Real Estate Live

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

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.

Razzi has 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 discussed 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. There's a lot coming up on the Hill in the next week or so as politicians try to come up with the latest iteration on homeowner help in various bailout/stimulus packages. These are all moving targets at this point -- any guesses we make are bound to be just that, guesses. But I suspect we'll talk about them anyway...

And we'll talk about just about anything else related to real estate, so please, jump in with your questions and comments. The sooner the better -- it's easier to respond to your thoughts if we get them before the last few minutes...

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Elizabeth Razzi: Hello, everyone! Our last chat was a spirited one (gotta love that). One comment came in after the bell that really deserves posting. A chatter, Fairfax, got the exchange started by sharing with us how her parents have been burned by this economy. They've owned their home a long time and had substantial equity, but they used cash-out refinancing to pay for their children's college educations. Now they cannot refinance to a lower interest rate.It sparked lots of comment on the wisdom -- or lack thereof -- of the parents' strategy. Here's the last word from Fairfax:

"I just wanted to note that my comments were not about how to pay my parents mortgage, I wrote in simply as an observation of how this market has screwed a lot of people. When my parents refinanced - they borrowed up to 350 even though homes around them where in the 500k range they assumed they where playing it safe. oh and btw - I have paid my parents back for my education and they placed it into an IRA Roth that has lost substantial value. I just wanted to point out that alot of people are realy hurting now by this situation and what good are low rates if the people who need help the most can't get any."

Let's see what we have this week!

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Arlington, Va.: Hello ladies,

In December I refinanced the mortgage on my condo. Last month I received my real estate tax assessment from Arlington County, and it is $8,000 more than the appraisal for the refi. So I plan to appeal the assessment. Before I do, I was wondering: is there a downside to a successful appeal? I know the benefit is paying less taxes, but I was wondering if there are any negative consequences to having the county lower the value of my home. Thanks.

Elizabeth Razzi: There's not really any negative consequence. And if you have an appraisal showing a lower value, that's pretty good ammo for an appeal.

Maryann Haggerty: Occasionally people have argued that a lower assessment might make possible buyers think the place is worth less. That is nonsense, of course.

Elizabeth Razzi: Actually, in this market, buyers ALWAYS seem to think a property is worth less, anyway.

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Cheverly, Md.: A Realtor (Jock) in our community sends his mailing list the price for each home sell in our community each month. The prices which I am assuming are primarily foreclosures are virtually what we purchased at 7 years ago. Our home is probably a little larger and better maintained or updated from the one's we have seen. However, with the drive down in prices, is there a reasonable rule of thumb for pricing our house if we sell? We are debating a refinance at 5.1% or putting our home back on the market.

Elizabeth Razzi: Rules of thumb don't work very well even in normal real estate markets. To price your home for sale you're going to have to take a snapshot of what values are at that time. You have to look at what else is on the market at that moment, including foreclosures and regular sales, and adjust for location and property condition. Think hard about refinancing if you're serious about selling the home in the next year or so -- that's not long enough to cover the expense of a refinance.

Maryann Haggerty: You really do need to see what's comparable. You may wish to talk with that agent, as well as with a few of his competitors.

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$15k Tax Credit?: I've heard that the proposed $15k tax credit in the Senate version of the stimulus would likely phase out over $75k income. Do you know if that would probably be adjusted gross income? In other words, if I make over $75k, but reduced my taxable below that amount through 401k contributions and interest deductions from said newly purchased home, would I then be able to claim the full credit? Assuming this measure passes, of course.

Maryann Haggerty: These things are almost always on Adjusted Gross Income. However, you are not defining AGI completely correctly. Itemized deductions such as interest paid on the house generally do not count when reducing your income to get to AGI. (I can't recall treatment of 401k off the top of my head--that's what TurboTax is for...)

Elizabeth Razzi: Other things come into play, too, such as the phase-out of itemized deductions once your income hits a certain level. Also, keep in mind that when there is an income limit on a deduction, it is usually phased in so that many people can claim at least part of the tax break. Stay tuned--we'll know more in just a couple of days.

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Tyrone, Okla.: I have a 16x80 mobile home on 4 lots. How much would it be valued at if I were to sell today?

