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

Submit your questions and comments.

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.

Springdale, Md.: I recently discovered that many people are getting interest only loans. Is this a viable option or a gimmic?

Daniela Deane: Hello everyone!!! Welcome to Real Estate Live! I'm starting with a question right away since I'm having technical difficulties. Anyway, here I am and here I go right away. Thanks for joining me.

Springdale's queston:
Yes, mortgage brokers tell me almost every institution offers an interest-only product. They can potentially be a good cash management tool as they allow you to redirect your cash flow as you wish. Since your monthly payment is less, you can us the extra money you’re not paying towards your mortgage to pay off high-interest credit card loans, shore up your retirement account, or whatever. BUT...you need to make sure you know why you’re doing it, I think. If you have a financial plan, an interest-only mortgage can fit into that plan. But at a certain point, when you’ve accomplished your goals (i.e. paid off those credit cards or whatever), you should start redirecting some money into your mortgage, otherwise you build absolutely no equity. What that means, of course, is that you’re not paying off your property at all and if prices soften at all and you need to sell, you could find yourself in a position where you need to bring money to the settlement table.

Washington, D.C.: Is it true that the newly renovated Roosevelt Apartment building on 16th Street NW will be reducing its rental prices by half?

Daniela Deane: It doesn’t seem to be, no. I called the Roosevelt leasing office when I saw your question. Glenn Parisi, the property manager there, tells me that they’re offering a free month’s rent to people who are moving in in December and January. He said five apartments are currently occupied out of the 196 apartments available. He said 12 apartments are scheduled to be occupied in December and January for a total of 17 leases. He insists that that’s not a bad leasing rate for this time of year. “Between Thanksgiving and Christmas, you’re happy when anybody knocks on your door at all,” he told me. The leasing office number for the Roosevelt is 202 265 4540. Let me know if you hear anything further. And thanks for making me check this!

Alexandria, Va.: It ain't over. The $1.3 million home down the street from my modest rambler in the 22301 zip code sold in three weeks. Here's the question: As homes get more and more expensive, won't mortgage lenders get more and more creative with financing with 40-, 50-, and 100-year amortizations? When I bought mine, the broker was trying to push a 40-year onto me. I passed.

Daniela Deane: Lenders are always coming up with new ways to do mortgages and it doesn’t necessarily have anything to do with the price of homes. Now, you can get a 100 percent mortgage, a 103 percent mortgage, a 107 percent mortgage, like that. I’ve never heard of a 50-year or a 100-year product. And somehow I doubt lenders want to get involved with anything like that. Most of the flexibility from lenders come in the adjustable-rate products rather than the fixed-rate mortgages. Now, they’re loaning 30-year money at around 6 percent. But they know that there’s a good chance the borrower won’t stay in the house 30 years and so they’ll be able to get a better interest rate down the line. Oh, and thanks for the info on what happened to a house on your street. I suspect that house was in good condition and you’re in a good location. And that it was fairly priced (gosh, that’s hard to believe, but there you go...those are the three ingredients agents tell me sell a house quickly these days.)

Vienna, Va.: We bought a 7-year-old house and found that a portion of the main level floor was sagging a little. I was told by a contractor that there might be a structural issue. Generally, builders are required to cover the structural deficiency for 10 years. What is the correct procedure to have the builder cover the cost if it turns out to involve structural issues? Can you also recommend a few good lawyers? Thanks.

Daniela Deane: I called a couple builders for you and they said that their warranties, both of which were 10 years for structural problems, do convey from one buyer to the next as long as its within the 10-year period. So I’m thinking you’ll be able to get this problem fixed under the warranty...Call the builder who built the house as the first step. I’m also wondering though: Did the previous owners know about this and shouldn’t they have disclosed a problem this serious to you at time of purchase? Check into that too. I really shouldn’t recommend lawyers, but one of them has a column in our paper! (that’s a slippery way to do it, isn’t it?)..And he could probably recommend others if he doesn’t handle this kind of case. Best of luck, Vienna. I feel for you.

