Happy Motherâ€™s day! We hope you find comfort in knowing that â€œa mother is she who can take the place of all others, but whose place no one else can take.â€ Cardinal Mermillod.
One of our good friends asked about the importance of how a property shows during a frenzied real estate market. His point was that it is surely not as vital how a home is presented to buyers when in many cases the house sells as soon as, and sometimes before the sign goes in the yard. The idea that â€œstagingâ€ a home, or getting it â€œmarket-readyâ€ is somehow less important to buyers because they are just going to snap it up without caring about what it looks like, so this should make no difference to the seller. In fact, the seller could save time and money just putting it out there as it is, letting the buyer be concerned about to overall condition once they own it.
That would be a great idea, I said, if the seller doesnâ€™t mind compromising on the sales price. In fact they are likely to leave money on the table if they donâ€™t take the time to prepare their home for the sales process. We make all kinds of suggestions as RealtorsÂ® to our clients as to what they might consider doing to improve the presentation of their property to prospective buyers. It doesnâ€™t matter if it is a good market or a stale one, the fact remains that if you prepare to sell your home by making improvements and staging, you are more likely to get a better price and sell it in a shorter period of time than if you donâ€™t do it. It makes a significant difference in any type of market.
Not to mention that once a buyer has won the bid to purchase their home, the reality of walking through and inspecting a property that hasnâ€™t been maintained elicits a sense of buyerâ€™s remorse. They may feel they overpaid for the house, and then the wheels start turning as to how they might recoup their money, or even get out of the contract. There are multiple scenarios to these questions that a qualified real estate professional is prepared to discuss with you. Itâ€™s always best to choose your most trusted real estate advisor to be on your team when buying or selling your next home.
As a RealtorÂ® one of the benefits of our business is that we have continuing education classes that we must take in order to maintain our real estate license. This week I attended, â€œHandling Multiple Offersâ€, which in many locations of the Richmond area real estate market is extremely pertinent. This is certainly not the case everywhere, but in the ultra-high-demand areas such as the Fan, Museum District, near West End, and some other urban and â€œhigh walk-scoreâ€ locations, it is absolutely the case.
If you are not familiar with these situations you should know that multiple offers, with extremely favorable terms and conditions for sellers, highest and best offers, escalation clauses, and all-cash deals are extremely frequent. Much of the conversation and questions in our class focused on what buyers are doing to make their contract rise above others to gain the sellerâ€™s attention. Our presenter, an attorney, was quick to point out the risks and rewards of certain transactional behaviors.
â€œAs isâ€ purchase agreements where the buyer is waiving their inspection rights are increasingly popular. The risk and burden it places on the purchaser is extremely high and should not be considered with a light heart. It sometimes means the difference in getting a property, but if you have lost the opportunity to ask for repairs, or the chance the void the contract, or you donâ€™t have the funds to take care of problems on your own, it is not likely to be the best action you can take. Consider your decisions carefully and engage a licensed RealtorÂ® to be your most trusted advocate in any real estate transaction. The savings to you could be priceless!
This article is to be featured in RTD “Ask the Expert” 4/29/18
Weâ€™ve had a recent situation which has brought this to our attention:
Â Have you noticed, or been told, that attorneys are less likely to accept cashiers checks, or require that they be delivered 24 to 48 hours in advance of closing? In essence, it has to do with fraud.
Â As you know, we are seeing a lot of fraudulent occurrences in real estate these days. Apparently there is the opportunity for a person to withdraw a cashiers check within a certain period of time once it has been issued. In documented cases, people are showing up to settlement with a cashiers check, going through closing, and then withdrawing the check before it can be deposited and approved for payment.
Â As a result, attorneys are being advised that they should avoid this type of payment, or require it in advance of settlement, in order to avoid these possible situations. I was also not aware of this change in precedent, but this is what is taking place at the moment. Note that all office policies may be the same.
Â Our business is extremely susceptible to fraud because of the high dollar value being transferred. The people committing fraud are exceptionally skilled at it. It is reassuring to know that our attorneys are on top of the latest trends, keeping all of us safer from this abuse.
Â Please consider sharing this with your buyer-client early in the contract process. Â I trust this will help them understand the situation and be a little more patient with current trends. These are difficult times for all of us; fortunately our attorneys are being cautious in order to protect everyone involved. Something we can all appreciate.
