Real Estate Live

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

The transcript follows.

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Elizabeth Razzi: Hi, everybody. It's a bittersweet day here at the chat. Maryann is back from circumnavigating the globe, but only for a few more days. She's about to embark on a hard-earned early retirement from the Post. Maryann knows more about real estate, particularly the way it's done in the District, than anyone I know, and I've found it a joy to work for her. She'll have a standing invitation to drop in on the chat whenever the mood strikes her, but we'll always have to figure out what continent she has traveled to before we can snag a guest appearance.

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Maryann Haggerty: Hello, folks; it's nice to be with you to talk about local real estate.

Before we dive in, I have a personal note: This is my last Real Estate Web chat. After 22 years as a reporter and editor at The Post, I have decided to accept the company's buyout offer. As of next week, I'm moving on to what I hope will be a long-delayed personal Gap Year (well, maybe Gap Half-Year)of thinking, traveling, etc.

These chats have been a blast. I have always enjoyed hearing directly from readers and have loved how your input has helped focus what we do every day.

Now, onto the chat!

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My first investment condo: I'm contemplating purchasing a condo for investment purposes (actually, live in it part time for a year or two while I'm a super commuter, then converting it into a rental once we can sell our house in NE MD). I've found several areas where current prices seem to support positive cash flow (given my research on rents). But other than number crunching, where do I start?

Maryann Haggerty: Current prices supporting positive cash flow is the holy grail. See if you can get hold of condo docs to see whether there are surprises down the road. (You have to receive this info when you're close to a contract, but you may be able to get in advance.)

Elizabeth Razzi: Also, there are so many rentals in some condo buildings now that future buyers who would have wanted to be owner-occupants are turned off -- or can't get financing.

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Eagle River, Alaska: Professional couple with 2 toddlers moving to WA state. Husband will work at Tacoma General Hospital, wife is a dentist that eventually will open dental practice. First year rental and then buying a property. I need help, finding the best area to grow family with top schools in the area. I would appreciate the best advice you could give us as if I were one of your love-ones. Thanks!

Maryann Haggerty: This is Washington D.C., not Washington State. I know the lower 48 all looks the same from Eagle River, but you need to talk with people in the area where you're moving, not here.

Nonetheless: Your husband's soon-to-be colleagues at the hospital are a great place to start.

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Orlando, Fla.: Hello. I read an article several weeks ago about a proposal to increase the $8,000 tax credit to about $15,000 and would also allow non-first time home buyers to take advantage of the incentives. Do you have additional information? Thank you.

Maryann Haggerty: The National Association of Realtors would dearly love that change. Of course I can't predict what Congress will do, but my gut feeling is that's unlikely to happen.

Elizabeth Razzi: The housing industry lobbyists, and a lot of big brokerage companies are pushing hard to increase the credit. I wouldn't hold my breath given the increasingly loud concerns being raised about deficit spending. Then again, who ever would have expected some of the government interventions we've seen over the past year?

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Washington, D.C.: Is it better to just use the cash you have to pay the closing cost of refinancing (approx. 11K) if you have the cash or use the line of credit loan that you also have? The cash is just sitting there in the bank earning less than .05%. Thanks.

Maryann Haggerty: I wouldn't use the line of credit to borrow money, especially since it's probably an adjustable rate (and would cost you a lot more than 0.05%). Your best deal is probably to roll the closing costs into the loan, if that's possible. Whether you consider using the cash depends on whether you have enough additional cash to carry you through at least six months of living expenses.

Elizabeth Razzi: Borrowing against your line of credit will also show up in the lender's evaluation of your debt-to-income ratio. Cash sitting in the bank, even at miniscule interest, is still a handy thing to have in this economy.

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Northern Va.: Why does the post always interview the same bitter Real Estate Brokers when you need someone to down play the industry? I've read two articles in the past month in which you interviewed the same Broker. In each interview the Broker openly spoke about other agencies practices while totting himself as the anti-Realtors Realtor (trust me I'm a Realtor...ha ha). This week you went after Realtors who think positively about today's market. Wouldn't it have been better to speak to someone who has been running a successful Real Estate firm or business for more then a couple of years or a Broker who runs a medium size firm with more then say 2 active agents? Or better yet how's about the many Realtor Associations who can fill your columns with facts and figures? I've always been lead to believe that Realtors who constantly down other Realtors to make themselves look better often have little to say about themselves or their services. Interviewing the same Weird Al Yankovic guy who is always good for quote is just lazy journalism. I know you weren't aiming for a Pulitzer or anything but can you at least drive around a little and meet other Realtors?