Clinton, Md.: I have been living with my parents since I finished college. While in school I bought a house jointly with my mom to flip for a profit. Can I still qualify for a loan as a first time home buyer if apply for the loan by myself?

Daniela Deane: Well, off the top of my head, I would think you would be a first-time homebuyer anymore, since you’re already been a homebuyer...That’s my feeling. But there may be time limits on that and some jurisdictions, like the District, consider you a first-time homebuyer if that’s the first home you’ve bought in the District. Check the jurisdiction where you’re thinking of buying. Does it matter that much?

Haymarket, Va.: Daniela, does it make financial sense to refinance now when I'll be selling my home within a year?

Daniela Deane: Probably not, Haymarket. The way to decide is to look at how much it will cost you to refinance and how long it will take you to pay it back. If it's a lot less than a year, then okay. But if it's just about that or just a month less or so, I wouldn't bother. Do the numbers, mortgage brokers say. Let's face it: Even though they're always saying how EASY it is to refinance, you usually have to get a whole lot of paperwork together to do it. I personally have never found it easy. Anyway, since I have no idea what rate you're paying, it's hard for me to say. Just do the calculations.

Arlington, Va.: I have a townhouse in Ballston that I'll be renting out shortly. I've never been a landlord before. I am an extremely talented handyman on the side so I'm not concerned about things breaking so much, but what kind of problems can I expect outside of the toilets, etc.., ? What kind of problems have you encountered

Any general advice from your years as a landlord?

Daniela Deane: Well, I've only been a landlord for two years...And the problem I've had is renters not staying more than a year...They've all been on my chats, I guess, and have taken my advice about buying. So every one of my tenants have gone out and bought after only a year...So the problem there has been, I've had to paint (or at least touch-up)every year and advertise again and go through the whole process of finding a tenant. I think that if you're a handyman, you've got a real leg up...at least on me, you do. I've had to call handymen. And my husband has painted. The main thing to think about is: Do you mind being called and having to respond quickly (which is a good way to keep a tenant). Do you mind running ads, doing credit checks, showing your townhouse to several people before you snare a renter. Generally, the work involved with renting. Good luck, Arlington! I bet you'll do great. (Wanna come paint for me?)

Alexandria, Va.: Re: the 1.3 million home in 22301. It's in Park Fairfax, behind the Masonic Temple, 1/2 mile walk to King Street Metro. At least from the outside it's in to drool for condition. Still, having read your piece of a couple of weeks ago about sales of $1 million-plus homes dragging, I figured you'd wanna know. Thanks for your response on creative financing -- FYI, I encountered the 40-year amortization pitch on ARMS too...

Daniela Deane: Thanks for the further information. Heck, I don't mind being proven wrong...I'm humble.

Rental Property Insurance: Daniela, can you PLEASE tell us the
name of your insurance company? I'm
having trouble finding a company that
covers rental properties. Throw out 2 or
3? Help!

Daniela Deane: I've got State Farm....Good luck!

Arlington: Just a comment to all the buyers out there who are bummed over losing out on contracts... there is ALWAYS a silver cloud. I lost out on a great house over the summer because we included inspection and mortgage clauses. However, I've been keeping an eye on the crime reports in the paper for that area... there have been several muggings and robberies since then along the street, and I'm VERY glad we lost out... we are in a much safer neighborhood and closer to the metro in the place we did get!

Daniela Deane: Glad to hear it worked out well for you, Arlington! I always want everything to work out well for my chatters....

Arlington Va.: Hello,

What is PMI exactly, and how do we get rid of it? We bought our 1br 1bth condo in Arlington in July, with 5% down.

Thanks!

Daniela Deane: PMI is private mortgage insurance...It's basically an insurance policy that covers the lender in case you default...(we wouldn't want that poor bank to have any trouble, now would we?)...They tend to require it if you're putting down less than 20 percent. It can be avoided with these new 80-10-10 and such mortgages however. To get rid of it, you have to get an appraisal (from a bank-approved appraiser) that shows you now have 80 percent equity in the property. The onus is on you, though. Lenders aren't that anxious to get rid of that extra payment for you. I've heard stories of people getting rid of it easily; I've heard stories of people having a hard time getting rid of it. Good luck!

