Buying Real Estate in Virginia

Did you know that Virginia is one of the few caveat emptor (buyer beware) states in the country?  Most buyers coming outside of the state expect to see a long list of disclosure items from the seller.  For example:  Dishwasher works, stove works, there is an easement across the property and so forth.  In Virginia, the seller has to tell you very little about the property.  When you make an offer on a property, you will be given a Summary of Rights and a Residential Disclosure form to sign.  You would be wise to read these documents and ask some questions about the property.

Here are some of the items that the seller does not need to disclose.  This list comes from the link off of the Residential Disclosure Form.

  1. The Seller makes no representations or warranties about the property, the improvements and if there are any covenants and restrictions.
  2. The Seller makes no representations pertaining to the adjacent parcels.  That beautiful field across the street could become the next high-density development or the county dump and the Seller does not have to tell you.
  3. The Seller makes no representation as to whether the property is in a historic district and if you need to go before a board for approval prior to making any changes to the home or property.
  4.  The Seller makes no representations as to if the property is in a resource protection area.
  5.  The Seller makes no representation if there are any registered sexual offenders in the area.
  6.  The Seller makes no representation as to whether the property is within a dam break inundation zone.
  7.  The Seller makes no representation as to if there are any stormwater detention facilities n the property or if there are if there are any maintenance agreements on it.
  8.  The Seller makes no representations about the wastewater system and if there are any regulations pertaining to it.
  9.  The Seller makes no representation as to whether you can place solar panels on your home or property.
  10.  The Seller makes no representation that the property is in a flood zone and if flood insurance is required.
  11.   The Seller makes no representation that the property is or is not under a conservation easement or any other type of easement.
  12.   The Seller makes no representation as to whether the property is subject to a community development authority.

Most Sellers and their agents will do the proper thing and make you aware of potential problems.  If the Seller’s agent is aware of a problem and it lies within the property boundaries, then the agent must disclose the problem.

So, what does the Seller have to tell you?

  • If there have been any mining operations on the property.
  • If the property is located in a locality with a military installation.
  • If the home has defective drywall.
  • If the home has pending building code or zoning ordinance violations.
  • If the property has been used to manufacture meth.  Yes, like a Seller is going to really tell his agent this.  Nevertheless, it is the law!
  • If the property septic system has an operating permit that cannot be transferred.

So, what is a buyer to do????  Do some research at the courthouse to find out about covenants and restrictions, easements, historic districts and adjacent parcels.  Talk to your insurance agent about insuring the property.  Get the well and septic permits, if they exist, from the county health department.  Look at the county website for zoning permits and zoning districts.  Look at the FEMA website for flood zones.

It never hurts to ask lots of questions and to do your due diligence!


Economist Lawrence Yun Offers Hope for the Housing Market

Last week Dr. Lawrence Yun, Chief Economist and Senior V. P. of Research at the National Association of Realtors, paid a visit to Charlottesville to offer his economic and real estate outlook at the Charlottesville Area Association of Realtors (CAAR) General Membership Meeting. He emphasized that the moderate recovery we’re experiencing in rising home sales is a positive thing because it is much more sustainable than the boom in the early 2000s caused by subprime lending. The challenge we face today, he said, is the lack of supply to meet the demand. Specifically, there are too few available houses that meet the needs of first time home buyers. Yet he is hopeful that steady recovery will continue and that there will be the potential for growth going forward.

In order to create a more detailed picture of what is happening, he presented his analysis of the middle class today. The fact that median household income has not fully recovered to match the levels seen in 2000 and 2007, he says, has upset middle class ideas about the American Dream. He then pointed out that a majority of American families are not directly impacted by positive spikes in the economy because only 10% of them have a meaningful ($100K or more) investment in the stock market, which contributes to the overall viewpoint that the economy is not recovering. Then there is the fact that despite making high profits, businesses are not spending as much as they used to. And even though the employment rate is rising and the unemployment rate appears to be falling, he pointed out that what these statistics fail to show is the unemployed person who is not actively searching for work, as this is a requirement to be included in the unemployment rate. Specifically in Charlottesville, he said, there are 20,000 more people with jobs in the area than there were in 2000, which has contributed to the high housing demand.

By Lawrence Yun
By Lawrence Yun

In addition, rent is at a 7-year high, he said, and will be the driver of inflation in the future. Rising rents encourage home ownership, which offers the benefit of a stable mortgage payment. And a high inflation rate will mean higher mortgage interest rates. But currently the rate of homeownership is at a 50-year low. Younger households are less likely to own, a fact explained by the large wealth gap between young adults (defined by those under 35) and retirees. While wealth has grown for retirees since 1983, it has declined for those under 35. Yun sited contributing factors such as the rise of tuition and student loan debt, as well as medical inflation. This is the reason, Yun said, we’re seeing less foot traffic and lockbox openings.

