The outcome of the presidential election has had positive and negative effects on our real estate market. I’ll go over everything you need to know today.
How has the presidential election affected the real estate market? Well, there is some good news and some bad news.
The bad news is that mortgage rates went up since the election ended. Rates jumped from 3.47% to 4% by the end of November. Economists say this might continue because of emerging statements from the incoming administration; there is a lot of uncertainty right now.
The good news is that there are plenty of reasons to be optimistic down the line. Promised tax breaks could boost the luxury home market, which has been very slow the last couple of years. If the luxury market gets revitalized, that could have a ripple effect throughout the rest of the real estate market, from construction to mid-level and lower priced housing as well.
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We can all be grateful that the election is finally over.
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Looser regulations for construction and permits will help the real estate market as well.
One thing to be grateful for right now is, one way or another, the election is finally over. The stock market has been surging the past few weeks. That might be a vote of confidence for our President-elect and his anticipated business-friendly policies, but it might also be a sign of relief that the election is finally over and done with.
It seems like things are getting back to normal as people realize that the world is not ending. In fact, many people who were waiting on the sidelines during the election are now entering the real estate market. We’re seeing a lot of increase in showings and offers on all of our listings.
Home prices are actually near record highs, so if you’ve been thinking of selling your home, now is a good time to enter the market.
If you have any other questions about the current market, give me a call or send me an email. I would be happy to help you!
Both buyers and sellers in our area will pay closing costs in a real estate transaction. We've broken down each cost that each party will incur in a real estate transaction.
If you're a home buyer or seller in Northern Virginia, Maryland, or Washington D.C., you'll have to pay closing costs. What are they? Who pays what?
As a buyer, you'll have to pay a loan origination fee, any discount points to the lender, title insurance, appraisal, surveys, homeowners insurance, and government recording fees. For example, if we're talking about a $500,000 house, your closing costs will amount to about $15,000.
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As a seller, the biggest closing costs you'll incur are broker fees.
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If you're the seller, your biggest chunk of closing costs will go to a broker fee. Then, you will pay transfer taxes and a fee to the title company to record the deed and pay off your mortgages. Title company fees can range from $750 to $850. For that same $500,000 house, as a seller, you're looking at about $33,000 in closing costs.
I hope this gives you a good understanding of what closings costs are. If you have more specific questions about closing costs in your particular area, give me a call or send me an email. I'd be happy to answer any and all of your questions!
As a home buyer working with a builder of a new construction home, it's important to have representation. Why is it important to work with an agent when buying a new home? Today I have Susan Titus with me to discuss this issue.
First of all, the representative at the builder’s site works for the builder, so their goal is to maximize the builder's profit, not to protect your hard-earned money. Secondly, you have to remember that when you look at model homes, you're seeing dressed-up homes that have upgrades that aren't included in the price of the home. You should also know that building companies may offer incentives to work with companies like their own mortgage company, but the loans offered may not be the best deal for you as a buyer in the long term.
The most important thing to remember is that the contract favors the builder. Working with an agent will give them a chance to help you understand the risks, timelines, and requirements. They can also help negotiate some fees that may be standard to the seller that the builder isn't normally apt to pay.
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The representative works for the builder, not for you.
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You may be wondering why you can't save the cost of a buyer's agent's commission just by working with the builder. The cost of commission for an agent is actually built into the price of the home. Even if you don't work with an agent, the builder is not going to discount you that cost of a commission; they're going to put it in their pocket as profit. The builders want the prices to appraise and continually escalate, so they will not give you a discount just because you didn't have a representative helping you.
Also, know that you can't go out looking at model homes, find one you like, and then call an agent and ask them to write up a contract. Your agent has to accompany you on the site or call and register you with the builder before you go on site. If you go to the site without an agent, you will be tagged, and then you will not be able to be represented if you decide to go back with that agent.
