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Maryann Haggerty and Elizabeth Razzi
Washington Post Real Estate editor and columnist
Friday, April 3, 2009; 1:00 PM

Post Real Estate editor Maryann Haggerty and author Elizabeth Razzi discussed the local housing market -- from condos and investment properties to contracts and mortgages.

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Maryann Haggerty: Thanks for joining us today. We'll dive right in and answer your questions.

But here are a couple questions I've been wondering about. Perhaps you have some ideas?

--What makes a good investment property in this market? Sure, yeah, make sure the numbers work, etc., but how about details?

--As weather warms up, is anyone out there thinking about buying/selling a second home? Thoughts?

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Elizabeth Razzi: Hello, everyone! This is the weekend my house gets larger--that is, I set up the furniture on my back porch. Please jump in early & often, we love to get dialog going and it's easier to do early in the hour. Let's go...

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Refinancing difficulties?: Do you all cover refinancing? Last week, when rates went so low, I called my mortgage servicer about refinancing. They told me my loan was owned by Fannie Mae, and to wait until they worked out the details of some deal that would help us more than refinancing (we are not behind, not underwater, etc). My friend called about refinancing, too, only her lender told her that because she was current, they wouldn't refinance her. Is anyone else, especially folks who are up to date and have no problems, having difficulty getting anyone to work with them on a refinance?

Maryann Haggerty: It seems to me that everyone I know has refinanced in the past few weeks. However, some small lenders are saying that it's tough to get cash. We'll see if we can dig out an article that ran yesterday about the problems these lenders are having with their lines of credit.

Elizabeth Razzi: I think you reached a confused loan officer who thought you were asking about the Obama administration's refinance plans for people with little equity--or for people well on the way to foreclosure. Call back and stress that you're looking at a simple refinance. If you have less than about 30 percent equity -- at today's value-- you may indeed be a candidate for the Obama refinance program.

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Arlington, Va.: Hi Maryann and Elizabeth. My husband and I just locked in our mortgage on our first home. I'll give you my report as someone who has been looking recently in the Northern Virginia area: seller-owned homes are moving very quickly right now as long as they are priced comparable to others sold in the area. But prices are way down -- the house we bought appraised for $350,000 last year and we bought it for over $50,000 less. Anyway, our realtor and our -- I don't know what you call him -- the person representing the bank that is our lender, have been amazing and fabulous. They made the process easy-to-understand and really helped us quite a bit. We'd like to get them both a little gift during closing. Is this okay? And if so, what would you recommend? Thanks.

Maryann Haggerty: Usually, your agent will give YOU a gift. (Champagne or something else housewarming-ish.) However, something from you to them would not be amiss if they've been great. Nice chocolates come to mind.

But what they really, really want from you is your promise that you'll recommend them to friends.

Elizabeth Razzi: Now, more than ever, they really want that recommendation. A signed thank-you letter would probably go into your agent's files and be used during future listing presentations.

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Annandale, Va.: Seeing that most buyers complain that the prices for houses are still too high and need to come down more, what do you recommend for an owner who is now $90,000+ underwater(and getting worse)? If the prices will never go back to what they were because it was an artificial bubble, how are you ever supposed to move, either up or laterally? I didn't over extend myself, never made a late payment. Its just a 1br condo. But as it stands, the only way to move to another state or anything is to walk away from the condo and let it go into foreclosure. I know its not wise, as far as credit is concerned, but what are your other options?

Maryann Haggerty: The primary other option is staying. If the prices never ever ever go back, well, you'll need to evaluate your options and realize that you lost money on your investment. However, if they go back in 5 or 10 or whatever years, that's different.

Elizabeth Razzi: Never is a very long time. And some people, when major life changes (like a job transfer or family illness) force them to move to another city or just to a different home, will have to walk away from their homes in situations like yours. Sure, that will wreck your credit, but people do overcome that with time. BUT...if there's nothing forcing you to move, you can ride this thing out. Maybe you will still have to sell at a loss someday, but it might not be as drastic as it would be now.

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Davidsonville, Md.: Are refinance deals available?

Maryann Haggerty: It strikes me that the lowest 30-year rates we've seen in a lifetime count as a deal. Were you looking for something else?

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First-time buyer credit for unmarrieds: I keep reading about the $8,000 credit for first-time buyers, but it looks to me like it is $4,000 for people filing singly. Is that correct? I recently signed a contract on a house and am not married to my co-borrower; as I read it, we each take a credit of up to $4,000. If my income disqualifies me, he takes $4,000 (not $8,000) and I take nothing. Right?

