Real Estate
2019 home ownership is Mission: Possible
Get started with these three key steps
If you haven’t gotten on the first rung of the property ladder yet, the holidays are a perfect time to make a game plan for buying in the New Year. After all the hustle and bustle of holiday shopping, parties and family time starts to wind down, sit down with your laptop and a cup of hot chocolate and start strategizing to get the process started.
STEP 1: BUDGET AND FINANCE CHECKUP. Take a close look at your monthly income and spending, and evaluate what your true comfort level is with a monthly housing payment. Remember, your first home should be as much of an investment as a place to live, so try to reach for the property with the best chance of appreciation in the coming years. Be realistic about your spending, but also try to reign in unnecessary expenses by cutting out some restaurant visits, weekday drinking and subscriptions to services like Hulu or Prime, if you’re not using them much or can share with a housemate. And speaking of housemates, factor a possible housemate into your housing budget—you’ll actually save money by buying a two-bedroom condo that allows you to charge a roommate rent. Also, remember that when you buy, you’ll enjoy some tax deductions that will cut the bite of the mortgage down a bit, so make sure you discuss these possibilities with an accountant to understand all the benefits available to you. Finally, if you have any credit issues, get those resolved. Pay off any outstanding obligations if you can, and get an account with a credit repair service like LexingtonLaw.com to remove blemishes on your report, even if they weren’t there by mistake.
STEP 2: TALK TO A LOCAL LENDER. Most buyers think that if they work with the bank that has their checking account, they’ll get a better deal. That’s usually not true; in fact, the “big box” lenders often dangle a low rate to you but then cause so many problems during the process that you may not even be able to close on your property on time, which could cost you thousands. Instead, talk to a local lender like some of our favorites: Brooke Lowry at Atlantic Coast Mortgage (NMLS ID #1061722, cell: 202-803-6733) or Tina Del Casale at Sandy Spring Bank (NMLS # 191852, cell: 301-523-1893). They are able to get the best rates, but also to close your deal on time, with as little hassle as possible. And since they’re local, they know all the programs available to you so you can budget accordingly and not leave a penny on the table. There are some amazing programs in D.C. for first-time homebuyers, especially those with “lower” incomes, so it pays to talk with them even if you think you should wait on a big raise before starting the process—sometimes that big raise might actually cost you $20,000 or more in savings. For example, the D.C. Tax Abatement Program for single buyers who earn $65,000 or less, and who buy a property less than $464,000, benefit with a net 2.2% benefit at settlement, and then don’t pay property taxes at all for five years. That’s about $25,000 in savings!
STEP 3: GET A STRATEGIC PARTNER WITH AN EXPERIENCED AGENT. Choosing a Realtor is one of the most important parts of the buying process, yet so many buyers don’t think carefully about the agent with whom they align before it happens. Just as you wouldn’t marry the first person you dated, you shouldn’t commit to an agent before you know they have the skill, experience and support structure to provide you with the best service and results.
A great agent should be accessible night and day, knowledgeable of local neighborhoods, changes occurring in legislation and the market, and creative enough to find solutions for you that you and lesser agents could not come up with.
Agents who work solo are fine, but agents on a team are usually steeped in education and have more accountability, so they are usually a better choice. Teams also give agents an inside look at more properties before they hit the market, so you may have a better chance of getting a deal before it’s listed when you work with an agent on a strong team.
A buyer seminar is a great way to learn about the market and get insight on a potential agent partner with no commitment. You’d be surprised how few agents actually do hold them, so you know you’re working with a strong team when seminars are offered often. In a buyer seminar, you’ll learn with other newer buyers in a classroom setting, often with refreshments provided too. We hold our seminars monthly and even offer Champagne, and we’re proud to have our lenders there as well, so our guests can learn about the process on both the lending and the agency side of things.