I hope that clears things up for you when it comes to working with builders and the process of buying their properties. If you have any questions, give us a call or send us an email. We'd be happy to help you out!
Whether you are buying or selling a home, the appraisal can directly impact you. An appraisal is someone’s objective value of what a property is worth in today’s market.
Many people have asked me, “What is an appraisal?”
An appraisal is someone’s opinion of value of what a property is worth in today’s market. Appraisals are fairly accurate. Usually, once a home is under contract, the bank will send out an appraiser to verify the value of the property.
You might not be aware that as soon as appraisers get a request to look at a home, they contact either the listing agent or the buyer’s agent and ask for a copy of the contract. They look at the contract to see what the sales price is, and then they look at the house to see if they can justify that sales price. The appraisal prevents the buyer from paying more money than the home is worth.
I would say that 95% of appraisals come in at the sales price, which usually makes buyers and sellers unhappy. Sellers get upset because they think their home is worth way more than the market value. Buyers get upset because they thought they were getting a bargain.
Although it’s common to be disappointed when the sales price appraises, you really shouldn’t be. The appraiser is only doing a favor to the bank to justify the sales price and make sure that the home is not worth more or less than what it is being sold for.
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Do not be disappointed if the appraised value matches the sales price.
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If you are the seller, you need to make sure that the buyer’s agent and the lender are on the same page. The appraisal should be ordered as soon as possible because it can take anywhere from seven to 21 days to complete the appraisal. You can order the appraisal the minute the home goes under contract.
Also, if you are the seller and the sales price does appraise, you will not see a copy of the appraisal. The buyer is the one who pays for the appraisal, so the buyer is the only one who should see it. If you are the seller and you do see the appraisal, that is a bad sign; your property did not appraise to the sales price.
Finally, keep in mind that appraisals for home sales are different than appraisals for refinancing your home. If you refinanced a year ago or even six months ago, that home appraisal has no value in the current marketplace.
If you have any questions about home appraisals or about real estate in general, give me a call or send me an email. I would be happy to help you!
In Maryland, Northern Virginia, and Washington D.C., the market has performed very similarly in that it’s a great time to be a seller in all three regions.
Is it a good time to sell? Is it a good time to buy more investments? In Northern Virginia, Maryland, and the Greater Washington D.C. area, the market has performed similarly for each region.
In Northern Virginia, it’s a great time to sell. Inventory is down 18.5% year over year, and listings are up 3.8%. The average days on market is down 1.9% to 52 days. The median sales price, year over year, has risen 0.7% to $431,500.
In Maryland, it’s also a great time to sell. The year-to-date median sales price is up 3.2% at $319,900. Active listings are down 13.7% year over year, but sold listing are up 7%. The average days on market is 53 days.
In Washington D.C., you see more of the same. The year-to-date median sales price has risen 2.9% to $540,000. Active listings are down 0.5%, and sold listings are up 4.3%. The average days on market is 30 days.
In both Washington D.C. and Maryland, homes have appreciated 3% year to date. In Northern Virginia, they’ve appreciated only less than a percentage point.
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It’s a great time to sell.
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We’ve been talking about a shift in the marketplace, and it will turn to the buyer’s favor eventually. I don’t have a crystal ball, but the real estate market normally works in cycles of seven to eight years. We’ve been climbing steadily for the entire decade, so 2017 should still be a good year. Whether it’s immediately after the election or sometime in the spring, there will eventually be an influx of inventory.
As I stated before, if you’re contemplating selling your home, now is a great time to do so. If you’re looking to buy, now would be a great time to do that as well, since interest rates will eventually be going up in the ensuing quarters. If you’re looking to build an investment portfolio, you might want to wait until the market adjusts itself in 12 months or so.
I’m never too busy for your referrals, so if you have any questions, don’t hesitate to give me a call or send me an email. I look forward to hearing from you.
