Capture-000018Spotsylvania County is one of the best places to buy a single-family home to rent out, according to a new report from RealtyTrac.

With an annual gross rental yield of almost 12 percent, Spotsylvania was the No. 5 market in the country for buying single-family rental properties, according to RealtyTrac’s Q2 2014 Residential Property Rental Report.

That means investors who bought those properties have an annual return well above the national average of about 9.97 percent.

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Our First-time Homebuyer Savings Plans are getting a lot of coverage, especially in the real estate community.

Our posting to Twitter alone got lots of retweets from Virginia Realtors, not to mention the Virginia Young Professionals Network and real estate companies as far away as Dallas, Texas, and Scottsdale, Ariz.

NAR even picked up on it — and not only did it pass along our Tweet about FHSBs…

its Realtor magazine covered the news, as did HousingWire.

The new plans were already covered by the Washington Post, Richmond Times-Dispatch, and local papers across Virginia.

Don’t know about Virginia’s new First-time Homebuyer Savings Plans? Head over to VARealtor.com/FHSP to get all the details.

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Can Realtors use camera-equipped drones to shoot photos and videos of property? The short answer appears to be no, not legally, according to the Federal Aviation Administration.

The long answer is a bit more interesting.

In general, the FAA has the authority to regulate things that fly — anything “from the ground up,” as it explains on its mythbusting page. That includes drones.

That doesn’t mean you always need FAA approval to put something into the air. You can buy a cheap model rocket at Toys R Us and launch it from your backyard without approval, or zip a model airplane around the park.

That’s because the FAA has model-aircraft guidelines that let you fly things below 400 feet (as long as you aren’t within three miles of an airport, or near populated areas).

But drones are a different matter. The FAA has some different rules for these “Unmanned Aircraft Systems” or UASs. Here’s the important part of those rules:

You may not fly a UAS for commercial purposes by claiming that you’re operating according to the Model Aircraft guidelines [...] Commercial operations are only authorized on a case-by-case basis. A commercial flight requires a certified aircraft, a licensed pilot and operating approval.

The question is, does “commercial purposes” include Realtors? Yes, according to the FAA. By definition, it says, Realtors using drones are using them for commercial purposes. Ditto for any drone-flying services a Realtor might hire.

As the New York Post reported, the agency is looking into brokerages that use drones. The Realtors in these cases claimed that drone-photo flights aren’t commercial use because they don’t charge their clients for the photos; it’s part of their overall service. (Dome drone-flying services  tried to claim they don’t charge for the drone flights, but for “video editing”.) But the FAA isn’t buying it.

Realtors using drones to photograph properties are using them for commercial purposes, and thus must have a license, it says.

But then things get complicated.

In June 2013, the FAA fined Raphael Pirker $10,000 for operating a drone around the UVA campus illegally — “in a careless or reckless manner.”(He was shooting a video for the medical school.)

Pirker appealed, and a federal judge ruled in his favor, saying that the FAA couldn’t enforce its drone rules because it didn’t go through the proper procedure to create those rules.

Inman News reacted to that ruling by saying it “[paved] the way for broader adoption of drones by businesses including real estate agents, brokers and real estate marketing firms.”

Not so fast, says the FAA. See, it appealed the ruling immediately, which (it says), means the judge’s decision has been stayed and “that means all rules are still enforced and the FAA is still enforcing them,” according to the agency.

So, at this point, according to the FAA, if it learns about unauthorized use of drones, it will either call or visit the pilot and ask him or her to stop. If that doesn’t work, it will send a warning letter. If that doesn’t work, it could pursue a cease-and-desist order.

The FAA has also recently issued this notice of its intent to issue clarifying regulations.

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Capture-000007The Washington Post gave us some nice coverage about First-time Homebuyer Savings Plans in Dion Haynes’s “Virginia establishes savings plan for first-time home buyers“:

The program, somewhat similar in concept to college-saving plans, also allows parents and grandparents to designate savings or investments for a child’s future purchase of a home. Money or investments in the plan can grow to no more than $150,000, sponsors of the program say.

Part of the purpose of the legislation is to establish “the mental discipline to save and invest,” said Chip Dicks, legislative counsel for the Virginia Association of Realtors, which requested the legislation. “What this [does is to] put money aside and let it grow without taxing the growth on the money.”

Click here to read the full story, and be sure to click here to read more about First-time Homebuyers Savings Plans.

 

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Today we’re rolling out four new standard forms and nine revised forms. You’ll want to check them out immediately — so click here to go to our new-forms page.

And beginning today, VAR will update its forms library twice a year: every January 1 and July 1. This makes forms updates more predictable (and it’s how other associations across the country do it).

Each update will include the new forms themselves (obviously) as well as a document describing and highlighting the revisions — and it will all be at VARealtor.com/newforms.

What are you waiting for? Get those new forms ASAP!

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Today’s the day: July 1. That’s when most new laws take effect in Virginia, and this year includes several that VAR fought for to improve the real estate climate in the commonwealth (not to mention help the rights of property owners).

From important changes to the Landlord-Tenant Act to protecting you from being unjustly labeled a criminal, our Policy and Advocacy Team worked hard and scored big this year. (The biggest news, of course, was the launch of First-time Homebuyer Savings Plans.)