Once you’re ready to commit to working with an agent, you should set a game plan with him or her so you understand the timeline and know what to expect. Most of our clients find their home within the first three outings, but it can take longer, especially if there is competition on the ones they like. We’re happy to show as many homes as our clients want to see, and to advise on every aspect of the contract so they have the highest likelihood of winning, and it shows in our results—we win in multiple offer situations more than 50% of the time, often beating out five or six other offers. And just like most buyers’ agents, our team offers all these services without charging commission; the seller pays the entire commission for both sides.
With this three-step process, you should be well on your way to accomplishing the goal of home ownership in 2019. And since it’s such a good investment to do so, your future self will thank you for accepting the challenge.
David Bediz is a 14-year veteran Realtor and has served on the boards of directors of both local Realtor associations. He has a top-producing team of agents called Bediz Group, LLC at KW Capital Properties. Reach him at 202-642-1616, bediz.com or through the main office number at 202-243-7700.
Real Estate
Assuming a VA Loan
Program available to eligible service members, veterans, and their families
A VA loan is a mortgage loan guaranteed by the U.S. Department of Veterans Affairs (VA) and is available to eligible service members, veterans, and, in some cases, their families. The VA doesn’t directly lend money; instead, it provides a guarantee on loans made by approved lenders. This guarantee enables lenders to offer favorable terms and less strict requirements than conventional loans, also allowing the loan to be assumed by a subsequent buyer.
Currently, we are seeing renewed interest in the assumption of VA loans from buyers seeking a lower interest rate from what is currently available on the market. In fact, I represented sellers involved in such a transaction earlier this year.
While often a slow and paper-intensive process, an assumption of the seller’s loan balance, interest rate, and length of loan can lead to substantial savings for borrowers, as well as a reduction in up front settlement fees.
Assuming a VA mortgage, however, is not without its complexities and potential pitfalls. Here’s a closer look at the pros and cons of assuming a VA mortgage to help you decide if it’s the right choice for you.
Advantages of a VA Mortgage Assumption
Lower Interest Rates. If the seller has a VA loan with a rate that’s lower than offered in the current market, the buyer could benefit significantly. Assuming an older VA loan with a lower rate could mean long-term savings on monthly payments and total interest paid over the life of the loan.
No Down Payment Required. Assuming a VA mortgage typically means that this no-down-payment feature can be transferred to the buyer, assuming the lender allows it.
No Private Mortgage Insurance (PMI). With conventional loans, a downpayment of less than 20% triggers the addition of PMI. VA loans do not require PMI, so assuming a VA loan can help the buyer avoid this expense and can make monthly payments more affordable.
Other Reduced Costs. Since the mortgage is simply being transferred from the seller to the buyer, certain fees associated with originating a new loan may not apply.
Expanded Loan Limits. A seller with full VA entitlement (no outstanding VA loans) and is otherwise qualified can purchase a home without a down payment for up to $766,550 nationwide (2024 figures) and up to $1,149,885 in certain high-cost areas, including DC and several counties within the suburbs of Maryland and Northern Virginia.
Disadvantages of a VA Mortgage Assumption
VA Entitlement Tied Up. While most assumptions take place between buyers and sellers who are veterans or active-duty military, if the new buyer does not have VA loan eligibility, the seller’s entitlement remains with the assumed loan until it’s paid off or refinanced. This can limit the seller’s ability to obtain another VA loan in the future while continuing to be liable for the original loan balance if the buyer defaults; therefore, most sellers will only agree to assumptions by others who have VA eligibility.
Equity Gap Requirement. When assuming a VA loan, the buyer must pay any difference between the contract price and the loan amount. Many lenders do not allow a second mortgage with an assumption, so this is often paid in cash. For example, a buyer assuming a $550,000 loan on a home with a contract price of $600,000 will need $50,000 plus applicable closing costs to assume the loan.
Fees and Other Costs. Although closing costs are generally lower in an assumption, there are still fees involved, including a VA funding fee of 0.5% of the loan amount for assumptions, which may add to the upfront cost.
