A Real Estate Story

I learned about a notary and real estate scam, back a year or so ago, and I don't have first hand information so this entire story should be viewed as 'apocryphal'.

The owner of a house in DC died. His heirs who were out of state were a bit slow in probating the will, which had some flaw, I understand. None of this is huge, so far, but time and a half pressed on and the house was finally put on the market by DC for failure to pay taxes. It was bought through a tax sale and notarized by a fake or unregistered Notary. The person who bought at the tax sale sold to a second person who was also a fake and also using a fake notary. This latest "buyer" left a fake name and a fake address in Phoenix, AZ. Years passed. The house deteriorated so badly that the next neighbor painted the exterior and repaired a lot of it to keep it up and to avoid living next to a nightmare. You could hear the raccoons (or something) in the house and it was a haven for feral cats. In fact, DC has a provision (thanks to the cat lobby) that says homeowners who have been visited by feral cats can have established a "feral cat feeding station," and are enjoined from changing that situation to the disadvantage of the cats.  

What a mess! Coupled with the Vacant Home Act, which magnifies the taxes of houses that are deemed vacant for more than 30 days. These "Vacant" houses have their real estate taxes raised by a factor of 5...meaning if the taxes were $6000, the tax would then become $30,000. And to show you that the DC tax office is your friend, if the house is blighted, the taxes are raised by a factor of 10 taking it all the way to $60,000. Think of the ramifications for this for a town of transients...politicos who maintain their homes in other states or even countries and who come and go like seasonal workers... (like the Australian Sundowners who visit in the late winter early spring to shear the sheep for their annual haircuts). All it takes is a complaint from a neighbor and a visit from the Vacant Home office of the DCRA and you are [1. toast, 2. hosed, 3.  screwed, blued and tattooed. (Pick one or more)]

Scary enough? Well, there's a bright side to this story (but not for the neighbors, sorry to say). The fake owners proceeded to file suit against each other. Governmental agencies are remarkably reluctant to enter the legal arena in the midst of a fight so they stood back and let this battle rage. Since the main owner of record was fake and the notary was fake, the authorities had no alternative but to get a court's judgement, but wait, since there's a prior lawsuit raging, DC couldn't act.

Yow.  

Good news...the fake owners were unmasked and unhorsed finally, the house was taken off the Vacant home list and a developer stepped in to clean up (boy, did he clean up!). It sold almost as soon as it hit the market for way more than anyone expected. The fact that this happened in one of the plushest  of the expensive neighborhoods makes the story even more interesting but as it was of only tangential value to me, I was a mere observer.

Listed and SOLD - in Kalorama (DC)

Listed and SOLD!

Two bedrooms and 1151 sf, private parking, renovated kitchen and bath, 4 large closets and a regular closet, hardwood floors, higher than normal ceiling, awash in sunlight, in the KALORAMA TRIANGLE, in-between two metro stops: Woodley and Dupont. What's not to like?

These opportunities come and go quickly. If you are interested in buying or selling, it's always best to work with a competent realtor...give me a call - let me help.

Cell: (301) 980-4085 or Timothy.Healy@lnf.com

Always glad to hear from you...Tim

SOLD: Delaware Street in Chevy Chase, Section 3 (20815)

Listed and Sold in 7 days with 2 offers.

The back side says:

This lovely old farmhouse was built by TW Perry for one of his daughters, which meant that over the 93 year time frame, there were only 2 owners. Now some new people have come to enjoy a new life on Delaware Street. Please call me if you are coming into or going out of the real estate market. Let my 28 years and hundreds of millions of dollars in finished sales help you fulfill your real estate dreams.

Always glad to help,
Tim

Property: Marketing Materials - Gales Street, Washington DC

Considering real estate investments?

With mortgage interest rates at historic lows, opportunities for real estate investment couldn't be better. Money market rates of return are counted in the single digit "basis points" and are lamentable for seniors and pensioners. Considering an investment for cash in real estate as an alternative to annuities and savings accounts? It may match your investment needs.

By the way, a client of mine has just initiated a Reverse Starker like-kind tax deferred exchange, an IRS approved real estate investment tool. 

If you'd like to explore the world of real estate investing, please give a call at 301-980-4085. My office number is 301-986-1001, ext. 7319

The nuts and bolts:

The tax deferred exchange, sometimes referred to as the Starker exchange or the 1031 like-kind exchange has two aspects, both approved and both part of the IRS tax code: Forward and Reverse.

The Forward envisions the sale of an investment property (not primary residence and used for investment) and the purchase of another investment property (like kind...that is to say, the same style or function as the sold property), and the orderly and timely exchange, title for title within the appropriate time period. It's a tight window of opportunity, made shorter after the initial "Starker" exchange which created this opportunity, many years ago.

An example might be the sale of a rental condo or townhouse in town and the repurchase of a rental condo at the beach, where a student condo (purchased for a student during college and grad school whose price appreciated enough to warrant some concern for taxable liability, or a first time condo purchase after college where the owners moved out to a larger residence and rented the apartment many years ago.

The Reverse envisions the purchase of the property to exchange to and the sale at some date 180 days from settlement of the property to be traded from. In either case, the properties have to be identified within 45 days of the purchase settlement, there has to be a qualified "intermediary" or "facilitator" (often a knowledgeable title attorney) and a paper trail to document the intention and follow through for the IRS.

