Overpaying Real Estate Taxes? What are Your Odds…

A few weeks ago, I helped some friends buy a house near Ginter Park for around $175,000

Here’s the glitch: the city is assessing the house at a value of $339,000.

 

Hmmmm…  let me do the math…

 

These owners have been over-paying nearly $2,000 in annual property taxes for the past several years.

 

How Common is it?

A recent study in Philadelphia found that 40% of homes in that city are being assessed outside the acceptable standard of 80-120% of a home’s true market value.

 

A quick glance of houses for sale and houses that have sold just in the past 6 months in my Southside neighborhood (Westover Hills/Forest Hill/Woodland Heights) gives an idea of the local community.

 

For Sale:

5202 Sylvan Court

Tax Assessment $400,000

For Sale: $299,950

Annual Overpayment: $1,200

 

 

2601 Semmes  Ave.

Tax Assessment: $201,000

For Sale: $152,000

Annual Overpayment: $588 

 

 

3728 Brookside Rd.

Tax Assessment: $180,000

For Sale: $150,000

Annual Overpayment: $360

 

 

 

Sold in the last 6 months:

5030 Devonshire

Tax Assessment: $217,000

Sold: $175,000

Annual Overpayment: $504

 

 

4603 Forest Hill Ave

Tax Assessment: $276,000

Sold: $240,000

Annual Overpayment: $432

 

 

5202 Caledonia

Tax Assessment: $475,000

Sold: $422,500

Annual Overpayment: $636

 

 

2000 Westover Hills Blvd.

Tax Assessment: $319,000*

For Sale: $282,500 (pending)

Annual Overpayment: $438

*mistake: the tax assessment above is actually from 2011. The current assessment is actually $265k.

 

Total overpayment for these 7 homeowners: $4,158.

That’s a lot of iPads, folks.

 

Remember This:

  • City and County assessments are (usually) not accurate gauges to determine the true market value of a home.
  • You might be paying way too much in real estate taxes.
  • Don’t be impressed if a house that’s for sale boasts a list price “thousands below assessment!!”

 

Here’s what to do if you think your real estate property value is being over-assessed:

 

1.  Contact your city/county tax assessor’s office.  Requesting an assessment appeal is free of charge and it is not a really time-consuming process.

2.  Make sure you make your appeal before the deadline for your city/county (see below).

3.  Gather evidence for why you believe your property is not worth the amount it is being assessed for.

  • If you just bought your house and the purchase price is far below assessment, use that as evidence!
  • If houses in your neighborhood are all selling for well below what your house is being assessed for, use that as evidence!
  • Remember that an assessment falling within 80-120% of hour home’s true market value is generally considered acceptable.
  • If you aren’t sure what the true market value of your house is but you suspect your city/county is over-assessing you, give me a call; in a couple of minutes I can give you a pretty good idea.

4.  Stop paying money that you don’t owe.

 

Contact your City/County Tax assessor’s office:

Richmond City: (804)646-5700.  Appeal Deadline: July 31

Chesterfield County: (804)748-1000.  Deadline: March 15

Hanover County: (804)365-6029.  Deadline: March 15

Henrico County: (804)755-7380  Deadline: April 1

 

If you live in Chesterfield, Henrico, or Hanover county, your lowered assessment rate will be applied retroactively from January 1 of this year (as long as you request your new assessment before the deadlines above).  Unfortunately- if you live in the city of Richmond- your new lowered tax rate will not apply to you until 2014.

Better late than never though…

 

Jay McGee is more than a Real Estate Agent.  He helps people meet their Financial and Creative Goals when they Buy or Sell their Home in the Richmond Area.

He gives a microloan to somebody in a developing country every time a home is Bought or Sold with him.  Learn why here.
Contact: jaymcgee.kw@gmail.com

Sale of Westover Hills Home Helps Fund Greenhouse in Eastern Europe

It has been a crazy spring in Real Estate- at least here in Richmond.  Everyone I know who is tied to the Real Estate biz seems to be busier than they have been in years.