To Clinton: From what I have read, "first-time" really only means you haven't owned anything in the past 5 years. So, if you sold the house more than 5 years ago (you didn't say when school was) then you should be fine. If I recall, the questions on my mortgage application also refered to owning property in the past 5 years, but nothing about have you ever owned property. The paperwork did say that co-owner counted.

Daniela Deane: Clinton, are you still on?

NW D.C.: I must disagree with the Roosevelt rental rep. I had an open house for an apartment two blocks from the Roosevelt two weeks ago with about 30 people viewing the apartment. Leased that day. I suspect that the high end rental market, like the Roosevelt, has been flooded with new or renovated apartments and demand is low.

Daniela Deane: Great news, Northwest! My investment property just down the street from the Roosevelt is coming up for rental at the end of December...Anybody want a condo on 16th and U? .. Did you really have that many people come to the open house?? And you leased it that day?? Tell me more about it...(Hey, I need information too, you know!!!)

Herndon, Va.: I can honestly say both when we bought our house and when we refinanced it was incredibly EASY. We have never had to provide a W-2, any tax forms, nor any bank statements. The first time we borrowed 100% of the house value and we refinanced 58% this time. We were told both times it was because of our excellent credit rating. For anyone leary of re-financing, since they heard it was a hassle, they should check things our for themselves.

Daniela Deane: Glad to hear it, Herndon. I've refinanced five times and it always involved a slew of paperwork. Who did it?

Falls Church, Va.: Hi,

Saw a nice house in Fairfax County for sale. Checked it out - it's a great value in a nice neighborhood. Then we looked up the schools. They're on the weak side. Now we're having doubts.

How much do less-than-average schools hurt resale value?

Daniela Deane: Schools are an important part of what buyers with children are looking for. I know that was crucial for me. I basically picked the high school I wanted and then only looked for properties in that school district. Is this a neighborhood with lots of families? Or singles? Empty-nesters? If it is a neighborhood that people with children want, then schools are an important consideraton. Do you have kids? I would think if you do, it's important to you too.

Alexandria, Va.: In your opinion, how much of a premium is walking distance to Metro rail worth, especially in the suburbs?

Daniela Deane: Easy metro access is also an important consideration to some buyers. Usually, properties close to Metro, big arteries or with easy commutes usually do go for more.

Washington, D.C.: We're putting our 2-bedroom, DC, near metro condo on the market in January. We know a similar one sold in June for a good price. Has the condo market slowed since then or will that price be a good starting point for us?

Daniela Deane: From what I've heard, the condo market hasn't really slowed in the District, especially condos under $300,000. When you say starting point, do you mean start there and then go up tens of thousands? Or start there and stay there? I would think that a similar price, or a bit more, would be where you'd want to be. But I have no idea what area you're talking about. Has anything affected the neighborhood since June?

Fairfax, Va.: Hi,
We have a 3 year old 2600 sq ft townhouse right next to the Vienna Metro going for $500k, we also have two small children, and we are thinking of selling and buying something older with a yard in the Vienna area. Do you think the prices for single family homes in the 400-450k price range will go down a bit? Should we wait? Hard to decide - going from a new home to a 30-40 year old house. Please shed some light if you can. Thanks.

Daniela Deane: Here's my usual crystal ball question! (Don't worry, I don't mind.) Basically, what local and national housing economists are saying is that appreciation will definitely slow in this area, but we'll still have appreciation. No one knows for sure, of course, but they're saying that nationally prices will rise about 3-6 percent next year and that here, the appreciation could be higher than that. So if that's true, there probably isn't much point in waiting, is there?

To Clinton: My folks were surprised to find they qualified as first time home buyers because their condo was the first home they bought in Maryland. They moved here 3 years before from NY, where they owned their home for 35 years.

Daniela Deane: That's what I suspected....Thanks!

Re: PMI: No, not 80% equity! You have to show you have 20% equity. If it were 80%, we'd all be stuck with PMI.

