The Overlook - Leisure World of Maryland

Overlook Floorplans

Leisure World of Maryland

The Overlook (Mutual 26) is a 10-story high rise condominium building constructed in 2004.  Its address is 3100 N. Leisure World Blvd. Silver Spring, MD 20906.   It contains 260 condo units, as well as a nice lobby, party room, and outdoor terrace (behind the party room).  The condo units either overlook (see what I did there) the golf course or the parking lot in front of the building, which also has a gazebo and a little park.

The Overlook is a very popular building—it is one of the newer high-rises in Leisure World, there are lots of floorplans available, and the monthly condo fees are currently among the lowest in Leisure World.   In the last year, 15 units were sold there, ranging from two units that sold for 245K, each with 1035 sq ft, 2 bedrooms/2 bathrooms, and a condo fee of $673 a month, to a condo that sold for 515K, with 1735 sq ft, 2 bedrooms plus a den/2.5 bathrooms, including a garage spot and a storage room, with a condo fee of $891 a month.  In the Overlook, as in all of Leisure World, the condo fee includes basic cable, internet, water, common area maintenance, and all amenities at Leisure World (other than the golf course, which is an extra fee).  In the Overlook, you do pay your own electricity and gas.  Yes, this is one of the buildings in Leisure World that has gas.  It’s important to note that the gas is only used for heating.  Except in very rare cases, all stoves in Leisure World are electric.

I’m including a link to all of the floorplans in the Overlook, if you’d like to see the floorplans that are available there.  If you have questions or are interested in possibly purchasing or selling in the Overlook or other parts of Leisure World, please contact me.  I’m happy to help!

Costs Associated with Buying in Leisure World

I’ve noticed the blog post I wrote a few years ago about Condo/Co-op Fees in Leisure World is my most popular blog post, so I thought you might also want to know the costs associated with buying in Leisure World.  This is something I go over with clients the first time I speak with them, but I thought it might also be helpful to have this information in my blog. 

Any real estate transaction comes with closing costs.  When you buy in Montgomery County, Maryland, where Leisure World is located, you can expect to pay about 3.5% of the purchase price of the home in closing costs, and a bit more than that if you’re using a loan rather than paying cash.  Closing costs include taxes (county, recordation, and transfer taxes), title charges (settlement fees, title insurance, etc.), pre-paying condo fees if the unit has them (Leisure World always has them), and pre-paying Homeowner’s Insurance. There’s also a brokerage fee if you’re using an agent to buy.  If you’re using me as your agent, Samson Properties charges a $345 brokerage fee as part of the closing costs.  All brokerages charge a fee like this, and Samson’s tends to be one of the lower ones.  The buyer’s agent commission is usually paid by the seller. That might change with the new NAR ruling, but at the moment, that is still what I’m seeing.

I say closing costs are usually about 3.5% of the purchase price, but I can’t give you an exact number, because different title companies charge different fees, homeowner’s insurance cost varies, etc.  If you’re a first-time homebuyer in Maryland, you don’t have to pay the state transfer tax, so the total amount you’ll pay in taxes also varies, depending on your situation.  But 3.5% (a bit more if you get a loan), is a good estimate to keep in mind. 

When you buy in Leisure World, you also pay a one-time 3% of the purchase price fee, that goes towards their reserve fund.  At the present time, Leisure World is re-doing their Administration Building and the parking lot at Clubhouse I and the Administration Building.  Their reserve fund pays for projects like that.  There’s also a $350 membership transfer fee.

All of these costs are paid at closing.  So, when thinking about what you can afford at Leisure World, make sure to add about 6.5% to the total, to take care of these closing costs.  Sometimes, you can roll this into your loan (if you’re getting a mortgage), or you can negotiate when making an offer on a home, that the seller pay part of these closing costs.  But buyers often pay the whole 6.5%, so I think it’s important to be aware of it.

If you have any questions about anything in this article, or if you’d like to talk with me about possibly purchasing (or selling) a home at Leisure World, please don’t hesitate to contact me.  Thanks!

Newer Condo Buildings at Leisure World

Vantage Point East, at Leisure World of Maryland

I’m often asked, is everything at Leisure World very old?  Well, actually, the oldest buildings in Leisure World were constructed in the late 1960s, so nothing there is really very old.  And the older buildings (including the patio homes) have often been renovated by previous owners and can feel very updated and fresh.

But there are several buildings in Leisure World that were built after the year 2000.  Vantage Point West was constructed in 2001, Vantage Point East in 2002, Overlook in 2004, Creekside in 2006, and 15000 Pennfield Circle, one of the buildings in Villa Cortese, was constructed in 2013.  These buildings have gas furnaces, high ceilings, and of course the kitchens and bathrooms feel newer than those in the older buildings that haven’t been renovated.  Vantage Point East and West and Overlook are on the golf course, and many of the units have wonderful views, just as their names suggest. 

These buildings tend to be more expensive than the older buildings, which isn’t surprising, given their plusses.  The floorplans of the units are very similar to what you’d find in the older buildings. 

Many other buildings in Leisure World were built in the 1990s.  Turnberry Courts was built in 1999-2000, the rest of the buildings in Villa Cortese were built from 1994 - 1996, and Fairways North was built from 1991-1993.  These buildings vary on whether they have gas furnaces and higher ceilings.

While Leisure World has no new construction, it is easy to find units that feel updated, and you can’t beat the location, campus, or number of amenities, clubs, and organizations it has.  If you’re interested in learning more about Leisure World, please don’t hesitate to contact me.  Thanks!

Selling a Condo, Co-op, or Home in Leisure World

I’ve written quite a few blog posts about Leisure World from a buyer’s perspective, so I thought it would be helpful to write a post about selling a home in Leisure World.  It’s not too different than selling a home anywhere else, but I thought it still might be something someone would be searching the internet for information about.