SOLD after 12 hrs on the market

And seriously- mortgage rates hit 3.67% a few weeks ago (they went up to 3.71 again… blast!) so people who are used to renting are finding that it’s actually a lot cheaper on your monthly budget to buy a house right now.

A few weeks ago, I helped some people sell their gem of a house on Sylvan Rd in Westover Hills (at right).

 

Easiest. Transaction. Ever.

 

Kennon & Sarah, the owners, were some of the easiest people to work with.  We struck up a fast friendship over living in strange and far off places- they having lived and worked in Nigeria for a spell and us in Indonesia.  We also happen to share the woes and wonders of living with a 3 year old boy.

Over the several years they owned the house they did all the right things to set it up to sell quickly and for a good price.

Sarah happens to have an amazing eye for interior design:

 

Tied Together.

One of my favorite parts of my job is getting to give a loan to someone whenever a house sells.

This house provided a loan for Emrie, a farmer in the small Eastern European country of Georgia.

click for more on Emrie’s loan

Emrie will use her loan to build a greenhouse so that she can grow vegetables through the winter and earn additional income by selling them in the market.

What’s the connection between homes in Richmond and loans for struggling entrepreneurs?  Click here.


Jay McGee used to live in Southeast Asia, doing language research and literacy development. Now he’s a Real Estate Agent with Compass Realty. He gives a microloan to somebody in a developing country every time someone in Richmond buys or sells their home with him.  Learn why here.
Contact: jaymcgee.kw@gmail.com

Church Hill Civil War Home Provides Loan for Civil War Survivor in Sudan

A little while ago, I had the good fortune of helping some friends buy a home in Historic Church Hill.  I thought I’d post a few pictures and let them tell you about the process.  I also thought it was cool that they bought a pre-Civil War era house, which is now connected in a small way to a young woman in Sudan, who is living in the aftermath of her own country’s longstanding civil war.

When I need to know a piece of history about Richmond, Richard is my go-to guy.  So it seemed appropriate that he would be the person to buy this little gem in Church Hill- right above Libby Hill Park- and care for this living piece of history in the decades to come.

The house was built circa 1850

I asked Richard a couple questions:

Me: This is a very special house in a wonderful location, and complete with a well preserved servant’s quarters and an English Basement.  What were the things about the house that stood out to you?
Richard:  1850 is the vintage as far as I know, we value historic houses and were happy to find one whose owners had a sense of stewardship for the place.  We appreciated that though it had been a duplex, the renovations were sensitive to the historic materials and done to last.

Charming streets complete with gas lamps

 

Libby Hill Park, just down the block

Me
: You got to choose who would receive a loan to be tied to the purchase of this house.  Why did you choose Lucy Peter?

Lucy will use her loan to expand her business of buying and selling fish in the local marketplace. Click photo to learn more

Richard: It was a joy to choose a loan to Lucy Peter in South Sudan, and giving this loan reminded us how amazingly fortunate we are in this country to have a  banking system that functions well for so many people.  A 4% loan in a country that is fairly stable economically is surely rare in this world.  I wish everyone buying a house could have the opportunity to tie it to a loan for someone in a country where loans are so much harder to come by.
***********
2 more houses in Church Hill have also contributed to the success of struggling entrepreneurs around the world.  If you want to, you can learn more about those loans by clicking on the pictures of the loan recipient below!

Mawar women expanded their farm in Indonesia

Wahhab started a motorcycle repair shop in Iraq

Jay McGee used to live in Southeast Asia, doing language research and literacy development. Now he’s a Real Estate Agent with Compass Realty. He gives a microloan to somebody in a developing country every time someone in Richmond buys or sells their home with him.  Learn why here.
Contact: jaymcgee.kw@gmail.com

My Hope for Richmond on Martin Luther King Jr. Day

All that kills abundant living,let it from the earth be banned:

pride of status, race or schooling, dogmas that obscure your plan.

In our common quest for justice may we hallow brief life’s span.

                -From the Hymn: For the Healing of the Nations

I guess everyone has skeletons in their closet; every person, every nation.  Today is Martin Luther King Jr. Day, and it brings cause for us to celebrate the progress we’ve made as well as our shortcomings on some of the biggest skeletons in our national closet: slavery, racism, mounting economic inequality.