Click here to see what the new laws are and learn how they affect you.

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Starting today, July 1, 2014, Virginians can create First-time Homebuyer Savings Plans, where they can put money to use for the closing costs on their (or someone else’s) first home and keep it free of Virginia taxes.

Click here to read all about FHSPs — and be sure to tell your clients!

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The issue of home inventory

Let’s talk about inventory — rather, the lack of it. Granted it’s more of a problem in some areas than in others, but not having enough ‘product’ to sell is becoming more and more of an issue, and it’s acting as a brake on the entire housing market.

According to NAR figures, May saw housing inventory with a 5.1-month supply. (Anything below a 6-month supply is considered a seller’s market.) Nationwide, inventory was down about 10 percent.

Why are there fewer houses to sell? A number of reasons.

First, investors have gobbled up a lot of properties. During the worst part of the housing crisis and up to about a year ago, cash-paying buyers came into the market in droves, taking advantage of low prices and interest rates. Unlike previous investors, though, this group was looking to turn those properties into rentals, not to flip them for a quick profit. Result: Many of these properties are off the market for the long haul.

Second, the foreclosure pipeline is running dry. At one point we were worried about “shadow inventory” — homes that were not yet in foreclosure that were poised to flood the market. That never happened. But the improving economy — and the alphabet soup of government programs designed to assist homeowners and potential homeowners — helped many families avoid or escape the foreclosure process.

That’s a big reason the May report from Black Knight (formerly LPS) found that the number delinquent loans was down 7.6 percent from the year before, and the percent of homes in foreclosure was down 37 percent. In fact, foreclosure inventory in May was at the lowest level in six years, and distressed sales only made up 18 percent of existing home sales, according to NAR. (It was 25 percent a year ago.)

But if distressed sales only make up a small part of the market, what about the rest? Why aren’t homeowners selling?

The low down

Equity is low, for one. With home prices not having recovered from the real estate crash, a lot of owners are finding themselves with little or no equity. They can afford their mortgage payments, but they can’t afford to sell — they’re either upside down (owing more than their homes are worth), or they would be left without enough for a down payment on another home. And in the latter case, stricter requirements for personal mortgage insurance may mean even higher payments. So they’re holding on until prices have risen enough that they feel they’ve got a good deal… or are at least above water.

Interest rates are at rock bottom, too. The low cost of mortgages over the past few years has been a powerful incentive for people to buy or to refinance. According to CoreLogic, almost half of all mortgaged homeowners now have mortgages with rates of 4.5 percent or lower.

But rates are expected to rise — in a way, they have nowhere to go buy up. That leads to what the Wall Street Journal termed the “lockdown effect,” where homeowners are afraid to give up their ultra-low rates — and that will only get worse if and when those rates begin to rise. NAR Chief Economist Lawrence Yun even suggested that many of those homeowners would prefer to rent out their homes, rather than lose their great mortgage rates.

5. Builders are also recovering. Home builders were hit hard by the recession and housing crash, and are ramping up their efforts slowly — a bit too slowly for Yun, who says he’d like to see a 50 percent increase in new-home construction to reduce the pressure on sellers. “We will continue to have some degree of shortage in the market as supply of new homes trails behind demand,” he told the Washington Post.

Bottom line

The result of all this is a drag on the market as a whole. You can see it in NAR’s May Pending Home Sales Index, which tracks contract signings (not closings): It was 5.2 percent below a year ago. There simply isn’t enough to sell.

Of course, there are issues on the buyers’ ends as well. The most notable is the lack of first-time buyers, and younger people — so-called “Millennials” who are in their early to mid 20s — opt to rent rather than buy, thanks to heavy student-loan debt and slimmer job prospects.

There’s hope, of course. A seller’s market pushes up prices — that’s Economics 101 — and rising prices may nudge some of those reluctant-to-sell homeowners off the fence. Banks still own many properties they haven’t yet sold off as well, which can add to inventory. Homebuilders are building more. And the recovering economy will hopefully allow those Millennials to afford to (and want to) buy.

For now, though, the issue of the day remains inventory, and finding ways to give people the product that survey after survey shows they want: a home of their own.

 

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On Thursday, June 19, two members of the VAR board of directors and one VAR staff member visited the Southwest Virginia Association of REALTORS for its membership meeting. The meeting included education, lunch, and a chance to meet two new affiliate members and 3 new SWVAR members.

2014-06-23 Lynne SWVAR

(l. to r.) Karen Smith, vice chairman of VAR’s RPAC Fundraising Committee and member of VAR’s board of directors; VAR Director of Member Outreach Lynne Wherry; SWVAR President-Elect Cindy Hornsby; SWVAR CEO Lisia Amburn; Charlee Gowin, member of VAR’s board of directors and SWVAR board liaison

 

 

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Joe Funkhouser 2013Ferebee_Sandee2Congratulations to Realtors Sandee Ferebee of Norfolk and Joe Funkhouser of Harrisonburg. Both were reappointed to their positions on the Virginia Real Estate Board by Governor Terry McAuliffe.

Also named to the board were Jennifer Boysko of Herndon (a staff aide to Dranesville Supervisor John Foust) and Antonio Elias of Charlottesville (a student at the UVa School of Law).

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