Buying
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If You Are Renting A House Now But Hope To Buy Soon, Start Looking At Homes Six Months Before Your Lease Ends |
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![]() So, you are renting a home in Harrisonburg or Rockingham County now... but you hope to buy a home within the next year? I recommend that you start looking at homes for sale about six months before the end of your lease. Many leases require you to provide 60 days notice (or more, or less) as to whether you will renew or not renew said lease. Thus, you shouldn't wait too long to start looking at homes you might purchase. Furthermore, there still aren't many choices of homes to purchase in many price ranges in Harrisonburg and Rockingham County. Thus, you will want more time to consider new listings that pop up over the course of a few weeks or a few months, rather than just choosing from homes that are available for sale at a single moment in time. This is best accomplished by starting to look at homes several months before you need to secure a contract to purchase one. Finally, the longer you look at homes for sale, the better context you will have for what types of houses sell for what types of prices - which will make you a more informed buyer when you are ready to make an offer on a home you hope to purchase. So... if you're renting now, but hope to buy at the end of your lease... start looking at homes six (or so) months before that lease ends. | |
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When Multiple Offers Exist, Home Buyers Should Go Ahead And Make Their Strongest Offer |
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![]() If a house has been on the market for a few days without an offer, a home buyer may be inclined to attempt to negotiate somewhat on price and add contingencies related to a home inspection, appraisal, etc. All of that is fine, and can make sense. Until another offer exists. Once more than one offer exists, home buyers ought to go ahead and make the strongest offer that they would like to make - acknowledging that they are now not only negotiating with the seller but they are also competing with other buyers. For example... A home is listed for sale for $475,000. Five days go by with plenty of showings but no offers. A buyer offers $455,000 with an inspection and appraisal contingency. A second buyer makes an offer - clearly, with terms unknown to the first buyer. The first buyer does not modify their offer, or only makes a small change, not taking it all the way to the best terms they would be willing to offer for the house. The seller moves forward with the second buyer. The first buyer regrets not having made their strongest offer. Yes, negotiate if you must, or if you feel that you should, but if you are competing with another buyer, don't hold back if you really do hope to buy that house! | |
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Are Homes Staying On The Market Longer These Days? |
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![]() Some homes certainly are staying on the market longer these days than they have been over the past few years. We haven't seen a noticeable shift in the "median days on market" statistic that I track on a monthly basis, but it is no longer the case that nearly all homes that are listed for sale go under contract within a week. For example... 1. There are (22) resale homes currently on the market with a "Harrisonburg" or "Rockingham" mailing address (ignoring towns or far flung properties) that are priced under $400K and have been on the market for at least a week. 2. Of those (22) homes, there are (18) that have been on the market for at least two weeks. 3. Of the (133) resales homes that have sold in that same geographic area over the past three months, only (76) had a "days on market" of a week or less, and (44) of them took longer than two weeks to go under contract. So, when we list your home for sale, will it be "off to the races" with an offer being received (and a contract signed) within days? Maybe -- but maybe not. Plenty of homes are taking longer than a week to sell -- and no, that does not necessarily mean that nobody will ever want to buy your house. :-) | |
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Home Sellers AND Buyers Are Both Trying To Get Used To Home Inspection Contingencies Again |
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![]() For much of the past five years, in many price ranges, in many locations, we were seeing multiple offers, escalation clauses, and buyers willing to remove any and all contingencies. Home inspections were a thing of the past -- for a few years. But now, with somewhat fewer buyers in the market to buy (given higher mortgage interest rates) we are often just seeing a single offer, or only a few, rather than 5 to 10 offers on a popular new listing. As a result, home inspections are often taking place on transactions in Harrisonburg and Rockingham County. Since home inspections haven't been top of mind lately (given the heated market) here are a few reminders to home sellers and buyers related to home inspections... Sellers - Certainly, it would be ideal if the one offer you received did not have an inspection contingency, but you only have one offer, so it is probably reasonable to go along with the home inspection. Buyers - Try to focus on major issues in the home inspection report. It is not necessarily realistic to think a seller is going to address every minor issue identified in the inspection report. Sellers - Your buyer is (probably) not just trying to use the inspection report and contingency to renegotiate the deal. Assume the best about your buyer, that they are attempting to renegotiate the deal given the new information they discovered during the inspection process. Buyers - I do not recommend asking sellers to make elective upgrades to the home. Your home inspector might have pointed out items that would be done differently if the home was built today, but was normal at the time the house was built -- or they might point out areas where you could make improvements to improve energy efficiency, etc. These sorts of items are not typically repairs (or upgrades) that you should request from a seller. Sellers - If the unknown of what might be discovered during a home inspection worries you, it could be a good idea to have an inspection completed before listing your home to identify and resolve any significant issues. Buyers - Given how difficult it can be to line up a contractor or handyman these days, consider being willing to discuss a credit with the seller instead of requiring that repairs be completed. I suspect home inspections will continue to be (will return to being) a normal part of the home purchasing and selling process over the next few years. | |
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If You Are The First Or Only Buyer To Make An Offer, Go Ahead And Include Those Contingencies |