Elizabeth Razzi: Here's what the IRS has to say: http://www.irs.gov/newsroom/article/0,,id=205416,00.html

The credit is up to $8,000, except for married taxpayers filing separately. Then each taxpayer can claim $4,000. Looks to me like you should qualify for the $8,000. Be aware that the credit gets phased out starting with adjusted gross incomes of $75,000 for singles; $150,000 married filing jointly. You can find a lot of detail about the deduction on www.IRS.gov.

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Holly Springs, Md.: How do you know if the person who's doing your loan modification is scamming you or not?

Elizabeth Razzi: The person asks you to pay money for his service. There are high-quality non-profits that offer this help for FREE. Take advantage of them.

Maryann Haggerty: Please be careful out there, folks. We are seeing an alarming rise in loan modification scams.

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Washington, D.C.: A DC tax question that I hope you can shed some light on: I haven't been able to get a good answer searching online or talking to agents. We are looking to buy in DC in the near future, and many of the properties we've looked at are so far recent rehabs and many are listed on the DC tax rolls as Class 3 : Vacant. I looked up some of the city records for these properties out of curiousity and saw large tax bills due because of the Vacant tax rate (tens of thousands of dollars). Do you have any idea how that works contractually at closing? Are the sellers obligated to make those payments prior to closing even if the current tax bill covers a period after the closing date? Are they owed a refund at that rate if settlement happens in the "middle" of a tax period? Will the tax rate automatically reset when the sale is recorded with the city? Of all of the questions we've had about buying our first place I don't know why this one is still bugging me, but it is.

Maryann Haggerty: Those vacant-property rates in DC are very very high.

Usually, tax bills are split between buyer and seller on a prorated basis as of the day of closing. If the bills are paid in advance by the seller, the buyer reimburses the seller for the days the buyer actually owns the place. (That is, yes, they get a refund from you at closing.)

Your settlement company should be able to explain this quite clearly. It's an everyday thing.

Now, the other part of your question: NEVER EVER ASSUME SOMETHING HAPPENS AUTOMATICALLY IN THE DISTRICT OF COLUMBIA. Is that clear? You should check with the property tax office and make sure that every possible I and T is dealt with in this situation. I have heard of circumstances where in fact the rate got caught in Kafka-esque complications.

Elizabeth Razzi: Also, never assume there is ANY ASPECT of who-pays-what that cannot be negotiated in the contract. A $10,000 tax bill can easily be swapped for a $10,000 price reduction. Experienced real estate lawyers can be very helpful with this sort of thing.

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Arlington, Va.: I wanted to get your take on this question. My friend and I at work were discussing housing in the Washington metro region and one of our observations was that there seem to be a fair number of million-dollar homes around -- more than the market can support. We were trying to figure out if there were enough people around here who could afford such housing. Do you think the area has a disproportionate share of million-dollar homes?

Elizabeth Razzi: I've driven around wondering that for years and years. Then I realize there are a whole lot of people around Washington who earn way more money than I do. Seriously. Think of all the law partners, thriving small-business owners, association executives, defense contractor bigwigs, and on and on. There really is a lot of money around here, hence the expensive homes.

Maryann Haggerty: I've always thought that's a sector prone to overbuilding. Why? Because I suspect many developers of those homes (like lots of other developers) do a good job measuring possible demand for their product--and a bad job measuring competition that is trying to reach the same customers. That's not as much of a problem at the low end, where you have a large pool of customers. At the high end, where the customer pool is more limited, the problem becomes more pronounced.

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Burke, Va.: Can a HOA enforce their rules selectively? We are encountering a problem with a local HOA that is trying to close a family child care provider when they are aware of at least two other providers and many other home businesses. We believe it is a personal and perhaps racist issue.

Maryann Haggerty: "Can" they? Yes. Is it legal? Probably no.

Elizabeth Razzi: You'll have to go to war to fight this on the legal merits. But, especially if you can document there is racial discrimination, you can find allies quickly.