Maryann Haggerty: Absolutely no clue. I have never been to Tyrone, OK--and you have. So you are the one who needs to see what comparable sales in that mobile home park have been.

Of course, I am assuming that you own the lots fee simple. It's much more common in most parts of the country for a trailer to be on rented land. In that case, your mobile home is a depreciating asset--ie, it's worth less than you paid.

Elizabeth Razzi: Seriously -- you could be talking about a rust bucket or a lovingly tended home. You've got some research to do.

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Clifton VA: Hi Ladies,

We own a lot to build on the Chesapeake Bay near Reedville and we are wondering what has happened to the price of land. Has it dropped? by how much? Thanks!

Elizabeth Razzi: Just don't know about Reedville, down on the lovely Northern Neck. You're going to have to roll up your sleeves and check some recent sales prices. Any chatters out there familiar with the area?

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Atlanta, Ga.: I purchased a condo over 2 years ago. I was given a brochure about the do's and don'ts. It is not a very thorough brochure. I was told the amount on my HOA fees and what was included. I never got a bill or receipt for my monthly payments. I always paid on time through my online banking. Gas and internet service are included in the HOA. There is no mention of cable. I pay a cable company $10.00 a month for the cable boxes. I never received a cable bill. I was never told that I was required to pay for cable or who to pay. Now the board is telling me that I owe over $500.00 in past due condo fees. I don't think that I should be responsible for something that was not discussed with me, for which I was never billed, or for which is not specified in the handbook. Can you give me some advice as to how I should handle this matter. Should I be held responsible for charges for which I was unaware? This matter was brought to my attention approximately 3 months after the former manager resigned and the new manager came on board. Do I have any rights? Can they put a lien on my condo? Can I file for an injunction to prevent a lien?

Sincerely,

Taking a Stand

Elizabeth Razzi: Okaaayyy. Yes, a condo board can place a lien against your home for unpaid assessments. But you shouldn't be at that point yet. You've been presented a $500 bill without good documentation of what it pays for. Keep it friendly at first, but firmly demand an accounting. And dig out the condominium documents, called CCRs, that you almost certainly received (and mostly signed for) at closing. That's where you will see exactly what expenses you're liable for. If it turns out you really do owe $500, talk with the condo board about spreading the payments out over time.

Maryann Haggerty: Ditto. The brochure is a convenience, but not a binding document. You need to go through the real documents, as boring as they seem.

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Atlanta: I read your last chat after it happened. And this really, really bugged me...

The woman who was trying to tell her "sob story" regarding her parents and how they "only" took money out of their house to pay for college... and now they were having a tough time getting a new loan and paying it back. WELL...her parents took a gamble. Yes, it worked well over the years, but at some point (now) it was going to go the other way. Yes, it's a gamble. They gambled with taking the money out using ARMs. It is always a gamble. No one ever knows how interest rates, or the real estate market or a hundred other variables, are going to go -- if they did, they'd make a fortune. Many times, one is able to either pay the mortgage or refinance. But not always. And we are in the "not always" portion of the probability curve. Just because something is unlikely, does not mean it will never happen. AND, as many people indicated in the chat -- the kids -- who benefitted from their parents' gamble, should be helping to pay back the loans. So don't get all huffy about how "other people" ruined it for your parents. They were taking advantage of things just like everyone else. That's right -- JUST LIKE EVERYONE ELSE. Don't try to convince everyone that that's not the case -- don't try to blame everyone else while holding your parents up for all to see and praise.

Elizabeth Razzi: And this was the other side of that heated conversation....

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washingtonpost.com: Mortgage Initiative Mired In Details

Maryann Haggerty: Here's an article we has today that looks at some of the tradeoffs inherent in trying to pull together the latest mortgage relief package. As it says, there are three key issues: How to get help to the right homeowners, how to aid the lenders that modify mortgages without encouraging these firms to make bad decisions in the future, and how much risk the government should bear to boost the housing market.

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Loudoun, Va.: As a fairly successful and seasoned real estate agent, I can't help but wonder why the press hasn't done a better job of scrutinizing the banks on how they handle short-sales. The banks finally got their act together on foreclosures and can get the buyers responses to contracts in 24 hours -- 3 days at most.