Ostensibly, I’ve got two big strikes against me regarding the issues above.

I’m from Detroit.

I’m a Real Estate Agent…

First, Detroit.  A couple of years ago, cartographer Eric Fischer produced a series of maps based on census data.  Maps of cities show where people live based on what color their skin is.  It is an instant way to visually grasp the reality of segregation in American cities today.  And guess which city is one of the most segregated?  My home town, Detroit.

Click to read Time’s article on the maps

Red dots represent white people.  The blue dots represent black people.  Every dot is 25 people.

I grew up in the suburbs on the Northeast side of the city.  Me, my family, my friends-almost everyone I knew- are a handful of those red dots.  Without being able to see the street names on this map, I can tell you that that dense line of red next to the dense line of blue by that box on the far right is Alter Rd.  I know that because even as a kid- even though no one ever told me to- I knew to turn around on my bike once I got to Alter Rd.  To the east of Alter are the Grosse Pointe suburbs (solid red) and the west side of the street begins the city (instant blue).  For the most part, Alter Rd also represented the outer boundary of the world to myself and my friends.  Segregation.

I was surprised to see that Richmond, the old capital of the Confederacy, is a more integrated city than many of the larger Northern cities.

Click to find your own city map

Still, you can easily identify some neighborhoods the bright red West End, or the heavily blue Jackson Ward.

 

The maps point to this simple fact: skin color is still, generally speaking, is one of the biggest factors in determining where people choose to live.

 

And that leads me to my second strike: I’m a Real Estate Agent.

Before the Civil Rights Act of 1968, the Real Estate Industry was one of the most influential contributors to racism that existed.  Housing discrimination was the norm.  Back then, it wasn’t hard to find neighborhood communities or Real Estate companies that would display signs making it clear that Whites were the only neighbors or clients allowed.  Of course, the norm for many industries before 1968 was blatant discrimination, but the Real Estate Industry, because they had a hand in where people would or wouldn’t live, had the potential to be a powerful voice as Civil Rights continued to grow in our country.

For the most part, the Real Estate Industry was slow to change their ways.  Laws were passed, but practices continued, and still do.  In 2006, there was a legal investigation into a Chicago Real Estate company for refusing to show certain properties to black buyers.

 

My Hope for Richmond:

That we become a more purple city and a less red and blue city.

That the functional segregation of our school system breaks down more and more every year.

That businesses, especially grocery stores, invest in  and serve the urban, largely black communities.

That Sunday 10am will be the least segregated hour of the week and not the most.

That as my 2 little white children grow up, they will have dear friends who are not only white.

That in the old Capital of the Confederacy, Martin Luther King Jr.’s Dream would happen again and again in our daily lives…

“I have a dream that one day… the sons of former slaves and the sons of former slave-owners will be able to sit down together at a table of brotherhood…”

 

 


Jay McGee used to live in Southeast Asia, doing language research and literacy development. Now he’s a Real Estate Agent with Compass Realty. He gives a microloan to somebody in a developing country every time someone in Richmond buys or sells their home with him.  Learn why here.
Contact: jaymcgee.kw@gmail.com

Woodland Heights Renovation

Just over a month ago, I helped Christof and Megan buy an amazing house in Woodland Heights.  Now they are in the middle of doing what many of us dream about: a diamond in the rough foreclosure, a great neighborhood, and major renovation plans.

Click on photo to learn how this house also provided sheep for a family in Kyrgyzstan

I asked Christof about the process of going through a major renovation.  Here, he shares his answers and unveils the master plan for the house.

Christof & Megan with their incredibly cute and well-behaved daughter

MeWhat was it about this house that made you decide to buy it over all the other houses for sale in Richmond?

Christof: This house had, by far, the most character per dollar of any house we saw during our house-hunting process. Also, the curved wraparound porch, and beautiful old Sycamore were selling factors.

 

MeTell us about the process of re-designing so many aspects of the house… Why did you decide to add the bathroom downstairs and change the floorplan the way you did?  What were your priorities (maximize space/resale value/personal needs/historic integrity)?

