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Welcome to Real Estate Live, a online discussion of the Washington area housing market, featuring Post real estate writer Daniela Deane.

In her live online discussions with the audience, Deane discusses the specifics of the market, from condos and investment properties to contracts and mortgages.

Deane has covered Real Estate for The Washington Post since 1999 and has worked as a reporter for more than 20 years.

The transcript follows.

Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.

Daniela Deane: Hello everyone! And thanks for tuning in. As always, I have a lot of questions already, so I'll just get started...

Washington, D.C.: Daniela - it seems like rental prices are finally starting to reflect the economy slowdown, esp. in the outer suburbs. Do you think this will trickle to home sale prices as well?

Daniela Deane: Yes, I think you're right. Rentals are softening a bit...And we're seeing a slowdown in the sales market too. Inventories are up and buyers are more skittish than they have been, especially in the higher-price ranges. Condo sales are still brisk, especially condos priced under $250,000....The District is still active.

Virginia: Hi Daniela,

I am about to start my career as a real estate agent. This may seem like a silly question but I am wondering how important a really nice car is to clients/the trade in general. Most agents have really nice cars, but I assume they've also made some sales! My car is four-door Acura in great shape but six years old and cloth seats. I could upgrade now, but I would rather not since I won't have steady income for a while, and mine is paid off. Thoughts?

Daniela Deane: Here's an interesting question....I know what you mean about agents having nice cars. They drive Lexuses, Mercedes and cars like that...One of the most successful agents I know drives that new VW bug, though...And one agent I went out with once had to call a tow truck after his car broke down. For me, if you have a nice car in good condition, that would be enough...But that may be just me. Any of you out there care what kind of car your agent is driving, as long as it's decent? (I doubt it somehow...)

Shepherd Park, Washington, D.C.: Daniela,

I'm sure you've heard of the new condos to be built in the shadow of the Takoma Metro station. I've been toying with the thought of buying one as an investment. It would be my first foray into investment real estate. What are your thoughts about this? What do I need to take into account while deciding whether this is a good idea?

Thanks so much!

Daniela Deane: Well, the basic thing to do are the "numbers." Find out what it could rent for in that area (be realistic), and how much your costs would be -- mortgage, taxes, insurance, like that...And then see if there's any left for you. I personally like to have a positive cash flow, even if it's only a couple hundred dollars a month, but some investing gurus say even if it isn't positive now, it will be in the future. Think also about whether you want to be a property manager or not. If not, you have to pay one about 10 percent of your monthly rent. So add that in. Or if you want to sell it when they're done rather than rent, be sure to find out how much money you have to come up with and when...There's usually a deposit and then 5 percent or so payable on signing the contract. Get as much information as you can before you plunge into this...Peruse the bookstacks. There's plenty of books on investing...There's Property Management for Dummies too, if you're thinking of going the landlord route...

Germantown, Md.: Hi, we bought a townhouse back in April, and we are desperately wanting to get rid of our PMI. Could you explain to us how we would go about doing so?

Daniela Deane: Contact your lender and ask them what you need to do. Different lenders have different procedures. You'll have to pay for an appraisal and the lender usually has a list of approved lenders you can use. The onus is mostly on you; the lender isn't in a hurry for you to drop PMI. Are you sure you have enough equity built up already?

Rockville, Md.: Daniela,
Hope you can help out here. Last December I bought and moved into a condo, which has appreciated nicely. In the meantime I have bought and will move into a new house in several weeks. Can I sell my current condo and buy a rental property of equal or greater value to avoid taxes?

Daniela Deane: Yes, you can do what is called a Starker Exchange...Ask a tax advisor for details.

Pentagon City Owner: For all those discouraged buyers out there, I want to tell you that I finally bought my 1-bedroom condo yesterday! It was my 5th contract in 17 months of looking. Keep looking. It's worth it at these rates!

Daniela Deane: Thanks for sharing, Pentagon City...Condos are still hot, especially those under $250,000. How much was yours?