There is an interesting article in the Richmond Times Dispatch Metro Section today (5/15/17), â€œZillow under scrutiny for â€˜Zestimateâ€™ systemâ€, by Kenneth R. Harney. He notes a law suit filed in an Illinois court that claims Zillowâ€™s Zestimate system has seriously undervalued a womanâ€™s home, preventing her from selling it for what itâ€™s worth. The article suggests that Zillow is not only responsible for stigmatizing her property, but furthermore begs the question of how can Zillow perform appraisals without a license? They are also making the value available to the public without owner consent.
Well, â€œitâ€™s about time they got called on itâ€, said Pat Turner, a Richmond real estate appraiser quoted in the article. If, as the article mentions, Zillowâ€™s information meets the definition of an â€œappraisalâ€, then why shouldnâ€™t they be licensed to perform such tasks? Why shouldnâ€™t they be held to the same high standards as the rest of those who are licensed professionals when performing these works? Why shouldnâ€™t they be held accountable for their representation of a propertyâ€™s value in the same stringent manner as are all licensed real estate appraisers? The penalty for providing inaccurate information and property value for a licensed appraiser is severe â€“ Why shouldnâ€™t Zillow have the same level of responsibility and accountability when posting information that the public so willingly seems to rely on when self-evaluating a home?
Is it because the information provided by Zillow is quick, easy, and free? Well then, one should not be surprised to get that they pay for. In the mean time, home owners who have a property for sale, like this woman in the article, may not be pleased to know that they, in many instances, may be penalized for the inaccurate information that Zillow is offering to consumers. Zillow is notoriously off-the-mark when it comes to appraised value, or the market value that can be offered by a licensed Realtor, and they freely admit it.
Zillow makes an incredible amount of money, hundreds of millions of dollars per year, by offering questionable housing valuations to the public via their â€œZestimatesâ€. Somehow, the consumer doesnâ€™t seem to mind; at least until now. It will be worth watching to see if the courts take this action seriously. By all accounts, it seems to me as an educated consumer, that they should. The financial stakes are simply too high to be ignored. But beware; there are other AVM systems out there that will then also be under scrutiny, including those used by the government. It may be too late to put this animal back in its box!
US householdsâ€™ income shows biggest jump since recession, no change in income inequality
“(Bloomberg) – Fresh yearly data from the U.S. Census Bureau showed median, inflation-adjusted household income rose 5.2 percent to $56,516 in 2015, the highest level since $57,423 in 2007, when the recession began. Gains were spread across the income spectrum and by race, while womenâ€™s earnings inched closer toÂ menâ€™s.”
Positive changes in projected household incomes, and increases in consumer confidence will influence the Federal Reserve whenÂ they meet again to consider increases in the interest rate.
The Presidential election will likely influence when interest rates change, but rest assured, change is coming. This is important toÂ those of us in real estate because rate changes influence a buyer’s affordability. One mortgage rate point is equivalent to approximately 10% change in affordability or purchasing power. This impacts both buyers and sellers.
Please contact us if we can assist you in understanding market variations and current housing trends.
The answer is, most likely, YES.Â The average time a home owner stays in their current home ranges from 5-9 years according to the National Association of Realtors (up from 3-5 years during the years prior to 2008). If you have not been in the housing market recently you will experience notable differences with this process. Your Realtor can provide a complete guide to the process of buying or selling a home today.
You will also find market conditions are continually changing. There are certain areas where transactions are fast and furious. Yet there are other locations where housing seems to move more slowly, still catching up with the most recent marketplace nuances, or competing with new construction increases. The good news is that we are experiencing positive changes that will continue to support strong home sales.
Donâ€™t forget, it is still important to have the property looking as good as you can in order to generate interest. Most buyers, not investors, are looking for a turn-key product; a home that doesnâ€™t require a lot of work before of after the move. It is important to remain compelling with your price. Know the value of your house and price it near where you think it is going to sell. Buyers should feel like they will be missing an opportunity if they fail to act.
As always, to better understand changes in the real estate market, start with your most trusted advisor. Or call us for more detailed information regarding your personal housing needs.
