Financial
Navigating short sales and foreclosures
Those who can’t keep up with their mortage payments are in tough situations but they do have options
For sellers who are upside-down (owing more than their home is worth) on their mortgages, especially those who need to sell their property, it helps to know the options available to extricate themselves from their mortgages.
There are government programs like the Home Affordable Mortgage Program (HAMP) of 2009, which aims to reduce the number of foreclosures by incentivizing loan modifications such that monthly payments are within homeowners’ means, but not all lenders participate, and not all borrowers qualify. In addition, some homeowners simply need to sell due to lost employment, a necessary move, medical conditions, etc., and can’t benefit from a reduced mortgage payment.
In the latter situation there are three main options available, all of which are unpleasant in one way or another. For homeowners with the means to do so, they may sell their property at market value and pay the difference between their loan amount and the sale price, in addition to the fees associated with the transaction. For some of our clients in this position, this has cost them upwards of $100,000, but there is really no limit, in theory, as to how much this may cost.
The second option is simply to stop paying the mortgage. A homeowner’s loan documents will outline the process for foreclosure to begin, which usually takes three months, but can take longer. Banks will contact their borrowers to determine the situation and hopefully to offer assistance in getting the payments back on track.
If a borrower can’t do so, the legal machine will grind into action to effectively evict the homeowner from the house. The ultimate effect is that the homeowner’s credit is severely tarnished, preventing him or her from obtaining financing for another home purchase for several years and also affecting his or her creditworthiness for everything from credit cards to cell phone plans, for up to seven years.
Many borrowers don’t realize that in many states, banks have the right to sue their clients for the deficiency amount, calculated as the difference between what they are owed (including legal fees, insurance and other costs) and what the property eventually sells for at a foreclosure sale. This suit can be brought even years after the foreclosure, so it can be a constant threat and a cause of anxiety for borrowers even after they feel a sense of relief when the foreclosure is finally finished.
Buyers of properties that have already been reacquired by the lending bank (listed as “Real Estate Owned” or “REO” properties) should know that the process is generally the same as with a normal sale. The bank generally behaves like any other seller, offering the property for sale and accepting or negotiating to get the best offer possible. The few differences include the fact that the bank will almost always offer the property in “as-is” condition only and the property will likely be in sub-standard condition (although not always). In addition, the listing prices for REOs are generally below market value, which drives many other buyers to be interested. Because of this, it is important to be able to offer the best terms possible, including a contract with as few contingencies as possible, a price that may exceed the list price (sometimes by more than $100,000) and with no financing at all, if possible.
Instead of allowing a property to go into foreclosure, a homeowner may opt for a “short sale” instead, which usually minimizes the possible liability they may owe. In this scenario, the sale price is less than the total debt on the property and transaction costs of the sale. Sometimes the proceeds are enough to satisfy one loan on the property but not another, and sometimes the proceeds are not even enough to pay a single debt on the property in full.
In any of these situations, the lien holder or holders who will not be paid completely will have to agree to take a reduced amount, or perhaps nothing at all, for the sale to go through. Usually the process can be handled by the homeowner themselves, or through an agent, but the process can be so cumbersome and unpredictable that we always recommend working with an attorney who specializes in short sale negotiations. Owners should accept the written agreements provided by the bank only if the deficiency amount is forgiven, if possible. This eliminates the chance they may be sued for that amount in the future, but it should be noted that they must pay ordinary income tax on the forgiven amount to the IRS as if that money were earned.
As a buyer, you must know that if you are interested in pursuing a short sale listing, there is a large chance the process will not be successful, even after many months of waiting. The chances of success go up sharply if the seller is working with a short sale negotiator, but even then there are no guarantees. Therefore it should be noted that a short sale is only worth pursuing if the price really is attractive enough to justify the risk involved.
Either way, the outlook for owners of properties in distress is not rosy. Foreclosure affects their credit for up to seven years and may result in a lawsuit to recover the deficiency. Short sales have a softer impact, although still significant, on their credit and may also expose them to liability for the deficiency amount, if that amount is not forgiven. And paying the shortage themselves at closing can be a very difficult thing to do, although it preserves the borrower’s good credit. If the property must be liquidated, however, one of these three options may actually allow the homeowner to move on with their lives and start working on their financial future with less of a burden.
Buyers can take advantage of the current market conditions to acquire a property in distress at a good price, but should be aware of the potential pitfalls, especially when purchasing a short sale property.
David Bediz is a Realtor at Coldwell Banker Residential Brokerage and part of the Dwight and David Real Estate Group. He can be reached at 202-352-8456 or through DwightandDavid.com.
Real Estate
The rise of accidental landlords
How changing market conditions are impacting property management
Why are there more “accidental landlords” renting out their properties in the Washington, D.C., metro area?