Daniela Deane: Oops....Sorry. Heck, you try typing this fast...

Washington, D.C.: Rental property insurance - I had State Farm for years with no claims, but their rates kept going up (to cover mold claims in the 'burbs, mostly). I switched to Erie, who specializes in rental property (especially condos). The rates are about 40% less. I have six properties, so it saves me thousands per year. Their customer service isn't as good as State Farm's, but I'll take the savings any day.

Daniela Deane: I better call Erie, huh?

Herndon, Va.: We went through USAA Banking and PHH Mortgage, and no paperwork was required from us.

Daniela Deane: Well, bully for you!

Arlington: Is there such a thing as a Web site that shows all the listings in the D.C. area, with pictures and prices and whatnot, or is the only resort to go to specific realtors' sites? Any recommendations?

washingtonpost.com: I humbly suggest you try the search engine on the post.com real estate site as a next step... and see how it may meet your needs. We have access to local listings as well as advertising.

Daniela Deane: And them I humbly suggest you try realtor.com or longandfoster.com....there are others too!

Clinton, Maryland: Hi, we bought the house in 2000. A friend mentioned that there may be time limits of 2 years. I concerned with the being a first time home buyer because there are some programs out there that offer special incentives for first time home buyers.

Daniela Deane: Clinton, good to see you again! So you must've read all these great comments you've gotten...

Silver Spring, Md.: Okay Daniela,

I'm sure I'll get a lot of flack for this one but here goes. I want to rent out the fully finished basement of my home. I don't have a walk-up basement entrance, and as I don't want the tenant to have access to the main house I plan to let them have the garage (for an extra charge) and entry that way which is restricted, or charge less rent but they still have to use the garage as their entrance via remote control key. It seems a bit tacky to me, but security is more important. Perhaps I should wait until I get a tenant that I know and trust. What do you think? Thanks.

Daniela Deane: Security is definitely important, Silver Spring...I certainly wouldn't want someone to be able to get into my house...Yes, you could wait for someone you know and trust or take the secure route...

Washington D.C.: The 2-bedroom condo is in Cleveland Park.

Daniela Deane: Cleveland Park is a very sought-after area....Keep that in mind in all your calculations...I would say it's gone up then since June...

Loudoun County, Va.: Hi Daniela,

For too long, folks here complain in writing to THE POST EXTRA, community newspapers,
board of supervisors, et al., about increased County government property tax assessments, yet NEVER mention the fact
that, at the same time, their property values have sky-rocketed. The public rarely
read both sides of the "issue"; the big
picture, if you will. Do you concur?
Please offer said reportage.

Daniela Deane: This is a conversation my editor and I have often...I'm on the side of increased property values and she comes down on the side of more expensive taxes...But of course my position means you have to wait until you sell to realize the gains (unless you borrow against your increased equity) and with taxes, you get to pay them now...

Leased near Roosevelt: Showed a cozy 1-bedroom basement with walkout to enclosed yard sandwiched neatly between Dupont, Adams Morgan, and U St. Included utilities in the lease, which I hope doesn't come back to haunt me. M

This is my first venture into investment real estate.

Daniela Deane: How much did you rent for, may I ask?? (If anyone complains about me trolling for my own information too, I won't answer your questions!)

To Silver Spring: Check the housing code. It may violate Montgomery County's housing code to have the tenant's only entrance/exit be through a garage in a single family home.

Daniela Deane: Good point.

Washington, D.C.: Re: Arlington search engines.
Go to homesdatabase.com and just pick any realtor and it will give you pictures and everything.

Daniela Deane: Yes. I knew I hadn't mentioned them all...You've got plenty of research tools here now!

Northern Virginia: Hi,

I bought my house 10 1/2 years ago (Spring 1993) for $275K and am about to sell it for $493K after putting $50K+ of improvements into it over the years. It is located about a mile from the toll road. Is that about the standard increase?

Daniela Deane: I couldn't say. But congratulations on that nice appreciation!

Washington, D.C.: Can you buy rental property with no money down?

Daniela Deane: Television man Carlton Sheets certainly says you can...

