Looking at Real Estate in Blacksburg, Christiansburg and the New River Valley of Virginia. Sometimes on topic, occasionally irreverent, always Real. That’s why we’re Real Estate. Simplified.

I’m working on a new program for listing real estate here in the New River Valley, and Phase I of the program is now ready!  I’m really excited to share this, as I think it’s going to make listings stand out even more.

The idea is pretty simple, and one that I am not ashamed to say that I copied from The Bloodhounds, as well as Mariana and Jim.  Real estate signs traditionally all look the same, and too often are used as reasons to call the agent to find out anything of value about the house.  Sure, we can say more about the house through the use of flyers, but IF a buyer pulls up and grabs a flyer who knows what condition that flyer is going to be in, whether the information is correct, or if there are any flyers at all!  I wanted my new real estate signs to be more about the house, and I think this first iteration has done just that.

Think of these new signs as one big flyer.  The price is at the very top, in bold numbers so it’s easy to see as you’re driving by.  At the bottom is my contact information, if someone wants to call to find out even more.  And the main part of the sign is the static brochure – full
of information about the house, with professional real estate photos done by Sean Shannon Photography.  The signs are going out now, and already sellers are saying they’re seeing more brake lights as people drive by – that’s the kind of instant feedback I like to hear!  Oh – AND they’re recyclable, so Valley Curbside Recycling could swing by and take care of them at closing if need be!

As I said, this is the first iteration of signs, and I welcome your feedback – good, bad or indifferent, would love to hear your thoughts.  Personally, I think it’s a great way to market a home, and as part of the entire package I’m rolling out will make my seller’s homes stand out even more than they already do.  My thanks to Kelsey and Caroline for their design, and Justin at SignSpot for his help with the printing – I sent him a LOT of files, all at one time, and he knocked them out in short order.

And Jim – you wanted to know how long until your signs were copied?  Here’s your answer.

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I told you times were a-changin’ … and they are, we just got sidetracked by the Ferrari and the Yugo.

Soon, we’ll unveil the whole package! For now, here’s a little tease:

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The following is a reprint of a letter written by Paul Mitchell, CPA (540-552-2721), and distributed by Dennis Duncan.  They have graciously allowed me to reprint the letter in its entirety, and I thank them for that.  The reason I wanted to post it in its present form is that it brings up an important point, and one that has not been discussed much – despite rumors to the contrary, at this point the First-Time Homebuyer Credit will expire at 11:59pm on November 30 2009.  I’ve heard people recently saying that it expires at the end of the year, and that’s simply not true.  Perhaps it’ll be extended, we don’t know, but if it were me I wouldn’t bet on it.  So if you’re thinking about buying in 2009, and you’ve not owned a home in the last three years, than you might want to think about taking advantage of this credit.  Get your preapproval, and let’s go shopping.

You have probably heard about the first-time homebuyer tax credit. Congress enacted the credit in 2008 and enhanced it in the American Recovery and Reinvestment Act of 2009 (2009 Recovery Act) to help revive the housing market. On its surface, the credit appears simple but there are some complexities of which you should be aware. In this letter, we will highlight some of the key features of the credit. If you are thinking of purchasing a home this year or if you have done so recently, please contact our office for more details about the credit.

As its name implies, you must be a “first-time” homebuyer to take advantage of the credit. A first-time homebuyer is generally an individual (and if married, the individual’s spouse) who has not owned a home in the three years before the date of the purchase. The credit is also temporary. Unless Congress extends it, the credit will expire after November 30, 2009.

The amount of the first-time homebuyer tax credit varies depending on when you purchase your home. There is no credit for homes purchased before April 8, 2008. If you purchased a home between April 8, 2008 and December 31, 2008, the credit is 10 percent of the purchase price up to a maximum of $7,500 for the purchase, whether you’re married, single or sharing co-ownership with someone else (except it’s $3,750 for a married individual filing a separate return). The 2009 Recovery Act increases the maximum amount to $8,000 ($4,000 for a married individual filing a separate return). Unfortunately, the increase is not retroactive to 2008. The $8,000 credit is only available for homes purchased on or after January 1, 2009 and on or before November 30, 2009. Additionally, you cannot claim the credit in absence of a purchase.

That said, the IRS recently added another wrinkle to the credit. If you purchase a home in 2009 and you qualify for the credit, you can claim an $8,000 credit on either your 2009 tax return or on your 2008 return. That means you can use the credit to reduce your 2008 or 2009 taxes. Claiming it on your original or amended 2008 return in most circumstances is the better option, since you can get the benefit of the $8,000 credit as cash in your pocket that much sooner.