Letâ€™s Review Your Mortgage for Savings Opportunities;
This is a follow up to the email I sent you last week. Â As you may or may not Â know, mortgage rates have yet again, hit a new low. Â Based upon the terms of the 30 Year Jumbo loan we completed in February of 2015, this may be a perfect time to review your loan program to determine if we can save you money. Even if you have already refinanced or closed on a new loan recently, you still may be able to benefit. Â I’d be happy to provide a complimentary review at your convenience.
How much could you save? Â The table below shows the principal and interest payments on your loan compared to other loan products on February 9, 2016.Â Rates fluctuate every day, so these options may only be available for a short time.
Your Current 30 Year Jumbo Loan
Your loan at our
30 Year Jumbo rate
Your loan at our
5&5 Advantage ARM rate
By refinancing your current loan, total finance charges may be higher over the life of the loan. These mortgage rates apply only in certain conditions. Your loan’s final rate will depend on the specific characteristics of the loan transaction and your credit profile up to the time of closing. The displayed APRs include total points and additional prepaid finance charges but do not include other closing costs. On adjustable rate loans, rates are subject to increase over the life of the loan. Rates available as of date of printing and subject to change without notice. ** Total Est. Initial Housing Payment amounts includes principal and interest for both Primary and Secondary Financing as well as tax, insurance, homeowner dues. Payment amounts include mortgage insurance if the down payment is less than 20% or the loan product is FHA. Down payment amount excludes any secondary financing.
The scenarios shown above illustrate just a few of the many loan options you have at Prosperity Home Mortgage, LLC. These options might allow you to consolidate loans, make home improvements or simply cash out on some of the equity in your home.
Prosperity Home Mortgage, LLC appreciates your business and I thank you for placing your trust in me. Please contact me at 804-855-4590 or firstname.lastname@example.org to review your loan for savings opportunities or if you have any questions about your mortgage.
It has begun! In case you havenâ€™t heard, the October third deadline for compliance with the TILA-RESPA (TheÂ Truth in Lending ActÂ (TILA) of 1968; The Real Estate Settlement Procedures Act (RESPA), a consumer protection statute first passed in 1974) Integrated Disclosure Rule implementation is underway. The Consumers Financial Protection Bureau (CFPB) has initiated mortgage initiatives designed to help you, the consumer of home ownership, understand your loan options better, give you time to review loan documents, and in essence protect you from costly surprises at the closing table.
Basically, the mortgage disclosure rule replaces four disclosure forms with two new ones; the Loan Estimate and the Closing Disclosure. These disclosures are forms that you get when you work with a lender to get a mortgage. The new forms are designed to be easier to read, and to understand the terms of your mortgage before accepting them. The rule also requires that you get three business days to review your Closing Disclosure and ask questions before you close on a mortgage, or delays in the closing process will be triggered.
So, what does this mean for you the consumer? Perhaps nothing more than some additional time needed when securing certain loans in order to purchase a home â€“ at least for the next several months while the process becomes the new routine. With tighter lending guidelines and new disclosures, it will be imperative for you to quickly meet the deadlines for those documents your financial institution requires to process a loan. Certain circumstance may trigger delays, so it is imperative to be organized and provided documentation early. It will also likely mean you will need a more communicative and streamline approach in selecting your real estate â€œteamâ€ â€“ your real estate professional, your lender, and your closing attorney or settlement company â€“ when purchasing a home.
As always, to better understand these most recent changes to your home-buying process, start with your most trusted real estate professional, or call us for more detailed information.
The real estate market is ever-changing â€” keeping buyers, sellers and Realtors busy trying to keep up with the latest trends and forecasts. Since the start of a new season is always a good time to reflect on whatâ€™s happening in the market, we recently asked Ann and John VanderSyde, a husband and wife team with Virginia Properties, a Long & Foster Company, to share their thoughts Â on whatâ€™s happening in Richmond.
As a team specializing in residential real estate, are you noticing any specific trends right now?
John: There are some specific areas â€“ The Fan, the Museum District, the Near West End, Bellevue, and neighborhoods close-in â€“ where weâ€™re seeing an increase in quick contracts and multiple offers.
Ann: Weâ€™ve been in situations where sellers have had 5-10 contracts to look at when theyâ€™re making their decision.
Is this something youâ€™ve just begun seeing?