Silver Spring, Md.: I want to know the range in dollars it would take to buy land and get a builder to custom built your home. I really don't care for the homes they are building today in the area.

Daniela Deane: Land costs vary widely depending on the neighborhood. What a quarter-acre lot costs in McLean is a completely different ball of wax from what it might cost in another part of the metro area...As for the building costs, it's hard to get a custom home built for under $800,000 in most close-in areas, I would expect....And land can be expensive. A tear-down in my north Arlington neighborhood recently sold for $400,000 to a builder. He just sold his newly completed house for $1.2 million.

Alexandria, Va.: Where do you see housing prices going in Northern Virginia in the next few months?

Daniela Deane: Here's my crystal ball question...I've just finished a story on how we're starting to see a slowdown in the Washington housing market, especially in the higher price ranges. So many houses are over-priced these days too, there's more on the market and buyers are more cautious with our slumping economy and stock market losses. So, the answer is: I don't know what's going to happen and most other people don't either, no matter what they say. Housing economists say that appreciation will level off to about 5-6 percent a year. Mortgage rates, which don't look like they'll move up much at all in the short term, are keeping people buying. The market is slowing yes, but it's hard to know how much of an affect the sniper had on people looking and now the holidays are approaching. We'll know for sure which direction the market is taking by spring, the busiest buying and selling season. I haven't answered your question at all!

Arlington, Va.: Re: agents' cars... Our buyer's agent had a large, comfortable but unremarkable car, which was fine with us. I think it just needs to be comfortable enough to carry prospective buyers around, but I can't imagine it's important whether it's a "status" car (unless you're working for Sotheby's). Keep it clutter-free and vacuumed out, but otherwise, why trade in a perfectly good vehicle?

Daniela Deane: I agree Arlington!

Alexandria: Real estate agent car: Daniela, I usually meet my agent in my own car at a house I want to look at. I think it's getting more and more rare that an agent will drive clients around, rather than just meeting them at the property. A really expensive car doesn't impress me. Most important would be that it has 4 doors (so I could get in & out easily), and is clean.

Daniela Deane: Hmm...I didn't realize that agents weren't driving clients around as much....Story idea?

Agent cars: Our agent drove a Mercedes. While it was certainly comfortable to ride around in, I kept thinking that we were paying her way too much, since we couldn't afford to drive a Mercedes!

Daniela Deane: My point exactly!

Alexandria, VA: I've had my house on the market since September. No offers, yet, but I'm not panicking. Originally was buying a place locally, due to move in December. Plans have changed, so move is outside the area, now in June.

Should I just leave the house on the market over the winter? Or would it be better to pull it off until say March? My move is overseas, and I don't want to rent it out, so I really would have to sell it sometime next summer.

Daniela Deane: Hmmm, Alexandria...Are you one of those over-priced houses I keep hearing about? ... If you're well-priced and have a house in good condition in a nice area, you still should be selling..Anyway, when you sell also depends on you. Do you mind having people traipsing through the house over the holiday period? Having to keep it nice all the time? .. Some people do. What's true about winter buyers and sellers is that they're usually motivated, i.e. they want to either buy or sell. People tend to be serious on both sides of the fence. And also, agents have told me that it can be better sometimes to list in the winter; you're the only girl at the dance instead of one of a hundred...I would do what felt comfortable...Since you don't have to move until summer, I would probably wait until the spring, but that's just me.

Washington D.C.: Hi there -- we recently submitted a contract on a $269K house that ended up going for $340 (not to us, obviously!). It was on the outskirts of Capitol Hill. Is this what we have in store for us? I thought it seemed like pricing was a little "truer" these days. Any thoughts? Thanks!

Daniela Deane: In the lower price ranges (am I really saying that $300,000 is low?..it is, for a house in many parts of the District, though, isn't it?), houses are still selling well. And the District is still active too. Well-priced properties in the District are still selling...as you've just shown us!