You also may have heard that the first-time homebuyer tax credit must be repaid. Again, this is only partially correct. When Congress enacted the credit in 2008, it required taxpayers to repay the credit in equal installments over 15 years. The 2009 Recovery Act removes the repayment requirement but only for homes purchased after December 31, 2008 and before December 1, 2009. However, there are still some situations in which the credit must be repaid for 2009 purchases (for example, if you sell or cease to use the home as your principal residence within 36 months after purchase). Conversely, there are some exceptions to repayment, such as death.

Like many tax credits, the first-time home buyer credit has income limits. The credit begins to phase out for single individuals with modified adjusted gross incomes above $75,000 until the credit reaches $0 for income over $95,000. The phase-out for married couples filing joint returns starts at $150,000 and ends at $170,000.

It’s not uncommon for two or more individuals to purchase a home together, such as a parent and child or domestic partners. The first-time homebuyer credit has the added flexibility of being able to be allocated between two or more owners who are unmarried. The IRS recently released guidance with examples on how to allocate the credit. The IRS will allow the credit to be allocated using any reasonable method.

The IRS has published a special form for the first-time homebuyer tax credit. Form 5405 reflects the changes made to the credit by the 2009 Recovery Act. You must file Form 5405 to claim the credit.

Do not let the complexity of the first-time homebuyer tax credit prevent you from taking advantage of this valuable tax incentive. Our office can help you understand the credit and maximize its benefits. We can also help you calculate what additional tax benefits in the form of mortgage interest and real estate tax deductions you may be entitled to as homeowners. Please contact us if you have any questions about the first-time homebuyer tax credit.

Thanks again to Dennis and Paul for the reprint.

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You don’t send text messages while driving, do you?  Good.  Me neither … anymore.  All this month I’ve been having to train myself to put the phone down and respond later, because as of July 1 2009 anyone caught sending text messages or emails while driving will receive a fine.

So put the phone down until you’ve reached your destination.  Consider this a friendly Public Service Announcement from NRVLiving.com.

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Warning: This is a long post (2034 words, to be exact), so skip ahead to the end if you’re not interested.  It deals with an issue that’s central not only to the success of a New River Valley real estate agent, but also to a buyer or seller who’s relying on their agent to provide concise, well-formatted information in a timely manner.

On Monday, I brought up the issue of The Ferrari vs. The Yugo, and this is the follow-up.  The following is a reprint of Sunday’s article in The Roanoke Times entitled “NRV Real Estate Community Weighs In On The New MLS System“, written by Sarah Cox.  Please read the article to the end, where I’ve posted some thoughts:

The new Multiple Listing Service (MLS system for members of the New River Valley Association of REALTORS has arrived.  Produced by Rapattoni, it replaces flexMLS, which the NRVAR has had under contract.

If there has been concern about the change in MLS systems, it is because REALTORS rely on the MLS as one of the main sources of data.  These systems produce data so that REALTORS can price houses accurately; provide current sales information; and generate sales sheets for client information.

It is not unusual for real estate associations to constantly upgrade their MLS systems – this is the sixth or seventh one that the NRVAR has had, according to REALTOR Vicki Powell.

“It’s always the belief that if you are going to make a purchase of that size that it will be a great improvement; it’s kind of like buying a computer – it should be cheaper and faster than the last model.  That’s why we’re concerned.  With every MLS system, there is a learning curve … but a large portion of the association believes that a mistake has been made.”

As with most issues, there are two sides.  According to Bart Castleberry, chairman of the MLS committee, his group had been previewing the flexMLS system for the last year-and-a-half in addition to looking at other systems.

“We have never stopped looking for ways to improve and advance.  We wanted to have more features and we had a major security issue.  We had instances of people sharing their passwords,” said Castleberry.

Nick Rapattoni of Rapattoni, Inc., said this new system provides a secure log-on solution using a two-factor identification authentication that moves away from a physical token toward a non-token-based system.

“This is the same technology as used by a financial institution,” said Castleberry.  ”It is called adaptive authentication.  The NRVAR is an MLS with 600 members and some were sharing their passwords to decrease dues; we have had about an 18 percent increase in dues in systems we sold Rapattoni to.  Passwords are also shared with lenders, clients, and other REALTORS – this is sharing intellectual property.”