Elizabeth Razzi: I see you're not a fan of Frank. So go ahead and email me your contact info; I'm all ears.

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Washington, D.C.: Would you have any advice for first time home buyers? Also, what types of sales trends are you seeing for the areas both inside, and close to the beltway?

Maryann Haggerty: Advice for first-timers: Save your pennies, buff up your credit rating, and think about how and where your family wants to live. What are your must-haves? What are your would-be-nice things?

Throughout the housing crash, the local pattern has been consistent: The outside the Beltway stuff has fallen hardest. Desirable inside-the-Beltway neighborhoods have remained desirable, especially in comparison.

Elizabeth Razzi: I have been hearing a lot from close-in buyers that the good homes get snapped up fast, and that they're facing a lot of competition. Sellers aren't being pushovers, either. Good luck.

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Washington, D.C.: I'm going to install solar panels on my row house which shares party walls with the row houses on each side of me. One option is to attach the solar panels to I-Beams that would span from one party wall to the other. The I-beams would cover both sides of the property line, but not go past the edge of the party wall. I am going to get a permit to install the solar panels. My question is: do I need permission from each owner to have the I-beams on the party walls, or can I even do this at all?

Maryann Haggerty: I think you need to check with the city permitting office on that one.

Even if you legally don't need their permission-- and I don't know what the District requires -- as a matter of courtesy, I would let the neighbors know.

Elizabeth Razzi: Even if it's not required, you really might want a consult from a structural engineer before you go and install these things--especially if it's an old row house that could have all kinds of unseen stresses being exerted on the structure. You want to consider how these panels will perform in a high wind, too.

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Arlington, Va.: Maryann and Elizabeth, many of us are getting a laugh at your Pessimists vs. Optimists categorizations. There are many of us who saw this mess coming years ago, warned about it and said what was going to happen and the financial mess and fallout. It's called being 'Realistic.' We're the same people telling you guys that the longer the government tries to prop up home prices, and not let the market correct itself, that this pain is going to continue... and it will.

Why is it 'pessimistic' to want prices to return to 'affordable' levels? Your own paper posted a 2000 baseline chart a few weeks ago that showed each years 'appreciation (facade at that)' for this areas counties for SFH and condos and everyone can see how out of control it got and most of it due to speculative lending/flippers and lending to individuals who in no way shape or form should own a home. Just look at the housing prices vs. incomes in this area... they are out of proportion. So someone who uses sound logic and data is a pessimist?

The people who don't want prices to come down are A) investors/flippers/banks and B) Homeowners that got in over their head, upgraded to too big of a house they shouldn't have or an overpriced box condo. Unfortunately with everything there is risk and they should have known it.

No one forced anyone to sign on the dotted line and at the end of the day, there were millions of us that could have done the same thing, BUT WE DIDN'T.

Now that the people who weren't foolish to jump into a market that was based on a facade are waiting for prices to come back down to realistic prices in regards to incomes, everyone is labeling them bad or pessimistic...seriously...double standard going on here.

There are many good points on your Pessimist vs. Optimist blog but really, you need to make a 3rd group called the Realists.

http://voices.washingtonpost.com/local-address/2009/06/real_estate_optimists_and_the.html

Elizabeth Razzi: Very interesting. I'll point out though, that everybody, from one end of the pessimism/optimism scale to the other, considers themselves to be the realistic ones.

Maryann Haggerty: I've always maintained that there's really no such thing as Positive News or Negative News; that it all depends on where you stand.