Christof: The rationale for introducing a powder room in the center of the ground floor was a necessary, balancing, response to our decision to take out the old, full bath next to the kitchen. It didn’t make much sense for us to have a full bath on the first floor anyway, it needed tons of work, and we wanted space for a pantry… so we pulled it out.

 

Original Floor Plan

Renovation Floor Plan

Floor plans shown above are courtesy of Brian Ward, general contractor on this project and owner of Greenleaf Renovations.

Christof: Our priorities all along have fairly focused on livability. So many people view their homes through the lens of resale value. We’re not taking that approach. We knew we wanted a walk-in pantry, open kitchen, large island, and smooth flow from the living room through the dining room to the kitchen. Our secondary concern was historical integrity. We’ve purchased old pine lumber to replace any holes in the wood floor, used reclaimed wood for as much framing as possible, and decided to restore the porch to its original glory with a railing and spindles to recapture some of the romance of the original Victorian look.

 

 

Me: What have been some of the biggest challenges to this point?

Christof: Some of the biggest challenges have been getting the yard in order. The huge Sycamore and surrounding vegetation cost a lot more to handle than we thought. But, on the other hand, now that they’re all trimmed up it’s much more exciting and beautifying than we expected so it all evens out.

 

MeWhat part of the house are you most excited about?

Christof: The most exciting part of the house right now is the kitchen. It looks like it’s just going to be awesome.  There are three additional areas that keep our minds spinning at night. The first is the possibility of fully restoring the wraparound porch. This has the potential to add value to the home and make the home much more useable for entertaining. Secondly, we are excited about the possibility of adding a second-floor balcony off of the guest bedroom/study. This is definitely one of those “aim for the moon” concepts right now, but it’s still within the realms of possibility and so… we keep dreaming. Third thing would be the “loft” – aka attic. We would like to finish it off and are preparing the space for additional work after we move in.

 

Great attic space just waiting to turn into living space

New Master Bedroom closet framed out

 

If you are thinking of buying or selling your Woodland Heights/Westover Hills home, contact me!  I live in the neighborhood… know it, love it, and I’m excited to help you with all things Real Estate.

Keep visiting the blog for more updates on the progress of this home in the coming weeks!

Jay McGee used to live in Southeast Asia, doing language research and literacy development. Now he’s a Real Estate Agent with Compass Realty. He gives a microloan to somebody in a developing country every time someone in Richmond buys or sells their home with him.  Learn why here.
Contact: jaymcgee.kw@gmail.com

10 Holiday Craft Ideas

It’s that time of year where adults get out their crayons and don their smocks.  Holidays awaken the arts & crafts soul in all of us.

 

Yesterday, we took a walk in Forest Hill Park and collected some choice leaves.  This morning, Sam made an autumn leaf, waxpaper and crayon… thingy.

 

 

 

 

If you’re in an arts and craftsy mood for the holidays, check out these ideas from around the web (Click on any picture for the full link.)

 

Step It Up

Tie bundles of bare tree and winterberry branches to the spindles in your staircase for an autumnal look. After Thanksgiving, tie pine boughs to the branches with pretty velvetribbon, and wire Christmas ornaments around the velvet ribbon for extra color.

 

Twinkling Vases

Tiny bulbs create a striking modern display when placed in frosted cylindrical vases. Wrap ribbon around the bottoms of the vases and affix with double-sided tape. Loosely coil a single strand of lights in each vase, and then send the plug end over the back lip of the vase and run it behind so it’s hidden.

 

Card Garlands

The season’s first greeting cards, arriving weeks before the family tree goes up, are enough to stir most people’s decorative impulses. This year, festoon mirrors with Lametta tinsel and use the sparkly wire to display your collection of cheerful tidings. Under the garlands, nestled in compotes, ribbon-lined candy pouches make sweet, simple party favors.