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Washington, D.C.: First time buyers may be primed to cash in, but the DC market is ful of really crappy homes for sale for most of us normal buyers -- there are a lot of really greedy sellers out there who think their tiny 2br/1ba homes are worth $500,000 to $600,000 and there are few opportunities in the sub-$400,000 range. To top it off, lender underwriters have stopped lending on all properties with estimated price increases of 20 percent or more in less than a year. It seems that the property flippers with cash are buying up foreclosures and trying to flip them, but as soon as they attempt to take a profit the lenders won't even consider them. There are many on the market -- but again, they're marked up anywhere from 40 to 200 percent. Some might argue that these properties are not worth the price, but those of us without a few hundred thousand in cash laying around can't buy the foreclosure properties. The flippers may be being greedy, but they have a role to play. I know the lenders are trying to avoid a quick price run-up again, but it seems a bit unreasonable for them to determine the value of properties based solely on last sale price, when these properties are being purchased at very low prices. Everyone is saying this is a great time to buy, but that's just not the case in DC. What can a normal potential buyer do when there's simply not much inventory of solid properties available? Is there any indication that lender underwriters will loosen their terms?

Maryann Haggerty: Underwriters will be tough, period, considering what they've been through and are still going through. And I think we want them to stay that way.

So are they right or wrong to shy away from loans on properties that have doubled in value over a year on paper? I'm not sure. I do know that these big big jumps in value are a sign not only of a flipper doing a good job, but also of a flipper pulling off a scam. If they don't set a red light flashing on the desktop underwriting software, I'm not sure what should.

And so we come back, again, to market forces. If the sellers can sell at those prices, then they're not being greedy. If they can't, then they can't sell, and they have to deal with that.

So, is there a role for seller financing here?

Elizabeth Razzi: You're not explaining why the price would increase by 20 percent or more in a short time. It could be justifiable if there was significant repair and rehab of the property, but otherwise, I just don't see the argument. And I can't imagine lenders would, either.

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Arlington, Va.: Regarding the first time homebuyers tax credit. I am single and claimed the entire $8,000 while my co-borrower claimed zero. You can split the $8,000 however you like as long as your income doesn't force your credit down.

Maryann Haggerty: That's how I read the IRS rules--it's an $8,000 credit for the transaction.

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Tips from the field -- a real estate brokers opinion: Best tip I can give you, and I have been a real estate broker for years -- fire your agent. Yep. First off, interview at least three before listing your property. Don't sign a listing agreement for more than three months -- you can renew it. Don't agree to any penalty should you decide to list with another agent AFTER your agreement has expired (you would be amazed at some of the idiots who don't read this important fact in their listing agreements). Don't listen to friends or family who want you to use them as your agent -- you will be sorry. This isn't some kids game -- you are dealing with one of the biggest investments you will ever have and you need to treat this appropriately. Business and friends never mix well. Read everything. Ask questions. No agent is ever too busy to see that his clients are well informed and well educated. If they are, fire them. Cancel your agreement or ask that the principal broker get involved. Buying? Get your ducks in a row first -- don't waste my time or yours if you are not serious. Lastly, we are in the business of real estate. I am not your shrink, your bartender, your meal ticket, your taxi or your ambulance. I will not be put upon by clients to show them the sites, arrange hotel stays, vacation outings, pick up your tabs for meals or drinks (unless I invited you), drive you around town while you have no car, pick up Aunt Ruth from the airport, listen to you complain about your wife, babysit your kids or run your errands. That's not my job -- hire a personal secretary. I am a professional and will do the best I can to see that you are treated as such so do the same for me. I am here to sell your home and/or help you buy a home not be your slave. Please -- respect the job. Thank you.

Elizabeth Razzi: A useful rant. Thanks.

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Arlington, Va.: The Federal government has designated some metropolitan areas to have a higher limit for conforming mortgages, about $630k versus $417 for the rest of the country. Washington, D.C. is supposed to be among them; however, I'm having trouble finding a lender who is willing to honor this designation. Are lenders gun shy after the meltdown, or are their customer service reps ignorant of the change?

Maryann Haggerty: They're gun-shy, but those mini-jumbos should be available. Can you drop me a note with names of specific lenders that say they aren't? The e-mail is haggertym@washpost.com

Elizabeth Razzi: I also suspect, especially given some of the comments in today's chat, that there are some overwhelmed loan reps out there who are having trouble keeping up with all the recent changes.

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Fairfax, Va.: Earlier in the year, we began working with an agent looking for a house, the agent came recommended so we signed a contract with the agent, however after about four weeks, we just didn't feel like the agent was the right one for us (too many reasons to list). We waited four weeks, because we wanted to give the agent a chance. At the time we signed the contract, the agent said we could cancel at anytime for any reason. Well now the agent is "refusing" to void the contract. What options do we have?