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![]() Egads! The market is crazy right now -- would be home buyers have to include escalation clauses and they certainly couldn't include an inspection contingency or an appraisal contingency!?! Right? Well... yes... often... but not always. Sometimes you might be looking at a home that has been on the market for 3, 7 or 10 days -- without an offer on it as of yet. Should you offer full price, waive an inspection and opt out of an appraisal contingency? Not necessarily. As funny as it might be to say this... If a house has been on the market for a few days and does not have any offers, go ahead and go crazy... include that inspection contingency, and the radon test contingency, and the appraisal contingency, and... wait for it... maybe even try to negotiate a bit on price!?! Certainly, your offer might spur on another offer, and then you might be in a competitive offer situation where you are revising your offer and removing your contingencies... but you might just find success in buying a home with a few of those used-to-be-normal contingencies. ** results may vary based on property type, price range and location ** ;-) | |
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Mortgage Interest Rates Declining Steadily Through Start Of Summer |
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![]() Outdoor temperatures may have been HIGH during the first few weeks of summer... but mortgage interest rates have been falling! Over the past years, the average 30 year fixed mortgage interest rate has been 7.01%. The average rate peaked last October at 7.79% and then fell relatively steadily through December... but then (mostly) climbed again all the way through May when it hit 7.22%. Since that time we have seen a decline almost every week, and the average rate is now 6.87%. That is nearly a full percentage point lower than the high of 7.79% this past October. Home buyers are certainly enjoying these lower mortgage interest rates though they hope they will continue to decline. | |
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I Just Contracted To Buy A House But An Even More Exciting House Was Just Listed For Sale!?! |
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![]() Thankfully, this doesn't happen too often, but I have had a few clients over the years who have been in this predicament. They finally, excitedly, ratify a contract on a house that they are thrilled to purchase... and then... a few days later... a house hits the market that is even more exciting! What is a conflicted buyer to do? 1. Remember that you are contractually bound to buy the home that you signed a contract to buy. There will likely be ramifications (financially and otherwise) if you do not complete the purchase. 2. Remember that you were excited about lots of other new listings in the past, all of which you were much less excited about after you toured the houses. Thus, even if the shiny new listing seems like a really exciting house, you might not actually like it as much as you think you will if you walked through it. 3. Remember that in a competitive market (which we are still in, for the most part) there isn't any guarantee anyhow that you'd be able to secure a contract on that newer and possibly more interesting listing. 4. Remember that this dynamic will always exist -- whether it's a few days later, a few months later or a few years later -- a home will inevitably come on the market that will be (or will seem to be) more exciting than the home you bought a few days ago, a few months ago or a few years ago. 5. Consider turning off your new listing alerts to avoid feeling conflicted? 6. Feel free to talk all of this through with me and I can try to help talk you off of the ledge if you are suddenly less excited about the house you just contracted to buy based on a new listing that just hit the market. | |
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Listings Hitting The Market On Fridays Make It Important For Buyers To Have A Lender Letter Ready To Go |
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![]() A buyers says... I plan to buy a home as soon as "the right one" comes on the market. I talked to a lender six months ago and they didn't have any concerns with being able to approve me for a mortgage. I'll just wait until the right house hits the market and then I'll get a prequalification letter from my lender. This works out OK some of the time to most of the time - but not all of the time. Sometimes a new listing hits the market on a Friday. We might go see it on Saturday afternoon. By the time we are looking at the house there are already two offers in hand and a few more might be received at any moment. If you love the house, and want to make an offer, we might be in a tight spot, because... 1. An offer without a lender letter won't typically go anywhere. 2. An offer with a promise to deliver a lender letter on Monday won't typically go anywhere. Certainly, sometimes a seller won't be making a decision until Monday or Tuesday and sometimes offers don't materialize that quickly. But... if you want to be ready to make an offer on a house that you love when it hits the market, you should already have a lender letter ready to go. | |
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Do Not Assume A Seller Will Say No To An Offer You Have Not Made |
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![]() It often goes something like this... "That house was listed for a sale a few days ago for $435K and I could probably only afford to pay $425K. I'm sure the seller would not accept my $425K offer, so I just won't make the offer." "I know that house has been on the market for two months priced at $650K without a price adjustment, but I'm sure the seller would not be willing to sell for $625K, so I won't even make the offer." "Even though that house has been on the market for a few months, they probably still wouldn't accept a full price offer because I would need to include a home sale contingency, so I probably shouldn't make an offer." In almost all cases, I recommend that all three of the fictional buyers above go ahead and make the offers that they chose not to make because they assumed a seller would say no to their offer. Certainly, a seller might really say no to your offer, but that's OK. If you never actually make the offer, you'll never have a chance to find out if the seller will say "no" -- or whether they would say "yes" or "no, but how about..." | |
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How To Determine Whether To Rent Or Buy A Home (via NYT) |
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Buying a home is expensive these days, given high sales prices and high more interest rates -- but renting a home can be quite expensive as well! How can you best compare the financial impact of buying vs. renting? The New York Times has created a very helpful, interactive calculator that lets you dive into the details to better understand whether it will make sense for you to buy or rent based on the particular details of your situation. You'll start with some basic inputs including:
It is important to then adjust a few additional assumptions they have built into their calculator to match your scenario. The main sliders that seem important to adjust are...