 

Mini Christmas Tree Door Decoration

Turn the traditional Christmas wreath on its head with a handmade container for a live tree. Make a pouch by sewing the sides of a folded piece of burlap or a similarly styled dish towel. Wrap damp cheesecloth around the roots of a small sapling and place the tree into a plastic bag. Tie a few holiday-hue ribbons around the bag and attach bells or ornamentswith hot glue or thread.

 

Make-at-Home Simple Snow Globes

Oversize glass containers and vases offer a great see-through way to display holiday colors. Start with a large tray and a few jars and containers in various sizes. Plantevergreen saplings (we used Golden cypress) in several of the containers and cover the soil with faux snow. For contrast, pile another jar or two with red fruits — apples, pomegranates, or cherries — or red ornaments. Place the collection in front of a window, at an entry, or as a centerpiece for your holiday table.

 

Welcoming Doorknob Decoration

This fun holiday door decoration will welcome guests with the festive scent of evergreen and a friendly message. Fold over the top of a wideburlap ribbon and cut a slit through both layers to slide over a doorknob. Use adhesive letters to spell out a message and use wire to attach bits of evergreen and pinecones.

Editor’s Tip: Create a handful of these door accents in just an hour or two — just change the message on each one and use them on guest bedroom doors or the front door.

 

Winter Branch Chandelier

Stand back and marvel at your beautiful handmade and eco-friendly chandelier. Happy Holidays!!

 

Mini Evergreen Shelf Decorations

Planted inside transferware bowls, a series of baby Norfolk Island pines brighten up a mantel. The idea also works for shelves, bookcases, or tabletops. Choose bowls in complementary colors or plain white, whichever best suits your existing holiday decor color scheme. Cover the dirt with nuts and acorns or with a collection of mini ornaments.
Indulge in a little holiday nostalgia by displaying vintage Christmas postcards in classic frames. Cards, from $6 each;ikea.com

 

 

Ornamental birch bark makes a handsome wrap for glassed-in candles. Peel it into thin, pliable sheets, trim to fit, and hot-glue to the candle cup. Bark, about $20 for three 12-inch-square sheets; birchbarkstore.com. Pillar, $20;yankeecandle.com

 

 


Jay McGee used to live in Southeast Asia, doing language research and literacy development. Now he’s a Real Estate Agent with Keller Williams Realty. He gives a microloan to somebody in a developing country every time someone in Richmond buys or sells their home with him.  Learn why here.
Contact: jaymcgee.kw@gmail.com

Winter Sales Promotion for Foreclosed Homes

Freddie Mac just launched a promo that is actually pretty sweet.  If you are thinking of snatching up a foreclosure for a steal, the deal just got that much sweeter.

Click to visit Freddie Mac website

Check out the details, and remember- hiring a Buyer’s agent is totally free to you.  It’s crazy, I know.  I help my clients locate houses that match their criteria through a fancy pants Realtor search engine, help you navigate through all the different kinds of financing available, home inspections, contract writing, negotiation, etc.  Contact me.  Even if you’re just flirting with the idea of home buying and you just have a few questions, I’m here to help.

 

The details:

Freddie Mac First Look Initiative

Freddie Mac will offer homebuyers and select non-profits an exclusive opportunity to purchase HomeSteps homes prior to competition from investors through the Freddie Mac First Look Initiative. This on-going initiative offers owner occupant homebuyers the ability to purchase HomeSteps homes during their initial 15 days of listing (30 days in Nevada), without competition from investors. The purchaser does not need to be a first time homebuyer to be eligible provided, however, that they are buying the home as their primary or secondary residence.

HomeSteps SmartBuySM

HomeSteps SmartBuy is our exciting home purchase program that offers:

We want you to feel confident about your decision to buy from us, and have the peace of mind you expect and deserve from your new home.

Buying a HomeSteps® home is truly a smart buy!

*Certain restrictions, limitations, terms and conditions apply. SeeHomeSteps SmartBuy Terms and Conditions for further details.