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To Sell or Refinance?: I own a condo that I have been renting for the past couple of years. My 5-year-ARM is set to reset in January. (I know, I never should have gotten one.) I'd love to sell the condo and not be a landlord anymore but units in my building are going for about 15K less than I paid 5 years ago. Refinancing would mean I have to put more money down to get a new loan. And, of course, I have no idea what my monthly payment will be if I just let the loan reset. So, do I sell at a loss? Keep renting but not be able to cover my monthly payment w the rent? Something else I'm not thinking of? (the condo is in NW D.C., if that makes a difference.)

Maryann Haggerty: You need to look at this in the context of your entire financial picture. However, if you don't like being a landlord AND you are losing money every month, ask yourself whether $15K is a loss you are willing to accept in order to stop the slow bleeding.

(It depends on the terms of your own loan, but you can usually figure out pretty quickly what your monthly rate will be when it resets. Considering that rates remain pretty low right now, the increase might not be all that much, which could give you some breathing room.)

Elizabeth Razzi: I agree, the reset might not be that bad. (Please tell me you didn't make interest-only payments, though.) Dig out your loan documents and figure out what index (i.e, one-year Treasuries, LIBOR, etc.) will be used to calculate your new rate, and the margin that will be applied on top of that index. Follow your new hypothetical interest rate for a while. And if you have made interest-only payments, talk to your lender about an estimate of what your reset might look like.

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Arlington, Va.: In the entire D.C. area, has the decline in property values been amount the same on a percentage basis? Or have some areas fared better/worse than others?

Maryann Haggerty: The differences are marked throughout the region. The actual numbers vary wildly depending on your favorite yardstick, but the pattern is obvious: Prince William/outer Loudoun/outer Fairfax/Prince George's have seen dramatic tumbles, on a par with some of the other hardest-hit parts of the country. Elsewhere, price drops have ranged from modest to barely perceptible.

Elizabeth Razzi: That's one of the problems with national indexes, which offer a single percentage change figure for the entire metro area. As defined by the Census bureau, that ranges from the Chesapeake bay to the foothills of the Blue Ridge!

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Baltimore, Md.: A long-delayed refinance: On March 25th, I began the process of refinancing with Bank of America, where I am what they call a Premier Customer. I had a 60 day rate lock. I submitted all my docs promptly, sometimes multiple times, but the refi had not closed by May 25th. No problem, the B of A rep said, we will extend the lock. Well, that extension has gone and come, I have still not closed and rates, as we know, are no longer 4.875 for 30 years. To make this even more aggravating, when I was called early this week and was told they had everything but my payoff information from Countrywide, I had to tell the rep, gee that's funny, given that you own Countrywide and that Bank of America Home Loans has been servicing the existing loan for 3 months. The response was, "Oh, that's right. We own Countrywide."

This is all a long winded way of asking if they call me to close on this loan (all of about $65,000)and say "Your rate is now 5.50", what are my options? (That's not even a point below my current rate.) Can I demand my app fee of $400 back for failure to perform? If I tell the bank I am withdrawing all my money (in excess of 6 figures), will they give me the rate I originally contracted for? Thanks.

Maryann Haggerty: Read what you signed. You may have given up your rights to get the app fee back. But I'm-gonna-withdraw-six-figures sounds like enough leverage to get a refund of $400. It may not be enough, however, to get them to cut the rate, even though the screw-up was theirs.

We're hearing stories about people with similar problems. If you're willing to talk with a reporter about your situation, please drop Elizabeth an e-mail directly at razzie@washpost.com. (I almost said to e-mail me, but it's better to get in touch with her.)

Elizabeth Razzi: You might also want to reevaluate whether it's still worthwhile trying to refinance such a small balance--just $65,000.

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Anonymous: Will $250,00 per person exemption to taxes ever be broadened to an investment property?

Elizabeth Razzi: You're talking about the ability of married couples to claim up to $500,000 in capital gains tax free (or $250,000 per individual)when they sell their principal residence. I would be shocked to see that expanded to investment properties. They get other benefits -- such as the ability to put off tax payments by arranging an exchange of investment properties, rather than an outright sale.

Maryann Haggerty: I would be shocked, too. Real estate investors aren't exactly the most popular people around these days.

However, I recall being shocked when the tax system was changed to allow this exemption, back in I think 1994 -- it just seemed like such a radical departure from the previous system.

