Official Press Release From NVTA Regarding Today’s Court Ruling

As many of you know, the VA Supreme Court today ruled that the taxing powers given to the Northern Virginia Transportation Authority (NVTA) were unconstitutional. Well, here is the official press release from the NVTA on the matter:

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Grantor’s Tax Update – Court Rules NVTA Taxing Powers Unconstitutional

Today, the Virginia Supreme Court ruled unconstitutional the taxing powers given to the Northern Virginia Transportation Authority (NVTA). This gives serious doubt as to whether the Grantor’s Tax will remain in effect. The Grantor’s Tax was increased by 500% beginning January 1, 2008 as part of the NVTA’s plan.

Governor Tim Kaine and the Virginia General Assembly originally empowered the NVTA to collect specific taxes in Northern Virginia to spend on transportation improvements in the region. Part of these taxes included the "Grantor’s Tax" paid by home owners when selling their homes.

The NVTA went to an Arlington court to confirm its authority to sell bonds against the increased tax revenue that would be collected. Loudoun County immediately jumped in to oppose the NVTA.

The case then made its way up to the Virginia Supreme Court, which heard arguments on January 8, 2008 and ruled on it today.

Those who settled between January 1, 2008 and today can contact the NVTA to request a refund on their Grantor’s Tax.

For the actual VA Supreme Court ruling, click here.

UPDATE: If you sold your home after December 31, 2007 and paid the higher Grantor’s Tax rate ($5 per $1000), you may request a refund. For more information on how to do so, click here.

Partial Source: Loudoun Easterner

Wells Fargo Identifies Loudoun County As An “At Risk Market”

Wells Fargo just named most of Northern Virginia including Loudoun County as an "At Risk Market". In doing so, they will be limiting the number and types of loan products available and increasing the credit guidelines for borrowers in this area.

This will affect buyers/borrowers by making it harder to obtain a loan. It may also affect current borrowers who have already been approved by Wells Fargo much in the same way Fannie Mae revaluated or even revoked already-approved loans waiting to close.

With credit guidelines and interest rates increasing daily and loan products diminishing, it’s getting harder and more expensive to buy a home by the day. If you’re a buyer on the fence, you may want to think about getting down. If you’re a seller with your home on the market or if you’re on the fence on whether to sell now or wait, you may want to get extra aggressive with your marketing and price or put your home on the market now before it gets even harder for buyers to buy.

Related Articles/Source:

"Wells Fargo: New Tighter Mortgage Guidelines" – Calculated Risk

Buyers – Using A Mortgage Broker May Leave You Dead In The Water

If you are thinking about using a mortgage broker for financing or have already been approved through a mortgage broker, you may dead in the water and without a new home come settlement day. And to add insult to injury, you will most likely be in default and may lose your earnest money deposit.

First of all…what is a mortgage broker? A mortgage broker is a company that does not lend their own money. Instead, they outsource the loan to direct lenders who actually have the money and fund the loan. Examples of direct lenders are Wells Fargo, First Horizon, National City, SunTrust and CitiMortgage.

The part of the direct lender that deals with mortgage brokers, gives final loan approval and funds the loan is called the wholesale division.

So why may using a mortgage broker leave you dead in the water come settlement day? Because more and more direct lenders are closing their wholesale divisions and not going through with funding broker's loans even if the loans have already been approved and are supposed to close in the near future.

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Seller Tip – How Not To Alienate Potential Buyers Over $1

Pretty much all listing sites such as Realtor.com and Homesdatabase.com provide buyers the option to search in 25K, 50K or $100K blocks. Buyers can search "up to $400K" or "up to $425K". The same is the norm for agents who search for properties "less than $400K" or "less than $425K". By being priced directly at or even $1 over a price bracket, you will lose exposure to another pool of potential buyers.

For example, if you are listed at $426,000, you’re losing exposure to all buyers and buyers’ agents searching for properties up to $425,000. Perhaps you have to have that last $1000, but you’ll never realize any money unless you sell your home in the first place. It would make more sense to price your home at something like $424, 900, gain exposure to a greater number of buyers and then do a great job negotiating the price and terms of the offer once you actually have one on the table.

With over 80 percent of today’s buyers searching for homes online, it’s crucial to understand how they go about doing so in order to gain exposure to the greatest number of potential buyers. This is just one of the many ways to do so.

Why Are Interest Rates Going Up?

Many consumers are wondering why interest rates are going up (click on image to enlarge) despite the approval of the economic stimulus bill and higher loan limits on Feb 13. To help answer this question, here is an article from Cathy Jones, Senior Mortgage Lender with OlympiaWest Mortgage Group:

"The short week turned out to be one of the most volatile in recent years. Early in the week, mortgage rates surged to the highest levels of the year, before they turned around and recovered nearly to their starting level, leaving only a small rise for the week. With the Fed cutting rates and pumping liquidity into the economy, and the government implementing fiscal stimulus programs, mortgage investors became increasingly worried that the stimulus would lead to higher inflation, which is negative for mortgage markets. The major inflation data released during the week amplified those concerns, as the January Core Consumer Price Index rose at a 2.5% annual rate, which was higher than the consensus estimate.