Charles Burnette, president of the board of directors of the NRVAR, said the listings with the new MLS system will be more accurate and up-to-date.  Castleberry added that the data is now “cleaner, more accurate and easier to search.  We couldn’t select a date range with Flex, just a 24-hour hot sheet.”

Burnette pointed out that the NRVAR covers nine counties and two cities, and the new MLS system allows members to automate their data information.

The words “learning curve” have been used quite a bit, but according to both Jeremy Hart, a REALTOR with NRVLiving/Coldwell Banker Townside, and Steve Ayers, a REALTOR with Coldwell Banker Townside, that is not the main issue.  Rapattoni is not MAC-compatible; it is Internet Explorer-based.

Ayers, who designed the telephone system for James Madison University, the original 911 system for the Town of Blacksburg, and worked for Universal Communications Systems, said:  ”Most systems today want to be browser independent, and realistically, even platform and operating system independent.  You really want an application to run on any device, anywhere, to maximize your reach, because devices are changing rapidly.

“We have graduated from big laptops to hand-helds, and most companies are trying to design their applications to run on all those devices and be platform independent.  Internet Explorer has a market share of 66 percent and falling.  Unfortunately, Rapattoni and their technology necessitate Internet Explorer on the agent side to function, so right off the bat, you are restricted in terms of modern browsers.”

However, said Rapattoni, the company is not only working toward their system becoming compatible with Firefox, but they are providing two ways for Mac users to access the data.

One is through Citrix, a free software program that comes with Rapattoni software.  It allows agents to remotely access a server in real time.  The problem with this, pointed out Hart, is that it is slower.

The second solution is to download Windows and a Windows-compatible software program, such as VMWare, onto a Mac.  These packages, which cost about $150, were offered by Rapattoni to the NRVAR agents for free, but Rapattoni said as of the end of May, there has only been one taker.

Ayers confirmed that there are several solutions to Mac users, but none really meets the forward thinking of being browser independent.  The inherent disadvantage of Citrix, he said, is dependent on what kind of tunnel you have established – a speed hit.

“It’s not as transparent with other applications – cut and paste doesn’t work the same … it will work, but you wouldn’t want it to be your primary methodology.”

He also pointed out that because the area is a university community, it makes it more susceptible to viruses, worms and spyware.  That is why many people have switched to Firefox, he added.

“In terms of market share, they have basically chosen a system that one-quarter of the people have to do something different, and this is during a busy time of real state season.  You have REALTORS with a broad range of technology skills – some are still struggling with basics of computers, others are doing stuff at the leading edge, but you have to train for everybody,” said Ayers.

Rapattoni contended that their system is a lot more flexible.  Castleberry said that the data is cleaner, more accurate and easier to search.

“We couldn’t select a date range with flex, just a 24-hour hot sheet,” he pointed out.  ”I am very excited about the switch.  You can access public records now, even transactions from one family member to another.”

Michael Wurzer, president of FBS, which produces the flex system, said flex provides the full suite of features to the New River Valley MLS.

He said his company’s flexMLS web system allows agents to deliver the MLS listings to their customers with “unlimited high-resolution photos, interactive maps, market statistics, detailed property histories, disclosure documents, open house information and much more.  With our customer portals, agents can better understand the listings their customers like, view their search activity, and interact with them through our messaging system.”

How does the discussion affect the buying and selling public?

Ayers pointed out that, in the long run, the MLS is a significant part of the REALTOR’s strength in doing his or her job.

“It is our knowledge,” he said.

This particular learning curve may take longer than others, but the goal of the NRVAR board, the MLS committee and REALTORS, is to give the public the best information possible.

The landscape in this market has changed – REALTORS now have to be more competitive, market themselves in an efficient way, position houses to sell and be faster with their response times.  The debate over flexMLS and Rapattoni system would seem to be a symptom of this increased stress to remain competitive.

I appreciate Sarah Cox covering this story, and knowing Sarah there was a LOT of effort on her part to get the scope of the story.  Unfortunately, I think she missed the real meat of the issue.  The board is correct … sharing of passwords to the MLS is reckless, and they needed to crack down on that.  But what they frame as a “security risk” did not necessitate pulling me out of my red Ferrari and dropping me into a Yugo.  The Ferrari was running just fine, thank you very much.

See, I always found flexMLS to be a tremendous product.  Prior to flexMLS, the NRVAR was using another vendor, and that was the system that I started on when I first became an agent.  I remember it being cumbersome and limited, but it was what I had and what I knew and so I made it work; I didn’t know how good or bad an MLS software program could be.  When we switched to flexMLS I found out, because it could do a lot of what I needed it to, and the developer was constantly tweaking and upgrading the system to include even more features.  The Ferrari was really humming!  But there were also some things it couldn’t do, because decisions had been made by NRVAR to leave certain features off.  Again I ask the question – why not use the Ferrari to do what it’s supposed to do?