The National Association of Realtors will make a large effort in the next year, he said, to present to the next President of the United States the benefits of home ownership. These include a lower juvenile delinquency rate, better health, self-esteem, and civic engagement. But since all of these benefits can be counteracted by foreclosure, the National Association of Realtors will emphasize the need for sustainable home ownership. The good news in Virginia is that the mortgage delinquency rate is lower than the rest of the country.

In an article published on Forbes online titled “Are We Entering a New Housing Bubble?” Yun argues that we are not heading toward another bubble as we currently lack the inventory for such a thing to happen. He advocates for more home-building in order to meet the current demand and maintain a gradual recovery of the economy.

Yun - Fed Policy re Mortgage Rate
By Lawrence Yun

He also pointed out at the CAAR meeting that the Federal Reserve always waits until after an election to raise rates because they don’t want to affect the outcome of the election. But Yun predicts that the mortgage rate will be more affected by inflation in 2017 and 2018, rather than by actions of the Federal Reserve. His economic forecast is that the economy will continue to be subpar, but may be affected by whoever is elected for President of the United States. He predicts that growth of the GDP will be 1.6%.

Yun - Economic Forecast
By Lawrence Yun

His housing forecast is as follows.


Yun - Housing Forecast
By Lawrence Yun


Charlottesville Home Inspectors

Charlottesville Home InspectorVirginia is a caveat emptor (buyer beware) state, so we encourage all of our buyers to do their due diligence as a contingency in their purchase contract. One of the most common inspections is the home inspection. We thought it would be of interest to run a series on the various home inspectors in the area, so that when the time comes, you will easily be able to select the inspector that meets your needs and you feel the most comfortable with. This quarter we are introducing Jim Quisenberry of Cavalier Home Inspections located in Charlottesville.

1. What is your background as it relates to conducting home inspections?

I spent 30 years in the building supply and lumber business as well as I built my own home.

2. How long have you been inspecting homes?

I have been inspecting homes for the last 11 years have done approx 2700 inspections.

3. What is the most common problem you see around Charlottesville when conducting home inspections?

The most common things we see are safety issues, maintenance issues and water intrusion issues.Examples: Smoke detectors not working, Filters not being changed regularly or no service on heating and cooling systems. The water intrusion issues are generally landscaping problems or gutters not working.

4. What are the three things that you would suggest all homeowners to do to keep their home in good shape?

Have HVAC systems serviced. Keep the landscaping and trees trimmed off of the house and perform general maintenance.

5. What areas do you cover? Do you have any specialties?
The area I cover is where ever I’m needed. I have done inspections in as far away as Culpeper, Staunton, Amherst and Goochland.

House Payment with an Adjustable Rate Comparison

If you have a high house payment, that doesn’t mean your home is more valuable, it may indicate that your mortgage rate is higher than it has to be.

Although fixed rates are currently low, you might consider looking into an adjustable rate mortgage.  Depending on how long you plan to own your home, an ARM may provide the lowest cost of ownership. 

There are different types of ARMs. One type, an FHA ARM, features a maximum rate change of 1% during one period and the maximum lifetime cap of 5% over the initial rate.

The chart below shows an example of a 30 year mortgage with a five year fixed rate that can adjust every one year after that, based on independent indexes.  The payment on the adjustable is $153.48 lower for the first five years/60 payments.  The lower interest rate loans amortize faster than higher interest rate loans.  The ARM in the example below has a lower unpaid balance of $4,239 at the end of the first five years.

At the end of the first period, the total savings on the ARM is $13,477.  The breakeven point for this loan would be 8.5 years. If the borrow felt they would sell the home prior to this point, the housing cost for this ARM would be lower, even if the mortgage rate increased to the maximum level at each adjustment period.

Always consult with a trusted mortgage professional to learn more about the advantages and disadvantages of varying programs.  You can also contact one of our agents to help guide you as well. 

For more information, visit:

Are you ready to buy a home?

are you ready2.png

Don’t think twice! Are you thinking about buying a home, but keep delaying your decision?  You may want to reconsider based on the conditions of today’s market and the potential for the future market.

Today’s rental market has seen an increase to the point where it’s significantly less expensive to own than to rent.  The monthly cost of housing can be lower, even after repairs are factored into the comparison, as interest rates are low, principal accumulation due to amortization, as well as appreciation and tax savings from owning your home.

The Federal Reserve recently announced that they intend to start increasing the rates.  Experts are agreeing that an increase in interest rates is an inevitable conclusion. With that said, a $300,000 home today could be considerably more a year from now.   If you have a down payment of 20%, prices increase by 3%, interest rates increase by .5%, the principal and interest payment at 3.625% would be $1,094.52 for 30 years compared to $1,198.05 at 4.125%.

Here’s something to ponder when thinking about postponing a long term decision to buy a home.  If you wait too long and the rates go up, can you afford that increased amount in a monthly payment because you weren’t ready to make a decision?  Do you want to continue paying rent when you could put that money towards the equity of your own home? 