Many homes in Leisure World aren’t sold by the owners of the home, condo, or co-op, because the owners have passed away or they’re in an assisted living or memory care facility.  If you’re selling a home (from here on out I will say home to mean condo, co-op, or patio or townhome) on behalf of someone else, you need to make sure you have the legal documents in place to rightfully sign all the documents needed to sell the home.  Often, I work with Personal Representatives or Trustees to sell a home.  Your first step is to contact an attorney and make sure you have the documents in place needed to represent the owner to sell the home.  If you’re already the owner of the home (you are listed on the title), you can skip this step.  If you’re the owner of the home and someone else is on the title with you that has passed away, you’ll need to have the death certificate of that person, and possibly some other documents as well.  I am not an attorney so please contact your attorney to ask exactly what you will need.   I do often work with an attorney who conducts many closings at Leisure World, so if you’d like to speak with him, please let me know and I can provide you with his information.

After you get the documents you need, the next step is to contact a real estate agent about selling the home.  I sell many homes in Leisure World and would be happy to help.  There are a lot of great agents who sell homes in Leisure World—I recommend working with an agent who has expertise in Leisure World.  Leisure World requires some disclosures for the sale (I won’t go into them here) that other, outside sales don’t require, so you want an agent who won’t leave anything out, and who has a working relationship with some of the managers at Leisure World, in order to streamline things.

Once you contact an agent, they can inspect the home and let you know what they recommend you do to get it ready for sale.  If you don’t live in the area, the agent can often take care of these details on your behalf.  Of course, just like any sale, there are things you can do to the home that will most likely increase the sales price you can get for the home (new carpet and paint are two that spring to mind), and there are things you can do that might increase the sales price, but not enough to be worth the expense of doing them (brand new kitchen).  Of course, all of this varies on a case-by-case basis.  You can also choose to just sell the home without improving or refreshing it at all.  The agent you hire should be able to give you a rough idea of what price you could sell the home for, depending on what you decide to do.

In order to sell the home, the agent will have you complete and sign a listing agreement and the disclosures needed to sell the home. Then they will list the home for sale.  Once you have a contract on the home, you or your agent will need to order what’s known as a “resale package” or “condo docs.”  Those cost about $300 or $400 dollars, and they will contain all the budget information, the by-laws, etc. of the mutual and home that is for sale.  As part of these documents, a mutual representative will inspect the home and make sure there are no violations the owner needs to correct.  If they find any, the owner will need to correct the violations before the sale closes (and the inspection report will be included in the resale package).  It usually takes a couple weeks for the resale package to come in, once ordered, and then once they’ve come in (over e-mail unless you pay extra and request a paper copy), the buyers have seven days to review the information, and back out of the deal if they see something in them that’s a deal breaker.  The buyers will also most likely want to do a home inspection.  After the home inspection they will probably present you and your agent with a list of items they would like fixed or given a credit for at closing.  Your agent can advise you about negotiating those items, if any.

Closing is typically anywhere from 21 – 60 days after the property is under contract.  The most typical timeframe is 30 days.  By closing, all the repairs requested in the home inspection will need to have been completed— you usually need to show the invoices for the repairs, to prove they’ve been done and who did them.  By closing, you’ll also need to make sure you have all the keys, fobs, and possibly even garage door opener that come with the home.  There can sometimes be several different keys—the home key, the mailbox key, the storage room key, the key for the padlock on the storage cage, etc.  If you don’t have them or can’t find them, that’s good information to know before closing so the mailbox can be re-keyed, or a new key can be bought for the storage room, etc.

Does this sound like a lot of work?  I can’t say that selling a home is ever tons of fun, but with a good real estate agent working for you, things will be easier, and at closing you will have the proceeds from the sale to show for all the effort.  If you have a home you’d like to sell at Leisure World, I’d be happy to help. Please feel free to contact me.  Thanks!

Should I Use a Realtor to Sell my Parents' Home?

Because one of my specialties is working with seniors, I frequently also sell homes for people whose family members have passed away.  These homes are often not in the best shape, and sometimes family members consider just selling the home to a flipper or a “We Buy Homes” company rather than enlisting a realtor for the sale.

            In my opinion, it is almost always better to use a realtor.  The flippers or the companies (that are essentially also flippers) are going to offer you much less then you could get otherwise, because they need room in their budget to flip the home, and then make a sizeable profit.  They also don’t feel the pressure of competing with anyone else, so they will low ball you as much as possible.

            When you sell a home using a realtor, yes, you must pay realtor commissions, but the realtor will advertise your home far and wide, so there is often competition, and bidding wars.  The price you get usually more than makes up for paying the commissions.  You often wind up selling the home to someone who plans to live there and renovate as they go.  These people still want to feel like they’ve gotten a deal, because they’re buying a home and planning to work on it themselves, but they will frequently pay much more than a flipper will.  Plus, in my experience, even if you’re selling to someone who will live there, you can still sell the home as-is, just as you would to a flipper.  These people do often need to use a loan, rather than cash, but if they’re well qualified, it isn’t a problem.  If the home isn’t in livable condition, they can use a Home Renovation Loan to buy the home.

            I have had situations where flippers and people who would live there bid against each other.  Even if the home ultimately goes to a flipper, they will pay much more than they would otherwise, since they’re forced into competition.  They will also put much more money down than they would otherwise, which makes it less likely they will back out of the deal.

            If you live in the Washington DC area, I am happy to talk with you about possibly selling your relatives’ home.  I work primarily in Silver Spring, Kensington, Chevy Chase, Bethesda, and the other close-in suburbs on the Maryland side (College Park, Hyattsville, Rockville, etc.).  But I am licensed in Washington DC and Virginia as well, and happy to help.  Please contact me if you’re interested.  Thanks!

Forest Glen: Forest Estates

The area of Forest Glen (a part of Silver Spring, MD) encompasses a number of neighborhoods, as I wrote about here.  Today I want to focus on the neighborhood of Forest Estates.  Forest Estates’ non-official borders are Forest Glen Road to the south, Georgia Avenue to the west, Medical Park Drive and Dennis Avenue to the north, and Sligo Creek Parkway to the east.  The neighborhood is made up of about 700 homes, built from the 1940s to the 1960s.  They are a mix of cape cods, ramblers, and colonials.