Qualification Process. The seller must make a written request to the lender to begin the process. After preliminary approval by the lender’s Assumption Department, the buyer must demonstrate VA eligibility, if applicable, and submit a loan application and supporting documents needed to meet the lender’s credit, income, and debt-to-income requirements. The assumption can take anywhere from 30 days to a year to complete, depending on the lender, the buyer’s situation, and the complexity of the loan. On average, it takes 60 days to close; the transaction I participated in took 100 days from contract ratification to settlement.
Assuming a VA mortgage can be a great financial move if the interest rate on the existing loan is lower than current rates and if the buyer has the cash to cover any equity gap; however, it’s essential to weigh the eligibility requirements, the potential cash needed upfront, and any liability issues carefully. Consulting with a lender and possibly a financial advisor is always wise when considering the many ways to buy a home.
Valerie M. Blake is a licensed Associate Broker in DC, MD & VA with RLAH Real Estate / @properties. Call or text her at 202-246-8602, email her at DCHomeQuest.com, or follow her on Facebook at TheRealst8ofAffairs.
Real Estate
Transform your home with energy-efficient LED lighting
Add sconces, lamps, outdoor accents, and more
The light-emitting diode (LED) is today’s most energy-efficient and rapidly developing lighting technology. Quality LED light bulbs not only last longer but are more durable and provide comparable or better light quality than other types of lighting. In fact, the inventors of the LED were awarded the Nobel Prize in Physics in 2014 for their groundbreaking invention. This simple bulb has transformed how we light our homes, significantly reducing energy usage and reshaping the future of home lighting.
When incorporated effectively, LED lights into your home can create a visually appealing as well as an energy-efficient environment. Let’s both save on electricity bills and also do this aesthetically well.
As the real estate market in Washington, D.C., continues to evolve, landlords are constantly looking for ways to make their properties more appealing to tenants. One of the simplest yet most impactful upgrades a property owner can make is improving the lighting in their rental units, particularly by using LED lighting. LED technology offers a range of benefits that can transform spaces, improve energy efficiency, and enhance tenant satisfaction.
Incorporating Downlighting with LED Technology
LED downlights are a popular choice for those looking to add modern, subtle lighting to their homes. According to a post on Quora by contributor Nick Chris, “LED downlights can be installed in ceilings to provide direct and focused lighting, perfect for task-oriented areas like kitchens or bathrooms.” The post also highlights that downlights can be used in living rooms to create ambient lighting, adding that “LED downlights are a great option for areas where you want to minimize the visibility of the light fixture itself while maximizing the impact of the light.”
By using LED downlights strategically, you can direct light exactly where you need it, providing both functional and aesthetic benefits.
Lighting Dark Spaces: Transforming Basements and Beyond
One of the biggest challenges landlords face is making dark or poorly lit areas more inviting, especially in basements. LED lighting, particularly flat ceiling spots, can dramatically change the ambience of these spaces. Many basements in older homes or rental units can feel dark and uninviting, but by installing LED ceiling fixtures, landlords can make these areas bright, warm, and attractive. Tenants often respond positively to these improvements, as a well-lit basement can shift the overall perception of a property from gloomy to welcoming.
The key benefit of these LED fixtures is that they don’t require much ceiling space, making them easy to install in areas with lower ceilings. This is particularly useful in basements, where ceiling height is often limited. Additionally, these lights can be strategically placed to maximize illumination without overcrowding the room, allowing for better use of the space.
Customizing the Mood
LED lighting provides not only brightness but also versatility. One of the standout features is the ability to adjust both the color temperature and the brightness level. This allows for light customization, from bright, crisp white to a softer, more soothing yellow. For landlords, this flexibility helps in creating comfortable and appealing environments that can suit a wide range of tenant preferences, whether in living rooms, bedrooms, or basements.
Many LED fixtures also come with dimmable options, giving both landlords and tenants more control over the lighting. In practice, this means the lighting can be adapted for different times of the day or for various activities, making it a versatile choice for rental properties.
Energy Efficiency
Another major advantage of LED lighting is its cost-saving potential. LEDs consume only a fraction of the energy required by traditional incandescent or CFL bulbs, leading to significantly lower electricity bills. This is beneficial for landlords in common areas or in rental units where utilities are included in the rent, as well as for tenants who are responsible for their own utility payments.
