for you to pay the price that you are asking? If you would not put up with it, neither with buyers and they'll find one that is.

We were fortunate (so to speak) that we had a home disaster in the vacant house some months ago and the insurance paid for a large amount of restoration. We made arrangements with the contractor to add in some additional rennovations which cost us less since much of the demo and labor was already paid for by the insurance company. Previously, it was on the market off and on for 18 months. We had two lowball bids that collapsed due to financing issues. After the reconstruction, the house was on the market for 2 weeks and we had a buyer bid our list price for the home and we closed 3 weeks from the first bid .

It can be done. You just need to be wise how you spend your money.

Elizabeth Razzi: Thanks for contributing!

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Takoma, D.C. re: 401(k) loans: If the earlier poster is a Fed and has a TSP 401(k) account, they can borrow from it for a house, and the interest goes into their account as well as the principle payback.

Elizabeth Razzi: Thanks for that -- But will they have to repay the loan if their employment changes? I don't know the answer -- but they should find out before they borrow.

Maryann Haggerty: In the private sector, that interest goes back into your 401(k), too. HOWEVER: While you are borrowing the money, it's not earning anything else but that (low) interest. The money you repay hteloan with is after-tax cash (rather than the pretax money you put in.) And if you leave the job, you gotta pay it back right away, or pay penalties.

In other words, borrowing 401(k) money disrupts long-term retirement plans, even though it may be the option you choose.

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Gaithersburg, Md., again: Re: selling the house now or later. We are ready to move from this area. Looking for a smaller "metro" area in the south. Job-wise, both of us are pretty flexible (although his age bothers him when we talk about job hunting anywhere). My gut feeling was to hang on and wait until spring. Good advice for tightening up and getting rid of "stuff." Thanks!

Elizabeth Razzi: You're welcome -- from both of us. You always have to trust a well-informed gut instinct, I think.

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Mt. Rainier, Md.: for your homeowner who doesn't have 20 percent down, I can't say enough good things about the Acorn program for low income households. At the time I used it 6 years ago, 3 percent down got you out of PMI. My sister used it last year and it saved her from having to get a second mortgage to make up what she didn't have for the downpayment. Both of our mortgages with Bank of America. And don't be discouraged by the term "low-income." The threshhold is higher than you'd think.

Elizabeth Razzi: That's correct -- average incomes (and expenses) in the Washington area are much higher than national averages. You shouldn't assume that you don't qualify for help.

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Washington, D.C.: When do you think that someone with a "less-than-perfect" credit score will be able to buy a house again? Ever?

Elizabeth Razzi: Well, of course. In fact you can significantly improve your credit score in just a year. Get to work on it!

Maryann Haggerty: Yes, look at this as a wake-up call/breathing period. By the time the financial markets warm up to subprime borrowers again, you can already have your credit rating back up to prime.

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Metro Area: Do you think HELoCs will ever really come bback? What would it take, and under what new conditions?

Elizabeth Razzi: Well, some home equity would help.

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Arlington, Va.: Maybe more of the regulars aren't posting today because, like me, they've decided to put off buying for another year or two.

My husband and I have been looking since last year, but we think the inner suburbs are still overpriced. We've decided to focus on saving for a bigger downpayment (20 percent if possible, and we are first-time buyers) and paying down our student loans. So instead of fall 2008, we'll aim for fall 2009.

The market now is just too shaky for us. By next year, hopefully, things will have calmed down, the rules for financing won't change daily, and prices may drop even more (yes, we are wishful thinkers). Until then, we'll keep renting our 1br apartment. C'est la vie.

Maryann Haggerty: I think the August slowdown just hit early. (And I suspect there may have been a couple tech glitches somewhere.)

Thre's nothing that says you have to buy, especially in a scary market.

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Re: entitlement attitude: Really Over the Entitlement Attitude refused to pay $400K for a home worth $200K, which was the right thing to do. The thing is, if (s)he knew the right thing to do, why didn't so many others? ROEA and many others knew they couldn't afford a McMansion on a McDonald's salary. Why did others feel -- dare I say it? -- entitled to own more home than they could afford?

Elizabeth Razzi: I think one overlooked point is just how long we had gone on with interest rates decreasing and home prices increasing. A generation of people, including folks working in the mortgage business, grew up never having experienced interest rates that go up. The answer to all bad loans was always to refinance! I'm not sure how much was entitlement, as it was a loss of the good-old fear instinct. A little fear for the bad times will serve us all well as consumers and investors.