Homebuyer Incentives**

  • Up to 3.0% buyer’s closing cost

**HomeSteps homebuyer incentives are available to owner-occupants purchasers only.

 


Jay McGee used to live in Southeast Asia, doing language research and literacy development. Now he’s a Real Estate Agent with Keller Williams Realty. He gives a microloan to somebody in a developing country every time someone in Richmond buys or sells their home with him.  Learn why here.
Contact: jaymcgee.kw@gmail.com

3 Things You Didn’t (really) Know About the Richmond Market

We all know that the economy sort of… you know… stinks right now.  We all know that the housing market was one of the key triggers as well as the biggest victim of that economic decline.  For the first time in recent history, home owners around the country have lost significant equity in their homes.

But if you’re thinking of buying or selling, you need to know more than just an understanding of the concept that “the housing market crashed.”

Here’s what you know… but didn’t really know about the Richmond Market…

 

1- Prices are Down.

Median House Price in Richmond Metro

Lucky Dog:  The guy who sold his house in June of 2008.  Back then, the average home in Richmond fetched a price of $233,000

Here's what that feels like

Poor Schmuck:  The guy who bought his house in June of 2008, and then sold it in February of this year, when the average Richmond home price dipped to $153,000

The Difference:  A decline of 34%… or $80,000

 

 

 

 

2- Ask and Ye Shall Receive… Less

Back in October of 2007, when you listed your home at $200,000 you ended up selling it for $195,000… or 98% of your list price.

Today when you list your home at $200,000 you will probably end up selling it for $188,000… or 94% of your list price.  That’s a difference of $8,000

3- What it means

If you are buying, you are going to find some amazing deals and buy a lot more house than you would have been able to 5 years ago.  If you are in that boat, here’s the other great thing… hiring a Buyer’s Representative is FREE to you.  Contact me if you’d like to learn what I do for Buyer clients.  Here’s a snapshot.

If you are selling, it means you might not get the price you would like when you sell your home.  Here are the Top 10 Value Boosting Projects that you can do for your Richmond home.  You are also going to need a Realtor who works harder and is better than the rest.  You happen to be reading his blog.

Do you have any questions about the Richmond market?  Leave a comment!

 


Jay McGee used to live in Southeast Asia, doing language research and literacy development. Now he’s a Real Estate Agent with Keller Williams Realty. He gives a microloan to somebody in a developing country every time someone in Richmond buys or sells their home with him.  Learn why here.
Contact: jaymcgee.kw@gmail.com

Balloons of Bhutan

Every once in a while, you run across something on the web that is exceptional.  The ol’ laptop is good at spewing forth tons of content that’s entertaining, but it’s harder to find things that are… Inspiring.  Peaceful.  True.

What makes people happy?  We go to such lengths to measure GNP (Gross National Product) but isn’t Gross National Happiness even more important?

Click to enter balloonsofbhutan.org

Instead of “Gross National Product”, Bhutan uses “Gross National Happiness” to measure its socio-economic prosperity, essentially organizing its national agenda around the basic tenets of Buddhism. Bhutan’s fourth king, Jigme Singe Wangchuck, invented the idea in 1972, to give his tiny country some international clout and guard against potential future invasion by its two mighty neighbors (India and China).  (taken from balloonsofbhutan.org)

 

Jonathan Harris traveled to the Himalayan kingdom of Bhutan, taking a snapshot of happiness.  He asked people 5 questions:

  • What make you happy?
  • What is your happiest memory?
  • What is your favorite joke?
  • What is your level of happiness, between 1 and 10?
  • If you could make one wish, what would it be?

He recorded people’s answers and took beautiful photos as he traveled.

The recordings and pictures are beautiful, simple, and honest.

How many balloons are you holding?

Jay McGee used to live in Southeast Asia, doing language research and literacy development. Now he’s a Real Estate Agent with Keller Williams Realty. He gives a microloan to somebody in a developing country every time someone in Richmond buys or sells their home with him.  Learn why here.
Contact: jaymcgee.kw@gmail.com

Real Estate Lingo Decoded

For the past week, I’ve been sitting in on a Real Estate seminar a few hours every day.  40 Real Estate agents in 1 room.

Sounds like the beginning of a bad joke that might involve God and lightening.

If you see me walking around the grocery store donning a big name tag with my company logo, you’ll know that I’ve taken some advice to heart (check out the play by play on RealRVA’s facebook page).

