Sometimes home buyers in the Shenandoah Valley are too polite for their good.  Don't get me wrong, I am grateful that we have such a congenial local culture where most people show others decency, respect and kindness.  But when it comes to purchasing a home, buyers need to be willing to be bold with their offering price or they may find themselves sitting on the sidelines, missing the best opportunities.  Ask yourself this, would you be willing to make a $175,000 offer on a house that is listed for $200,000?  Most buyers in this area would not be willing to make such an offer. 

Last year, homes in Harrisonburg and Rockingham County sold for an average of 5.2% below their last list price.  This means that a home last listed for $200,000 would have sold for $189,600.  As you think of what offer you might make as a potential buyer of this home, you should quickly realize that if you hope to be an average negotiator and get to that $189,600 price, you likely need to start with an offering price lower than where you hope to end up.  Perhaps that means an initial offer of $180,000 in order to aim towards a final price of $189,600.

One other perspective that buyers often forget about is that if a buyer doesn't come along soon, the seller of any given home may very well adjust their list price downward to attract a new set of buyers.  Thus, if someone does not buy this $200,000 house soon, it might then be reduced to $195,000 or $190,000.  Combining these two ideas above, we should quickly realize that if the seller might soon reduce the price to $190,000 at which time an offer of $175,000 would be reasonable, then you might as well go ahead and make that lower offer now.

In explaining these concepts to first time home buyers earlier this month they asked why most buyers don't make these low offers, even just to find out whether they can buy a home for a particular price.  One reason, it seems, is that some buyers do not want to become emotionally invested in hoping to buy a particular house if it is likely that the negotiations will not work out.  Some buyers also hesitate to make low offers because they don't want to insult the sellers and miss out on the opportunity to buy the house at all.  Finally, some buyers don't want to deal with the process of determining offer terms, reviewing an offer, and dealing with all of the paperwork required for making an offer.  Whatever their reasons, many buyers won't make a low offer that they don't believe a seller will accept.

All of this general counsel aside, it is important to recognize that a seller's willingness to negotiate will likely vary based on if their current list price is realistic and/or based on how much they owe on their mortgage and/or how motivated they are to not own their home any longer.  But regardless of how much a seller is willing to negotiate, nearly all sellers would rather have more offers rather than fewer, even if some are quite low.  And as one final word of encouragement for you to make an offer as a buyer, even if it is low --- let the seller make their own decision about how much they are willing to negotiate, don't assume that you can accurately guess how they are going to respond to your low offer.
  

"Scientists at SRI developed a rapid, sensitive test that recognizes molecules specific to bed bugs. Redcoat intends to market the device under the brand name RAPID PURSUIT™. Based on preliminary testing, RAPID PURSUIT presents a number of advantages: unlike other detection devices, the test requires no sophisticated equipment and registers a response in minutes, and RAPID PURSUIT is designed to detect only bed bugs, avoiding confusion that could be caused by the presence of other pests."

"Redcoat Solutions, Inc.'s Chief Executive Officer, John Hall, has drawn upon his knowledge of the bed bug detection and treatment industry in guiding the company toward the upcoming launch of RAPID PURSUIT. "We have assembled an excellent management team, and we have worked closely with SRI to develop a great product that will revolutionize bed bug detection in several industries," said Hall. "We look forward to taking RAPID PURSUIT to market very soon, and we already are at work on new products that we will introduce over the next several months. Redcoat has a great business opportunity, and one of the best things is that it will be based right here in the Shenandoah Valley.""

• There are 21% more buyers in the market.
• There are 25% fewer sellers in the market.
  

• Walmart Distribution Center
  
• Rockingham Memorial Hospital
  
• Quarry near Smithland Elementary
  
• Frazier Quarry

1. We can negotiate the contract with the seller to include a portion of the sales price to be paid as a brokerage fee to the buyer's agent (me).
2. We can negotiate the contract without the seller paying a brokerage fee, and you would pay my brokerage fee at closing in addition to the sales price.
   
