The Coghlan Team

Tom's Blog - Making Some Cents Of It All.Laughing

November 2016

Cleaning up your home before putting it on the market is a "Must Do" item. Clearing out stuff is another. Most of us accumulate far too much stuff, and it makes it harder for a Buyer to see themselves living in your home.

Another really important consideration is smell. Smell is a very powerful deterrent. Any funky smells will drive Buyers away. Unfortunately, most of us cannot tell if we have them - because we are so used to smelling them. It's best to have a third party (Realtor, friend, neighbor) check for you. Common smells are musty ones (mold, mildew, damp walls, or carpet, etc.). You can often remove the smells with dehumidifiers, or by removing the mildew, mold, or musty item. Mold usually requires professional remediation. Pets can be another potent source of smell, and a potential deal breaker. Regular professional cleaning is recommended. Sometimes a pet "vacation" (kennel, friends home) is a good idea while the house is on the market. Certain types of cooking, particularly if heavy spices or oils are used, can leave a lingering smell. Again, a professional cleaning can help. Once the house is cleaned, you might want to give that type of cuisine a rest until the home is sold.

September 2016


Three Quick Ways to Give Your Home Curb Appeal

1. Spruce up the Exterior: 

  • Wash Off the Dirt
  • Paint Areas that are Fading, Chalky or Peeling

2. Tame the Landscaping

  • Clean Up the Leaves and Debris
  • Re-edge the Flower Beds
  • Trim and Shape Your Bushes

3. Add Color

  • Paint the Front Door a Color that Complements the Home’s Look
  • Plant Seasonal Flowers in Beds, Boxes or Urns
  • Add a Seasonal Wreath or Flag
  • Add a New Doormat, or Pillows for Furniture



Be Careful When Choosing a Closing Day

1. Friday is not the best day to close – because they are the busiest days for Closing Agents.  Shoot for a Monday, Tuesday or Wednesday to avoid congestion and allow time to correct last-minute complications (to provide additional funds or documentation as needed.)

2. Closing early in the month – tends to be less busy.  It allows time to take care of unforeseen problems (inspection approvals, access to funds, etc.).

3. Closing later in the month – means buyers will have less out of pocket expenses (upfront) because you’ll owe less interest on your mortgage and pro-rata expenses (taxes, HOA fees, etc.).  The first mortgage payment won’t be due until one month later whether you close on June 13th or June 27th – your first mortgage payment won’t be due until August 1st.



Planning For a Smooth and Quick Closing?

1. Get Conditional Approval from Your Lender before Making the Offer

2. Assemble all Your Pertinent Documents (bank statements, pay stubs, tax returns, etc.) Before Looking for a House

3. Make Sure You have Sufficient Funds to Close (down payment, closing costs, etc.)

4. Be Prepared to Wire or Bring a Cashiers Check to Settlement

5. Make Sure to Insist the Repairs are Completed Prior to Walkthrough Inspection

6. Stay in Close Contact with Your Lender Leading Up to Settlement (to ensure issues are resolved quickly).



Tips for Selling Your House

1. Fix the Obvious Problems Before Listing Your House for Sale – buyers watch HGTV too.

2. Walk Through Your House with a Buyer’s Eyes – think about what a buyer wants (clean walls and floors, freshly painted).

3. Price Your Home to Match Current Market Conditions – asking too much ensures they house will sit with no offers.

4. Check Out Your Curb Appeal – ask a neighbor their opinion on what improvements are needed.

5.  Insist your Agent Use a Professional Photographer – they can make the house shine.

6. Unclutter – Remove extra furniture to improve traffic flow, and clean our closets, basements and garages.

7. Make Sure Buyers Can See Your House – restricting times and days for viewing can limit interest.  Crate your animals.

8. Stage your home – to look like a model home.

9. Upgraded kitchens and bathrooms sell a home.  Rip out old carpet and replace or expose/refinish wood floors.



Re-Doing Your House

1. Kitchens

  • Lower-grade granite countertops can look just as good and cost less
  • Skip under-cabinet light fixtures with wiring – use LED adhesive lights to save money
  • Stock Cabinets make more sense (less cost to recover) if you plan to move soon
  • Hire a professional to help you design the remodeling (but skip the pricier ones)
  • Consider shelving instead of upper level cabinets to save on cost
  • Use a pricey looking special tile on backsplash, but only sparingly as needed
  • Invest in top-of-the-line hinges and glides, but save on knobs and pulls
  • Skip pro-style appliances if you plan to move soon
  • Paint the kitchen walls before installing new backsplash and cabinets, and make sure the colors harmonize
  • Add recessed lights over working surfaces

2. Painting

  • Use semi gloss paint on walls in high traffic areas – easier to wipe clean, and lasts longer

3. Hired Help

  • Only call in a pro on big jobs
  • Use a handyman for easy plumbing, electrical or painting

4. Cut lighting costs

  • By sticking with light colored walls and floors
  • Stick with pure white ceilings
  • Stick with off white trim

5. Carpets

  • Buy less expensive neutral carpeting
  • But pair it with upgraded padding to improve look and feel

6. Fireplaces

  • Choose a fully enclosed gas fireplace insert – burn less gas, retain 80-99 percent of heat, lose less air to outside via chimney 

7. Wallpaper

  • Avoids its use, remove old wallpaper
  • Use it only as an accent

8. Flower Beds

  • Use mulch, stone or gravel to eliminate weeds



What is the Legal Definition of a Bedroom?