It’s incorrectly stated in the article above that our old system didn’t allow you to search by date.  Completely and totally incorrect.  I still have access to our old system, and it still allows you to search by date.  On the main search screen there were two places to enter dates, and you could search based on those dates and various other criteria.  It’s also incorrectly stated that the information is “cleaner and easier to search”, which in my personal experience I’ve found to be completely the opposite.  When I print out a listing to hand to a client, the information contained on the detail sheet is never in the same place twice.  The reason for this is that it depends on what information an agent puts into the listing when it’s first entered, and the rationale for this is I have no clue.  Instead of being able to quickly show a client where to look on the detail sheet for particular data, now both client AND agent are staring at the page, together, scanning and trying to locate it.

Again, I appreciate Sarah’s coverage of the issue, but I think she missed the mark.  The fact that Mac-users are forced to use two methods of logins that are unstable has nothing to do with my frustration … well, has little to do with my frustration.  I’ve used both methods, and both have caused me major issues – frequent lockdowns, tremendous slowdowns in processor speed, the inability to save my work … how can I quickly and effectively work for a client to get their offer in first if I can’t even get into the system?.  No, it’s not a Mac issue at all.  And it’s not about increased stress in a competitive marketplace – honestly, I don’t care about the competition.  I care about NRVLiving and Jeremy Hart, and I know if I focus on doing right by my clients I’m just fine.  No, it’s not about those things at all.  Steve Ayers hit the nail on the head when he stated that “you wouldn’t want it to be your primary methodology.”

Bingo.  Yahtzee.  You sank my battleship.

You might think all this sniping back and forth is tiresome, and you’re right.  It is.  But it’s important, because the members of NRVAR are working through a very important issue right now, and it hits home with every buyer and seller of real estate in the New River Valley.  I don’t know what the exact numbers are, but I’d be willing to be that nearly 40% of our membership right now is frustrated with the product we’ve been handed, and they’re making their voices heard.  If it brings about change in the technology we use, great.  If it doesn’t, that’s disappointing, because our association and our clients lose.  That’s the core of the issue – our MLS committee got this one wrong, I’m afraid, and no one wants to admit it.  It’s okay to be wrong, I do it every day and still get to sleep at night.  But we need to look at where we missed the boat, and how we fix it before we permanently damage our standing as professionals in our community.

And to Rapattoni?  I’m 32, male, and I want my Ferrari back.

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Ever seen a Ferrari cruising down the street and wondered “why would you buy that car and drive it here?  A car like that needs a freeway!”  Later, as you’re heading down the freeway, making great time and enjoying the breeze, you come up on a Yugo in the left hand lane going 20 miles slower than everyone else – “get out of the way!”, you yell.  ”I’ve got places to go, things to do!”

Welcome to the Multiple Listing Service saga of the New River Valley right now.  Our old product was the Ferrari – robust yetrestrained on our quiet residential streets – while our new product is the Yugo – overwhelmed and outdated from the get go.

It’s been a few months since we switched MLS systems, and I’ve got to say that I’m without a doubt more frustrated than ever.  My list of problems with this new system is long, and I had the opportunity several weeks ago to address them, directly, with the president of this new vendor, but I didn’t walk out of that meeting encouraged.  Sure, he was nice enough, and he took notes on what were the problems members were having, but at the end of the day we made a switch from a product that did everything I needed it to do – with plenty of features I wanted but weren’t accessible in my local market – to a product that’s outdated, unstable and slow.

Take this limitation I ran across yesterday … I was evaluating four properties for a buyer who’s moving to the area.  When doing Opinions of Value, I’m trying to make adjustments of value on properties that are similar to my “subject” property – I want these adjustments to give me as close to an “apples-to-apples comparison” as possible.  All four properties are in the same neighborhood, and I had good sales data to work with.  One of the properties my buyer is considering also sold last year, and is on the market again due to a job transfer; a great opportunity to get a great comparison, right? Wrong. The system won’t let me compare a property against itself, even if it’s a sold property.  Think an appraiser’s going to have an issue with this?  It severely restricts the accuracy of their reporting to a lender, just as it restricts the accuracy of the data I can provide my buyers and sellers.  Add that to the list of problems and concerns that were presented by agents and appraisers to the president of this vendor over a two day period, and I’m surprised if he wasn’t thrilled to be leaving the New River Valley.