You may not know this, but over one million moves are taking place each year with U-Haul. Even if you haven’t used U-Haul for moving yourself, you can’t ignore the data on the sheer number of moves. By tracking U-Haul trucks, we can see where people are moving to and from, and predict what we will see this year.
A company called John Burns Real Estate Consulting made a very nice map that’s easy to understand. You can see it in the video above. Basically, it shows two kinds of cities. Places like Portland, Seattle, Atlanta, and Austin have a surplus of U-Haul trucks. This means that they were the destination of many one-way movers. This makes moving trucks in those areas much cheaper than in other parts of the country.
On the other hand, if you wanted to rent a truck from San Francisco, LA, New York, or Chicago, you would have to pay a premium due to the shortage of trucks. A truck from NYC to Portland would cost you $2,400, while a truck from Portland to NYC would cost you only $900.
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More people are migrating towards the Northwest and Southwest.
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These statistics tell us that more people are migrating towards the Northwest, Southwest, and Southern United States than anywhere else. These are hot markets, and homes in these areas are selling almost overnight.
If you have any questions for us, don’t hesitate to reach out via phone or email. We would love to hear from you.
Our 5th annual Charity Golf Tournament is coming up soon, and we would love for you to join us! This year’s event is going to be held on Friday, September 16th at the Raspberry Falls Golf & Hunt Club.
The cost for this year’s tournament is $150 per golfer or $525 per foursome. All net proceeds will be donated to the Alzheimer’s Association, which we are thrilled to be supporting.
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All net proceeds are going to be donated.
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Whether you’re playing golf or not, it is going to be a great day. Check-in is at noon with a shotgun start at 1 p.m.
I wanted to talk a bit more about Zillow home estimates. Zillow is becoming one of my favorite sites not because I use it every day, but because I run into buyers and sellers who are using it every day.
People ask me daily about Zillow and the things they see on the website. I don't use it to price homes, but sometimes I'm actually forced to go to Zillow to look at their home values to see how off they are! There was an article recently published on Inman.com about the CEO of Zillow and how his home's estimate - or Zestimate, as they call it - was 40% off.
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The method is not scientific.
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This was not an isolated case, either. The values are off by a number of ranges, sometimes up to 70%. This should give a pretty clear picture of the information you're looking at with Zillow. It's a great website and I have nothing against it, but please do not use it to price your home. The method is not scientific, and there's no live person behind the pricing. For example, Zillow can't account for things like a home being right off a highway, which would normally take about 30% away from a home's value. Likewise, Zillow doesn't know of or factor in any upgrades or renovations done to your home.
If you want an accurate home valuation, call a local professional like myself. We can provide you with the most accurate info. In the meantime, if you have topics you're interested in, send me an email and we can discuss them. I'll see you in two weeks!
What if you could cut eight years off of your 30-year mortgage? How would that make you feel? There is one simple thing you can do to make that happen: make one extra mortgage payment each year.
Adding one extra mortgage payment will turn your 30-year mortgage into a 22-year mortgage. If you can’t afford to do one full extra payment, you can still cut down your mortgage by making that extra payment in smaller increments.
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Add 10% to your monthly payments & cut 8 years off your mortgage.
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Simply add 10% to your normal mortgage payment. For example, if your monthly mortgage payment is $2,000 and you add an extra $200 each month, you will still shave eight years off your mortgage.
Another way to shorten your mortgage is to refinance and switch to a 15-year mortgage. Keep in mind that the 15-year mortgage payments will be very high, and not everyone can afford this option. That’s why one extra payment a year is a great way to earn your financial freedom in fewer than than 30 years.
If you have any questions, give me a call or send me an email. I would be happy to help you!
There are three deadly mistakes that every seller should avoid when putting their home on the market:
1. Overpricing: If you overprice your home hoping that someone will magically swoop in and make you an offer, you’re delusional. That’s a fantasy. By overpricing your home, you’re actually alienating buyers. Realistic sellers are going to sell for fair market value, and they’ll sell long before your overpriced home does. You’ve got to price at market value in order to sell as well. You don’t have to give it away, but price the home to sell. 2. Making a home difficult to show: We all have busy schedules, agents included. However, you need to be as flexible as possible for showings. The more difficult you make it to show the home, the fewer buyers will visit and the fewer offers you will have in the end.