Most parts of Forest Estates are an easy walk to the Forest Glen metro station, and it’s also located less than a mile from the entrance to 495 (the Beltway), so it is a great neighborhood for commuters.  Located inside the boundary of Forest Estates are two popular parks with playgrounds, General Getty Park and Forest Grove Neighborhood Park.  Getty Park has tennis courts and a gazebo in addition to its playground, and Forest Grove Park has basketball courts in addition to its playground.  They also both have open field space.  Getty Park has a nice path running through it, which is fun for kids on bikes or scooters, as well as for walkers and joggers.  Getty Park even hosts a Farmer’s Market on the weekend, though I believe that is temporarily on hold due to COVID.  You can get right onto Sligo Creek Trail from Forest Grove Park.  Sligo Creek Trail is a beautiful paved, wooded trail that runs from Wheaton to Takoma Park.

Holy Cross Hospital is right across Forest Glen Road from Forest Estates, and their Resource Center is located just down Dameron Drive, inside Forest Estates.  The Resource Center hosts a number of classes, as well as an Adult Day Care Center.  Also housed in the same building is the Kensington/Forest Glen Children’s Center, which a very popular daycare center/preschool in the area.  St. John’s the Evangelist is also located in Forest Estates.  It’s a Catholic Church that also has a Catholic school as part of it, for grades K – 8th.

The public schools Forest Estates are zoned for are Flora Singer Elementary, Sligo Creek Middle, and Einstein High. Please keep in mind that schools are sometimes rezoned, so please double check and make sure these are still the schools the area is zoned for, if you’re thinking about buying in the neighborhood and the particular schools are important to you.

Forest Estates has a very active community association, which puts on regular yearly events, such as a Halloween Parade, an ice cream social, and a July 4th BBQ.  You can look at their website here.

If you’re interested in buying or selling a home in Forest Estates, or if you have questions about the community, please feel free to contact me. Thanks!

Co-ops in Leisure World

I’m often asked, what is the difference between buying a co-op and a condo in Leisure World?   Thus, I decided this topic deserves its own blog post.  Co-ops in real estate in general are defined as owning a share in a co-operative, rather than owning a physical unit.  You buy and sell this share much as you buy a condo or home, but there are usually a few differences.

In Leisure World, one difference is that the co-op fee covers much more than the typical condo fee.   It covers your property taxes, since the co-operative pays property taxes for all of the units.  It covers much of the equipment in your unit, including the HVAC, plumbing, and any appliances that are original to the unit, since the co-op technically owns the unit.  And it covers all utilities for the unit.  

There are also additional requirements to buying a co-op at Leisure World.  You must have at least a 700 credit score, even if you’re paying cash for the property.  You must show proof that you already have three-years-worth of the condo fee saved (could be in a retirement fund, doesn’t have to be cash).  These requirements were mandated several years back, because many people could afford the initial purchase price of a unit in the co-op, but were then defaulting on the monthly fee.  You also have to use a lender (if you intend to use a mortgage to purchase the property), and a settlement company that have been approved by the co-op.  I have an updated list of the lenders and settlement companies that are approved by the co-op, so please contact me if you want more information about this.

The co-op section of Leisure World, called Montgomery Mutual, was the first section of Leisure World that was constructed, and the buildings date from the late-1960s to the early-1970s.  As such, they tend to be among the least expensive units in Leisure World, and are therefore very attractive to many buyers.  They range from studios with a square footage of 635 square feet, and a price range of 75K – 96K in the last six months, to two-bedroom townhomes with 1600 square feet, and a price range of 168K – 192K in the last six months.  One issue to be aware of is that none of the co-op buildings have elevators, so owners must be able to either do a flight of steps to reach their unit, or do a flight of steps within their unit, as is the case with the townhomes.  Occasionally, though, a ranch-style home becomes available (selling in the mid – high 200ks in the last six months), or a buyer might be able to find a unit on the main floor of a building, therefore not requiring the ability to climb any steps.  Another issue is that some of the buildings have common laundry areas, rather than each unit having a washer and dryer within it.  But many units do have their own washers and dryers.

If you have questions or further interest in buying or selling a co-op at Leisure World, please don’t hesitate to contact me.  Thanks!

How to Successfully Navigate the Housing Market Right Now

I’m sure you’ve been hearing about the crazy housing market for awhile now.  Homes that are priced right and in good locations are selling very quickly.  It’s a great time to be a seller (if you have a place to move to), and a tough time to be a buyer.  I thought it might be helpful for you to read what I’ve been seeing on the front line.

If you want to buy in an area of Maryland that is close to DC, such as Silver Spring, Kensington, Chevy Chase, or Bethesda, you need to be ready to compete.  That means a strong pre-approval letter from a local lender, preferably for a conventional loan, or be ready to pay cash.  It means you need to make your offer with as few contingencies as possible, and be ready to close quickly and offer the seller a rentback.  If you’re a first-time buyer or haven’t bought in some time, let me break down what I mean by those statements.

Using a local lender is important, because the seller and listing agent want to be confident that the deal will close quickly, and on time.  Local lenders can usually close much more quickly than national banks or internet lenders.  They also usually use appraisers who are local and familiar with this market, so the home is more likely to appraise (meaning the value of the home will be at or above what the buyer is under contract to pay for it).  If you work with me, I can provide you with a list of great local lenders that I trust to do a good job.  