Alexandria: Agent cars. I think realtors are not driving people around as much for safety. Then they don't have people they don't know very well in the car with them. On the other side, a buyer doesn't have to get in and ride around with someone that they don't know that well (or that may be a bad driver). Plus, when I go to look at a house, I like to get there a little early, and ride around the neighborhood to check things out. Can't do that if you're in the agent's car. I think it depends whether you're going to see one or two house, or a lot of houses in one day. The more houses you want to see, the more it makes sense to ride around with the agent.

Daniela Deane: Yes, that makes sense....

Agent Cars:: If you're showing half-million homes and up, drive a car worthy of the clienteel who buy them. Otherwise you look like an amateur out of your league. If you're showing $150k townhouses; don't make it look like you're a bigger shot that will intimidate your buyers.

Daniela Deane: Okay, here's another view....Our topic of the day: Agent's cars!

Woodbridge, Va.: I have 30 rental houses and I was wondering if there would be advantages of Incorporating (sub chapter S of C)? About 20 of them are mortgaged and it is getting increasingly difficult to get more.

Daniela Deane: Wow...If you have 30 rental houses, you know a heck of a lot more than me, I tell you...I take my hat off to you...I'm sure you know a lawyer who can answer this in a jiff, right?

McLean, Va.: What is the going rate that real estate brokers are asking in commission? I am thinking of selling "For sale by owner," and the buyer is asking what kind of break if we don't use a realtor.

Daniela Deane: Commissions are always negotiable...Everything is in real estate, the saying goes...But saying that, a seller usually pays 3 percent to the agent who lists the house and 3 percent to the agent who brings the buyer. For Sale By Owner sellers often do give a buyer who doesn't have an agent a bit of a break since they save on the commission....For Sale by Owner sellers also often end up paying the 3 percent to the agent who brings the buyer, but save the 3 percent for listing it...

Va.: I will be meeting with my mortgage guy and the title people. He said the closing costs will be rolled over in the payments for the mortgage. Is that ok?

Daniela Deane: Yes, that's pretty standard...I refinanced today and I rolled the $3,000 closing fees into my new loan (ouch!)

Washington D.C.: With Virginia rejecting the tax to inprove roads, Do you think that the continued congestion on Northern Va. roads will have an affect housing prices within the beltway? Or has the trend to move further out reversed?

Daniela Deane: Agents tell me that people want to move closer in, that they're sick of commuting, and I've certainly interviewed plenty of people who felt like that for various stories I've done. It's a lifestyle thing. The traffic can really get you down.

Silver Spring, Md.: This is not a question really. But I think I am single handedly responsible for sustaining the housing bubble further. Last time I asked the question of buying a bigger house in the suburbs or a smaller house in the city for which your answer was the latter. Well really liked this house in the 20854 zip code and offered the list price (>.5M) 1 day after the listing. The next day they accepted the bid and I am in the process of closing. I am not sure whether we could have offered a lesser price but we really liked the house. After all trafic is not going to improve in this area ever. BTW we didn't buy this as an investment and we wanted a home rather than a "house."

Daniela Deane: Thanks for sharing your experiences...You're not holding me to anything I said previously, now are you??? You know that's forbidden...It's an uneven picture out there is the feeling I'm getting. There are still properties selling quickly..Agents tell me they are the ones that are well-priced, close-in, in good condition, and in a good area ..(anything else?)

Silver Spring, Md.: Not a question, just a comment to reassure any recent homebuyers out there who think they bought at the peak of the bubble: we bought a house 9 months ago, paid $25,000 over the asking price, and have been freaking out thinking that we made a big mistake. The good news is that we are in the process of refinancing, and the house was appraised for another $40K over and above what we paid, e.g. $65k over the original asking price. And we haven't made any improvements yet (though some are definitely in the works). I was really anxious that the appraisal would be such that the refinance would turn out to be less beneficial than expected, but I was very pleasantly surprised.

Daniela Deane: Good news for homeowners! I don't think prices have come down, except in the real high-end...

Washington, D.C.: At what point would you advocate the purchase of a second property as an investment/rental property? Are there any rules of thumb in terms of how much money one should have in 'reserves' in the event the 2nd property needs repairs, goes a couple of months without renting, etc?