The answer, according to The New York Times and other sources, is the current state of the real estate market. A growing number of accidental landlords are emerging as homeowners rethink their options in a challenging sales market. Rather than accept lower offers than they feel their properties deserve, many are choosing to rent instead of sell.
This shift reflects both financial caution and changing market dynamics, where holding onto an asset and generating rental income can seem more appealing than locking in a perceived loss.
A Market in Transition
The D.C. housing market remains fundamentally strong, but it has clearly shifted from the frenzied seller’s market of prior years. Inventory has increased significantly, and according to Redfin, active home listings in the Washington, D.C., metro area have increased significantly, with reports indicating a rise of roughly 33% to 50% year-over-year in late 2025 and early 2026.
This surge in inventory, coupled with falling demand, has shifted the market in favor of buyers, with roughly 22% more homes for sale than interested buyers. At the same time, homes are taking longer to sell. Buyers are still active, but they’re more selective, more price-sensitive, and less likely to engage in bidding wars.
This combination of rising inventory and longer selling timelines has created a key tension: sellers are no longer guaranteed the price they want. What’s a homeowner to do? Rent.
Why Homeowners Are Choosing to Rent
Rather than reduce their asking price, many homeowners are choosing to hold onto their properties and rent them out. National data confirms this shift. According to a report from Zillow, the share of rental listings made up of homes that failed to sell has climbed to near-record levels, with these accidental landlords accounting for a growing portion of rental supply. The number of these homeowners nationwide is at a three-year high.
The underlying psychology is simple: most sellers are not under immediate pressure to sell. And instead of accepting what they perceive as a discounted price, they opt to generate rental income and wait for more favorable market conditions.
For many homeowners, renting offers a way to “pause” the sales process without exiting the market entirely.
The Ripple Effect on the Rental Market
This influx of accidental landlords is reshaping the rental landscape. And this could be you!
- This trend is increasing rental supply. When unsold homes are converted into rentals, they add inventory to a market that has already seen new apartment deliveries and multifamily expansion. This is one reason rent growth has cooled in recent months, with national increases slowing to modest levels.
- Additionally, it is changing the type of available rental housing. Accidental landlords are more likely to offer single-family homes, townhouses, or condos; properties that differ from traditional apartment stock. Zillow notes that single-family homes make up the largest share of these rentals now.
For renters in D.C., this means more choices, particularly in neighborhoods where rental inventory was previously limited.
Operational Challenges for Accidental Landlords
While renting may seem like a straightforward fallback strategy, many accidental landlords quickly discover that property management is a complex, operationally intensive business. Some of the most common challenges include:
- Tenant screening and leasing compliance. D.C. has robust tenant protections and rent control regulations, particularly for older multifamily buildings. One wrong step can create legal complications home owners are not prepared for.
- Maintenance and repairs. Deferred maintenance can quickly erode profitability and tenant satisfaction. And tenants do have the power to cut into your monthly profit when certain livability standards are not met.
- Cash flow management. Not all rental income covers mortgage payments, especially for owners with higher interest rates.
- Regulatory compliance. Licensing, inspections, and rent stabilization rules can create administrative burdens.
In short, many homeowners underestimate the complexity involved in the transition from owner-occupant to landlord. What begins as a temporary strategy can evolve into a long-term operational commitment.
Property Management Firms Are Stepping In
As a result, property management companies across the D.C. metro area are seeing increased demand, particularly from first-time landlords. These owners often lack the infrastructure, systems, and expertise required to manage a rental property effectively. Professional management firms provide an array of solutions including marketing and leasing services, tenant screening and placement, rent collection and financial reporting, maintenance coordination, and compliance with D.C.’s evolving regulatory environment. For accidental landlords, outsourcing these functions can turn a reactive decision into a more structured investment strategy.
Green Renting: A Strategic Advantage in D.C.’s Rental Market
One often overlooked opportunity for accidental landlords—especially in Washington, D.C.—is the growing demand for “green renting.”
Energy efficiency is no longer just a lifestyle preference. For many renters, particularly in a high-cost city like D.C., it is a financial decision. Utility costs in the District can be significant, especially during peak summer and winter months. Properties that offer lower monthly energy expenses immediately stand out in a competitive rental market.
Installing solar panels, where feasible, can meaningfully reduce or even offset tenant electricity costs. For renters comparing similar properties, the difference between a standard utility bill and a reduced or stabilized energy cost can be a deciding factor. This is particularly true in D.C., where tenants are often highly-informed, environmentally-conscious, and sensitive to total monthly living expenses, not just base rent.
For landlords, the benefits extend beyond tenant appeal. Solar installations can help reduce vacancy, support longer lease terms, and create a premium perception that differentiates a property from competing listings. In some cases, landlords may also benefit from local incentives, tax credits, or increased property value tied to energy improvements.