However, in short sale situations where the bank will take a much smaller hit financially, they take anywhere from 3 months to 8 months, in some cases, to get a response back to the potential purchaser -- even when we submit a sales price that is OVER asking. There are defininitely more steps that need to be taken, but they should only take an additonal couple of weeks, not months on end. This is really stalling our recovery -- epecially when we have buyers out there who want to PURCHASE. Any thoughts on why no one is calling FOUL?

Maryann Haggerty: We've touched on the topic, but the reality is that the banks don't have to open their books to us, just to their regulators.

My guess is that they're doing whatever triage they can, considering the circumstances.

Elizabeth Razzi: The delays are tremendously frustrating. But keep in mind there is often a second-mortgage lender objecting to the deal -- or the faceless investors who actually own the note. I also suspect -- don't know for sure -- that lenders have learned to wait for the next program coming out of Washington, which might offer them a better deal. Anybody have thoughts on that?

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Fairfax County, Va.: Hi, thanks for taking my question. Have the county governments been proactive in increasing the absorbtion rates of available inventory (ex. reducing the number of building permits, etc)? Also is the DC area projected to have population growth (mainly inflows) which would help mitigate the vacancy rates for rental properties and somewhat increase the demand for housing?

Elizabeth Razzi: I think the builders have been taking care of the job of reducing permits. They ain't exactly lining up for them. And governments don't tend to control permitting like a faucet, opening and closing the flow to achieve a desired target. If someone owns land, and their building plans conform to current zoning laws, they have a right to build. And, yes, the DC area is still brining in population, but not to the degree that we're accustomed to.

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First-time homebuyer: Not sure if this is the correct forum or not, but I just purchased a new home in June 2008 and qualify for the first time homebuyer credit. I'm very confused by what the proposed stimulus package could do to it. Some reports I've read are that it will eliminate the need for me to repay it, others say the no repayment is only for houses purchased after January 2009, others say the amount could increase, you get different stories from different sources.

Everything seems so fuzzy. If I have to pay it back, I don't really mind, it only gets deducted from my income tax refund anyway, so it isn't like I include that amount in any budgeting that I do. I always do it on my knows net income and then the tax refund becomes my 'icing on the cake' that allows me to pay down a bill, take a small trip, save, etc.

What is your take on the whole first-time homebuyer credit? Thank you.

Maryann Haggerty: Everything is VERY fuzzy right now. How proposed changes in the tax credit could affect those who might be eligible for the previous credit (the one that's really a no-interest loan) has not yet been decided.

You may want to hold off a while on filing your tax return.

Elizabeth Razzi: Definitely hold off on filing your tax return. I was just reading some of the rules about the $7,500 tax deduction, and they say you can choose whether to claim the deduction in 2008 or 2009. (Keep in mind I am NOT a lawyer or CPA.) Anyway, we should have better details in just a week or two, and the tax filing deadline for 2008 returns isn't until April 15. Wait to see how things settle.

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Reducing the number of building permits: County governments can't refuse a building permit. If an applicant submits the required fees and drawings and the plans meet all codes, county has to issue the permit. The market determines absorption, not the county review staff.

Elizabeth Razzi: There you go. Thanks.

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Washington, D.C.: Hello Elizabeth! I'm posting this from our email conversation the other week. I hope readers find it of some use. Happy Friday!

Hello Elizabeth, I read the online discussion and saw this posting after the discussion ended. I saw both postings and felt compelled to respond. There are actually quite a few homes in the $250k-$300K price near metro stops, particularly in SE and NE D.C. Granted, the condition of the houses are not consistent but they are relatively close to metro stops. So its not some much as being close to the metro as it is what metro stop are you near. This person couldn't afford a place in NW (say U Street or Friendship Heights) but the could find something near Brookland, Rhode Island and Riggs Park in NE. And in NW they could find something near Petworth. But watch out for condition! Some homes are move-in ready, only requiring painting, floor refinishing, and appliances and others need a GREAT DEAL of work including a new bathroom, kitchen, etc. It's all about what is the person willing to sacrifice for location. Perhaps the poster below should be CALLED OUT for not knowing their locations and real estate in D.C., I should know. I've been looking at homes under $300k in those areas for a year

$250K max, 3 br/1.5 ba townhouse, close to Metro: Hahahah. I can't believe you didn't call this person out -- that sounds like a joke to me. Three bedrooms near a metro in the District? You can easily rent a property like that for $3,300+ a month, so why would anyone sell it for $250,000? Unless the federal government goes bankrupt (hmm...), prices for a three bedroom near a metro will NEVER come EVEN CLOSE to $250,000 ever. I mean, heck, I'd like a place in Georgetown, 4 bedrooms and an English basement, indoor/outdoor swimming pool, 4 car garage, helipad, $500,000 max... should I wait until March to see if something like that is on the market?