Arlington, Va.: for the person looking for a website to do house hunting on, go directly to homesdatabase.com. they have all MLS listings and a "homes prospector" feature that emails you new listings that meet your criteria EVERY DAY. I have been in the hunt for a condo for two months and have used it exclusively, it's great.

Daniela Deane: I think we said this, but thanks anyway!

Southwest, D.C.: HI Daniela,
I live in SW DC along the Waterfront and 2 blocks to the Metro. Prices continue to go up - up - up in this forgotten quadrent. I paid $89,900 a little over a year ago and a simliar unit in my building just sold at $175,000.

Daniela Deane: Thanks for the information, Southwest and congratulations on that equity build-up. Yes, it is sort of the forgotten quadrant, isn't it? .. It's actually so very convenient too.

Baltimore, Md.: Please help! I am looking at buying a house that will not be available until the current owners' retirement apt becomes available -- which they expect to happen within the next six months. Their attorney has advised them to have me sign an intent to buy. However, I am concerned about interest rates rising next year and making the home no longer affordable. It is affordable at current rates. The home is in good condition and in the neighborhood I want, so I'd like to make this deal work. My lender recommended buying the house now and renting to the owners until they move. That's not desirable to them because they don't pay rent now. Is there some other creative way to complete the purchase at today's low interest rates but allow flexibility for taking occupancy? Or do you think that any interest rate increase in the first half of 2003 will be modest enough to not make too much difference on my monthly payments? Thanks.

Daniela Deane: What economists are saying about rates is that they should stay low (maybe only going up a little) in the first half of 2003, rising more in the second half of the year. But still, the highest forecast I've heard by the end of next year is 7 percent. And that's the highest. Others are predicted only about 6.8 by the end of 2003. As long as the economy stays sluggish, rates will stay low. Of course, the wild card in all of this is the maybe war with Iraq.

Research Tools, D.C.: I have found erealty.com very helpful. You have to register, but it's free.

Daniela Deane: Thank you, D.C...You chatters know so much...It staggers me. Anyone want to sit here instead of me? (You gotta be a smart-aleck though...)

Virginia: I have a 30-year mortgage at 6 5/8 -- when do you think it's worth my while to refinance? I'm trying to reduce my monthly payments as much as possible. Total loan amount is less than 80% of assessed value of the house, and my credit is good with no debt other than the house.

Daniela Deane: That's a pretty good rate, Virginia, don't forget...We're losing sight of the fact that these rates are good, so good historically. Anyway, the basic formula to refinancing, mortgage brokers tell me, is to figure out how much it will cost you to refinance and compare that to how long you want to stay in the property. If it takes you 10 months to pay back your refinancing costs and then you're only planning on staying a year, it's hardly worth it. If you're going to stay there until you die, it's most certainly worth it.

Hyattsville, Md.: Hi There,

Great forum. Bought a 4-bed,2-bath house in Hyattsville, Md. for $249k. Appraised for $255k with 3 comparables. Last year the same house sold for $140k but was fire damaged. The house next door sold two years ago for $140k. I really like the house, and plan on staying put for at least 7 years but the age-old question is: Am I a dummy for paying that much and will I ever be able to sell it for a profit? The neighborhood is very stable, and people don't move often so I don't see how values can go up anytime soon. Should I just sit tight and enjoy it, or give myself fifty lashes with a wet noodle?

Daniela Deane: Okay, chatters. Don't think I just posted this one because he says this is a great forum. I don't succumb to compliments. (HA!). I just love the wet noodle line...As I see it, you should just sit tight and enjoy it. The longer you stay in it, the more chances of it going up. Why should you sell now if there's a good chance you won't get your price? And you like it? ...What I want to know, though, Hyattsville, is were you represented by a buyer's agent? And if so, how come that agent didn't do comparables for you? I may be missing something here, but why did you pay $249 when others paid in the $100s....I don't get it. Please tell me more.