Daniela Deane: There are some guidelines as to how much of a cushion you should have before plunging in...I suggest perusing Amazon.com or your local bookstore for books on investing...For me, I decide by doing the numbers. i.e. can the rent I can get cover my costs (mortgage, insurance, taxes) and leave me a bit more at the end of the month? That's how I decide...With sales prices having risen as much as they have and rents softening a bit, having a positive cash flow is getting more difficult, though...

An Opposing View: A car is an extension of the self, no matter what the profession. For someone such as a real estate agent, the motor vehicle of choice is even more important, because that person will be taking people around and showing them properties. I feel the same way about whether an agent wears a nice suit or not, and whether the shoes are polished. Call me old fashioned, but appearances say a lot to me.

When we looked for our move-up house to accommodate our growing family, our first agent drove a Honda Civic. Nice enough fellow, but he showed us houses we could have easily seen on our own through open houses, and he wasn't aggressive in negotiating concessions from the prospective sellers. We dumped him. The next agent was an elegant, assertive woman who drove a Cadillac Escalade. To us, it made a huge difference, both in our perception of her and how comfortable we felt driving around looking at up to 6 houses a day (I have two degenerated disks in my back). She was a shark in negotiations, and got us our current house, which we love, with concessions for the seller.

Daniela Deane: Okay! We hear you!

Charlotte, N.C.: Agents' cars. Mattered to me. I wonder if it matters more at the high end of the market, though. I figured an agent who drove something similar to what I drove, bought clothes at stores in the same price range I did, etc., had a better idea what would be important to me in a home. Probably sounds pretty shallow, but homes reflect our preferences and our tastes, so perhaps we're just more comfortable when we see our preferences and our tastes reflected in the agent's choices as well.

Daniela Deane: And more on cars...Looks like I was only speaking for myself when I said it didn't matter, huh?! ...

Pentagon City condo: It's me again. I paid 208K for the 1-bedroom which includes a washer/dryer in the unit. It's in excellent condition with upgraded carpet and linoleum. The w/d was the hardest part of the search as well as wanting something near a metro for resale an convenience. Can't wait to move in!

Daniela Deane: Congratulations! Enjoy your new home!

D.C.: We own a vacation home and are interested in selling it in order to buy another one. Are there capital gains consequences for this if the two transactions take place within a few weeks of one another?

Daniela Deane: Look into a Starker Exchange....Ask a tax advisor.

Vienna, Va.: Daniela....can I make a comment on agent cars? This idea of having to have an expensive car to "show off" to clients is pure nonsense. In fact, a top-of-the-line Merces, Lexus, or Cadillac will show a client that you make too much in commissions and have too much disposible income....while they will be struggling in many cases just to get the mortgage paid every month. You will shoot yourself in the foot with a pseudo-limo.

Daniela Deane: And more back on the previous side of the agent car debate....As many people there are as many opinions you get, huh?

Bethesda, Md.: Prices in my condo have shot up in the past couple of years, but people who live there have to ask where they would move to? Everything that's 'as nice' will cost as much, or more.

Daniela Deane: There's the dilemma in a nutshell.....

Arlington: I have read that it's not really worth refinancing if you can't save more than a percentage point or so on the mortgage interest rate. What do you think? We are at 7% now and have only owned about 18 months. Risk averse, so no ARMs please!!

Daniela Deane: It's all in the numbers...(am I getting repetitive?)...i.e. how much it'll cost you to refinance compared with how long you're going to be in the property and how long it'll take you to recoup that cost...Also, how much will your payments change by and do you want to get any cash out to blow on anything....Mortgage brokers say that's the way to calculate it these days, not the straight 1 percent drop theory...My refinancing today is going to take me about two years to pay off ... (Now that sounds really stupid then, doesn't it?)...But I plan on keeping the property for a lot longer...

Fairfax, Va.: My wife and I have already done almost all of the legwork looking for our first house, but we want an experienced agent to help us make an offer and close. Is it worth it to try to negotiate the buyer agent's fee downward, since they just get paid from the seller agent anyway?