Elizabeth Razzi: Hello, Washington, D.C.! As I said, last chat was a lively one.. Thanks very much for pointing out these areas. All very definitely worth a look. I'm not a big fan of "calling out," though. We're all here to learn from each other.

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McLean, Va.: Hello Ladies,

I was searching for a house in May in the D.C. Metro area but got cold feet and decided to get in a little better financial position before I take the plunge. So, I began looking again last month and was shocked to find out how much has changed since May. Before, probably about 20% of the listings were short sales or bank owned. Now, I would say about 70% fall into one of those two categories. The other 30% that are listed seem to be priced significantly higher. However, I've been told that buying short sales are bank owned properties can be a frustrating and lengthy process. So, because I have a short time frame (baby on the way) I've been focusing on the 30% of houses that don't have a bank involved. However, I have a hard time pulling the trigger because there is such a price disconnect between comparable homes that are bank-owned and those that are not. Everyone keeps telling me that it's such a great time to buy a house but I'm finding the whole thing frustrating. I feel like the glut of bank-owned propeties has added another layer of complexity to buying a house in this market.

Maryann Haggerty: I think you summed that up very well. Just because it's technically a buyer's market doesn't make it fun for buyers.

There are reasons for the price disconnect. Some have to do with home condition. Others have to do with the hassle factor, which is real.

Elizabeth Razzi: I agree completely. There's almost always a trade-off between price and convenience, isn't there? Even in retail, it's more hassle to wade through the racks at Loehmann's than at Bloomingdale's. If they get passed, the financial incentives for buying that are being cooked up in Congress may warm your feet a little. (And that's exactly what they're designed to do!)Good luck with your search -- and with the baby! (Don't forget, they're pretty portable, especially during the first year.)

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Washington, D.C.: I'm testing the waters by trying to sell my house FSBO. I plan to rent it if I'm not satisfied w/the market response. I am willing to work with buyer agents but not sure what is the going rate for commissions these days? I feel like I will be doing almost all the marketing work (internet, showings, etc.).

Maryann Haggerty: Be prepared to pay the buyer's agent 3 percent. That's not where you'll get any savings.

And of course you're doing the marketing. That's the point of a FSBO. That's where you look for the savings.

Elizabeth Razzi: In fact, make it loud and clear that you're willing to pay an agent 3 percent. And don't test the waters. If you decide to sell -- decide to sell. Be aggressive on the price and the marketing or don't bother.

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Rockville, Md.: Hello and Happy Friday! With all the trouble in the housing market -- why is NOBODY discussing the OUTRAGEOUS closing costs that are charged by lenders? and the OUTRAGEOUS commissions charged by real estate agents? Wouldn't (or shouldn't) this be the first place looked at to stimulate homebuying? Cutting those charges at least in half would do wonders. I am interested in hearing both of your views on this. Thanks so much for taking my question.

Maryann Haggerty: Our economic system still hasn't reached the point where a central authority can dictate how much people can charge for services such as these.

You can try to negotiate fees, shop for low-fee providers, etc.

Elizabeth Razzi: Absolutely, Maryann! We seem to have a lot of folks on the chat today who favor central planning...for other businesses' fees, issuance of building permits. Market forces haven't gone on hiatus!

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Woodbridge, Va.: Maybe one change the government can make to prevent this housing debacle from happening again is to limit mortgage interest deductions to only the initial mortgage and home equity loans that are taken out to materially improve the property. No more using your home as an ATM to pay off credit cards, buy a car, send the kids to school, or anything else, because you can just deduct the interest on that and re-finance later -- woohoo! If you want to take out a loan using your house as collateral, go ahead, but why should Uncle Sam (Me?!) subsidize irresponsible spending behavior?