1. The Legal definition is determined by the local municipality’s zoning codes.

  • Alexandria City 703-838-4666
  • Arlington County 703-228-3883
  • Fairfax County 703-222-0114
  • Fairfax City 703-385-7930
  • Falls Church City 703-248-5015
  • Town of Herndon 703-787-7380
  • Town of Vienna 703-255-6341

2. Virginia State-wide Requirements

  • Egress – a bedroom must have two ways to exit.  One that leads to the rest of the home.  One that leads to the outside.  If the outside egress is a window, it must be at least 5.7 square feet.  It can be no higher than 44 inches from the floor, unless a permanent step is installed.  It cannot have locking bars or grates installed.  In addition, its sole entrance cannot be through another bedroom.  Finally, it must have access to a bathroom without going through another bedroom.
  • Closet – Virginia has no closet requirement for a bedroom.
  • Size  - The minimum size of a bedroom is 70 square feet (e.g. 7 feet by 10 feet, etc.).  If more than one person occupies the room there must be an additional 50 square feet per occupant.
  • Ceiling – the Ceiling height must be no less than 7 feet.
  • Heating and Ventilation – Every bedroom must have access to natural ventilation (i.e. outside air), and must have a heat source (portable heaters don’t count).

August 2016

One thing most buyers want to know is "How much will my Mortgage cost me"?  We've created some tables for you to look up the principal and interest based on amount financed (typically less than the purchase price) and the interest rate of the mortgage.  These days 30-year mortgage rates typically range from 3.5% to 4.38% based on the credit score of the applicants and the amount financed.  See our newly added button Mortgage Tables on this website.

We can also tailor the results to your specific circumstances, if you'd like.  Just contact us and provide the particulars for your circumstances.

March 2016

First Time Buyers (and those who sell homes infrequently) are often surprised to find out that many contracts do not eventually close. Something along the way trips up the process and the purchase is cancelled. For example, the single most common reason given is Home Inspection / Environmental Issues. This is why we tell our Sellers to expect to have to fix some things before settlement. These issues can become particularly serious if they involve delayed maintenance our unsafe conditions. Or they could be something a simple as evidence of termite, mice, or bat infestations. The best rule of thumb is to always fix, repair, and prevent these problems before listing your home for sale.

For Buyers, an important point to note is that when you are purchasing a new home AND taking out a large mortgage - DO NOT make another major credit related purchase during the process of loan approval. For example, hold off on buying that new car or major appliance for now. You will want to make sure you have the highest possible credit score, both because it increases the likelihood of obtaining the loan as well as improves your chances of low interest rates and little or no loan origination charges. We've seen cases where deals have fallen through because the buyer made an ill-timed major purchase and it changed their credit score. FYI.

We'd be happy to talk with you about the sale or purchase of your home! The Coghlan Team

January 2016


Millennials are Less Attached to Tradition


Pew Research Center reports that those Americans born after 1980, the most diverse generation in American history, are less attached to traditional institutions than earlier generations.  For example, a mere 26% of Millennials were married by the time they turned 32, compared to 36% of Generation X, 48% of Baby Boomers and 65% of the Silent Generation.


Only 36% describe themselves as religious, whereas majorities of the earlier generations said they were religious people.  At least half of Millennials say they are political independents, and their views on social issues are decidedly more liberal than earlier generations.  We can see these differences in their views on marriage, raising children, and legalizing marijuana.


Millennials are the only generation where a majority favors a bigger government that provides more services.  They are also the only generation that believes the government should be responsible for guaranteeing health-care coverage for all Americans.  They are going to have a growing impact on the direction that American Society takes.  (Source: Reid Wilson of the Washington Post)


We can see differences in the housing market as well.  Millennials are renting more when compared to past generations, and their choices are more Urban than Suburban.  We can see that shorter commutes, easy access to public transportation, and the desire for greater proximity and easy access to more amenities (shopping, dining, parks, recreation, entertainment, etc.) are driving their housing decisions. 


Builders are responding by building more condos and apartments, and fewer single-family homes.  They are also building larger homes on smaller lots, particularly in areas closer to major metropolitan cities.  We can expect home prices in the far and distant suburbs to weaken, and home and condo prices closer to metropolitan areas to rise over time.