Then comes an article in The Roanoke Times yesterday entitled “NRV Real Estate Community Weighs In On The New MLS System” – written by Sarah Cox, I’ll post it in its’ entirety later this week while asking The Roanoke Times again, would you please make ALL articles written in your paper searchable on your website?  Anyway, as much as I like Sarah, I have to say I think she missed the mark with this story – the New River Valley real estate community HAS weighed in on the new MLS system, and the reviews are not good.  It’s safe to say that more than 30% of agents in the New River Valley are very unhappy with the limitations of this system, and I can say that in my personal experience there are many buyers and sellers who are frustrated, as well.  As I wrote in May, it’s important we get this MLS stuff right.  As an agent, this is one of the most important tools that I have in my toolbox; having access to the plethora of data that the MLS should be able to provide me is crucial to the process of consulting with clients, and yet

I’mhamstrung.  Case in point?  On two occasions last week, I tried to log in to my account and instead of

being taken to the login screen, I was instead directed to the Yahoo homepage.  If I was in the market for entertainment and sports news that might be a good place to go, but not when I need direct, real-time market statistics for the New River Valley.

I had a Ferrari, but it was stolen and now I’ve got a Yugo.   To my clients, past, present and future – I will do my best to make it the best Yugo in the New River Valley, but it’s still gonna be a Yugo.  We’ll dress it up, though, and do what we can to make it feel like that Ferrari you’re used to.

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According to Dan Green of TheMortgageReports.com, they go up.

I’d heard someone once say that gas prices often reflect what’s going to happen with mortgage rates, and Dan not only reiterated the same, but why.  It’s an interesting correlation, and one I’ll be watching more in the future.

They – gas prices OR mortgage rates – don’t seem to be cooling off anytime soon, so there just might be something to the idea.

But Marianne Lane of Coldwell Banker Mortgage says she’s seen the opposite effect in the last 15 years, that often rates in July and December are lower than they have been at other times of the year.

Your takeaway?  Buy when you’re ready to buy.  Rates are out of our control as buyers, so when you’re ready to buy, talk to your agent, get preapproved, and start shopping.

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It’s not that Blacksburg’s the only Town in the New River Valley that experiences the Summer Solstice, it’s just the only one that has a party to celebrate.

If you’re in town this weekend, head downtown and check out the second annual Blacksburg Summer Solstice Fest. Events start at noon (seriously, an Oyster Slurping contest? I think I’ll pass, thank you), and I’m looking forward to catching some live tunes.  New River Voice has a good post about the event, including ways the event has qualified to be a “green event” by the Virginia Department of Environmental Quality.

See you there!

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Well, 10 questions, actually.

Last week I wrote that I didn’t know much about short sales, but that I knew who to call to find the answer.  At the same time as I was writing that post, Danilo Bogdanovic of LoudounForeclosures.com (there’s an upbeat site address, huh?) wrote a post entitled “10 Questions To Ask Before Writing An Offer on a Short-Sale“.  I’ve read it three times already, and I keep going back to it so I thought I’d repost it again.

Look, most buyers aren’t going to have the time or the patience to wait for a short sale or a foreclosure to go through.  Nevertheless, I think it’s important to know that if you’re going to pursue one of these homes, there are very specific ways you need to do things in order to make sure you’re protected.  In short, D (it’s easier to say D than Danilo, don’t you think?) suggests:

1. Have you received any other offers that you are waiting to hear back on from the bank?
2. How many trusts are involved that will be “short”?
3. How many total banks/creditors are involved in the short-sale and which banks/creditors are they?
4. Have you requested and received the short-sale package from the bank(s) including the hardship letter?
5. Have you sent the package and confirmed receipt?
6. Has the asking price been approved by the bank(s)/creditor(s)?
7. Who is negotiating the short-sale with the bank(s)/creditor(s) – you, a negotiator, a lawyer, the title company or….?
8. Has the seller/borrower completely stopped making payments on their loan(s)?
9. Is the seller willing to hold a note with the bank for the difference? (much better for their credit score)?
10. How many short-sales have you (the listing agent) closed within the past 12 months?

And that’s just the tip of the iceberg.  Thanks to D, and Sarah, for their lessons on short sales and foreclosures.  If you’re a buyer – or a seller – who’s headed down this road, let’s talk … I’ve got some experts who’ll be glad to help.

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