In the course of my 27 years of real estate, I have worked through both of these exchanges. I am not an expert nor am I a qualified intermediary nor a facilitator. I do know about the value and mechanics of these exchanges enough to make recommendations to appropriate specialists, several of each category. 

Call me if you would like further information. Cell: 301-980-4085. Office: 301-986-1001, ext. 7319

Townships and Ranges in Wyoming

After working in the “vault” of the Johnson County Courthouse for four days recently, I have renewed respect for our legal teams at the Settlement houses in our real estate world. Johnson County, Wyoming, works from Township and Range descriptions, rather than the lot and block language that is employed in more densely populated districts. The context is the same, however.

It sure is easy to make a mistake, after going through the mind-numbing NW quarter of the North Half of Section 33, Township 49, Range 77, and wondering if you really meant to say it a different way. Sometimes, the shorthand property description is written NW4N2 and sometimes it’s simply NEN2. When it’s written out in long hand, the chances for error go sky high. 

In that environment, we discovered an incidental “cloud on the title,” on some land we own. Our neighbor, a long time ago, re-titled a lot of land that surrounds us, and part of our land, from himself and his wife into a Living Trust, trustees being himself and his wife. Then in subsequent years, they sold the land. Those owners sold to someone else and and someone else and now they have sold out to the last and final owner. 

Our mission is to inform the next neighbor that they have a defective title, having sustained a mistake when they bought the land. It was the duty of the Title Insurance company and the settlement company to search the title adequately. It’s not hard to see the error. The Title company missed this one for sure. Now they are on the hook for the damages.

In a case like this, they can turn to their title insurance to compensate them for the damage. We hope they have title insurance.

The remedy is the “Quiet Title” which results, I think, in a “Quit Claim” deed.

When “as-is” becomes a problem…

When “as-is” becomes a problem…

We’re under contract, having sold the house to the best of multiple offers.  The new owners have offered to accept the house in “as-is” condition.  However, one last test, independent of the buyer and seller remains:  the wood boring insect inspection.  The test determines that there is no evidence that a wood boring insect treatment has ever been done on the house.  The seller agrees to have the house treated, as a concession to the buyer who likely wouldn’t be able to get financing without it.  The treatment is to be done by the company who did the testing.  Their treatment protocol is to drill a series of holes around the front and back of the house (it’s an interior townhouse) and pump anti-wood boring insect chemicals into the holes. 

The front of the house has a cement patio, which looked like a piece of cement on slab construction.  The treatment team had not discovered that the front cement “patio” was actually the roof of a “coal cellar” which was now a room in the basement of the house.  They didn’t notice that they had drilled right through that ceiling and into the basement below.  One fellow was in front drilling holes and the next fellow was in line to pump the chemicals into what they thought was the ground in front of the house.  Fortunately, I was there and yelled, “Stop the chemicals!  Stop drilling!”  We discovered the chemicals dripping from the ceiling and into the room below.  What a mess!  The basic condition of the house had changed and our contract was at risk, not from our negligence but from conditions outside of our control.

I called the treatment company’s manager and asked him to come out to assess the damage and what they were prepared to offer to the buyer and seller for potential damage to the house and the terms of the “as-is” contract.  Because of the failed termite treatment, the house now had a substantial and difficult problem to resolve.  It was different from the way it was when the deal was struck and the way it is now.  Ouch!

The manager and the regional vice-president of the termite treatment company arrived and after a series of written assurances and product information and chemical treatment assurances that the chemicals could and would be cleaned up with no lasting damages, the buyer and seller agreed that the “fix” was sufficient and the warranties under the new circumstances were adequate.  The contract returned to stable and proceeded to settlement. 

Tim O. Healy Has a Facebook Brand Page

This is the image I chose for my Facebook Brand Page. Have you visited me there yet?

Try it now: Tim O. Healy Long And Foster Real Estate Agent on Facebook.

There used to be a castle in Chevy Chase!

Located in, what is now called, the Town of Chevy Chase on East Woodbine Street (near Beach Drive), this castle overlooked Rock Creek Park.  It was called Rossdhu Castle or Calhoun Castle.

The Washington Post described this castle as a replica of the 12^th century, Scottish ancestral castle of Clan Colquhoun from Loch Lomond. (February 1, 1975)

(Click for picture and more of the story by William Duvall, from TownofChevyChase.org)

Today, what is left of the castle is the turreted five-bedroom gatehouse and the small "moat" in front.  

However, in the subdivision below the Rossdhu Castle, the even numbered homes on nearby streets all share a stone retaining wall in their rear yards, one of the last graceful remnants of the landscaping of the 100 acre site.  

Tim O. Healy - (301) 980-4085

What a Treat!

Imagine yourself in this neighborhood, near a local bakery!

Tim will provide samples from a local bakery to give you a better idea of what it might be like to live in this home and neighborhood: 10200 Grant Avenue, Silver Spring, MD 20910!

The Open House takes place, Sunday, September 25th from 1pm to 4pm.  Come on by and experience this house for yourself!  Feel free to contact Tim at 301-980-4085 for a private tour.

Brought The Buyer!

Another one, SOLD!

SOLD!

Thanks for the Plate!

Recognition for 25 Years with Long & Foster Real Estate, Inc.