Elizabeth Razzi: Interesting point. I'm old enough to remember when all interest was tax-deductible. Car loans, credit cards, the whole bit. But in the 1980s, when the government took away the deduction--allowing it to remain only for home-equity debt--that gave birth to the all-purpose home-equity loan phenomenon.

Maryann Haggerty: The current rule, which does limit non-home-related uses of home equity loans to $100,000, is an attempt to strike a balance there.

The argument balancing yours is that not all home equity debt is for irresponsible spending. For instance, that's the main place many people turn for the cash to start small businesses, etc.

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Laurel, Md.: My fiance' and I are torn; I live here, he lives in Richmond. We have both agreed to move to the Stafford/Fredericksburg area. He wants to rent a townhouse while we save up for a home of our own; I say we get an apartment (its just the two of us) while we save for the house. The deposits and cost of renting are just as much as buying a home. What say you?

Maryann Haggerty: It sounds like you're agreed on renting; the only question is whether it's a townhouse or a smaller (I assume less expensive) apartment.

That decision depends on your personalities more than anything else. I would opt for the smaller apartment and save up the cash. BUT my husband and I enjoy hanging around in the same room together even if we are doing different things. Neither of us seems to need isolation for thinking, hobbies, etc. (We actually don't regularly use most of our townhouse.)

I know people who love each other dearly but would strangle each other if they had to share a small space.

Elizabeth Razzi: Thank you for this week's My Partner and I Disagree question. This is just the first of many, many compromises you and your fiance will make over the years. Respect each other's opinion on this. I'd start by laying out my budget for housing. Then each of you can hunt for the best accommodations you can get for that price. Oh...and calling in a higher authority to settle a disagreement isn't usually the best way to go....

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Washington, D.C.: Hi Maryann and Elizabeth, I hope you can explain the justification for mortgage insurance to me. Frankly, I don't get it. It's required for borrowers to pay until they have (roughly) 20% equity in their home. It has to be paid whether a borrower has an FHA insured loan (MIP) or a non-FHA insured loan (PMI). But... if the purpose of mortgage insurance was to protect lenders when borrowers can't pay their mortgage, then the recent banking/mortgage crisis has me thinking that the insurance didn't do what it was conceived to do. So why should it exist? If foreclosure numbers had collectively grown to half of all mortgages, then I'd understand that the insurance payments couldn't balance out the losses. But that's not the rate of foreclosures that we've hit (thank God).

Maryann Haggerty: The short answer is that many of the loans that took the worst hit did NOT have PMI. They were 80-20 piggybacks and the like. In the last years of the boom, the market share for both PMI and FHA loans shrank to almost nothing.

Over at the FHA, so far MIP has done exactly what it sets out to do: Insulate the general taxpayer funds from mortgage losses. The FHA's loan fund, which is where the MIP goes, so far has paid for all the losses. (The worry is that it may not be able to hang on in the face of an actuarily extreme circumstance, but we're not there yet.)

On the PMI side, those companies are picking up some of the slack, too.

Elizabeth Razzi: True. Also, some of the PMI folks underestimated the true risk on some of these loans, just like the rest of the financial market.

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"The market determines absorption, not the county review staff.": The original question indicates a reason we're in the pickle we're in, though. Governments don't make markets, they only interfere (whether good or bad) with markets. Thinking that government can change economic laws is a good way to mess markets up.

Maryann Haggerty: I'm feeling so contrarian today! Don't governments also have a responsibility to protect health/welfare/communal good? That's what the permitting process is for. It's to make sure that builders pay their share, and that they meet minimal safety standards.

Elizabeth Razzi: Sure governments have a responsibility to protect health welfare community (I'd say that rather than communal, which is a bit loaded). That's why building codes have standards for the safety of the structure, ease of exiting in case of fire, control of rainwater runoff, and compatability of land uses. (You shouldn't put a chemical plant next to a preschool, for example.) But it's not government's role in a free-market society to prohibit people from using assets they rightfully own.

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Washington, D.C.: What's it going to take for home owners in NW D.C. to realize we're in a housing crash and significantly cut their asking prices? At least here, the bubble may've stabilized, but it certainly doesn't seem to have burst. Unfortunate for those of us in the market to buy leery of investing in an area where the crash seems yet to be acknowledged...