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Washington, D.C.: Hi, thanks for chatting today! My wife and I are thinking of buying our first house sometime soon (like before the tax credit expires, hopefully - not real optimistic that it'll get extended). We're sort of torn between looking at closer-to-move-in-ready houses that are more expensive (like 200k to 250k - we're not looking on the high end of the market) and "needs work" houses that are a lot cheaper (like 100k or less).

Do you have any advice you could give on how to make that decision? Would it be wiser for us to get something we could live in right away, given that we'd be first-timers at hiring contractors to fix the place up for us, too? Or is it not really that hard if you do your homework?

Sorry this is so long-winded, thanks again!

Maryann Haggerty: This really, really depends on how much work is needed and what you are prepared to do yourself.

Painting is easy. Pulling up carpet and pulling down wallpaper is easy. Deep cleaning, laying tile, buffing floors, renovating landscape is not that tough; neither is hanging a ceiling fan or replacing a lock. Shoring up beams and installing cabinets requires skill. Upgrading wiring and replacing plumbing requires a pro; so does anything really structural.

If you can live in a fixer-upper while the work is being done, it may not ruin your marriage.

Elizabeth Razzi: On an older home, such as the ones you can get for such low prices, you run the risk that there's lead paint there, too. You would want to handle that carefully, most likely with a contractor, especially if there are/will be young children living in that home. Also, be careful not to underestimate the expense & time involved in a big rehab project. The move-in house could be cheaper.

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Washington, D.C.: This is my first house, I purchased this home for my mother and father in 1998. Unfortunately my mother and father passed before they had a chance to move in. Now I'm here with my two dogs, where and how can I get grant money to fix up my home?

Maryann Haggerty: I'm unclear: Has the house been sitting empty for 11 years?

Depending on finances, condition, etc., you may have equity you can borrow against. Depending on the neighborhood, there may be a community development organization that can point you to sources for grant money, but nothing comes immediately to mind.

Elizabeth Razzi: I sniff a criticism of government spending programs masquerading as a question.

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Washington, D.C.: Any chance rates will come down again so I can refi?

Elizabeth Razzi: Ouija board says..... Sorry. It seems to be broken.

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Refi questions: For the person debating refi vs selling, they should look closely at the conditions of the ARM. Our ARM was based on an average of the last 12 months worth of key interest rates and when it reset in February, it reset DOWN and not up. My mortgage payments went down and by putting the same amount in every month as I was, I now pay down extra principal on my mortgage. That means I'll be ahead of the game even if my mortgage resets up again next February.

Important. Know the details of your loan. If you don't, go back and find your loan documents or call your mortgage company and find someone who should be able to explain it to you.

Elizabeth Razzi: Excellent advice. Thanks.

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Rockville, Md.: Maryann, you said something a few chats ago that took me quite aback. I don't remember the exact wording, but it was something akin to you thinking that sticking with the idea of only purchasing a place a max of 3-times your income was a foolish notion. How, as a real estate editor for a major paper, can you justify that? Isn't the idea of lazy or un-informed people who only think short-term (i.e., in terms of the monthly payment) rather than long-term (i.e., paying a lot less for a home in the long run, interest included) is what got us into this trouble in the first place? There are some realists amongst us who see the writing on the wall and know that eventually interest rates will rise. But you know what? We would rather pay 8 or 9% on a $250k house than 5% on a $500k house. What say you?

Elizabeth Razzi: If you don't mind, I'll jump in. I'm pretty sure her point was that many people cannot afford anything close to 3x their income. That's why the rule of thumb is of little use.

Maryann Haggerty: My point was that three times your income is a useless metric, one that dates back to times when interest rates never changed and the hand-held calculator had not yet been invented.

I think you need to deal with REAL numbers, and they're easy enough to figure out these days. Perhaps you can afford more than 3x your income, perhaps less.

And actually, I think it's pretty realistic to look at monthly payments instead of the total cost-over-your-life. Problems have come because people can't make next month's payment, not because 29 years from now their (inflation adjusted) costs will be higher.

So I guess that means I haven't fallen into lockstep with the New Debt Moralists who believe that All Those People are headed for perdition. (And that comes from someone who recycles her ziploc bags.)