Contingencies are clauses in the contract that let the buyer cancel the deal without losing their earnest money.  In a competitive market, you want to have as few contingencies as possible.  In this market many offers even have zero contingencies.  That means if you want to do a home inspection (which I strongly recommend), you need to do it before the seller accepts your offer.  That’s called a pre-inspection.  It means that you work with a lender who can take your application all the way through underwriting ahead of time, so that you’re fully approved for a loan and don’t need a financing contingency.  It might even mean that you save enough cash to be able to waive the appraisal contingency.  That way if the home doesn’t appraise to what you said you would pay for it, you can make up the difference in cash, because the lender will only loan you what the appraisal says the home is worth.

Finally, many sellers in this market want the flexibility to sell their home, collect their money, and then buy a new home.  So, if you’re renting or in a flexible situation, it helps to settle on the home you want two or three weeks after you put a contract on it, but then agree to let the seller stay in the home, and rent it back from you, for 30 – 60 days.  Often, to compete, they don’t even rent it back from you, you just agree to let them stay there for free for 30 – 60 days.  60 days is usually the limit a lender will let you do this, but if you pay cash for a home, you could offer that the rentback last even longer.

Does all of this sound intimidating?  I understand that it might, but if you work with a good agent they will be able to help you through all of these steps, and hopefully take some of the anxiety out of the process for you.  The result is hopefully a home you’ll love and be happy in for many years to come.  If you’re interested in working with me, or just have questions for me about this process, please feel free to contact me.

Forest Glen: Glenview

As I mentioned in an earlier post, I live in the Forest Glen area of Silver Spring.  There are several neighborhoods in Forest Glen, and today I want to write about Glenview.  Glenview, as defined by its neighborhood association, is the area bordered by Dennis Avenue to the south, Georgia Avenue to the west, Windham Avenue to the north, and Sligo Creek Parkway to the east.  If you’re searching for a home in this area, there are several smaller legal subdivisions within the area of Glenview.  They are Evans Parkway, Glenview, Cameron Heights, Northbrook Estates, Chestnut Ridge Manor, and Chestnut Hills.  Whew!  I don’t know why the whole area wasn’t given one name, much like Forest Estates to the south, but it wasn’t.

            Glenview is a great place to live.  It is walkable to two metro stations—Wheaton and Forest Glen, both on the red line.  It is also walkable to downtown Wheaton, which has grocery stores, restaurants, shops, a library, a post office, and even Wheaton Mall, a major mall in the area.  Its elementary school is Glen Haven, which lies within the borders mentioned above, and is walkable from all of Glenview.  Glen Haven has a child care center within the school.  The middle school for Glenview is Sligo Middle School, and it’s also within the boundaries listed above, and is walkable for all of Glenview.  Sligo Middle School has a wonderful sledding hill behind it, for the rare times in this area when it snows.  But, I digress.            

            The high school for Glenview is Northwood High School, but Glenview is part of the Down County Consortium, which means there is some flexibility for what high school your child goes to.  They can pick amongst Northwood, Einstein, Blair, Wheaton, and Kennedy high schools.  Each high school has some special programs to distinguish it.  You are not guaranteed your first choice of school, unless it’s your home school, Northwood, but you can rank which ones you prefer, and the school system will try to give you one of your higher choices.  Northwood High School is deemed walkable from Glenview, as it’s less than two miles away, and Einstein High School has two bus stops located within the neighborhood. There are several private schools also located within easy walking distance of Glenview. 

  There’s a park in the middle of Glenview, called Evans Parkway Park.  It has great walking paths, tennis courts, basketball courts, a playground, fields, and a picnic shelter.  People also make use of the fields and playgrounds of Glen Haven Elementary and Sligo Middle School.  Sligo Creek Trail, a wonderful paved trail that runs from Wheaton to Takoma Park, is also walkable from Glenview and is very popular with walkers, runners, and bikers.  Finally, the Capital Beltway (495) is just over a mile away from Glenview.  So, between the metro stops and the convenience of the beltway, Glenview is wonderful for commuters.

            In the past year, 43 homes have sold in Glenview.  Prices ranged from 335K, for an 864 sq ft rambler with 3 bedrooms, 1 ½ bathrooms, to 748K for an expanded colonial with 2,231 sq ft with 4 bedrooms, 2 full bathrooms, and 2 half bathrooms.  While there is no HOA in Glenview, and so no HOA fee, there is an active listserve and a relatively new voluntary neighborhood association.  If you’re interested in buying or selling a home in Glenview, or just learning more about it, feel free to contact me.  Thanks!

Condo/HOA Fees at Leisure World

The globe at the entrance to Leisure World.

            When I work with clients who want to buy or sell homes at Leisure World, the questions I receive more than any others have to do with the condo/HOA fees at Leisure World.  What are they, what do they cover, etc.  So I thought it would be helpful to do a blog post dedicated solely to that topic.  

            Leisure World is a huge place—more than 8000 residents living on more than 600 acres.  It’s also very decentralized—each neighborhood is called a mutual.  There are 29 different mutuals at Leisure World.  Some mutuals consist of just one high-rise building, some consist of several low-rise buildings, and some consist of a number of patio homes or townhomes.  

            Each mutual sets its own condo or co-op fees, so they vary a lot, based on mutual, square footage of the unit, whether the unit has a garage spot included, etc.  In general, the combined HOA/Condo fee ranges from $650 - $1250 a month, depending partially on size of the unit and what mutual it’s in.  Does that sound high?  It might, but you get a lot for your money.  

            The HOA/condo or co-op fee always includes a basic cable package, high-speed internet, water, sewer, common area maintenance, snow removal, lawn care, etc.  It also includes most of the amenities at Leisure World such as the outdoor pool, the fitness center, tennis courts, shuffleball courts, walking trails, the shuttle system, etc.  In some of the homes and low-rise condos it also includes electricity.  So, when you add up how much you might be paying for these kinds of services and amenities in your current home, you might find that the condo/HOA fee really isn’t more than you’re currently spending.

            I help lots of people buy and sell homes in Leisure World.  If you’re interested in learning more about Leisure World, or in working with me, please feel free to contact me.  Thanks!