In a market where many accidental landlords are competing on similar housing stock—single-family homes, condos, and townhouses—energy efficiency can become a key differentiator. It is not just about sustainability; it is about positioning a property to perform better financially.
A Local Market With Unique Dynamics
Washington, D.C., is a housing market shaped by federal employment, policy changes, and macroeconomic uncertainty. Recent developments, including fluctuations in the federal workforce and return-to-office mandates, have influenced both housing supply and demand. In some cases, these shifts have contributed to increased listings and more cautious buyer behavior. At the same time, D.C.’s high cost of entry continues to support rental demand. This dual dynamic creates ideal conditions for the rise of accidental landlords. Are you ready for this seismic shift?
Scott Bloom is owner and Senior Property Manager of Columbia Property Management.
Are you prepared to meet the changing expectations of tenants? Tenant priorities are continuously shifting. As professional property managers, my team has witnessed firsthand the evolving demands of tenants over the last few years.
Frankly, today’s D.C. residents have high standards. Many have shifted to remote work, and they are placing a growing emphasis on sustainability. And these expectations are poised to evolve even further, with factors like affordability, technology integration, and community-driven amenities taking center stage.
Understanding these changes and adapting your rental to meet the growing demands of tenants and their evolving preferences will not only help you attract high-quality residents but also settle into long-term success in a competitive market. Let’s look at key tenant trends for 2026 in Washington, D.C. by providing practical strategies that help owners and investors navigate this shifting landscape, ensuring your property remains desirable and profitable in an increasingly growing rental market.
According to Buildium’s 2025 Industry Report, tenant retention is rising, and that’s due to a number of factors. It’s expensive to move, so if residents are enjoying a peaceful and pleasant rental experience and they appreciate where they live, it’s unlikely they will spend more money to live somewhere else.
The “2026 State of the Property Management Industry Report” also noted the rise of “Resident Benefit Packages,” which has contributed to retaining good residents. When landlords and property managers offer benefits such as protection against late payment fees, online conveniences, credit monitoring, air filter drop shipments, preventative maintenance services, and even concierge amenities, they increase tenant satisfaction and retention.
By investing in resident benefits, you can increase the likelihood of keeping your tenants satisfied. They’re more likely to renew their lease agreements and contribute to the care and upkeep of their home.
Provide smart home tech
According to data gathered by Nasdaq, Washington, D.C., is one of the top 10 U.S. cities where remote work is most popular, with more than one-third of the population working from home at least part of the time. Even with the federal government calling many people back into the office over the last year, remote work continues to be normalized. Tenants are working and studying from home, and they need their home to support that lifestyle shift.
They’re looking for technology, and that factor provides you the opportunity for you to attract remote workers as residents. While smart home technology was once a fairly niche amenity, it’s now becoming the standard. It’s an expectation of most tenants in Washington, D.C., that at the very least they’ll be able to:
- Connect to fast Wi-Fi at their home
- Enjoy online rental payment platforms that are secure and convenient.
- Make routine maintenance requests through resident portals
It was also recommended considering installing keyless entry systems, offering upgraded security such as video doorbells, investing in smart thermostats, and making it as easy as possible for tenants to integrate their own digital platforms and apps into their home life, whether that’s Alexa or Siri or their own personal AI-driven digital assistant.
Community-Driven Amenities in Washington, D.C., Rentals
Are you renting out units in a multi-family building or an apartment? Washington, D.C., tenants are focused on community and social connection, and so the demand for community-driven amenities is on the rise.
In 2026, renters are looking beyond traditional features like gyms or pools, seeking spaces that allow for interaction, well-being, and a sense of belonging. Co-working spaces, communal kitchens, and rooftop gardens are now more popular in buildings that are working to attract tenants who prioritize shared experiences. A recent report from Ronco Construction reports that these are the emerging trends in multi-family housing amenities:
- Rooftop decks
- Outdoor lounges
- Community gardens
- Fitness studios
- Dog parks and pet spas
- Co-working space
Know your tenant pool
If you rent out single-family homes, you’re dealing with tenants who prefer privacy and space. In those multi-family buildings and condo communities, however, tenants are likely looking for opportunities to connect with their neighbors and make friends. We have seen tenants drawn to properties that offer event programming, such as fitness classes, happy hours, or cultural gatherings, helping create a sense of community in a neighborhood atmosphere.
As an owner, investing in these types of amenities can increase tenant satisfaction, encourage long-term leases, and set your property apart in a competitive market where residents crave more than just a place to live, but also a place to connect.
‘Green Renting’ in D.C.