John: Just recently, since spring, Iâ€™d say.
Ann: Whatâ€™s happening is that thereâ€™s not a lot of inventory in these areas and there are a lot of buyers who have been waiting and wanting to buy. So there is just far more demand than there is supply at the moment. I think that in those particular areas, the trend in general is that many people are looking for walkable neighborhoods. People donâ€™t want to have to get in their car to get groceries, or go get coffee or walk to a destination. They want the lifestyle that comes along with being relatively close to where they live their lives.
John: The combination of an urban atmosphere and walkability is very appealing to a younger crowd, or for people who are looking to down-size their home and want to be closer into town for convenience.
Ann: And weâ€™ve had a lot of relocation work, people coming in from out of town. Typically theyâ€™re not buying their first house and they may be coming in with one of the larger companies. Theyâ€™re also looking for walkability. They really want that urban feel.
So would you say that walkability is a new trend?
Ann: I think itâ€™s been growing, especially since the economy started improving. During the real estate bubble people were looking for bigger homes â€“ they wanted space, they were gravitating to that. I think as a result of where the economy has been, people are now a little more conservative. Theyâ€™d rather be closer to where they live and work without adding in a commute.
John: I donâ€™t think itâ€™s a new trend; I think itâ€™s a more pronounced trend. Itâ€™s happening with more frequency.
Ann: I think it goes along with people being a little more careful with their money. Theyâ€™d rather have aÂ house closer-in, even if itâ€™s a little smaller, one that they can make nicer improvements on a smaller scale.
John: And the interesting thing I picked up on is that the prices of the houses in these areas arenâ€™t skyrocketing. The prices are improving, but in order to generate the interest that develops into multiple offers, sellers are still pricing their homes compellingly and letting the purchaser chase the price and bid the house up.
Ann: Itâ€™s exciting to see the activity picking up. A lot of sellers feel more confident about getting their house sold now. So I think there are people putting their house on the market now that for the last couple years have really held off. They just didnâ€™t feel like it was in their best interest. The inventory has not caught up with the demand but I think sellers are gaining some confidence.
Several years ago people were looking for luxury amenities. Has that changed at all? Have people scaled back a little on what theyâ€™re looking for in the house itself?
John: Well there are people out there who will compromise a little bit if theyâ€™re looking to do some work themselves; in general, purchasers still are looking for a â€œdiamond.â€
Ann: Many are looking for what Iâ€™d call a â€œjewel box,â€ they donâ€™t need all of the expansive space but they still want the home to be updated.
John: Most people are not looking for a project, but theyâ€™re willing to compromise on space in order to get a little nicer finish.
Do you find that the houses in the hot selling areas fall into that category?
John: In many instances, yes. Weâ€™re seeing homes sell that wouldnâ€™t have sold a year or two ago because they needed work â€“ the sellers couldnâ€™t get the price then because they knew people were not compromising on condition. Now I think there are people out there who are willing to do some work in order to get into a location that they want.
Ann: I think that the prices are going up and some people canâ€™t afford to buy in an area they want to be in â€“ with a finished house that might be their ideal. So theyâ€™ll purchase a house and take on the projects.
John: Although buyers will still not jump into just anything. Itâ€™s got to be the right house.
Is there a trend in amenities right now?
John: We just had an open house in Chesterfield and I would say that 90 percent of the people who came thorough were drawn to it because it had a basement.
Ann: I think that people still notice the kitchen. People still want a nice master suite and they want it to be nicely done. People are split on whether they want just the tub or the shower, but a nice master suite is a plus. Especially in some of the smaller homes in the Fan and the Museum District, where oftentimes the home only has one bathroom upstairs â€“ houses with two bathrooms are huge. It doesnâ€™t mean that people wonâ€™t take a one-bath house.Â But we always tell people that having two baths, where one is part of a suite, is a good investment. It will make their house much easier to sell.
I also think people like to entertain and they donâ€™t like to be limited. They like having an additional room, somewhere where people can gather â€“ an area that can be a family room and a living room.
John: If there is a basement, especially with enough ceiling height that it could be finished, theyâ€™re looking for that as additional family space â€“ potentially easily expandable living space. Thatâ€™s another little trend I think.
Is there any staging advice youâ€™re giving now that people are responding to?