Forest Glen Area of Silver Spring

Woodland Drive with Getty Park in the distance

My blog and website highlight the work I do with seniors so well that I think my other specialization can get lost in the shuffle.   I actually live in the Forest Glen area of Silver Spring, and I frequently help people of all ages buy and sell homes here.  Silver Spring is a really large area, and I’m quite familiar (and happy to help people buy and sell) in all of it, but I have a special affinity for Forest Glen.  We bought our first house here almost 18 years ago, and when we reached the point of needing a bigger house (with 3 growing boys), we chose to put an addition on our home, rather than moving.  This area is just too special to leave.

My definition of the Forest Glen area includes the area within a mile or so of Georgia Ave, on both the east and west sides, that starts just north of the Beltway (495) and goes to just south of downtown Wheaton.  This area has gotten a lot of press lately for being affordable, walkable, and community-focused.

Our house (and most in the area) is walkable to two metro stops (Forest Glen and Wheaton, both on the red line), the Sligo Creek Trail, four parks with playgrounds (most also have basketball courts, tennis courts, walking paths, and picnic shelters),  two swim clubs, and downtown Wheaton, with its many shops and restaurants.  Holy Cross Hospital is located here.  Downtown Silver Spring is also walkable if you’re willing to walk a little further.  It is very easy to get on the Beltway, and this area of the Beltway is close to both 95 and 270.

I will dedicate future posts to the individual neighborhoods that are within Forest Glen, but just wanted to introduce you to this area, if you’re not familiar with it!  Please feel free to contact me if you’re considering buying or selling a home in this area— I’d be happy to help!

Brisbane Street in Forest Estates

Springtime at Leisure World!

I thought during this time when many people are under stay-at-home orders, you might enjoying seeing a few pictures of Leisure World in springtime.  A friend and former client who is living there (and loving it!) sent me these pictures.

Leisure World is a 55+ community located on 600 acres and has more than 40 miles of walking trails.  It’s a beautiful place in the midst of a bustling area in Montgomery County, near to Washington DC.   You can read more about it here, here, and here.

I was the top buyer’s agent at Leisure World last year, both in terms of units sold and volume. I sell homes there as well. If you’re interested in buying or selling a home at Leisure World, please don’t hesitate to contact me!

How the Recent Fed Moves Might or Might Not Affect Mortgage Rates

I read this article today by someone high up at First Heritage Mortgage. I was so impressed by how well he explains what the rate cut might mean to mortgages that I asked him for permission to repost to my blog. He generously agreed, but asked that I not use his name. Here you go!

As many of you know, the Fed made an unusual move and held an emergency meeting on Sunday instead of waiting until their regularly scheduled two-day meeting this week on Tuesday and Wednesday.  The result of the meeting was the announcement of some major policy shifts. They are as follows:

1. They cut the Federal Funds Rate to 0% (This is NOT Interest Rates – more on this later)

2. They announced they will be buying at least $500 Billion in US Treasuries and $200 Billion in MBS (Mortgage Backed Securities) This is what could eventually help rates – more on this below as well.  This is known as QE (Quantitative Easing and is the reason rates dropped during the great recession.  This was the FED’s way to help stimulate the economy, which did work.)

3. The purchase of the first $40 Billion will happen today.

4. They announced that as loans the FED currently owns get paid off through refinance or sales, they will re-buy more loans with that money as well.  This is in addition to the $200 Billion above.

5. Finally, the FED announced they are cutting the reserve requirements for thousands of banks to zero.  This is important because it relieves the banks of the need to hold on to capital to meet federally mandated reserve requirements and gives them the flexibility to have those funds available to loan among themselves to help each other out and keep liquidity in the banking system. 

 
I know that some of this above may mean nothing to you so please allow me to explain a few things from above.

1. The Fed cutting the Fed Funds Rate to 0% does not mean interest rates on mortgages will go down.  Certainly not to 0%!  Could it eventually help? YES.  However, even if rates could come down there is a much bigger issue that has to be dealt with first.  That is the CAPACITY for the mortgage industry to handle all the mortgages.  Consider this.  There are $11 Trillion in mortgages in the US.  About half of those ($5 Trillion) are currently eligible for refinance.  In a great year in the mortgage industry there are about $3 Trillion in mortgages produced in 1 year.  If half are purchases, that means about $1 ½ Trillion in refinances are done by the entire mortgage industry.  Even if the industry does a heroic job of doing refinances to satisfy all of the demand and does $2 Trillion or $2 ½ Trillion in refinances, there is physically no way to do all of the refinances in one year.  So, the CAPACITY of the industry cannot handle all of the business that is out there to be had so why would they lower rates to generate MORE business when they cannot handle all of the business that is currently there?  Think about it another way, if Apple has a new phone go on the market and lines are around the block with people waiting to buy the new phone, they don’t put it on sale.  They couldn’t handle the business and there is no need to put it on sale.  It is sort of the same thing with interest rates.

2. The FED buying $200 Billion in Mortgage Backed Securities (MBS).  This is actually the thing that can help rates drop eventually.  This is because as long as there is a good buyer for MBS, then this will make sure that the mortgages that are closed have a buyer on the secondary market.  With the FED jumping in to buy $200 Billion and also replacing the loans that are already on their books when those are paid off through refinance or sale of the home, this helps with one side of the capacity issue.  The other side of the capacity issue is the simple fact that the mortgage industry (mortgage companies, title companies, appraisers, etc.) all have to be able to get caught up with the huge amount of recent business that they have taken in.  This will happen, but just takes time.  When it does, there is a good chance that rates will drop some.  How far is anyone’s guess but do not expect them to go down to 0% and don’t expect the rates to drop right away.  Any rate drop will be gradual and measured.  Rates could even move up a little depending on the capacity issue I explained above.  That would simply be the industry self-regulating to slow volume to allow for things to get under control.