But here’s the point, friends; hanging out with a bunch of agents this week has reminded me that Real Estate has it’s own language and mumbo jumbo to sort through.  Terms get tossed around by Real Estate folks, and regular folks- folks who don’t wear a name tag to do their grocery shopping- aren’t sure what they mean.

 

How to speak Real Estate:

First of all, here are the ones we sometimes see in ALL CAPS accompanied by WAY TOO MANY EXCLAMATION POINTS!!!!  in MLS (defined later)write-ups…

Cozy=tiny

Fixer Upper=might collapse on itself causing serious injury/death

Many Original Features=still has Grandma’s shag carpet circa 1976 throughout

Massive Price Reduction!= we reeeaallly overpriced it the first time around!

Tons of Character=haunted.

Ellen shares some wonderful write ups from my R.E. peers around the country.

 

The Technical Terms are what you really need to learn if you’re going to understand the R.E. market.  (some definitions taken from Trulia.com)

 

MLS– Multiple Listing Service.  A marketing database set up by a group of cooperating real estate brokers.  Basically, it means that even though your agent (me) works with Keller Wiliams, he can take you in to see houses for sale under Long & Foster or Century 21 or whoever.

REO– Real Estate Owned.  Property owned by the bank/mortgage servicer, this acronym refers to homes that were foreclosed and repossessed by the former owner’s bank.  It also signals that buying this property will involve doing a deal with the bank; possibly dealing with a different escrow timeline, offer process or contract forms than a non-REO sale; and almost always taking the place in as-is condition, among other things.  Oh, yeah – and it might also involve one more thing: a great deal.

Foreclosure– You probably already know that this is a house whose owners haven’t been paying, and as a result, is bank owned.  What you might not know is this: the first time you are late on your mortgage payment, you are technically in pre-foreclosure.  If you live in Virginia, you happen to live in a state where the law allows banks to collect their collateral (your house) much faster and with less legal hurdles than in other states.  Make sure you pay on time!

 

Short Sale– This does not mean in any way that the sale of the house will happen quickly.  It’s usually the opposite.  A short sale is a house whose net sale price will not cover the debt owed to the bank.  When that is the case, the bank must approve the sale price of the house because they may be forgiving the seller of the remaining debt owed.  Because there is a bank involved, you can plan on your short sale taking a long time.

Pre-approved short sale-  Many knowledgeable agents say no short sale is truly “pre-approved” unless and until the bank looks at a specific buyer’s offer and the seller’s financials at the same time, but some listing agents designate a short sale as “pre-approved” when a previous short sale application was approved at a given price, but fell out of contract for some other reason.

 FHA- Federal Housing Administration, which backs the popular 3.5 percent down home loan program. FHA guidelines also include somewhat strict condition and homeowners’ association dictates, so if  a home’s seller notes that they are not taking FHA loans, they might be saying that the property has condition or other issues which disqualify it for FHA financing.

HUD-  The federal department of Housing and Urban Development, which governs the guidelines for FHA loans, acts as a seller of homes which were foreclosed on and repossessed for non-payment of FHA-backed loans, and publishes the Good Faith Estimate and settlement statement forms every buyer and borrower will be provided at the time they shop for a loan and close their home purchase, respectively.

Sold “As-Is”- Most often when you buy a house, there will be a provision written into the contract that allows you to have a professional home inspection to uncover potential problems with the home and its mechanical systems.  The home inspection clause allows a buyer a way out of a contract if the inspection uncovers a major issue, or if the seller refuses to fix or pay for it.  A property being sold “as-is” means that you are still allowed to have a home inspection, BUT if it uncovers massive problems, you cannot back out of the contract.

 

Are there Real Estate terms that baffle you?  Have questions about one?  Leave a comment!

 

Jay McGee used to live in Southeast Asia, doing language research and literacy development. Now he’s a Real Estate Agent with Keller Williams Realty. He gives a microloan to somebody in a developing country every time someone in Richmond buys or sells their home with him.  Learn why here.
Contact: jaymcgee.kw@gmail.com


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