3. You can pursue the property "solo" --- without my assistance or representation.

• Some buyers are frustrated that they can't find what they're looking for in a home.
   
  
• Some sellers are excited to be able to sell their houses quite quickly as there are not many competing homes.
   
• Some sellers are depressed that they are in a price range that is sill experiencing an over-supply.
  

1. February home sales increased 43%.
2. YTD home sales have increased 33% in 2013.
   
3. YTD median prices have increased 2.5% in 2013.
4. YTD median days on market has declined 5% in 2013.

This surge in home sales is not over yet --- with a 16% increase in February contracts (shown above) we are likely to continue to see increase in home sales in the coming months.  ALSO -- buyers are in the market NOW -- if you want to sell your house this spring or summer, we need to start talking soon.

There is lots more inside -- click here to download this 28 page market report as a PDF to learn everything you need to know about the overall Harrisonburg and Rockingham County real estate market. 

Even if you read every word of my market report, you may still have some questions about how your current home (or a home you'd like to purchase) fits into the overall market.  Call (540-578-0102) or email me (scott@HarrisonburgHousingToday.com) if you'd like to chat about your real estate situation, needs, goals, hopes or dreams.

One last thing....here are a few articles I have written over the past month that might be of interest:

• All months (and market segments) were not created equal
• Local Online Real Estate Resources
• Will 30-year fixed mortgage interest rates fall below 3.5% again?

blinds, ceiling fans, curtain rods and brackets, built-in dishwasher, door knockers, garage door openers and controls, gas fireplace logs and inserts, installed floor and wall coverings, installed mirrors, light fixtures, mailbox and post, built-in range, shades, shrubs, exterior plants and trees, shutters, smoke and heat detectors, storm windows and storm doors, switch and receptacle covers, television antenna(e), window screens and screen doors

• Rockingham Memorial Hospital
  
• Quarry near Smithland Elementary
  
• Frazier Quarry

As published in the February 2013 Shenandoah Valley Business Journal....

When you arrive at the settlement table, ready to close onthe purchase of your next home, you will be asked whether you would like topurchase title insurance.  Do you knowwhat your answer will be?

First off, "title" is a legal term for an owner'sinterest in a piece of property. When a property is sold, the seller conveys"title" to the buyer via a deed that is recorded at thecourthouse.  Prior to settlement, theclosing attorney must conduct a "title search" to ensure the currentowner can convey ownership of the property to the Buyer.  For example, if there are two owners of aproperty, both owners typically need to be participating in the sale of the propertyin order to be able to convey ownership to the purchaser.

If there are issues, or problems, with the title to theproperty that you are trying to purchase, you will not even make it to theclosing table.  A title search, however,cannot reveal all of the potential title defects of a property.  Some of the title defects that would not bediscoverable during a title search include forgery, impersonation, undisclosedor missing heirs, undisclosed (but recorded) prior mortgage or lien, fraud;erroneous or inadequate legal descriptions, lack of right of access, deed notproperly recorded, etc.

The possibility of these unknown and undiscoverable titledefects creates a need for title insurance, which is an insurance policyprotecting the holder from loss sustained by defects in the title to the property.  For example, if you are purchasing a homefrom the heir of an estate, several years after your purchase took place, anundisclosed heir could appear at your front doorstep demanding that you moveout, since they inherited a portion of the estate before the property was soldto you.

As you consider the potential value of title insurance, youshould know that there are two main types of title insurance that may beinvolved in your transaction --- lender's title insurance and owner's titleinsurance.  Your lender will require youto purchase a lenders title insurance policy on their behalf. This policy willbe based on their interest in the property (the loan amount) and will allowthem to recoup that money should the house be reclaimed by a prior owner due toan unknown title defect.

The decision you will need to make at the closing table iswhether to purchase an owner's title insurance policy. This policy wouldprotect you from sustaining any future financial loss due to the discovery of atitle defect. Title insurance involves a one-time payment at closing, and thepolicy lasts as long as you own the property.

While every situation is different, in almost allsituations, I recommend that you buy title insurance.