John: The first and foremost thing that we cannot emphasize enough is paint. If people would just spend a couple hundred to a thousand dollars in paint â€“ it pays for itself.
Ann: We always use the expression, $30 in the can, $3,000 on the walls. It does a tremendous amount to make a house feel fresh and clean and gives the buyer the feeling that they donâ€™t have to touch every room.
John: And it doesnâ€™t have to be white on white.
Ann: I recommend soft neutrals, earthtones are nice, and people particularly like grey tones now. The other big staging emphasis is decluttering. Pack up what youâ€™re going to be moving anyway; go ahead and put things in boxes and get a POD or storage unit. Houses show better with something as opposed to a vacant house.
John: Usually we can work with the furniture that they have for the staging. We may ask a seller to take out some things or weâ€™ll just rearrange what they have. These are pretty simple things that donâ€™t cost a lot.
Ann: We try to do as much preparation as we can up front. As a seller you get one chance with the buyer. If theyâ€™re not impressed or emotionally engaged with your house the first time, they wonâ€™t be back. So you really want to make the best first impression. Itâ€™s important to make the entry attractive. Give it some curb appealâ€“ clean up the yard, the beds, put down mulch. Add simple things like a new doormat or a new mailbox. We give our sellers a checklist so that they can at least hit the most important things.
Anything else youâ€™d like to note for our readers?
Ann: A lot of buyers will get started on their own just looking around and getting familiar with different areas through whatâ€™s online.Â But I feel Â that when someone gets serious about purchasing a home that they find a buyerâ€™s agent and they get representation â€“ somebodyâ€™s whoâ€™s looking out for their best interests. The buying process had gotten so much more complicated and there are new changes coming out in August with closing statements, and new requirements that the attorneys and the lenders will have to follow; itâ€™s only going to get more complicated. Itâ€™s to the consumersâ€™ benefit to have somebody representing their interests and guiding them through the process. Thatâ€™s really my advice on both sides, because even as a seller,Â with the market getting better and houses selling â€“ having someone whoâ€™s going to market your house and get more potential buyers in there is going to benefit you in the long run.
I would think that advice would be especially important for first-time buyers.
Ann: Absolutely. Theyâ€™re really focused on what they can get with for money. They start out with the hope of being in a particular area, but then when they look there and they realize whatâ€™s available they might compromise â€“ or decide they might go to a different area to get more of what theyâ€™re looking for. We try to keep that wide open for them so that they really do have options. Richmond has so many wonderful neighborhoods â€“ there are so many good options.
John: Thereâ€™s definitely something for everybody. You can find generally what youâ€™re looking for in a couple of different locations.
Have you heard about, or better yet, been faced with stiff competition in certain housing markets around Richmond, VA that are leading to multiple bid situations? Some areas seem to barely receive a notice, while others are overcome with such frenzied activity that it is leading to numerous offers and extremely competitive contracts that go well above asking price. Certain locations are so thin with little or no inventory that when a property hits the market, buyers begin to line up, quite literally, in the street.
Buyer-anxiety and the pace of movement around these homes is so extreme that it seems reminiscent of housing boom conditions from just a few short years ago. Itâ€™s almost impossible to believe situations like this can exist today â€“ with one exception â€“ it is not across the board in all locations! In most instances low inventory is leading to very strong home sales, but the price of these homes is not skyrocketing. In fact, price increases have been, on average, quite modest. Yet there are pockets which appear to be progressively heated.
In all instances, sellers need to be prepared for these conditions by remaining realistic about sales prices; keep a calm head and price your home compellingly. Perceived value is the key to generating interest. The market is working in your favor, let purchasers pursue the price. Preparation also remains important. Donâ€™t underestimate the need to have the property looking its best in order to attract more traffic.
Purchasers need to be prepared to act quickly. They should have their finances squared away with a reputable lender. If they have more cash to put as a down payment they will be perceived as a more desirable prospect. Cash is still King! Minimize your contingencies in order to be more appealing, but be intelligent about choosing what to do or what to omit from an offer.Â Put your best foot forward immediately in order to be a front-runner and to generate a response. You will also want to be available to your Realtor in order to respond quickly to anything that may arise.
To increase your chances of success, choose an experienced REALTOR to be your advocate. Call on us if we can help you!