Elizabeth Razzi: Take this squabble straight to the agent's broker and ask that your contract be reassigned to someone else for the duration of the contract. And...next time...get "cancel at anytime for any reason" in writing.

Maryann Haggerty: Read the contracts. Always. But at least in this circumstance, the contractor is really with the broker, not the individual agent.

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Woodbridge, Va.: I've got a $140,000 mortgage that was financed two months ago at 5.375 percent. With my relatively small mortgage balance, would it be worth it to refinance?

Elizabeth Razzi: Good question. Refinanced only two months ago? I'd say it's probably not worth another go at it. There's not that big a difference between old and new rate, and you'll incur more closing costs. But try out the numbers using a good online calculator and see what they tell you.

Maryann Haggerty: I think you'll find that even teh smallest fees are enough to eat up that difference

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Washington, D.C.: I hear you two keep claiming you don't have a crystal ball. However, the so-called "experts" you rely on have laughable track records ("you" meaning not necessarily The Post, but media in general). Lawrence Yun? David Learah? Have you followed Yun's track record? He has been absolutely wrong in like his last 13 predictions. I had a hearty belly laugh about six months ago when Forbes named Yun as one of the Nation's top ten economic forecasters. Asking the leader of NAR whether or not it is a good time to buy is like asking a used car salesman if now is a good time to buy a car. The answer will always be "yes." And, if the info coming from NAR is indeed negative, you can bet they assuage the numbers to put the best possible spin on it. Locally the media keeps going to George Mason Professor Stephen Fuller. This is the same guy who said in 2007 that the worst was over and DC was immune to the downturn. He also claimed on WTOP that DC houses would go up to $14 million in 2050 and cost 11 times the median income. Seriously? If you can't find a reliable predictor, you should ask economist Peter Schiff. Sure he has an agenda and his own biases, but he has been correct in his forecasting about 90 percent of the time. There's your crystal ball.

Elizabeth Razzi: Might your name be Peter? There's a reason why we in the media identify economists by the organizations that sign their paychecks. Readers are smart; they understand that these guys are influenced by the organizations they work for. And there's a reason why we strive to include different economists in our stories, to mix up those sources. Do we ask Yun et al "Is it the right time to buy a home?" Heck, no! We know what they'll say. But they are the only source of comprehensive, nationwide, monthly existing-home sale data. Do you suggest we ignore that?

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Washington, D.C.: What's your take on "workforce housing" offerings (i.e., http://eyacapitolquarter.com/). Is the better pricing outweighed by the stipulations that come with it?

Maryann Haggerty: The stipulations--that you prove your income and that you pay back the subsidy if you sell-- strike me as a fair, creative way to make housing available to more people in an expensive region. (The subsidy is in the form of a no-interest, no-payment balloon loan payable on sale or refi.)

Elizabeth Razzi: Sounds fair to me. And if you aren't comfortable with the restrictions, that's cool. You just don't get that particular leg up.

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Savage, Md.: I owe little enough on my home that it's not worth paying closing costs to get a new loan. If I pay off my mortgage by borrowing from my 401k (which I would then pay back over 10 years, per my employer's plan agreement), can I tax-deduct the interest on that or does the loan have to be specifically with a mortgage lender?

Elizabeth Razzi: Oh, that sounds like a bad plan. Please don't do it. I can't even wrap my mind around the tax deduction part of your question. Most important, you want to keep that 401k money working and building wealth for your retirement. It won't do that if you've borrowed it for any reason. Second, if something should happen to your job (say a layoff or illness) you would have to repay that withdrawal immediately or face a 10 percent tax penalty -- on top of the tax owed on the 401k withdrawal. Don't do it!

Maryann Haggerty: I'll second that: Please don't do that! Please!

And you want another complication, as if there aren't enough? If you lose your job, you may have to pay back the 401k loan immediately.

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Woodbridge, Va.: Hi there. I'm looking to be a first time home buyer and would like to purchase a condo in the Arlington area, since I work in D.C. I've used the average rule of thumb (I heard 2.5 times your salary) which puts me at about the 165 mark. Is this a good rule to use? I'll have about 10-15 percent down for that mark by this fall and I'd really like to buy this year to take advantage of all the great incentives. Any tips you have would be greatly appreciated.