Elizabeth Razzi: You're talking about one of the least-bubbly areas around here. Could it be you're the one who has to adjust your expectations?

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Washington, D.C.: With home prices dropping and interests rates very low, I am tempted to buy my first property within the next several months.

I am currently working full time in D.C. but have a job possibility which will take me out to sea for 3 years with limited communication.

I am wondering if I should go ahead and buy something and if I get this job, rent out the property, or if I should hold out on buying for acouple years when I can be more confident of where I will be. Thanks for your help.

Elizabeth Razzi: Wouldn't it be much more enjoyable to be at sea and not worried about what renters are doing to your property? Wait until you find out where you're going to be.

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Washington, D.C.: Real estate for dummies question: what's a reasonable time frame for buying a house? Say you know you need to be in a location at a certain date -- how far before that date should you be aiming to close?

Maryann Haggerty: Backing it on up: You close the day you move in. Prior to that, it usually takes you 30-45 days or so to do all the paperwork (mostly mortgage related)after you agree on contract terms.

Before you go to contract, you'll want to actually get approved for a mortgage. Sometimes that takes hours, but more often at least days, and more if your credit is less than perfect.

You actually want that mortgage approval before you go househunting. How long the hunt takes is unknowable. Many people do it in a weekend. Others take months.

Elizabeth Razzi: Remember that you can make move-in date one of the terms of your contract. If you find a home you want, but it looks like closing would happen a month or two ahead of your preferred timetable, put a later closing date in your purchase offer. It's just one more negotiating point. If you're thinking of buying in the next six months or so, I'd go ahead and start checking my credit and get pre-approved for a loan.

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For the Fredericksburg Fiancees: Better go cheap, you're both going to be spending more on gas than you are now (unless you work at home).

Elizabeth Razzi: Good point.

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Wheaton, Md.: Just a comment re: the parents who took a refinance for their kids' college educations -- sounds like they took another gamble when they got repaid back by one of their kids, and chose to open a Roth IRA, when they could have paid down the home equity instead.

Elizabeth Razzi: That's one of the brutal things about this economy -- all our assets are getting hit.

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Lot on the Chesapeake Bay: Actually my question was about the trend of prices for land in general. Is it as affected as real estate?

Maryann Haggerty: Empty lot prices in fact tend to swing even more widely than do those with finished homes on them.

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Market forces and RE agents' fees: We aren't seriously saying that agents adjust their fees according to the market are we? This is one corner of the free market that doesn't function. Which is a nice way of saying "borders on price-fixing."

Elizabeth Razzi: There are discounters out there. And when commissions are based as a percentage of sales price, those commission dollarss are shrinking along with the market. Hey, go ahead and negotiate the fee.

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Fairfax Revisited: Whoah, wait a minute. I appreciate Fairfax's explanation, and I don't want to minimize the pain her parents are feeling. But they are not exactly innocent victims of the housing crash. I don't have a problem paying for college with a home equity loan; personally, I can't imagine borrowing more than a third of a million dollars for college, and certainly not putting my house at risk by taking on payments that I might not be able to easily make, but their family, their choice.

What strikes me is that the kids paid them back. Which means they had the ability to pay off that equity loan (or at least some of it) -- and they chose NOT to. Instead, they took that money, which they apparently couldn't afford to lose, and invested it in the stock market. That's no different than directly borrowing against your house to invest in stocks -- a hugely risky move that almost no legit financial planner would ever ok.

I feel bad that Fairfax's parents are suffering, but blaming the housing market isn't fair. Her parents took a chance borrowing against their major asset to play stocks, and they lost. It's a shame that the housing market now won't let them refinance to ease the pain of that loss -- but it sure didn't cause those problems in the first place.

Elizabeth Razzi: Thanks for the comment.

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Annoyed first-time homebuyer: So, I purchased my condo in January 2008. Had I known then, what I know now, I obviously would have waited (even though I got a fairly reasonable deal). What really irritates me is that the $7,500 credit is only for purchases made after April 2008. I know I'm just whining, but it just seems so unfair not to make a credit span the entire tax year, rather than just a portion of it.