 
In summary, we are in uncharted territory in our country right now.  With the Coronavirus going on, people having to work from home and avoid much interaction, there are all sorts of things that we are not used to.  As an industry, we are busy trying to keep things going from our end and will continue to work on what we can do.  As the current loans in the system close and more capacity becomes available to handle additional new mortgages, the FED’s Sunday moves may in fact cause interest rates to drop over time.  Hopefully, my explanation above will help you understand that this will not happen immediately.  The good news is, mortgage interest rates will likely stay low for quite some time.  There is no reason for people to panic and think they are going to MISS the opportunity.

Sumner Village in Bethesda

Sumner Village is located in Bethesda, MD on Sentinel Drive, off Massachusetts Ave, quite near to the DC/Maryland border. It is not an over-55 community, but it has many of the features that older adults often look for in a community. It’s made up of 16 low-rise buildings, each with elevators, and is ensconced in 28 acres of wooded land. It is very close to the city and many conveniences, but feels as if it’s away from it all.

Each building is 4 or 5 stories tall, and contains 24 – 28 condos. The condos are 2 – 3 bedrooms, with 2 or 2 ½ bathrooms. There are 12 different condo styles. Development of Sumner Village was begun in 1972 and completed in 1977. Each condo has a washer/dryer within the unit, and many have wood-burning fireplaces. Some have large balconies. Many of the living rooms are sunken, but in some units everything is completely on one level. Some units come with one or two garage spaces under the building.

Sumner Village has a large outdoor pool, two tennis courts, and a community center that includes a kitchen, a library, an exercise room, saunas, and several community rooms for gatherings. Sumner Village has a very active social calendar that includes book clubs, knitting groups, speakers, concerts, and dinners. It also takes advantage of its wooded setting by having paved, lighted trails throughout the property.

Located immediately next to Sumner Village are the Shops at Sumner Place, which contain a grocery store, a drugstore, and several restaurants and other shops. There is a gate that residents can walk through to immediately be able to access the Shops. Two different Ride-On buses have stops right at the Shops. One goes in the direction of Friendship Heights, and drops off at the Friendship Heights metro, the other goes to Sibley Hospital. So it might be possible to live at Sumner Village without driving or owning a car.

Seven units have sold at Sumner Village in the past six months, with prices ranging from 350K – 815K. The condo fee for these properties ranged from $896 - $1328 a month. The condo fee includes water and all of the amenities at Sumner Village, as well as maintenance of the common areas, lawn maintenance, snow removal, and a 24-hour guarded entrance.

If you are interested in learning more about Sumner Village or viewing some current condos for sale there, please let me know. As always, I am happy to help!

Ways to Buy a New Home When You Already own a Home

Hello readers!  I apologize that it’s been forever since I posted, but I have been extremely busy selling houses, and it’s been tough to fit in writing and posting.  But I do enjoy writing these posts and the clients I get to meet as a result of them, so I will try to post more frequently.

One of the questions I get asked most frequently is, if I already own a home, how do I buy a new home? I am happy to tell you some common ways to do this, but I urge you to talk to a loan officer or an accountant if you have detailed questions about the loan side of things.  This list is not all-inclusive.  It just contains some of the most common ways of making it work.

1)  Put your current house on the market, with the understanding that your realtor (could be me if you live in MD, DC or VA) will tell whomever wants to write an offer on it that you need a 60-day rentback.  Then, you settle (meaning you officially sell your home and collect your proceeds from the sale) in, say, 30 days, and then you have the next 60 days, while living in your current home, to find a new home, settle on that home, and move. 

Advantage: This is the simplest way to make a move, in my experience.  You have the money from the sale of your house, but you don’t have to move twice. 

Downside: You have to be reasonably confident that you will find somewhere you want to move in that 60 days.

2)  Take out a home equity loan on your current home to have a down payment for your new home. Then, take out a conventional loan to pay for your new home.   Once you sell your old home, you pay off the loan (or pay off a lot of it, anyway). 

Advantage: You can buy a home whenever you find one you love, and then sell your old home.  You can even move into the new home first so you don’t have to worry about de-cluttering your old place, or leaving it all the time for showings.  As I said above, you can get a conventional loan when you do this (rather than a bridge loan, which tends to have a higher interest rate and more fees), but you need to wait six months in most cases before you’re allowed to pay off the conventional loan.

Downside: You have to be able to qualify for another loan while you might still be paying off the mortgage on your original home. You might have two mortgages for a period of time, and you’ll have to be able to handle that.

3)  Borrow or withdraw from your 401K or other retirement plan to buy your new home. When you sell your old home, pay back the money into your retirement plan.  This is the option I know the least about, in terms of tax implications, interest, etc.  If you are considering this option, I strongly recommend that you speak to an accountant so you fully understand how this works.    

Advantage: You don’t have to sell your current home first. You can find a home you really want before selling.

Downside: There could be tax implications, and well as having to pay interest on the loan.

4)  Sell your current home, collect the proceeds, and then rent a home until you find something you’d like to buy.

Advantage: You can take your time to find a home that you really love, and you have the money ready as soon as you find something.

Downside:  You have to move twice.  Enough said.

5)  You put a contract on a home, contingent on your selling your current home.

Advantage: You can take your time to find the home you want, and you’re protected from being locked into the deal until you know that your home will sell and you’ll have the money to buy the new home.

Downside: At least in the DC metro area, it is very hard to find a home seller who will agree to this contingency.  Desirable homes go under contract very quickly here, and most sellers don’t want to take on the risk of waiting for your other home to sell.  Also, even if they agree to it, the contract will still have something called a “kick-out.” That means if any other buyer comes along and wants to put a contract on the home, you will have 3 days to come up with money another way, or lose the home to the new buyer.  Now, most buyers don’t search for homes “under contract with a kick-out” so that gives you some measure of protection, but it’s still possible you’ll lose the home.  This option does sometimes work if you find a home you want that’s been on the market awhile. But, you have to get your home on the market within 3 days of putting the new house under contract.  It’s easier if your home is already on the market, or completely ready to put on the market.