With LEDs, landlords can also reduce maintenance costs, as these bulbs last much longer than traditional ones and do not need to be replaced as frequently. This durability is a major asset, particularly in rental properties where long-term reliability is essential.
Enhancing Curb Appeal
Lighting improvements aren’t limited to interiors. LED bulbs can also be used effectively in exterior fixtures to enhance curb appeal. Bright, efficient lighting in entryways, pathways, and parking areas not only makes properties more attractive, but also improves safety for tenants returning home after dark.
By installing LED lighting outdoors, landlords can create a welcoming and secure environment for tenants, further increasing the value and desirability of their rental properties. Additionally, the long-lasting nature of LED bulbs means exterior lighting can remain functional for extended periods without the need for frequent replacements.
Tailoring LED Lighting to Each Property
When it comes to lighting solutions, one size does not fit all. LED lighting offers the flexibility to tailor lighting solutions based on the specific needs of each property. Whether upgrading overhead fixtures in living spaces or installing adjustable LED spots in dim basements, landlords can use LED lighting to enhance their properties’ function and appeal. By investing in high-quality fixtures and leveraging the energy efficiency, versatility, and brightness of LEDs, landlords can improve tenant satisfaction and retention, making their properties more competitive in the rental market.
Practical and Decorative Uses for LED Lights
LEDs aren’t just for basic lighting needs; they can be used to enhance the aesthetic appeal of your living spaces. Here are some creative ways to incorporate LED lighting into your home:
Accent Lighting: Under-Cabinet Lighting: LED strips installed under kitchen cabinets not only illuminate your countertops but also add a sleek, modern touch.
Bookshelves and Display Cases: Showcase your favorite books or collectibles by integrating LEDs into your shelves.
Toe-Kick Lighting: Installing LED strips along baseboards or under bathroom and kitchen cabinets adds a subtle and modern glow.
Task Lighting
Desk Lamps: For workspaces, LED desk lamps provide focused, bright light, which can reduce eye strain.
Reading Nooks: Place LED floor or table lamps in cozy corners to create well-lit spaces perfect for reading.
Ambient Lighting
Cove Lighting: Install LED strips in ceiling recesses or coves to create indirect lighting that adds depth and softness to any room.
Wall Sconces: Use LED sconces in hallways or living rooms for soft, ambient lighting.
Decorative Lighting
Fairy Lights: String LED fairy lights over headboards, furniture, or windows to create a whimsical and cozy atmosphere.
LED Candles: Opt for LED candles that offer a flickering effect without the fire risk, perfect for creating a warm ambiance.
Outdoor Lighting
Pathway Lights: Enhance safety and beauty by lining your walkways with LED pathway lights.
Deck Lighting: Embed LEDs into decks or stairs to illuminate your outdoor spaces for nighttime gatherings.
Holiday Decorations
Christmas Lights: LED lights are perfect for decorating your Christmas tree or mantels, providing a festive and energy-efficient glow.
Functional Lighting
Closets: Brighten up closets by installing small LED fixtures for better visibility.
Garages and Basements: Use powerful LED lights in garages and basements for well-lit, functional spaces.
Tips for Effective LED Lighting
Plan Your Design: Thoughtfully plan your LED lighting layout to enhance both functionality and design.
Choose the Right Color Temperature: Warm white (2700K-3000K) is perfect for cozy spaces like bedrooms, while neutral white (3500K-4100K) works well in kitchens and workspaces. For bright areas, opt for daylight (5000K-6500K).
Ensure Dimmer Compatibility: If you plan to use dimmable LED lights, check that they are compatible with your dimmer switches.
Energy Efficiency: Always look for LED lights with high energy ratings to maximize your savings.
Whether you’re upgrading your home’s lighting or planning for a renovation, LED lights offer a versatile and energy-efficient solution that can significantly reduce your electricity costs. By incorporating LED technology into your lighting design, you’re not only creating a more comfortable and appealing living space but also contributing to a more sustainable future.