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Richmond: They featured a family facing forclosure in the Richmond paper, and the wife didn't work. They explained that they thought it was best for the kids if Mom stayed home. Sure, when everything's OK. But once you start asking for a bailout, Momma goes back to work til everything's paid for! That depression era attitude of "I'll do anything, take two jobs, do my neighbor's ironing, anything, to pay my debts" is gone. Now it's walk away and get another credit card on the taxpayer's dollar. My Mom worked and my Grandmother worked, not necessarily because of career goals, but because the family needed the money. We all turned out OK.

Maryann Haggerty: Assuming, of course, that Mom can make enough money to cover the babysitter. A loan modification -- say, cutting an interest rate -- is a heck of a lot better for society than putting the kids into foster care.

Elizabeth Razzi: Not all that many Mommas worked during the Depression.

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Re: Fort Washington: I'm not sure what the case is elsewhere in the country, but in the Charlotte, N.C., area the high end houses seem to sell faster than anything. Two $700,000+ homes in my golf course neighborhood sold in less than 60 days, while houses just a very short distance away, priced not much lower at $300,000 -- $400,000 sit and sit and sit. Houses at the far lower end sell seemingly as fast as the high end. I guess it's a pretty bifurcated market, at least in N.C.

Maryann Haggerty: Haven't been to Charlotte lately, so I'll take your word.

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Annapolis, Md.: Home improvement question:

We have a hall closet that was used as a pantry until we remodeled the kitchen. Now that the kitchen has its own pantry, we are turning the hall closet into a coat closet. We are thinking of lining it with these cedar planks we found at Home Depot. Would this be a bad idea? Thanks!

Maryann Haggerty: That sounds nice, as long as it looks nice. Cedar coat closets are a lovely old-fashioned touch.

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Arlington, Va.: In this market, being on a busy street is the ultimate "incurable defect." There's a house just off Washington Boulevard near McKinley in Arlington. Tear-down, ripped every tree off the lot, built a monstrosity. The house then sat for nearly a year with about three price drops. More modest homes on side streets did far better over that time frame.

Maryann Haggerty: Yeah, it is. I wonder about all those houses that were built practically on top of the Beltway a few years ago...

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Richmond: I am thinking of trying to buy the empty (undevelopable) lot behind me for more garden space and to control it (we've dealt with dumping, vagrants, varmits, absentee owners who don't maintain it). But the $10,000 it would take to buy it might be better spent buying a new house with a garage. Might be better to invest that money in property with value rather than the luxury of the extra yard?

Maryann Haggerty: You can buy a new house for just $10K more? I know prices are lower in Richmond, but still...

Do you like your neighborhood and house otherwise? If so, that could be a bargain.

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Arlington, Va.: What are your thoughts on selling your house (in the $600K to $800K price range) without posting a For Sale sign? My parents are divorcing, and I think they don't want the neighbors to know why they are selling, and have opted to go without a For Sale sign. I think they are limiting their opportunity to sell since potential buyers may be passing through the neighborhood and fail to inquire about my parents' house because they didn't know it was for sale.

Elizabeth Razzi: I'm sorry for your parents' trouble. You're right, they should have a For Sale sign. They're very effective. Perhaps your parents will be surprised to find out how supportive their neighbors will be, once they know. And, besides, neighbors tend to pick up on these things anyway.

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AA County, Md.: You need some questions? Okay, I'll bite! Any thoughts on how much effect proximity to power transmission lines has on property values? I've been living with the lines for several years now and making use of the additional open space, but contemplating selling in the next few years. The property is a small farm, if that makes a difference. But the house sits pretty close to the lines.

Thank you!

Elizabeth Razzi: Oh... come back with this one next time... It's a good one, and we're running out of time.

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Washington, D.C.: If I buy a condo in the District before July 2009 can I get the $7,500 federal tax credit AND the first-time homebuyer credit in the District?

Elizabeth Razzi: No. The legislation specifically says people cannot qualify for the new federal credit and the District's first-time buyer credit.

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Arlington, Va.: How come the Post hasn't done some sort of comparison of the median income of people in this D.C. Metro area, compared to the median house price in the DC Metro area. For anyone trying to get into the market, I wonder when us renters will find a balance of interest rates and home affordability. It seems home prices have not been sustainable for awhile now here.

Elizabeth Razzi: Honestly, I think if you're looking at statistics to tell you when the time is right to buy a home, you're going to miss the boat by six to nine months.

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Washington, D.C.: Jim Cramer says it's time to buy. Is he right?