Maryann Haggerty: I just don't understand why people keep clinging to that "rule." (And on top of it, they can never decide whether it's 2 or 2.5 or 3 times salary.) It makes no sense in the real world, where interest rates can have such a big effect on your monthly payment. Example: Principal and interest on $100K at 5 percent is $536 per month; at 10 percent it's $877 per month. Those are big differences.

Perhaps it made sense once upon a time, when no one knew how to calculate an amortized loan without complex tables. People, there's probably a mortgage calculator on your cell phone.

And here's what makes sense: Your total housing costs--principal, interest, taxes, insurance-- should be somewhere around 28 percent of your gross income. Less is better. If you have other debt, it still shouldn't total more than a little more than a third of your gross for housing and other loans.

Elizabeth Razzi: I agree completely, Maryann! Even better is to work out a budget using your new after-purchase projected home/tax/insurance/condo fee payment. Can you live on that? What happens if your car dies or the water heater springs a leak? Can you handle that expense? When you can answer that yes, then you know for certain how much you can afford to spend on a home.

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Prince Georges County, Md.: My mother and step-father died in 2003, without wills. Both names on the are on the family home. I need to change the deed and add myself and my two siblings. Is there a DIY way to do this, as I can't afford a lawyer. Also, I was the executor of my mother's estate; closed bank accounts and transferred title to car.

Maryann Haggerty: You need to go through probate. Maryland has a streamlined probate process for estates under $200,000; check with the county Register of Wills for details. They can be very helpful.

I'm a bit confused--you were the executor, yet didn't deal with the single largest possession in the estate?

Elizabeth Razzi: I'm afraid this is one of those occasions where you really need to get the help of a lawyer. The chance that you could do something wrong and trigger a tax bill may outweigh the savings of bypassing a lawyer.

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Fairfax, Va.: I would love to purchase an investment rental property right now with property prices so low right now, but I can't make the ends meet since comperable rents in the area would not offset the property's mortgage. Have you done any investigation into independant renters and their abilities to make ends meet with the shrinking housing bubble? I would be curious to see how these people are doing, because after crunching the numbers a few weeks ago, unless I can put more than 30 percent down on the property, it just does not make financial sense even to buy a foreclosure property.

Maryann Haggerty: I'm wondering about this myself. Thoughts, poeple?

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Washington, D.C.: Good afternoon. What have you heard of the loan modification programs (about refinancing up to 31 percent of gross income for those temporarily suffering financial hardship)? Are people getting them? I'm considering applying for this through my lender, but I wanted to know if you've heard any stories.

Maryann Haggerty: Some of these programs have been a bit slow to start up as lenders get the software, etc., in gear.

You can find out a lot more on this Web page the Post has put together:

http://www.washingtonpost.com/wp-srv/business/foreclosureprevention/?sid=ST2009030401726

Elizabeth Razzi: And our loyal readers go through these refinancings, please drop us an email and let us know how it's going. That way we all can stay better-educated on this stuff. You can always find me at razzie@washpost.com

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Arlington, Va.: I have a complex question -- I'm buying a new house, but renting out my current one. The tax advice books say that my basis for depreciation is the lesser of my cost basis, or the current market value. My cost basis I can figure out pretty easily, but the current market value (which is suspect is the lesser) is a lot harder. I could use the county tax assessment, which conveniently separates the house from the land, but the assessor doesn't know about the new kitchen, windows, etc. Comparable sales are also hard, because they not only don't take into account improvements, but don't don't separate the land/house value either. How do I figure this out, without paying someone a lot of money to do it for me?

Maryann Haggerty: You pay someone a few hundred dollars to do it--an appraiser. If you want to convince the IRS that you're on the up and up, you're going to need that piece of paper from a licensed appraiser.

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Temple Hills, Md.: I am shopping around for rates in order to refinance, but each mortgage company requires an up front fee for the appraisal. I have not taken the step to pay for an appraisal yet. Is there a way for me to order an independent appraisal and pass that around to the different mortgage companies that I am shopping?

Elizabeth Razzi: They should tell you their interest rates, which change each day, without any commitment on your part. You'll get a more accurate quote if you already know your credit scores. Buy them for $15-$20 from www.myfico.com. You don't have to pay anything to get a rate quote. And no, lenders always specify who will do the appraisal for them. If you pay for your own, they're highly likely to ignore it.