Daniela Deane: usually they compromise more on the listing side of it, since one listing can sell very easily and another will take forever...you can try but i wouldn't hold my breath...

Arlington, Va.: I just refinanced my rental property. My lender required insurance that would cover "loss of rent" for 6 months. In order to secure this loan I had to "purchase" this useless insurance for $400/yr and had a very difficult time finding an insurance agent who would cover this. Is this kind of insurance "usual"?

Daniela Deane: That's exactly what just happened to me.. I refinanced my rental and the lender wanted that loss of rent insurance...But I was immensely pleased to find out that the renter's insurance policy I had (about half the cost of yours) included that, something I didn't even know...My policy covers damage inside the condo and loss of rent...Do some comparison shopping.

Dulles, Va: Hi - just bought a house in the area and am trying to open a line of credit on it. The bank has said that the appraiser I used for the first mortgage is on their not approved list. Do banks have tighter standards for lending or is this guy really a crook?

Daniela Deane: Banks do have lists of approved appraisers..And require their own appraisal for lines of credit...Sounds normal from what you've told me...

Agent Fee: There are some agents out there that will offer a rebate to the buyers. I saw an ad in the local Arl/Alex paper advertising this option. (Sorry I cannot remember the agent's name).

Daniela Deane: Interesting...

Arlington, Va.: do you know the status of that monster house on Sycamore ... Seems like they stopped working on it a year ago? But it's 90% complete on the outside

Daniela Deane: I shouldn't say this, of course, I'm supposed to be neutral and all, but I know just the house you're talking about and it's grotesque! It never seems to get finished...And even when it is finished, it'll still stick out like a sore thumb among that row of brick ramblers...

Clifton, Va.: What do you have against no cost refinancing? I recently refinanced in to a 6.5% jumbo loan paying no costs at all. Nothing rolled into my balance and nothing paid at closing. The rate is higher than what I could have gotten paying closing costs by about a quarter point but it's lower than the 7% that poster mentioned. With the average life of a loan so short these days it makes sense to consider this method.

Daniela Deane: Thanks for sharing, Clifton...

Silver Spring, Md.: Speaking of refinancing.....how much of a backlog is there at the lenders? We started our refinance in mid-September; locked to the end of October. We missed that deadline, but were relocked at the same rate (6 3/8) until Thanksgiving.

With no settlement date set yet, I'm wondering if the bottleneck is our broker or the bankers.

Daniela Deane: Geez, that sounds like a long time actually.....

Alexandria, Virginia: People form impressions of EVERYONE by their car, whether you admit it or not. Come on. If one prospective agent wanted to take you around in a beat-up old Hyundai, and another wanted to take you around in a brand new Lincoln Navigator with leather seats, you would pick the second one, whether you acknowledged the subconscious choice or not. Of course, that's because we live in the DC metro area. Just the opposite would be true in, say, North Dakota.

Daniela Deane: But then some people worry about getting ripped off by that Lincoln Navigator driver...

Mt Pleasant, D.C.: A question about refinancing. Do you think there is any reason to refinance a house now and pull out a bunch of equity and redo the kitchen, even though I won't be able to start the renovations for 6-8 months? I'm thinking with low interest rates and relatively high property values, it might be a good idea.

Daniela Deane: Will you blow the money on a New Year's cruise in the Caribbean? If you're asking about rates, everyone expects them to stay low for the foreseeable future...Look at what the Fed did yesterday...As long as the economy stays sluggish, rates will stay low.

Washington, DC: Are there any area where places still afordable (by which I mean, not to a six figure Ivy League Lobbyist with a trust fund from Grandpapa) in the District? One where you don't have to play diplomacy with the open air crack market?

Daniela Deane: Your best bet is east of Rock Creek Park..Property values east of the park are lower than west of the park....Look East, my friend!

What!?!: "An expensive car shows an agent makes too much on commission"? What does that mean? The more commission an agent makes, the more houses he/she is selling (or finding for clients)--how in the world is that a bad thing? I want an agent GOOD at the job! Don't you?!?