Perhaps contrary to what one would expect, the recent Fed rate cuts have led to higher mortgage rates as opposed to lower mortgage rates. To understand why, it’s important to understand that the Fed only controls short term interest rates. When they cut rates, it generally has the effect of increasing bank lending and consumer spending, which leads to more economic activity. Long term rates, such as 30-year mortgage rates, are determined by trading in financial markets and are highly impacted by expectations for future inflation. To a mortgage investor, a Fed rate cut increases the risk of higher future inflation, and that has been the dominant sentiment in recent weeks. This explains why 30-year mortgage rates have jumped 0.75% since the Fed’s aggressive January 22 rate cut.

In the housing sector, the news was mixed. January Housing Starts rose slightly from December, while Building Permits, a leading indicator of future activity, fell to the lowest level since November 1991. The National Association of Home Builders (NAHB) Housing Market Index showed a small increase. According to the NAHB, builders have been attempting to reduce the inventory of homes on the market, and there has been an increase in the flow of prospective buyers."

As we mentioned last week, you shouldn’t base your decision on whether you buy or sell primarily on the economic stimulus bill and higher loan limits. And as you can see, rates went up in the last two weeks despite the bill being approved so the bill and the higher loan limits are not the "cure" that many thought it would be.

Further Reading:

"Interest Rate Roundup" – BankRate.com

Fed Chair Ben Bernanke’s response to the question (video)

New Loan Limit Announced For Washington, DC Metro Area Including Loudoun County

New loan limits in the Washington, DC metro area including Loudoun County will be $562, 200, according to this podcast by Dick Gaylord, President of the National Association of REALTORS® (the second half of the podcast does not necessarily apply directly to this issue).

For more information on how the bill and new loan limits may affect buyers and the overall housing market in Loudoun County, check out this post.

Seller Tip – Do You Have A Personalized Web Site To Boost Exposure and Maximize SEO?

Are you are a seller with a traditional sign up in your front yard with just the name of the brokerage firm, listing agent, their web site and the phone number to the office and the agent’s cell phone? What about the url/web address of your own personalized web site of your home?

With over 80% of buyers going online to get information on homes for sale, utilizing digital marketing, part of which is having your own personalized web site, is key to getting the most exposure for your listing. And it’s key to getting the most amount of information about your property and community to potential buyers.

For example, if you were to search "Birdsnest Place" (one of our listings) in Google, the first result you would find is the listing on Trulia (one of the 25+ sites our listings are marketed on). The second and third search results are the personalized web site we created for that seller/listing.

As you can see, having your own personalized web site is an integral part of getting on top of search engine results. This is due to its’ search engine optimization (SEO) capabilities. This will bring your property to the attention of potential buyers much more so than being buried on a page deep inside your agent’s web site.

As far as providing buyers with the information they need, a personalized web site is great for accomplishing that. Your site can provide features and information that is not always available elsewhere (the MLS, Realtor.com, other listing sites). These features and information include:

• High-resolution digital photos which are able to be enlarged for better viewing
• Neighborhood information/links
• Additional information (this could include a plat, list of renovations/improvements, schools, etc.)
• Map/Directions (aerial maps including satellite views along with directions)
• Contact information for your listing agent (not some random agent who paid the most amount of money to have their information advertised on the listing as is the case with many listing sites)

And many of today’s buyers are getting tired of being "sold" by the listing agent/broker when they call so they would rather get the information online on their own. Having your own personalized web site for your property will appeal greatly to those buyers because they get most of the information they need right there on the spot.

Another thing to consider is how quickly you can get the information about your property to a potential buyer who sees the sign up in your front yard while driving by.

Rather than having to to call the listing or search through the various listing sites to find the property listing, buyers driving by your property can quickly jot down the url and find your property immediately when they get back to their computer. In a perfect world, the buyer would be able to access the information immediately.

Well, if you have the url listed on your yard sign, the buyer can pull up your site on their phone’s browser right there on the spot while still in front of your home.

So sellers…don’t sell yourself short by not embracing digital marketing, a part of which is having a personalized web site for your property/listing. Maximum marketing exposure is more important in today’s real estate market than ever before.

“Subprime Lending – Loudoun County Impacts Report”

We just got our hands on a report entitled "Subprime Lending – Loudoun County Impacts Report", which was reviewed at the Loudoun County Board of Supervisors meeting yesterday (Feb 20).  The report covers things such as reduced housing demand; reduced prices and slower homebuilding; and the impact on specific neighborhoods within Loudoun County.

To read the full article and review the actual report in its’ entirety, click here.

Home Buyer Tip – Do Your Homework and Ask If You Don’t Know

As of recently, more and more buyers have been asking questions on Trulia Voices that pertain to how to get out of a contract for reasons that should have been addressed well before they wrote the offer. In some cases, the issues should have been addressed before even starting to look at homes for sale.

Here’s a recent question posted by a buyer on Trulia Voices:

"Can I back down on a house contract after an inspection on the house and finding out the crime rate?"

Doing research on the crime rate is something a buyer should do well before writing an offer on a property. In fact, it should be done before the buyer starts looking around at properties in the first place.

I can’t say whether this buyer can get out of their contract for other reasons/contingencies because I’m not privy to the details of this transaction, but, in my opinion, they can’t get out of a contract solely due to the crime rate.

By not doing their homework beforehand, this buyer could potentially be legally bound to buy the property and lose their earnest money deposit and be sued by the seller(s) if they don’t move forward with the purchase.

Buyers – do your homework (and make sure you have a good buyer’s agent on your side if you’re using one) so you don’t get caught in a situation like this. If you don’t know what to do your homework on – ask. If you don’t know where to find the information you’re looking for – ask. It never hurts to ask, but it hurts bad to lose thousands of dollars and/or get sued.

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