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Arlington, Va.: I have a mortgage in good standing with Navy Federal Credit Union. Although they claim they never sell their mortgages, when I called to ask about refinancing under Obama's affordability plan, I was told that they still serviced my loan, but Fannie May actually owned it now, and Fannie May is not currently participating in the Obama plan. How is this possible, with Fannie May under federal control now? Is this even true? Thanks.

Elizabeth Razzi: You spoke with someone who is confused. Fannie IS very definitely involved with the Obama refinance plan. Call back and insist on speaking with someone else.

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Washington, D.C.: At what point are you locked in at a specific rate? I have a pre-approval but I am confused as to when my rate actually gets locked, or if I can request it at a specific time?

Elizabeth Razzi: You can't lock until you've completed the loan application, and to do that you have to have a contract pending on a specific address. Once that's done, though, have a very clear talk with your loan officer about locking in the rate. I'd want to lock in a rate ASAP (though others may feel more comfortable gambling). And make sure you get a written confirmation of that lock within a day or two of telling the lender you want to lock in your rate at that day's quote.

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Pacific Northwest: I have an outdated kitchen I can't upgrade, except for the appliances. I know most people prefer the smooth-top electric ranges these days, but I don't want that for myself. However, I'm only going to be here another couple of years, and if it would turn buyers off to have a coil range, I may reconsider. Gas is not an option. What do you think?

Elizabeth Razzi: I'm not naturally drawn to the smooth-top ranges personally, but when I've used them in relatives' homes I found I got accustomed to them quickly. Maybe you'd want to consider an induction cook-top? Some of them have the glass tops, but I think you can find them with raised plates as well. It might give buyers a little ooh-and-aah, and if you're going to sell in just a couple of years, that's a worthy goal.

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Laurel, Md. - Property Tax assessment: Hi, awhile back I read your article on reduction of property tax assessment in Washinton, D.C. surounding counties. I recall that Montgomery county reduced the assessment while PG country increased the assessment. I was not able to retrieve from your website. Would you please post the link?

Maryann Haggerty: Give me half a sec; I think we found that link...

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washingtonpost.com: Md. Assessments Reflect Downturn; Home Values Decline 3.4% in 3 Years, But Owners Can't Count on Tax Relief

Maryann Haggerty: For Laurel: Here you go.

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Anonymous: From the online feature this week that provided an overview of the whole metro area -- what on earth could have made 22204 (South Arlington) the steepest-declined close-in neighborhoods? Between the proximity it has and the conveniences and upgrades on their way in, the math doesn't make any sense. Shed some light?

Maryann Haggerty: In that case, my assumption is that the type of home actually changing hands has shifted to smaller homes, of which there are many there.

Elizabeth Razzi: South Arlington (much of which used to be in a flood zone) has the county's least-expensive real estate. I wouldn't be surprised if there were a lot of high-risk subprime loans made there during the boom.

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Cherrydale: I've noticed that since home prices have tanked, The Post has not seen fit to put this news on the front page very often. Of course we remember the stories about bidding wars on the front page.

Maryann Haggerty: Huh??? I hate to be flip, but what newspaper have you been reading the last three years?

Elizabeth Razzi: All those stories about foreclosures and economic crisis -- I suggest you read them.

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$4,000 for married filing separately?: Does this mean that just one person can get it? I'm married and have never owned a home. My husband owned a home until late 2007. We're looking to buy a home on just my income (he's unemployed). Could we at least get the $4,000 for me as a first time buyer?

Maryann Haggerty: It sounds like you know this, but for these purposes, your husband is not a first-time buyer. The IRS says: "For purposes of the credit, you are considered to be a first-time homebuyer if you, and your spouse if you are married, did not own any other main home during the three-year period ending on the date of purchase."

Often "married filing separately" means you have no clue what your legal spouse is doing--but how that applies in your situation? Hmmmm... This is the point where I have to say: Ask a real tax lawyer or accountant...

Elizabeth Razzi: Well, married filing separately doesn't always mean that. Sometimes people do that so one spouse can qualify to deduct medical expenses that exceed 2 percent of adjusted gross income. BUT...your question is about qualifying for the break in the first place. And it looks like your husband's prior ownership rules it out for both of you. Go to www.IRS.gov and read everything you can about the new deduction. I'm pretty sure they address your situation pretty explicitly.