The calculator will then show you your total costs of renting vs. buying over the timeframe you chose. In the fictional scenario I have illustrated above, it made more sense (barely) to buy over five years when comparing a $325K purchase to a $2100 rental rate. One final (important) note... the calculator assumes 3% growth in home prices. I don't necessarily recommend adjusting that to a higher percentage... BUT... over the past four years we have been seeing 10% growth in home prices each year. If we continue to see that type of home price growth it will almost always make sense to buy, regardless of your timeline. In summary... $325K purchase vs. $2100 rental rate over a 5 year horizon with 3% annual growth in home prices... it's better to buy, but barely. (If we see 5% growth in home prices per year for the next three years, it would be better to buy, even over that short three year timeframe) Explore the calculator and all of your possible scenarios here. | |
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Almost All Houses Look Better Online Than In Person |
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![]() This isn't a secret to anyone who has bought a home in the past 10+ years... Almost All Houses Look Better Online Than In Person Real estate photographers do an EXCELLENT job at making each home look absolutely fantastic! Some of it is in the lighting, some in the angles, some in the cropping, some in the post production... but real estate photographers can make almost any house look better online than in person. That's not a criticism of real estate photographers (certainly!) and it is not a criticism of all those houses that in reality don't look quite as pristine as they did in the photos online. It is just a reality that home buyers should be aware of when clicking through photos of new listings, imagining that the house is 110% as wonderful as the amazing photos make it appear. I am merely pointing out the importance of seeing a house in person to be able to take in... [1] the condition of the walls and floors that photos don't show in great detail [2] the parts of the house that weren't as prominently displayed in the photos [3] the lot characteristics or surrounding properties that weren't highlighted Don't get me wrong... I want you to LOVE each house in person just as much as you did when you viewed it online... but once we start looking at a few you may notice that the photos REALLY made it shine, perhaps a bit more than it does in reality. And, just to flip things completely upside down for a moment... every once in a while I do still come across a house that looks much better in person than in the photos... which makes me wonder why the photos look as they do. Photos matter in real estate marketing... a lot... but buyers will almost always be making their decision when walking through the house and experiencing it in person. | |
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Make The Strongest Offer You Are Comfortable Making And Acknowledge All The Possible Outcomes |
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![]() The market is still moving along pretty quickly in many price ranges. This often results in multiple offer scenarios, where you are making an offer and will be competing against one or more other buyers who are also making offers. You won't know how much the other buyers are offering... or if they are including escalation clauses... or if they are including inspection contingencies... or if they are including appraisal contingencies... or if they are offering cash. So, what then, are you to do as a buyer? I recommend that you make the strongest offer that you are comfortable making and acknowledge all the possible outcomes. Your offer might not be high enough to compete against other offers and the seller might select another offer. You might have included more contingencies than another buyer and the seller might select another offer. You might have the fewest contingencies and the seller might select your offer. You might have the highest offer and the seller might select your offer. Home inspection contingencies make sense to include as a buyer... as do appraisal contingencies... but both can limit your ability to win in a multiple offer scenario. So, make the strongest offer you are comfortable making and acknowledge all the possible outcomes. | |
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Different Local Real Estate Markets Are Performing, Unsurprisingly, Differently |
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![]() If you are relocating from a small rural area (or from a much larger city) to Harrisonburg, you are likely to experience different market dynamics in the two local markets. If you are relocating from Harrisonburg to a much larger city (or to a much more rural area) you are likely to experience different market dynamics in the two local markets. In conversations with folks moving to or from larger markets, I have heard anecdotes of...