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Oh Please! D.C.: So, you sat back and bitterly sniped at your friends who bought houses that they wanted to live in - that they've decorated and enjoyed over the past 5 years, and smugly said that you were glad that you lived in a crappy apartment, and now you want to make sure the prices fall down to 2000 rates (why then? Why not 1950?), so you can buy, and that makes you a "realist?" Honey, stop being so smug and try actually enjoying life.

Maryann, we are going to miss your no-b.s. way of explaining the market. I'm glad we still have Elizabeth, but we'll miss you!

Elizabeth Razzi: Zing. And she's a no b.s. editor, too.

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Herndon, Va.: I would like to note a problem with foreclosures.

We think we have it figured out in that the people who lived here before were close friends with several families - and related to at least one family. They want to "harass" us into moving out so another family can buy the property since prices have dropped, and then rent it back to their friends.

To nudge us out, their kids are driving by at all hours of the night with loud exhaust systems. Many times they will stop right in front of the house, and then stomp on the accelerator.

We are considering buying a fence (as tall as possible) to surround the property. But once the market comes back, we may just sell. I can't think of any options except to just hope they get tired, and stop the nonsense.

Elizabeth Razzi: Well, that's quite the drama. Two things to consider: There are noise ordinances, and your local police are the ones to handle that. Complain to them, and be persistent about it. Got a video camera? You might try spending a few sleepless nights using it. Second: Fences aren't' so good at blocking sound, even tall ones. And there often are rules about how high a fence you can build. The tall ones are even known as "spite" fences.

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Alexandria, Va.: I just bought a house for the first time at the end of last July (unfortunately too soon to qualify for that lovely credit). I just received a letter from mortgage company stating that I had to show proof of homeowner's insurance and a renewal bill from my homeowner's insurance company. I thought that part of the money they take from me in escrow every month was to cover homeowner's insurance (to make sure that we had it covered). Isn't that standard practice? I can afford to pay it, but I am wondering if I should have to do so.

Elizabeth Razzi: Hmm. Jump on that problem today. Call the insurance company directly to make sure your premium has been paid out of your escrow account and the policy is in effect. If it has lapsed, get the insurance paid for ASAP! You can't risk doing without for even a day. Next step is to demand an accounting from the folks handling your escrow account. Have they collected insurance money from you? And have they paid the bills? You need dollar figures and dates.

Maryann Haggerty: Yes, rush to check--but (fingers crossed) I think you may find out that's just standard paperwork, to make sure your file is complete.

So call your insurance company as soon as the chat is over. You'll feel better either way.

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Lower end condos: Hi ladies, I'm curious how to find a realtor for less than 200k condo. I'd like to spend around 150k in D.C., but I can't imagine there are many realtors who would want to help me because the commission is so low. Are there realtors that specialize in lower end first time buyers? For what it's worth my credit is excellent.

Maryann Haggerty: If you're actually ready to buy and realistic about what you can afford, plenty of real estate agents out there will jump to work with you. A small commission is better than no commission

Elizabeth Razzi: A lot of agents who specialize in the lower-priced first-time buyer market talk at buyer-ed sessions held by the District's Housing Finance Agency. http://www.dchfa.org/Might be worth attending one.

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Pessimists v. Optimist...: I don't belong in either one but just reading the chat every two weeks gives me a humorous look at what one individual person view of reality. I think every chat you have a couple of people that complain that prices aren't coming down to lower levels in highly desirable neighborhoods like Del Rey or along the orange line. Or people that have overpriced their homes in undesirable ones. To the first, I would say... um... look at the first rule of real estate - location, location, location. Lots of people want to live in those areas so sellers aren't having a hard time selling their homes so why should they lower their prices if someone is going to pay it.

To the latter... see the rule above and realize your home isn't worth what you think it is. Either, take it down off the market and don't move or be prepared to take a hit. Moaning about it on a chat isn't going to correct your perception of reality

Elizabeth Razzi: I think you nailed it!

Maryann Haggerty: Oh, moan away. We're here to listen, if it makes you feel better!