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Fence Fiasco: I live in a subdivision with a HOA and a loosely interpreted set of covenants. I was the first house on a lake to put up a fence. Per the covenant guidelines it had to be wrought iron as to not obscure the view of the lake, with at 1.5 ft easement on all sides in case the utilities folks needed to get to their lines underground. Well, one neighbor has built up a fence right up to ours (no 3rd side or easement). The neighbor on the other side lucked out even more because the neighbor on his other side built a fence like ours (all 3 sides) so he has only built a fence connecting between the two neighbors, but leaving it open 1.5 ft on each side. To say the least it looks tacky. Do I have any recourse or should I just chuck this up as a loss? By the way, after all this, I plan on taking the fence with me when I move.

Elizabeth Razzi: If you're unhappy with the aesthetics of different fences, maybe you should volunteer for an HOA committee and try to draft design guidelines. Just a word of warning, though. If you intend to take that fence with you when you move, tear it down before you list the home for sale. Buyers would be well within their rights to expect that to convey.

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Springfield, Va.: We called our own mortgage company about refinancing. We specifically wanted a no point/no closing cost type of refinance. The loan officer actually told us that while our credit was fantastic (highest they had seen that day) and our equity was fantastic (years ago we put about 50 percent down), there was nothing out there for us. Really? Nothing? At least the loan officer was honest and said "now if you were delinquent or upside down, we'd have plenty of low interest rate plans for you." Seriously, I'm not kidding. It's no big deal, our rate is 5.25 anyway, but still, it sure feels like the ones who have done the right things can't get a break.

Maryann Haggerty: Shop around, but you may find that 5 or 5.25 percent is about as low as it goes for no points/no costs. (Of course you are paying for that.)

But why is this one of those good-folks-don't-get-a-break things? 5.25 percent is pretty darn good. No need to write a hardship letter, go through complex bureaucracies, ruin your credit, risk foreclosure...

Elizabeth Razzi: I think you hit upon a tired, cynical loan officer. If you have massive equity and great credit, you can qualify for a refinance -- with him or his competitor. Just shop rates at a couple of lenders, and if you see a good deal, apply. And you can thank your lucky stars and your good planning for the fact that you don't lie awake at night worring about losing your home to foreclosure.

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Elizabeth Razzi: Great chat, everyone! Thanks for your contributions. Please stop by the Local Address blog (find it under the "Real Estate" tab) and vote on The Weekend Poll. The subject is remodeling. Have a great weekend!

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RE: DC Tax: Trust me, we are not taking anything for granted where DC bureaucracy is involved. I just haven't been able to get a straight answer from anybody other than "don't worry about it, it will be handled at settlement." Well, that's not good enough for me. Take a hypothetical but realistic example from places in our price range: 2009 tax assessment of $50,000 at the Vacant rate. $25K due for first half due April, $25K for second half due in the fall. If somebody settles on April 1 you are saying that they owe the pro-rated amount of the $25K even though the property is now occupied and not subject to Class 3 status after settlement (assuming they move in immediately)? Or somebody settles on June 1 which begins the 2nd "half" of the tax year. Will the 2nd half bill reflect the $25K assessment or the lower residential rate? As far as I can tell any appeals to the tax assessment need to happen by April 1. I can't imagine that people buying former rehabs in the beginning of the year are stuck paying 10% tax rates for the rest of the year. We just can't find any specific information on how that gets resolved. Thanks.

Maryann Haggerty: The problem is, the answer is true: It will be handled at settlement. People resolve this question every day, in every jurisdiction.

However, in a lot of ways, I'm like you. I want to know detailed answers in advance. You may find that you need to pay a settlement lawyer to get as detailed an answer as it seems you need--or at least keep asking people until someone--an agent, a lawyer--can show you the HUD-1 settlement sheet from a similar deal.

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Maryann Haggerty: Thanks so much for joining us. I hope we were able to help a bit.

Tomorrow, the Real Estate section looks at how to borrow money from relatives for a down payment, and also a look at how many repairs sellers need to do in order to sell.

We'll see you in two weeks, but in the meantime, keep reading Elizabeth's Locla Address blog at www.washingtonpost.com/realestate!

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Maryann has been a business and real estate editor and reporter for about 25 years. Razzi is the author of two consumer-advice books, "The Fearless Home Buyer" (2006) and "The Fearless Home Seller" (2007). Join their Live Q&A every other Friday at 1 pm.

Editor's Note: washingtonpost.com moderators retain editorial control over Discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions. washingtonpost.com is not responsible for any content posted by third parties.


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