3. Choosing the wrong agent: A lot of you have friends or family members that are agents. You may feel obligated to use them and that’s OK. However, before you commit, do some homework. Look at how many homes they’ve actually sold, what their track record is, and their average days on the market. Selling your home is as much a business decision as it is a personal one.
If you have any questions about selling your home or anything else real estate-related, give us a call or send us an email. We’d love to hear from you!
Many of you likely know I used to professionally flip homes before I was in real estate. I love buying houses below market value. In fact, many of you ask me about this. How can you buy a house below market value?
There are many ways to find a home below market value: short sales, distressed sales, bank-owned properties, for sale by owner, or even listed on Craigslist. A real estate professional can help you find a home below the market as well.
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Do not ever include home sale
contingencies in your offer.
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It is incredibly important to have your finances ready. Do not, under any circumstances, include home sale contingencies. If you have an FHA loan, federal subsidized loan, home sale contingency, your closing is 90 days out, or you want 15 days for the home inspection, I guarantee you won’t be able to purchase the home below market value.
If you want to buy the house below market value, get your home sold and go into a temporary rental if necessary. Ideally, you would qualify to purchase the home without selling your current one. That way, you can take your time searching for the next home. Remember, it can take a long time to find a house below market rate. If you go in the MLS, it gets competitive. If your offer isn’t polished, someone will snatch up that property. Use conventional financing, or, if you’re lucky, cash.
If you have any questions, give me a call or send me an email. I would be happy to help you!
Millions of people search Google and Zillow every day to find prices for their homes, but the only problem is that a lot of these online home valuations aren’t accurate.
If we go on Zillow's website, this is how they explain it: The Zestimate is created by an automatic software process designed by statisticians, and there is no ability for humans to manually alter the Zestimate for a specific property.
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Zillow is only accurate 38% of the time.
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It's been estimated that Zillow's home estimates are only right 38% of the time. That means that they are wrong 62% of the time! That is a terrible success rate.
Remember, Zillow can't take features or upgrades on your property and compare them to other recently closed homes in your area, even though doing so gives you a more updated value on your property. Zillow doesn't walk through your home or your neighborhood, and that's where my team can come in and place an accurate value on your home. As markets shift, Zillow's numbers become even less reliable.
Ultimately, if you want the most accurate price for your home, make an appointment with a real estate professional. We will go over your home and the local market data in order to give you the most accurate home value.
If you have any questions, or if you're interested in a home valuation, give us a call or send us an email. We look forward to hearing from you!
Today I’ll be providing you with a brief real estate market update for Virginia, Maryland, and Washington DC. A lot of people have been asking me whether we are in a seller’s market, a buyer’s market, or somewhere in between.
The answer to this question depends on where you live and what kind of home you’re looking for. Usually, the luxury markets will cater to buyers, and the lower price brackets will favor sellers more often. Overall, Virginia is in a seller’s market with only 5 months of inventory.
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Sellers should list quickly to sell for top dollar.
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What makes this market unique is that while it is a seller’s market, it’s still a great time for home buyers to make a purchase. Interest rates are at 3.5% right now, so buyers have the opportunity to save thousands of dollars over the lifetime of their loan.
Sellers will see a lot of activity if they list their home right now. Just in the last few days, we have had homes with multiple offers on them. However, inventory levels are accumulating, so if you want to sell your home for top dollar, I would suggest putting it on the market quickly. You will have much less competition if you list now, compared to the spring and summer when there is a frenzy of activity.
Please respond to Art for your feedback on Real Estate topics you'd love to hear about and we'll have this space updated with content in the coming weeks!