Maryann Haggerty: You're allowed to whine, if it makes you feel better.

The purpose of that credit was to act as a stimulus--that is, to push buyers into the market. It wasn't meant to be a pat on the back for those who had already bought.

Elizabeth Razzi: Will it make you feel better to know that they have to pay back the $7,500 over time?

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Washington, D.C.: If the 15,000 in tax cuts/credit (Assume it makes it through in the stimulus bill) in home purchases this year. Is the tax cut/credit the same as the 7,500 credit to first-time homebuyers? If not, could you explain what benefit this will have on a homebuyer? Thanks to taking my questions.

Elizabeth Razzi: I believe it would replace the $7,500 credit available now.

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Washington, D.C.: I bought a condo last year in the District and apparently after sending in my Homestead Rebate application form, it was never logged in by the Real Property Tax office, so I had to send it in again. Now that it has been filed after confirming my square and lot detail through the city's website, what is the appropriate next step once I get my 2009 assessed value form from city? Will my tax rate be adjusted if I send this document to the lender since I pay my real estate taxes directly to the bank? Are there any other steps that I would typically need to take?

Maryann Haggerty: To be clear: You pay your taxes into escrow. The bank then pays them to the city, twice a year.

When you get your assessment, make sure it is correct and includes the exemption. When you get the tax bills, make sure they are correct, too. Check among other things to make sure that the box that says the bill is being sent to the bank is checked. (You don't have to forward it or anything, but if you're nervous, feel free to check directly with the bank.)

Once a year, your lender will send you a reckoning on your escrow account and adjust the payments as necessary to reflect what it's estimated you'll owe in the coming year.

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Hyattsville, Md.: Hi, Maryann and Elizabeth,

My husband and I have just had a baby and have found a wonderful community of new moms and babies here where we live (seriously, local parents have been delivering dinners to us twice a week for two months now!). We may need to move because of my husband's job and I'm loathing the thought of not only moving with a baby but also because I don't know if we'd find such a supportive community. How do you find out about stuff like this -- the intangibles, I guess, in a new community? Hoping we don't have to leave.

Elizabeth Razzi: Hi, Hyattsville, Congratulations on the expanded family! You're right, these intangibles are hugely important. I'm not plugged into the mommy Web sites, but you should look for neighborhood & parent blogs. If you belong to a religious community that can be a great starting place to look for neighborhoods. Anyone else with ideas?

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Bowie, Md.: Please discuss the possible advantages/disadvantages of buying a home from a relative. A couple of things come to my mind: The seller could save some Realtor fee by it being a lot less work for the realtor (maybe they just help with the paperwork); a deal could go bad and cause family friction. Would appreciate any other thoughts.

Maryann Haggerty: Those are both valid considerations. In this sort of transaction, you won't actually use an agent, most of the time, so you sav that money. But PLEASE use a lawyer to draw up the contract, so it's very clear what the obligations of both sides are. That's how you avoid ruining your relationship.

Less obviously: On the plus side, your kids will love growing up in your old neighborhood, where their roots are deep. (However -- trust me on this -- they'll reach a point where they chafe at being known by everyone as "Rosie's daughter.")

And I am also told that your mother-in-law will probably hate your new decorating scheme.

Elizabeth Razzi: Absolutely, you need to hire a lawyer. You might consider having both buyer and seller pay a couple of hundred dollars for their own apraisal, to help ensure that neither one can be accused of taking advantage of the other years down the road.

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Silver Spring, Md.: My longtime boyfriend and I are thinking of buying a condo together and plan on joint ownership. Do you know how the first-time homebuyer tax rebate (even the current no-interest loan version) works for two people buying a property together? We're both first time homebuyers. Thanks.

Maryann Haggerty: Two unmarried persons buying together may split the credit "in any reasonable manner," according to the IRS.

Here's a link to a helpful IRS page about the credit:

http://www.irs.gov/newsroom/article/0,,id=187935,00.html

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Eastern Market: Thanks for taking my question. I put my two-BR Eastern Market rowhouse on the market in June when I moved out of the area for a new job. In spite of having pretty consistent traffic it has not sold. My question is, how long is too long in this market? Do we need to take it off the market after it has been on this long? (IE- does the listing get stale?) We finally staged it in December as it had been vacant and it has changed the look quite a bit, but I am worried people will not want to see it knowing it has been on the market over 7 months. Thanks.