Scott Bloom is owner and senior property manager at Columbia Property Management. For more information and resources, go to ColumbiaPM.com.
Real Estate
Migration trends: LGBTQ buyers moving to suburbs, small cities
Finding welcoming communities beyond traditional urban strongholds
Over the past few years, a significant migration trend has emerged: many buyers are leaving urban areas in favor of suburban or smaller city life. This shift is largely driven by the rise of remote work, lower cost of living, and the appeal of a quieter, more spacious environment. For LGBTQ buyers, this trend offers unique opportunities and challenges as we seek welcoming, affirming communities beyond the big cities.
Why LGBTQ Buyers Are Considering Small City Living
Historically, LGBTQ individuals have flocked to larger cities known for their vibrant queer communities, social support, and acceptance. Cities like San Francisco, Chicago, New York, Miami and Los Angeles have long been hubs for LGBTQ life. However, recent trends show a shift in priorities:
- Remote Work Flexibility: The pandemic accelerated the adoption of remote work, giving many the flexibility to live outside urban centers. LGBTQ individuals can now prioritize factors like home space, affordability, and lifestyle without being tied to a city office. This newfound freedom allows us to consider locations that may offer a more balanced quality of life.
- Affordability and Space: Urban centers have high costs of living, making homeownership a challenge. Many LGBTQ buyers are looking to build families and settle down, which often requires more space than city living affords. Suburbs and smaller cities typically offer larger properties and single-family homes at a more affordable price, making them appealing options for those seeking more space and financial savings.
- Emerging LGBTQ-Friendly Communities: While cities have traditionally been safe havens for LGBTQ individuals, many suburbs and smaller cities are becoming increasingly inclusive. With Pride festivals, community centers, and local businesses openly supporting LGBTQ causes, these areas are actively working to attract and retain LGBTQ+ residents
Considerations for LGBTQ Buyers in the Suburbs
Moving to a less densely populated area may offer financial and lifestyle benefits, but it’s essential for LGBTQ buyers to research and ensure they are moving into a supportive environment. Here are some factors to consider:
- Assessing Inclusivity and Safety: Before moving, it’s wise to visit potential neighborhoods to get a feel for the local culture. Researching online forums, LGBTQ community groups, and checking local nondiscrimination laws can also provide insight into a location’s inclusivity.
- Access to LGBTQ Services and Community: Many LGBTQ individuals value access to queer-friendly healthcare providers, legal support, and social networks. Some smaller communities may lack these resources, so it’s important to verify that you’ll have access to the necessary support services.
- Finding Local LGBTQ Groups: Community connection is crucial for LGBTQ individuals. Many suburbs have smaller but growing LGBTQ groups, often organized through social media or apps like Meetup. These groups can help you form connections, find local allies, and establish a sense of belonging in your new area.
Suburban Growth and Its Impact on LGBTQ Buyers
The migration to suburban areas has led to increased demand for single-family homes, which can lead to supply shortages and higher competition. In some LGBTQ-friendly suburbs, this demand has driven property values up as more people seek out homes that provide both the physical and emotional space they need to thrive.
Some suburban areas are responding to this demand by creating or improving amenities such as public transportation, dining, and cultural attractions, all of which contribute to a vibrant community. For LGBTQ buyers, this trend could mean greater access to the cultural and social opportunities they may miss from city life, alongside the benefits of suburban living.
The migration of LGBTQ individuals to suburbs and smaller cities highlights an exciting shift in lifestyle and priorities. As more suburban areas embrace diversity and inclusivity, LGBTQ buyers have the opportunity to find welcoming communities beyond traditional urban strongholds.
At GayRealEstate.com, we’re here to help you find LGBTQ-friendly real estate agents who understand your unique needs and can guide you through the process of finding your perfect home, wherever that may be. Whether you’re looking in a bustling city, a tranquil suburb, or a charming small town, our network is here to support you every step of the way.
Jeff Hammerberg is founding CEO of Hammerberg & Associates, Inc. Reach him at 303-378-5526 or [email protected].
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