Elizabeth Razzi: I saw that! Of course, Mr. Subtle says EVERYONE should buy now. That's just as rash as when he said NO ONE should buy. I say you should buy when the time--and finances--are right for your budget and your life plans. There are, though, some reasons to get off the fence now. Are prices stabilizing? I don't know. But, interest rates are inching up, and may very likely go higher. The new first-time buyer tax credit, up to $7,500, is a limited-time offer. The $729,750 "conforming" loan limit for Fannie Mae and Freddie Mac will be reduced somewhat--in a few months--by the new housing bill. And supply is astounding. If your finances and lifestyle say "buy a home," these things argue for doing it sooner rather than later. booyah....

Maryann Haggerty: Wait. Everyone doesn't take their investment advice from cable TV???

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Cap Hill NE: a question and a response:

I am going to update the appliances and countertops in my row house kitchen. I'm not a cook, so cheap appliances would be fine with me, but I like to keep an eye on resale (not planning to sell, but...). How "high end" do I have to go? There was a story in the NYT about real estate gants who put in sub-zero etc. because they know it will sound good in the ad.

And to the previous poster, I am sympathetic to people who were misled into exotic mortgages, but I'm sorry, being "ashamed" doesn't cut it when their mortgage is going to be 4 percent and I, who bought a house I can afford and made all the payments, pay 2 percent or more extra.

Elizabeth Razzi: Thanks for the response...Re the appliances, if you're in a high price range, and all the neighbors have Viking this and Wolf that, then you probably ought to go for it. But otherwise, just get stuff that looks good and works adequately. Buyers are thrify now!

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Building new, Va.: We about start designing our new house (just bought a teardown in a close-in VA burb) and are thinking about not putting in a tub in the master bathroom. We'd rather not waste space and money since we never use the tub. There will be other bathrooms with tubs in the house. What are your thoughts on the effect on the resale value?

Elizabeth Razzi: That's what we did with our house. New master bath addition did not include a tub...but has a lovely shower. If we had the space and money I would have liked both, but that wasn't going to happen. For resale value, both would be better, of course. But as long as there is one tub in the house (for the kiddos) you should be okay on resale. And if you're going to live there a long time, you should definitely accomodate your own preferences.

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Arlington, Va.: Not really a question, just a comment. I'm looking for a SFH in Vienna in the $500K range. We've been looking for a long time, and I have to say that I'm so underwhelmed by the inventory and what $500K buys you. While I'd like some luxuries like a big kitchen with island and a screened in porch, the things that I absolutely must have are a master bedroom with master bath, a walk in closet in MBR, and 3 bedrooms/2 baths on one level. Even with the housing crisis unfolding, I'm shocked at how few houses have any of these "amenities."

Maryann Haggerty: You're describing a very nice house. I'd be surprised if you would find a lot of places like that in a nice part of Vienna for $500K.

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Suburbs, Md.: This is more of a comment than a question... A (gigantic) house in my neighborhood was featured on the front of a Post real estate section several months back, and now seems to be in foreclosure. It was offered at auction recently. Might make an interesting story to follow up on some of the "dream" houses that were featured in the last few years.

Maryann Haggerty: Send me any info directly, please -- haggertym@washpost.com

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Silver Spring, Md.: My husband and I are looking to buy our first home. The houses we are considering are at the high end of our budget, but with all our number crunching seem doable. We have read that you should only spend 30 percent of your income on a mortgage. Is this a realistic number for the D.C. area? If it is true, we will end up in a fixer-upper or far far away from work and metro. How do we calculate the margin at which we become "house poor?" Thanks.

Maryann Haggerty: That's usually about 30 percent of gross (pretax) not net, although a growing chorus of people have decided that long-serviceable ratio is flawed. It sounds like you've done what you need to do--sit down and figure out how much money you have left after those payments and whether you can live on that money.

By the way, I doubt these days that lenders will really let you bust the ratios significantly, so you may have no choice.

And is that ratio realistic here? Well, the sad fact is that poor people who rent pay a lot more than 30 percent of their income toward housing, and rich people often pay a lot less than 30 percent.

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Elizabeth Razzi: That's it for now. Thanks for the questions and insights, and I'll see you next time.

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Maryann Haggerty: Well, thanks for jumping in there, folks. We now have more questions than we were able to get to, and we're out of time.

In Saturday's Real Estate section, we have a package of stories about the strange, silly and sad things that people leave behind in foreclosed-upon houses.

Sunday, Elizabeth looks at staging and whether it works.

Enjoy your weekend!

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