Bottom line:  If you own a home, think about what this means for your investment. (1/12/2016)



December 2015

Boomers Are Tired of DIY

Home Depot says baby boomers are no longer interested in do-it-yourself (DIY) projects and are more interested in do-it-for-me (DIFM).  Home Depot says they are ramping up their focus on catering to the professional contractor (from handyman to small contractors) who can handle these home-improvement projects for their baby boomer clients.  (Source: The Washington Post, article by Sarah Halzack)

People have less time and less energy, and frankly less interest, in doing the work themselves.  You can see this phenomenon all across Northern Virginia, in particular when it comes to lawn care, yard work and leaf removal.  They simply want someone to do the work for them.  They don’t want this work loaded on top of their day job. 

As the average age of the housing stock grows (about 63 percent of homes are more than 30 years old), the need for home improvement projects keeps growing.  We can see the same phenomenon in the home resale market.  Buyers don’t want fixer uppers.  They want clean, updated, painted homes with modern kitchens and bathrooms, relatively new appliances (1-5 years), relatively new flooring (carpet or hardwoods) and fairly new (1-10 years) roofs.  They don’t want scuffed up walls, delayed maintenance, and broken appliances.  They want the sellers to do the work, particularly if the seller wants to ask top dollar for their home.

Bottom line:  Homeowners who stay on top of home maintenance will find an easier time selling their homes.  (12/22/2015)


Boomers Just Aren’t Moving As Expected

Economists are noticing that Baby Boomers simply aren’t selling their houses and downsizing like earlier generations did.  They aren’t selling their houses as expected when they approach and pass traditional retirement ages, and this is contributing to both shortages of homes for sale and rising home prices.  Basically, they are clogging up the chain of home sales.

The chief economist of mortgage giant Freddie Mac, Sean Becketti, says ”they appear to be staying in the family home longer than previous generations and the imbalance between housing demand and supply continues to boost prices.”  In real estate, what Baby Boomers do has an outsized effect… because they own so much real estate.  A recent Federal Reserve survey estimated that in 2013 households led by people age 55 and older controlled two-thirds of all home equity.

In earlier generations, empty nesters began to downsize into smaller homes, condominiums, or rental units, in part because they no longer had the need for a larger home but also in an effort to cut expenses.  Boomers don’t appear to be in a hurry to do the same.  (Source:  The Washington Post Real Estate Section, Market Analysis by Kenneth R. Harney)

We can see this in our own market in Northern Virginia.  Prices are up this year for most single family homes in our neighborhood.  Anecdotally, demand has been strongest in the $500K to $950K price range, and a little slower below $500K and above $1M price ranges.   Well-maintained houses in desirable locations are selling quickly.  Houses with issues (deferred maintenance, undesirable locations, poor layouts or designs, and old kitchens/bathrooms) tend to take longer to sell and are more price sensitive… but most properties are selling eventually.

The real question here is when will the market turn down?  You can look at the historical pattern and there are always cycles.  The overall trend is up over time.  But when the market turns down the pain can be considerable.  We often hear sad stories of folks who bought at the peaks and folks who can’t sell to get out when markets turn south.

Bottom line:  My wife and I are Baby Boomers… and we don’t want to be the last ones to turn off the lights in a soft market.  At some point, more people will want to sell than there are people willing to buy.  We don’t want to be in that position.  What about you? (12/16/2015)


Low Credit Scores

The Federal Housing Administration (FHA) has implemented a new policy giving lenders nationwide more leeway to approve mortgages for borrowers who qualify under the FHA’s underwriting guidelines but may have below-par credit scores (i.e. how good you are at paying things back).  Credit scores run from a low of 300 up to a high of 850.  A score of 850 means you are a very low credit risk.  A score of 300 means you are a terrible credit risk.

Though applicants with credit scores in the 500s typically would meet FHA guidelines, in practice most lenders have shied away from approving loans for borrowers with credits scores below ~640.  In part this was because of FHA scrutiny and criticism of lenders who make too many “high-risk” loans.  The new FHA policy will take into consideration the communities where a lender is making loans.  In those areas with large concentrations of people with below-average credit scores (e.g. areas with young, first-time buyers, minority households, and moderate income working families), FHA will allow lenders to make loans without fear of being penalized solely because of their business focus.

Borrowers who have lower credit scores (upper 500s to low 600s) will now be able to qualify under FHA’s regular underwriting standards (e.g. reliable income, acceptable debt-to-income ratios, solid ability to repay the loan) and are more likely to find lenders who will underwrite their mortgages.  That’s good for existing homeowners, since more potential buyers will mean more demand… and higher prices.  It’s also good for those folks who will now qualify for a mortgage, because they can begin to build wealth by owning a home.

Why is FHA making this change?  Economists and financial experts generally agree that credit standards have gotten too strict in the years since the housing downturn.  Also, mortgages originated in the past two years by buyers with low credit scores are performing better than the total mix of FHA business from 1999 through 2011.  (Source:  The Washington Post Real Estate Section, Market Analysis by Kenneth R. Harney)

Bottom line:  this is good news for our real estate market. (12/15/2015)