Maryann Haggerty: That's pretty stale.

Staging the house that long into the listing isn't going to reawaken interest, especially among buyers who have already seen the house. Only a price cut will do that.

Elizabeth Razzi: And taking it off the market for a month or two...and then re-listing to catch the spring market (such as it is these days) really won't re-freshen it. Smart agents will know it's a holdover. You need to cut the price to make it move -- or quit and try again in fall.

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Alexandria, Va.: I owe $217,000 at 5% on my primary residence and $150,000 at 5.5% on my rental. I want to refinance and take cash out on my primary residence and use that same cash to payoff the mortgage on my rental property, thus getting rid of the 5.5% rate. QUESTION: Is the interest associated with the new loan amount ($367,000) on my primary residence deductible? Note -- None of the cashout would go toward improving the primary residence. Thanks for helping. I am hearing/reading many different opinions on this question.

Maryann Haggerty: Look at IRS Publication 936, "Home Mortgage Interest Deduction."

You can deduct $100K of that home equity loan.

However, the interest you're paying now on the 5.5% loan is deductible as a business expense. So how does the math work out for you.

Elizabeth Razzi: I'm not so sure you're going to save enough on the interest rate to make the refinancing costs worthwhile. Get thee to a calculator.

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Michigan Park, D.C.: Hi Ladies. I am considering putting my house on the market in the spring. However, I am dismayed in the drop in value of sfh's here in my part of the city (I purchased in the summer of '05) and the amount of time houses are on the market. There are some upgrades that I would ordinarily do to the house before placing on the market, but I am concerned that I will not get back any of that money. I have already spent quite a bit on kitchen and landscaping uprgrades. What would you suggest I do?

Elizabeth Razzi: If you want it to sell, you need to make it pretty. Take your best shot, in terms of price and condition, DAY ONE on the market. Or don't bother.

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Elizabeth Razzi: A question for you folks in the field: How is it going getting a mortgage to buy or refinance a condo? If you'd like to talk about it, please send an email to Dina@washpost.com

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Inspection 101: I am buying a home built in the 50s, and the owners have made no disclosures. My inspection is scheduled (and will have transpired before this chat takes place), but I am having anxiety (normal, right?). What else do I need to do to protect myself? What if there is something beneath the floor or in the walls that the inspections does not reveal? I do not plan on having children, so lead paint is not a concern to me (uh, should it be?), but I worry about other unknowns. Is there anything else I should be doing to investigate this house? Thanks for trying to calm my nerves if you can.

Elizabeth Razzi: You're right -- anxiety is completely normal. I hope you took advantage of the opportunity to accompany the inspector and ask questions. You are NOT going to find perfection, especially in an older house. But inertia is on your side too. The house has stood for 50-some years, so why not a few longer. Do pay attention to lead paint. It can affect your health -- and resale value. But it's a manageable risk. Look to see that the electric system is up-to-date, with a modern circuit breaker, enough power and GFI plugs (like the ones on hair dryers) in kitchen and bath. Ask the inspector if the structure is sound and the attic properly insulated. How old is the roof? Remember, it won't be perfect. You just need to take stock. Good luck.

Maryann Haggerty: There will indeed be stuff under the floor and behind the walls the inspection does not reveal -- but don't worry too much about it. Indications of bad problems actually will usually show up in the inspection.

If the inspector does find something that may indicate a deeper problem, he is likely to recommend a more in-depth inspection by a specialized professional, such as a structural engineer. Pay attention to those recommendations.

All houses have some flaws. You'll be able to live with most of them.

Consider a radon inspection, too.

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Elizabeth Razzi: We're out of time. Thanks for an invigorating chat! We'll have all the details for you on any housing stimulus that comes out of Capitol Hill. And we can all size it up next chat. Have a great weekend!

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Maryann Haggerty: Whoops. Time has flown, and we didn't get to everything. (The tax questions always take me a little longer -- I need to try my best not to get the answers backwards...)

Tomorrow's Real Estate section looks at assessments and appeals, as well as lots of other good stuff.

See you in two weeks!

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