Daniela Deane: I do not need an agent to have a Lexus...It really doesn't matter to me..But heck, that's just me!

Rent of Loss Insurance: Daniela, I tried to comparison shop (even via the internet) but no one would offer it or even return my phone calls. (I received insurance from the same agent that handled my condo's umbrella policy).

Unfortunately I was under the "gun" because it was only a week away from closing. Most likely I'll try to drop the coverage at the end of the year.

Daniela Deane: It's not a big money spinner for them, is it?...My policy is only about $230 a year...I would give you the name of my insurance company, but I truly can't..That would be plugging!

Clifton, Va.: I want my agent to be successful. If he/she isn't selling and generating commissions dont need him or her. In this area an agent should be driving a status car. If your looking for a doublewide it doesnt matter does it. A John Deere would suffice!

Daniela Deane: This agent car debate has really got you guys!

Washington, DC: I read on the WSJ that foreclosures are rising. Any comment on that? Will such figures give further pause to those thinking of buying in this market? Thanks!

Daniela Deane: You don't have to read it in the WSJ!!! You can read it right here..We've reported it as well. Yes, foreclosures have gone up. And yes, I expect those figures do give people pause...All this bubble talk is making buyers nervous....

Silver Spring, Md.: Daniela....what makes property near the D.C. line in places like Bethesda, Chevy Chase, Cabin John, etc....so much more expensive (on average)than places adjacent to the D.C line just a very short distance further east, like Takoma Park, Hyattsville, Bladensburg, Capitol Heights, etc...?
ALL of these places are just a step right across the D.C. line, but they vary significantly in price...do you have any idea why?

Daniela Deane: Ah, there's the million dollar question...I get a million for not answering it!! ... Back to my look east answer! ... Values are based on a lot of things: perception, schools, amenities, crime, shopping, etc...

NW DC: Daniela....what is so magic about one little strip of water in D.C. (Rock Creek) that it would affect prices so much?

Daniela Deane: I knew I shouldn't have said that....It's just an easy divider and prices do change from one side of the park to the other...Shut up, Daniela! See, these questions just get me in trouble...

Washington, DC: Rockville, Md.: Daniela,
Hope you can help out here. Last December I bought and moved into a condo, which has appreciated nicely. In the meantime I have bought and will move into a new house in several weeks. Can I sell my current condo and buy a rental property of equal or greater value to avoid taxes?

IF ROCKVILLE USED THE CONDO AS A PRINCIPAL RESIDENCE FOR 2 YEARS, I BELIEVE THE FIRST $250,000 PROFIT WOULD BE TAX FREE.

Daniela Deane: I'm confused here, but yes, if you live in a property for an aggregate of two of the past five years you can deduct up to $250,000 in gains for a single person and $500,000 for a married couple...

Sorry about the WSJ reference: That's where I read it. THE POST RULES!!! Is that better?

Daniela Deane: Yes, much better!!! Thanks!!

Bowie: "Why buy when you can rent?" True story:

Eight years ago I moved out of a $700/mo apartment and bought a house with a $1100 monthly payment, counting escrow. I figured that with the tax savings and equity building , I was still "throwing away" $700/mo in interest and taxes. Plus, having to pay my own utilities and do my own maintenance, I wished I had just kept my apartment.

New guy comes to work a couple months ago and asks if I know of apartments. I tell him about my old place. He comes back tells me it now rents for the same $1100 I pay in mortgage!

Daniela Deane: So what's the moral of this story, Bowie?

Daniela Deane: Okay folks, it's 3 and I've got to go...I'm off to Italy tonight for a week and gotta check out early...I'll be back on December 5, my producer tells me...So please, tune in again. I'll miss you. (HA!)

Washington, DC: Home prices are still very reasonable in the Brookland neighborhood of DC (but are beginning to creep up a bit). My husband and I moved here this past spring and continue to be very pleased with our decision.

Daniela Deane: Just to end on a note of optimism!

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