Why is MY house not selling?: It's priced at $419,000 and has been on the market almost 2 months. Primo location - North Arlington. Bus stop right outside the door, one mile to metro.
Negative comments so far: outdated kitchen (buyer can do that), only 1 full bath (buyer can add second), on a busy residential street (can't do anything). House is 50 years old. Most seem to think price is fair.
Two houses right near me have been on the market longer for slightly less and are still unsold.
Should I try another agent when her contract is up? Would GREATLY appreciate some advice.
We have had THREE open houses - not one offer.

Daniela Deane: I'm sorry, north Arlington...Where is it exactly? (Sorry, I'm as nosy as a reporter...I also live in north Arlington!)...Busy streets can hinder sales..Also, even though you say buyers can change the kitchen, buyers can add the bathroom, many buyers don't feel like hassling with that...I'm not suggesting you do all these things though. I'm just trying to give some insight here...You know what? Selling always come down to price...As my agent friends tell me, you can always sell anything if you have the right price. I hate to suggest this: but maybe you should lower the price...(I think you're going to have to if you want to sell.). Best of luck, north Arlington! I'm here for you..

To Silver Spring: If you don't have an entrance, please please please consider how the tenant will escape in a fire if the whole house is locked off and the fire is in the garage. Are there burgler bars? Then how will they get out of a window? Codes exsist for a reason. As far as the garage, as a former basement tenant I would say that's cool. Just be sure to maintain egress.

Daniela Deane: Good good point. I'm giving up now and letting someone else take this chat over...All I know for sure is nobody can be as smart-alecky as me, though!

Leased Near Roosevelt: $1100 per month including utilities for about 400 sq ft. Is a true 1 bedroom with seperate bedroom from rest of living space.

Daniela Deane: Way to go!!! You're my inspiration....

Vienna, Va.: I am planning on getting my house wired for an ethernet so I can use more than one computer on the same DSL line (costs around $2,000). Does this add to the resale value of the house or is this a sunk investment? I have through about going the wireless Lan route which is cheaper (about $200) but less secure.

Daniela Deane: Vienna, I can't say for sure. What I can say though is that people like pre-wired houses. A couple builders I talked to recently say they're doing more of that...Let's face it: you're not the only techie out there...Anyway, my old line is: DO IT FOR YOURSELF! DO WHAT YOU WANT! Don't always think of resale...You may be living there until you're 95...

Washington, D.C.: Hello, I am interseted in purchasing a small apartment building in the D.C. area. Could you give me some idea about the books I could read, or where I could get off to a good start? Is there an apartment buyers guide for "Dummies"? Lol.

Daniela Deane: Yep, there's property management for Dummies! (my bible...) Peruse amazon.com or the real estate stacks in your neighborhood book store. You'll find lots of titles. You're impressive buying an apartment building...Where may I ask? And how much may I ask? Heck, I can ask anything! I'm running this thing...

Arlington: So, they kicked the old people out of the Roosevelt and renovated it. They kicked the old people out of that grand apt. building whose name escapes me at the intersection of Mass & Wisconsin, near the N. Cathedral, and have been "renovating" it for years, supposedly to turn it back over to the old people... are they just waiting for all the old tenants to die so that they can turn it condo?

Daniela Deane: Are you talking about Alban Towers on the corner of Mass and Wisconsin? If you are, Charles E. Smith has renovated that (it's beautiful actually) and they're charging some grand old rents there...With the rental market slowing, though, some companies have switched some projects they were planning for rental over to condos, which are still selling very well. There are so many apartments in the pipeline in the District, it's hard to see how they'll all get rented...

To answer your question: No. Arlington house for sale is zip 22213 - on Williamsburg Blvd. between Williamsburg Shopping Center and Westmoreland Street - close to Fairfax County.

It's the house for sale on the corner.

Daniela Deane: Hmmm....All I can say is good luck! And I mean it..

Daniela Deane: Folks, I'm done...I've enjoyed it as always and I hope you have too. My next chat is January 9 since I'm off that first week in January...Please tune back in. It impresses me you all know so much and you help make this forum more informative...Have a wonderful holiday and thank you so much for your continued patronage...(I sound like a restaurant owner now...)

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