Guest Post: Using a Home Equity Conversion Mortgage to Purchase a Home

First off, a little FHA “refresher.”  The HECM, or Home Equity Conversion Mortgage, is just FHA’s fancy name for the reverse mortgage.  You’ll hear terms like “HECM for Purchase” or “Reverse Mortgage for Purchase” or “H4P” or “R4P”.  Just to be clear, these all represent the same product – the reverse mortgage.

In 2009, FHA began allowing the reverse mortgage for the purchase of a new home.  Prior to 2009, the reverse mortgage could not be used to acquire a new home.  It could only be used on homes that borrowers were currently occupying, and intending to continue to occupy.

With allowing borrowers to use the reverse mortgage to purchase a new primary residence, a new opportunity arose for homeowners looking to downsize to a new home. The best part is they could now do so with no monthly mortgage payments, and also give them the ability to just about double what they could afford as a cash buyer.

Let’s say we have a 67 year old borrower that wants to sell their existing home and purchase a new primary residence. Maybe it’s to move to a one level home, or maybe there’s too much land, or maybe it’s just to be closer to the grandkids. Regardless of the reason, they don’t want to stay in their existing home.

Using the HECM for Purchase, that borrower could sell their existing home, take the cash proceeds and use it as a down payment on a new home. There are a few substantial benefits to using the HECM for Purchase as opposed to paying cash and/or using conventional financing to buy the new home.

Benefit #1 – Increase the purchase price of the new home.

Using the HECM for Purchase, the borrower will get access to approximately 50% financing on the new home. Meaning, if the borrower has $200,000 in proceeds from the sale of their existing home, they could essentially double their purchasing power.

Example – Using the $200,000 in proceeds, they could afford to purchase a new home for approximately $400,000. The reverse mortgage would provide financing for approximately 50% of the purchase price ($200,000) and the borrower comes up with the remaining 50% ($200,000).

Benefit #2 – Keep more cash in reserves.

Let’s say the same borrower has the same $200,000 in proceeds from the sale of their home, but instead of using it all to buy a new home they want to keep some cash in hand.

Here’s how this would work….

Example – The borrower finds a $200,000 home they’d like to purchase. Instead of using all $200,000 of their proceeds to pay cash for the home, they use the reverse mortgage to provided financing for 50% of the purchase price ($100,000) and they come up with the remaining 50% ($100,000).

This would give them the ability to buy the new home, have no monthly mortgage payments and keep $100,00 of the proceeds in their control.

Benefit #3 – Income / credit qualification.

While there are income and credit requirements on reverse mortgages, they’re not the same as a conventional “forward” mortgage. The majority of reverse mortgage borrowers are at a stage in their life where they’re no longer working full time jobs and are instead living off of a “fixed” income (Social Security, pension, investment portfolios, etc.). Because a conventional type loan requires a monthly payment, the borrower normally doesn’t show enough income to meet the underwriting requirements for the new loan.

On a reverse mortgage, the lender is not required to calculate a monthly mortgage payment in to the equation, because there are none.

Instead of using an equation that calculates total debts and divides them in to the total income, the reverse mortgage simply requires an amount of “residual income.” In our area, it’s $529 per month for a one person household.

Benefit #4 – No monthly mortgage payments.

I think this benefit pretty much speaks for itself, so I’ll keep it short and sweet.

When a borrower initially tells us they want to pay all cash for their new home, that’s normally for one reason…

They don’t want a mortgage payment.

With the reverse mortgage, they have no monthly mortgage payments.

This article was written by Eric Rittmeyer with Fidelis Mortgage, and used with permission. For more information about using a reverse mortgage to purchase a home, please contact Eric at eric@fidelismtg.com or 410-668-6501.

Guest post: Excerpt from The Complete Guide to Caregiving

Does Your Loved One Need Live-in Help or an Assisted Living Community?

Seniors who exhibit signs of Alzheimer’s and the symptoms of dementia may require different levels of support, depending on their condition and their living environment. Individuals with more severe problems who have trouble coping with activities of daily living such as eating, bathing and toileting, likely need in-home care assistance, while those who are aging in place and can handle basic tasks of everyday living may require help of a different sort. You should be able to tell the difference in the level of care your loved one requires by recognizing the signs of Alzheimer’s.

Deciding to seek outside help can be difficult. Some seniors may resist the notion that they need help, or they might have trouble adjusting to a live-in caregiver, even a friend or family member they’ve known for many years. Maintaining a loving, nurturing and patient relationship with your loved one can help build the trust that’s needed for a successful caregiving relationship to take shape.

Recognizing the signs

The warning signs of dementia and Alzheimer’s indicate a decline in cognitive functioning and a decreased ability to function normally. Bear in mind that it can be difficult to tell when something’s wrong. Memory loss, a common symptom, may seem to be nothing more than an occasional forgetfulness associated with the aging process. Someone with Alzheimer’s disease may forget a grandchild’s name, then recall it the very next day. In more advanced cases, people suffering from the debilitating effects of Alzheimer’s will forget things that happened a moment ago, what was just said in a conversation, or start repeating themselves because they have no recollection of previous verbal exchanges. Forgetfulness caused by stress or anxiety won’t repeat itself; in dementia, the problem will persist and progress as their condition worsens.

Frustration and anger will show up in mood swings and increasingly agitated behavior. It may also manifest as manic physical movements, such as pacing or waving their hands in the air, or gesturing angrily. It’s a common response to confusion and fear, feelings that are often present in people who struggle to make sense of their environment. Poor judgment and taking chances the individual usually wouldn’t is another sign of trouble, and can lead to injuries. Or they may suddenly struggle with activities that once came easy, such as cooking dinner or doing laundry.

Aging in place: care needs

According to AARP, over 90 percent of adults over 65 would prefer to stay at home rather than moving to a senior living community. Those whose symptoms are manageable and can still function, there are certain conditions that should be met if they are to remain at home. Isolation is a major problem with the elderly, so make sure that friends and family members live nearby. The physical characteristics of the living environment should meet certain standards. There should be adequate lighting, and no objects capable of causing your loved one to trip and fall.