The Most Popular Trends in Kitchen and Bathroom Design

If you’re thinking about updating your home, kitchens and bathrooms still top the list as the most popular construction renovations.  According to Residential Architect, they have identified some of the latest trends in kitchen and bathroom design.

It’s not just about cooking! Kitchens are becoming the central hub of the family home.  Yes, kitchens are where you store and prepare food, but kitchens are also being used for family gathering, entertaining family and friends, and for everyday living.  How many of you have a computer, phone chargers, or some type of technology in your kitchen?  You need to have easy accessibility to that recipe you saw on-line, or that “honey, please stop by the store and pick up…” for those missing ingredients.

For 2014, Residential Architect found LED lighting to be the most popular feature in a kitchen.  This feature is followed by computer areas with recharging stations, large pantry spaces, upper-end appliances, double islands, adaptability/universal design, and drinking water filtration systems.

When it comes to bathroom designs, Residential Architect found the most popular features to be LED lighting, door less showers, as well as adaptability/universal design.

So if you’re contemplating a renovation to your home, consider the current trends in both kitchen and bathroom designs.

Finding the Right Mortgage Lender

Obtaining a mortgage for your new home is not about picking the first person or company you find on the web or call. Selecting the right mortgage lender is essential. The mortgage lender should make you feel confident that he/she will work with you to find the best loan to fit your mortgage needs.  It’s important to find a full-time professional who specializes in residential loans and is familiar with local conditions, values, and practices. A loan officer experienced in putting together unusual transactions is also beneficial.

Here are a few questions to help you select the right loan officer.

  1. What percentage of your business is FHA & VA compared to conventional mortgages and how long have you been doing them?
  2. What percentage of your loans close on time according to the sales contracts?
  3. Will my credit score affect my interest rate?
  4. Will you help me select the best loan product for me regardless of your commission?
  5. Are there prepayment penalties on any of the loans we’re considering?
  6. Are there any restrictions on refinancing any of the loans we’re considering?
  7. When is my loan rate locked-in? Is there a charge for that?
  8. Is your loan underwriting in-house?

Ask your real estate professional to recommend a few trusted lenders.


Finding the Best Interest Rate

Homebuyers will endlessly search for the right home, but what about the right interest rate? Over 50% of buyers don’t do their homework when it comes to finding the best interest rate for their new mortgage. They will accept the rates and terms from the very first lender.

There are many factors that affect the interest rates and terms provided by a lender.  The borrower, the property, credit score, home location, price and loan amount, down payment, loan terms, interest rate and loan type are all interpreted differently by each lender.

Researching several lenders to compare rates and terms for your mortgage could result in a lower payment and less cumulative interest paid over the life of the loan.  You would be surprised to see the difference 0.5% can make on your mortgage loan.

If you’re worried about your credit score being affected by having multiple lenders check your credit, don’t be concerned.  Credit bureaus will understand when several similar requests  appear during a specific period of time.

Contact for a list of trusted mortgage professionals to consider.










It’s Tax Time

Whether you’re doing your own income tax return or having them done professionally, you need to gather information to determine if any portion of your home ownership is deductible.  Here are a few questions to help identify if you may be eligible for home ownership deductions:

Did you refinance your home this year?  If YES, points may be taken as an interest charge.

Do you itemize deductions or use standard deduction?  Your best bet is to compare the mortgage interest, property taxes, and other eligible deductions to see which will provide you with the largest deduction.

Are you paying mortgage insurance premiums with your payment? If YES, you may be able to use this as a deduction.

Did you purchase a home in 2014?  If YES, look at your HUD-1 statement from closing for any possible deductions. An example:  If the seller paid points on your behalf, you may be able to deduct them. If you need another copy of your HUD-1, contact your real estate professional.

Did you purchase or install any qualified residential energy efficiency property or improvements in 2014?  If YES, you may be eligible for tax credits.

Do you have a designated exclusive area in your home for a home office?  If YES, you may be able to deduct a pro-rata share of home expenses such as insurance, utilities, phone, and other expenses.

For more information, visit:

2014 IRS Home Deductions –

2014 Home Mortgage Interest Deductions – 


The Sacrifices First-Time Home Buyers Make to Purchase a Home

Dreams do come true! The American Dream of having a place to call home where you can raise a family and create a lifetime of memories can bring about sacrifices as well.  So what types of sacrifices are first-time home buyers willing to make in order to make that dream come true?  

Here’s a survey from the 2014 National Association of Home Buyers and Sellers:

  All Buyers
Cut spending on luxury items or non-essential items


Cut spending on entertainment


Cut spending on clothes


Canceled vacation plans


Earned extra income through a second job


Sold a vehicle or decided not to purchase a vehicle


Did not need to make any sacrifices


Last year, the guidelines for qualifying on a loan to purchase a home were increased, but the record-low mortgage rates are allowing more buyers to purchase homes.  Therefore, this survey validates the importance of owning a home and making that American Dream come true.