Those sort of (extreme!) market dynamics are not currently being seen very frequently in Harrisonburg... but every local market is different. Consult an active, professional, local Realtor in the area where you are relocating to or from in order to understand current market dynamics in that market. Knowing how the market is performing will help you set proper expectations relative to potential offer terms and contingencies. | |
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You Will Be Well Served To See Multiple Homes You Do Not Love Before You See The One You Do Love |
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![]() Sometimes home buyers think they should only take the time to go see homes that are almost certainly the PERFECT home that they will almost certainly LOVE. I disagree -- I think you should take the time to see some homes that you will probably LIKE but not LOVE. By doing so... 1. You will start to clarify what you like, love, must have, must not have in a home. 2. You will start to very clearly understand what types of homes are selling for what types of prices. 3. You will be much more confident in moving forward with a home that you LOVE because you have explored multiple homes that you liked but did not love. So... if you want to pore over the photos of new listings and potentially disqualify them based on the photos, that's fine... and if you want to drive by new listings and potentially disqualify them based on the lot topography or surrounding homes, that's fine... but you will likely be a more prepared and confident home buyers if you look at some homes that are close to what you want, but not exactly on the mark. | |
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Bedroom And Bathroom Location Is Often Just As Important As Bedroom And Bathroom Count |
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![]() A four bedroom, two bathroom home might work wonderfully for you... unless all four bedrooms and one bathroom are on the second level... and the second bathroom is all the way down in the basement. A four bedroom, three bathroom home might be a great fit for you... unless all three of the bathrooms are accessed from inside bedrooms... leaving the person living in the fourth bedroom traversing through someone else's bedroom to get to the bathroom. A five bedroom house might work great for you, unless only one of the bedrooms is above grade and all four of the others are in the basement. A three bedroom, two bathroom house might seem like it is just the right size... unless the first bathroom is a common bathroom on the second level, for all of the bedrooms, and the second bathroom is tiny, in the basement, and two floors away from all of the bedrooms. There are countless other examples I could provide... of imaginary homes and/or homes I have explored with buyers over the past year... where the location of the bedrooms and bathrooms is just as important as how many bedrooms and bathrooms exist. We can sometimes piece together the bedroom and bathroom locations by poring over photos of a new listing... or if a floor plan is available... but oftentimes the quickest way to determine if the bedroom and bathroom layout will work for you is to go walk through the house together. | |
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How Does Your Childhood Home Impact What Home You Want To Buy Today? |
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![]() What type of home did you live in when you were growing up? A townhouse? A single family home? A one-story home? A two-story home? A home with (or without) a basement? The home you lived in as a child might be subconsciously impacting how you think about and feel about homes you might buy as an adult. If you grew up in a single level home you might be most comfortable buying a single level home -- and bedrooms might seem *SO* far away in a two level home. If you grew up in a two level home you might be most comfortable buying a two level home -- and it might feel odd to have *EVERYTHING* on the main level in a one-level home. If you grew up with a basement it might feel like something is missing in a home without a basement. Certainly, if you grew up in multiple homes of multiple styles and sizes when you were growing up, the impact of those childhood homes might be more diluted. | |
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Mortgage Interest Rate Fluctuations Do And Do Not Seem Likely To Impact Local Housing Market Activity |
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![]() Will mortgage interest rate fluctuations impact market activity in the local housing market? Yes and no. For context, first... Over the past year, rates have fluctuated between 5.75% and 7.75%. That's a pretty broad swing over just a single year. The current average rate of 7.09% is lower than the 7.5% rate we saw six months ago. Rates have been mostly rising over the past four months from 6.6% to 7.1%. So, will rates impact market activity? Yes... if/as rates get back below 7% or closer to 6.5%, more buyers are likely to more seriously consider more offers on more properties. Likewise, if/as rates rise further and if they approach 7.5%, fewer buyers are likely to consider offers. But, no... rate swings between 6% and 7% (for the most part) seem unlikely to drastically change the number of buyers who will choose to buy a home this year. So, if you will be selling a home, you likely don't need to try to time your listing with when mortgage interest rates are lowest. And if you will be buying a home, it will be convenient if the home you like the most hits the market when mortgage interest rates are the lowest... but you'll probably still pursue it if rates are a bit higher when that perfect house hits the market. | |
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Every Home Seller Will Likely Prioritize Differently When Comparing Multiple Offers |
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![]() It's tough to be a would-be home buyer making an offer in a multiple offer scenario... [1] You don't know what offer terms other buyers are including in their offers. AND [2] You don't know how the seller will prioritize differing offer terms. For example... [1] Some sellers will focus mainly or only on price -- they will likely go with the offer with the highest offered price. [2] Some sellers will lean most heavily towards cash buyers, followed by buyers with the largest down payments, even if this is not the highest offer. [3] Some sellers will opt for an offer without a home inspection contingency, even if that is not the offer with the highest offer price or with the smallest loan [4] Some sellers will focus mainly on the timing of the closing and/or whether the buyer is offering to let them stay in the house after closing. AND [5] Almost all sellers will consider ALL of these factors but will consider some of the offer terms more heavily than others. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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