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Fixer upper or not?: Hire a contractor to review a couple of fixer uppers with you. You can probably find one for about $50-100 per site visit. Have them detail what would need to be done, what equipment would be needed, whether it is something an amateur can handle or whether it requires specialty skills. For example, laying bathroom tile sounds easy to do (and I've done it), but it does require specialty skills such as splitting tiles to work into corners, handling corners, working with and around fixtures, etc. After two or three visits, you'll get an idea of what level of DIY you can handle and will have a better idea of what to look for. Believe me, it will be a very useful $100-200 if it allows you to save several thousand dollars by buying the right type of first home.

Elizabeth Razzi: Sounds good to me.

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Silver Spring, Md.: Update from the trenches: We started our no-PMI refi in mid-April. We finally closed it this week, nearly 10 weeks later. Happily, our lender maintained our rate lock-in at 4.875%, nearly 1.5 pts off our current rate. (This was the Obama Admin program for people with Fannie/Freddie mortgages who want to refinance, didn't need PMI at the time of purchase, and now have loan amounts within 80-105% of the current value of the home.)

The appraisal came in about 20% less than the original 2006 purchase price. More happily, the house is still worth more than our loan amount, even with the refi closing costs rolled in. (We had originally made a significant down payment, otherwise we'd have been in trouble.) The appraiser's report also said that foreclosures "were not a significant consideration" in the appraisal.

Thought you'd be interested in the field report! I wouldn't have known about the Obama program without this chat, so thanks!

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

Maryann Haggerty: Glad to be of assistance.

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South Arlington: Just sold a house and for anybody selling, you need the right agent for your market. That agent must be able to sell, and you must get an agent who can do that. Had a contract in three weeks when we switched and followed her suggestions, whereas the house languished for close to a year with a different agent. Seriously guys, a willingness to follow suggestions and a good selling agent who knows the specific market is all you take. To find such an agent, look for signs and talk to people who used that agent.

Maryann Haggerty: Another useful field report. Thanks.

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Washington, D.C.: Happy Friday and thanks for the Q&A. Have either of you seen this Deustche Bank report about housing price projections in the top MSAs? (http://matrix.millersamuel.com/wp-content/6-2009/US%20Home%20Px%20Outlook%2015%20Jun%2009.pdf)

This is what they say about DC:

"Washington D.C. is one of the few MSAs on this chart where housing does still seem to be overvalued, albeit barely. Based on affordability alone, we would forecast that prices would still have to drop another 2.3%. Government hiring has likely helped keep the unemployment and change-in-unemployment risk factor scores low (relative to other MSAs) in Washington. But because of the impact of the other risk factors in our model, our current-to-trough outlook in Washington, D.C. is for another 12.3% decline."

I guess what concerns me from this report is is the data on DC metro area's "Share of subprime/Alt-A mortgage balances outstanding." What have you all heard about how these might affect the foreclosure rate in the local market as well as recast Option ARMs in the near future?

Maryann Haggerty: We've always had a very high proportion of subprime/altA/exotic loans here, because of how expensive it is. That's why we continue to look so closely at the effects. But I still won't make predictions. Not even today!

Elizabeth Razzi: Everybody is wondering if there are a lot of Alt-A's out there, waiting to cause trouble. I don't know what's going to happen. But I will point out the trouble with any forecast that tries to assign a percentage change (out to one decimal point!) to the Washington MSA. That is a HUGE area, with many submarkets. Really, would any sane person say a home in Chevy Chase is going to fall 12.3 percent--and a rambler on an acre outside Frederick will fall 12.3 percent too?

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Shirlington, Va.: I bought a one bed and a den condo for $285k in Shirlington in November 07. I have since switched jobs and taken a huge paycut and am now drowning under a large mortgage. I have done a lot of nice upgrades to the condo since moving in (new bathroom, brand new kitchen, new wood blinds, all costing about $9k total) and want to put it on the market but I'm not sure if I could get what I paid for it. At this point, that's the only thing I'm going for. I am not sure that I could rent it as the most that I think I could get would be significantly under what my payments are a month. Any ideas on if the market can handle my condo at this point?

Refinancing doesn't seem to be an option either as I don't plan on staying in the area for that much longer.