Tenants want to save money on energy and utilities. Most of them would also rather do whatever they can to be more conscious of their effect on the planet. The city of Washington, D.C., actively encourages this. According to Building Innovation Hub, Washington, D.C., wants to cut greenhouse gas emissions in half by 2032. More efficient building standards and energy incentives are making that possible.
Rental property owners can meet tenant expectations around sustainable living and environmental-friendly features by providing LED lighting, energy-efficient appliances, low-flow plumbing fixtures, and modern programs for managing waste and recycling.
Every tenant in Washington, D.C., is different of course, but there are common expectations that come with residents when they’re looking for a new home. Those highlighted here are even more important to tenants in 2026.
Find out how to make your Washington, D.C., rental property more competitive on the market. Engage a professional property manager for the advice you need.
Scott Bloom is owner and senior property manager of Columbia Property Management.
Real Estate
Surviving spring cleaning
Create a space that feels comfortable, welcoming, and easy to maintain
Whether or not you are getting ready to sell your home, spring is finally upon us — you know, the time of year when you can open the windows to a warm breeze and commit to decluttering and thoroughly cleaning your home.
While decluttering, you will be faced with the challenge of what to keep and what to discard. Mysterious items may appear: the missing charger, the set of keys that open nothing, or, with any luck, that one important document you know you put “in a safe place.” The journey often turns into an archaeological dig through the layers of your daily life. Along the way, you will likely encounter objects that have been misplaced or are no longer needed, and you’ll wonder why you kept them in the first place.
The kitchen junk drawer, for example, is a universal catch-all that defies categorization. You might open it looking for a rubber band and instead discover a lone screw of unknown origin, a tube of hardened Super Glue, and at least four pens that no longer work.
Closets offer another layer of surprises, where you can find things that don’t seem to belong at all: cash in a coat pocket, a single glove, a book you meant to read, or a box filled with cables for devices you no longer own.
It’s guaranteed that if you only have one of a pair of something, its mate will appear shortly after you have thrown away the one you had. And, if you were intentionally searching for an item, it will turn up in the last place you look, simply because once you found it, you stopped looking.
Linen closets and bathroom cabinets can also harbor oddities. Now is the time to discard half-used or duplicate products you don’t remember buying, travel-sized toiletries from trips long past, or expired medications.
Under furniture is where things get truly mysterious. Reaching beneath a couch or bed in search of a dropped item often yields a collection of the unexpected: assorted coins, dust-covered pet toys, a missing sock, and perhaps something that makes you pause, like a long-lost piece of jewelry or an object you were convinced had disappeared forever.
Organizing garages and basements takes the experience to another level, where consolidating tools or seasonal decorations stored there can quickly turn into an encounter with objects that defy explanation. Why is there a box of tiles from a renovation that happened a decade ago? Do you really need the instruction manuals for appliances you no longer own? What could possibly be in the box that hasn’t been opened since you moved in?
Even searches within a home office – looking through files, drawers of old electronics, or stacks of paperwork—can yield similarly strange results. I recently found several flash drives with client files from 2014, a cache of notebooks containing names and phone numbers of prospects who left the area 15 years ago, and Turbo Tax installation CDs from as far back as 1997.
If decluttering hasn’t defeated you, then thoroughly cleaning your house may not be as overwhelming as you might think. Breaking it into manageable steps makes the process far simpler and even satisfying. A consistent method is the key to success.
Before you reach for cleaning supplies, take one last walk through each room and gather items that belong elsewhere for return to their proper place. Put away clothing and take out trash. This step instantly makes your home look better and clears the way for more effective cleaning. Working from top to bottom, dust ceiling fans, light fixtures, shelves, and blinds first so that any debris falls to the floor for addressing later. Use a microfiber cloth or handheld Swiffer to trap dust rather than spreading it around. Don’t forget overlooked areas like the tops of door frames, windowsills, and baseboards.
Move on to surfaces. Wipe down countertops and furniture with appropriate cleaners. Squeegee windows to let the sun shine in. Pay special attention to kitchen appliances. Stovetops, microwaves, and refrigerator handles tend to collect grime quickly, as do the tops of upper cabinets. In bathrooms, disinfect sinks, toilets, tubs, and showers.
Lastly, vacuum carpets, rugs, draperies, and upholstered surfaces thoroughly, including along edges and under furniture where dust accumulates. For hard floors, sweep first, then mop using a cleaner suitable for the surface type. This final step pulls the whole cleaning effort together and leaves your home feeling and smelling fresh.
Ultimately, cleaning your house doesn’t have to be a daunting chore. With a clear plan and a little consistency, you can create a space that feels comfortable, welcoming, and easy to maintain – at least until this time next year.
Valerie M. Blake is a licensed Associate Broker in D.C., Maryland, and Virginia with RLAH @properties. Call or text her at 202-246-8602, email her at [email protected] or follow her on Facebook at TheRealst8ofAffairs.