Benefits of home health aides

If your relative is having trouble paying bills or maintaining acceptable personal hygiene, it’s probably time to bring in a home health aide. Your family member will benefit from the presence of a friendly companion and personalized care. In-home care allows your loved one to remain at home and retain a measure of independence. Home health assistants make sure that their care subjects take their medications as prescribed, eat a healthy diet, and get sufficient sleep.

Deciding on what level of care a loved one needs can be difficult. He or she may actively resist the idea and descend into even more troublesome behavior. Bear in mind both your relative’s condition and temperament as you determine the best option.

When moving is necessary

Although your loved one might prefer to live at home, selling their current home and moving them into an assisted living facility might be the best option, especially as the disease progresses. Those with advanced Alzheimer’s disease are prone to wandering, extreme confusion, and aggression, so a home environment might not be the safest place for them. Even with live-in help, caring for your loved one is stressful. Consider the fact that they might benefit more from having a team of individuals dedicated to ensuring their needs are met. Should you decide that an assisted living facility is the next step, keep the special needs of your loved one in mind. Tour several facilities to be sure the one you choose caters to Alzheimer’s behavior, and don’t forget to ask if they are equipped to work with late-stage patients, as some facilities will require a transfer.

June is the primary caregiver to her 85-year-old mom and the co-creator of Rise Up for Caregivers, which offers support for family members and friends who have taken on the responsibility of caring for their loved ones. She is passionate about helping and supporting other caregivers and is currently writing a book titled, The Complete Guide to Caregiving: A Daily Companion for New Senior Caregivers, due out in Winter 2018.

The Greens - Leisure World of Maryland

Click to see all floorpans for The Greens

I frequently sell homes at Leisure World, and one of the most popular neighborhoods (called mutuals) there is The Greens.  The Greens is made up of four high-rise buildings, located on the golf course, and within walking distance of Clubhouse II.  Clubhouse II contains Leisure World’s brand new fitness center, as well as the indoor pool, the auditorium, the ceramics studio, and various game rooms and meeting rooms, so it’s a nice place to be close to.  All of the buildings were constructed in 1984.

Each building in the Greens has a large meeting room with a kitchenette and a small library on the lobby floor.  These meeting rooms are used for social events within the building themselves, and can also be rented out for private parties.  Each building also has a parking garage attached to the lobby and the basement.  Some condos come with a parking spot and some do not, so that’s something to pay attention to when buying there.  Also, each condo has some storage space in the basement.  Some condos come with storage rooms, which are about the size of a typical half bathroom in a home.  Many condos just come with a storage cage, which is about the size of an old-fashioned steamer trunk.  Again, that’s something to pay attention to when buying, if storage is important to you.

The monthly condo/community fee varies according to the square footage of the unit, etc.  The monthly fee for all of the units includes almost all of the amenities at Leisure World (see my general post about Leisure World to read about those), as well as Basic Cable TV, Common Area Maintenance, Exterior Building Maintenance, Lawn Maintenance, Management, Master Insurance Policy, Reserve Funds, Sewer, Snow Removal, Trash Removal, and Water.  The monthly fees for the units currently on the market range from $673 for 1115 square feet to $809 for 1530 square feet.

The prices for the units sold at The Greens in the last six months range from $122,500 for a 1-bedroom, 1-bath unit with 945 square feet, to 335K for a fully updated 3- bedroom, 2-bath unit with 1650 square feet and a garage space.   Many of the units at the Greens have original kitchens from when they were built in 1984, which I believe makes their sale prices lower than in many parts of Leisure World.

Clients often ask me to see all floorplans available at the Greens.  For your convenience, I am posting them here.  You can see that every unit comes with a lovely three-season enclosed balcony.  Almost all the units in all of Leisure World have a three-season enclosed balcony, which is a very popular feature.

If you or someone you know is considering moving to Leisure World, please feel free to contact me.  I’d be happy to help!

Can you use Assets as Income to Qualify for a Conventional Mortgage?

Recently I was talking to a friend who's a Mortgage Consultant about the challenges retirees face when trying to obtain a conventional mortgage.  He explained how assets can be used as income to qualify for a conventional mortgage.  Here's how it works. 

When a borrower is preparing to finance a new home purchase or refinance one of the key pieces of information a Mortgage Consultant uses for loan qualification purposes is the ratio of their debts to their income (DTI).   Relying on the debt to income ratio can pose unique challenges to retirees as they are relying on alternative sources of income than a traditional paycheck.  The three most common sources of retirement income for a retiree are Social Security, defined-benefits pension plans, and personal savings.   Social Security and traditional defined-benefits pension plans provide a stable income source and are easy to treat as income, but for many people, this is only two thirds of the picture.  Many borrowers have saved significant assets over their working lives with the expectation that they will consume those assets over time to supplement Social Security and pension income.   How does a Mortgage Consultant account for the depletion of personal savings to calculate income level in retirement?  The answer is Asset Dissipation.

Asset Dissipation is an income stream resulting from the assumed liquidation of certain asset types to meet the living expenses of the borrower.  This can be used in addition to other income streams like Social Security and/or pension income to qualify for conventional mortgages.  

Let’s work though the example of Sally, a recent retiree, to see how Asset Dissipation works.  

Sally is retirement age and has $150,000 saved up in a 401K that she can draw on penalty free.  To determine how much monthly income can be estimated to come from this asset we take 70% of the account balance to correct for fluctuations in the stock market and divide the remainder by 360.  So…

150,000 x 0.70 divided by 360 = 291.67

The $291 generated through asset dissipation would be added to Sally’s Social Security income and pension income to more accurately capture her true monthly income.

If you're retired and interested in buying a home with a mortgage, please contact me and I can put you in touch with a mortgage consultant who can explain this and other options you might have.