Elizabeth Razzi: You really ought to talk with a couple of real estate agents who specialize in Shirlington, and get their opinion. That's always been a very popular area because of its convenience to the Pentagon & DC. And if you do have to bring cash to the closing table--because values have fallen--would you be able to?

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Vienna, Va.: Hi! We moved from one rental to another rental apartment in Dec. 2008. However after a while we realized that our neighbor, directly on a floor below us smoked all the time! In the winter months we did not realize as the windows remained closed, but once spring came on, we would smell smoke in our apartment all the time.

Well to add to that, I became pregnant and it started annoying me all the more. With some help from friends and realizing the market was so great, we have a bought a house in Ashburn and have moved.

The rental apartment complex now insists we pay them an extra month worth of rent and an extra 300 dollars for all the six months that we lived there, as the rent we had was at a subsidized rate. they say it is all in the contract that we signed.

Is there no way to argue this... after all the rental apartment did nothing about stopping the smoking and only offered us to move into another appurtenant. We were unhappy and thought we might as well move out all the way.

Please please advice, what should we do?

Maryann Haggerty: In Virginia of all places, the landlord has no obligation to stop another tenant from smoking. They did offer to move you to another apartment--which would be considered doing their best to make sure you had a good living situation. You're the ones who decided not to accept that offer.

Read your lease and see what you agreed to. You can always ask for a break, but if they offered to move you away from the problem, I'm not sure how much of a case you'll be able to make.

Elizabeth Razzi: Virginia, btw, has been restricting smoking in public places lately....But, on to the question. Smoking is not really the issue here. They offered to move you to another unit, which should have taken care of the problem. You wanted to move and break the lease early. So you're bound by whatever was in your lease.

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Reston, Va.: Love the chats! I have a question. My husband and I bought our condo at the end of 2004 and it has lost a good deal of value (as far as we can figure considering we don't know how much we could get for it). My question is - should we try to sell now or attempt to wait it out. Do you predict tax assessments continuing to decline next year or staying level. I know the tax assessments tend to be a bit behind the market. Thanks!

Maryann Haggerty: Even if your assessment doesn't come down on its own, I bet you can appeal it down.

Whether you sell or wait it out is a function of your own finances and your own life. If you like your condo, then why sell when the price is down? (Unless you truly believe prices will never ever recover.)

Elizabeth Razzi: Thanks! Lots of people are trying to make that sell or hold decision. If you're not under pressure to move, why not wait? And about the tax assessments--it may not matter whether the assessments come down. A lot of jurisdictions have been raising tax rates to make up for the revenue they're losing due to lower assessments. Either you pay them a nickel or five cents.

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Elizabeth Razzi: Well, that's about it for today. All of us on the staff here at the Post will truly miss Maryann Haggerty. But we'll carry on. Saturday real estate sections will continue, which is important. They've been dropped by many newspapers across the country. I'll still do the chats (with guest chatters) every other week. The Local Address blog welcomes your comments each weekday. And my email box awaits your suggestions, tips, complaints, etc. (razzie@washpost.com). Vaya con Dios, Maryann.

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Montgomery County: The assessed value of my home was just made and it was about $150k less than the last assessment showed it to be, yet my property tax bill that I just received for 2009 was $350 higher than in 2008.

Did the tax rates go up and is this what accounts for the increase?

Maryann Haggerty: I think the Montgomery County rate did go up, at least for FY10.

(Oh, I always mix this up, but I think this is right: Your assessment is for going forward. Your bill is still going backwards.)

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Maryann Haggerty: Oh, it looks like we need to say good bye!

In tomorrow's Real Estate section, we look at the boom in DIY in these frugal times, and also examine the best ways to approach renting a room to a friend.

I know Elizabeth keeps alluding to the big trip I got back from-- it really was a blast, a super-speed four week run around the world. (Feel free to look at my blog, tinyurl.com/rtw29. Of course, this was mostly meant so I didn't have to mail postcards.)

But this has been great, too-- thanks for all these years of interaction.

And I'm serious about this, because it's the most important thing in real estate: If you do indeed have a roof over your head this weekend, take the time to be thankful for it. Not everyone can do so.

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