Buying
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Do We Focus On Buying Or Selling First? Which Will Be Harder? |
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 If you are getting ready to sell your home AND buy your home, it can sometimes be difficult to determine where to start... Do you start by finding a house you want to purchase? Or do you start by listing your home for sale? I would suggest that you start with whichever you anticipate will be the most difficult part of the two step process. If it will be difficult to sell your home (because of price, location, layout, features, age, etc.) and it will be at least slight easier to buy the next one (plenty of viable options are listed for sale) then you are likely best off starting with listing your home for sale. Work to get the more difficult half of the transition underway by getting your current home under contract, and then work on the easier side of the transition. If it will be more difficult to buy the next house (because of the specificity of your housing goals, or because of low inventory levels, etc.) and it will be at least slightly easier to sell your current home (because the property type, location or price are in high demand) then you are likely best off focusing first on finding the home to buy -- and then listing your home for sale. There are plenty of nuances we can discuss further to formulate a plan for attempting to simultaneously sell and buy -- but as a general rule of thumb, you'll be best off to start with the harder half of the transaction. | |
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The Danger Of Focusing On Just One Comparable Sale |
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 It's easy to want to do this -- as either a buyer or a seller. Let's think about it using the mostly fictional illustration below...
THE BUYER'S STATED PERSPECTIVE I know that your house is listed for $400K, but this one other home a few streets over sold for $350K last month, and it was a larger, so I'm not paying any more than $350K for your home. THE LARGER CONTEXT Just a few items...
Furthermore, aside from all of these differences in the two houses --- the other ($350K) house is not available any longer --- and there aren't three other houses just like it that the buyer can decide to buy. In this case, by focusing on this one not-actually-that-similar sale, the buyer has put themselves in a situation where they might miss out on purchasing a great home because of how they are viewing the market based on one comparable sale. THE SELLER'S STATED PERSPECTIVE I am confident that I can sell my house for $350K. After all, my friend owned a very similar house and he just sold it in a week, with multiple offers, for $360K! THE LARGER CONTEXT Just a few items...
Again, by focusing on this one not-actually-that-similar sale, the seller has put themselves in a situation where they might miss out on selling their home because of how they are viewing the market based on one comparable sale. So -- as a buyer or as a seller -- don't focus on just one comparable sale when deciding on a reasonable price to pay or to ask -- look for the larger context! | |
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If You Are Buying A House With A Basement, Test It For Radon |
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 As you can see above, Rockingham County is in Zone 1 -- which means we are in an area that is likely to have high radon levels. What is radon, and what does it mean for you? Read on, from the EPA.... Radon is a radioactive gas that comes from the natural breakdown of uranium in soil, rock and water and gets into the air you breathe. Radon typically moves up through the ground to the air above and into your home through cracks and other holes in the foundation. Radon can also enter your home through well water. Your home can trap radon inside. Learn more about radon and real estate here. | |
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Will All 264 Currently Listed Homes Be Appealing To You? |
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 If you are entering the market to buy a home, the number of homes you will have to choose from will vary widely based on what you are looking for in a new home. Some buyers have a very narrow scope and find themselves on a prolonged hunt for what seems to be an elusive or mythical home. Some buyers find plenty of options, evaluate quite a few, make a decision and move forward with an offer. However -- keep in mind that as you consider the 264-ish homes currently on the market for sale, that some of them have been on the market for 3 months, 6 months, 9 months or even longer. The freshest of fresh listings are those that have come on in the past 30 days -- which (this time of year) is less than 100 of the 264-ish homes currently listed for sale. Depending on your time frame for buying, and the narrowness of your scope, sometimes it makes sense to quickly evaluate the current options -- and then to wait and see what new and exciting listings will be coming on the market in coming days and weeks. Steps to get started include talking to a lender to get a sense of your target price range, and then chatting with me (in person, by email, by phone) so that I can also be keeping an eye out for suitable properties for you. Learn more about the home buying process at...  Keep up with new listings at ...  | |
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Understanding Price Per Square Foot When Talking With A Builder |
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 If you're thinking about hiring a builder to build you a new home, you may eventually be thinking about or talking about Price Per Square Foot. Let's try to create some context. Stick with me here... $111 = The average Price Per Square Foot for all properties sold in Harrisonburg and Rockingham County in 2018. But that includes condos, townhouses and duplexes - maybe those are throwing off our understanding of PPSF. $121 = The average Price Per Square Foot for all detached homes sold in Harrisonburg and Rockingham County in 2018. OK -- it didn't change much -- but perhaps the middle aged homes and really old homes are throwing us off as well. $149 = The average Price Per Square Foot for all detached homes less than 10 years old that were sold in Harrisonburg and Rockingham County in 2018. So -- new-ish homes sold in the MLS have been selling at an average of $149 per square foot. Though I should point out that the price per square foot does run all the way up to $218 in this same set of sales. A 2400 SF home at $149/sf (including the land) would cost $357,600. That's using the PPSF from the MLS for detached homes built in the past ten years. But your builder is likely quoting you a price per square foot for just the house -- and not the land. So if a builder says they can build for $125/SF... As a final (important) disclaimer here -- I'm not a builder. Talk with your builder about how they price the homes that they build for their clients. Carefully weight the pros and cons (financially and otherwise) of building vs. buying. In the end, you'll probably be able to get a house that is a better fit for you if you build -- but it might be at a slight premium over the price you might pay for a re-sale home. | |
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Buyers Are Racing To Contract On New Listings In The City |
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 It seems it would be an understatement to say that there are a LOT of buyers looking to buy homes in the City of Harrisonburg. Thus far in 2019 buyers have contracted to buy 99 homes in the City of Harrisonburg. Here's how fast they did so...
So, yeah, homes are selling (going under contract) very, very quickly right now in the City of Harrisonburg! | |
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Another Strategy For Preparing To Sell While Waiting To Buy |
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 As described yesterday, sometimes you might have to think about whether you are willing to move twice. If you'd really rather not move twice -- but you need to sell in order to buy -- and it will be harder to find something to buy than it will be to sell -- so you don't want to list your current home for sale until your future home appears... Then maybe, just maybe, we need to think about timing and sequencing a bit differently. Instead of this...
Maybe it needs to be this...
By changing around the sequence (preparing and photographing your current home ahead of time) we will be ready to list your home almost *instantly* when a home comes on the market that you are excited to pursue. So -- give it some thought -- would re-ordering the steps as described above make sense for your situation? Would it allow you to more quickly move towards a successful transition from one house to the next? | |
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Are You Willing To Move Twice? |
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 Anecdotally, the $250K - $300K market is HOT right now. If you're looking to buy a home between $250K and $300K expect to have LOTS of competition from other buyers. Houses that are prepared well, priced well and marketed well, are going under contract quickly -- sometimes with multiple offers. Which then (eventually) leads us to the question at hand -- are you willing to move twice? If you're buying a home between $250K and $300K, there is a decent chance that you own your current home, and that you'll need to sell it in order to buy the next house. And given that there are so few options for you to buy right now, you probably haven't listed your current home for sale yet -- because you're waiting until you see something that you want to buy. But when the home you want to buy comes on the market, and you look at it on the first day and decide you are ready to make an offer - I'm going to tell you that we probably won't be successful in securing a contract to buy your new home unless you have your current house under contract. So then we'll speedily get your house on the market. But by the time it is on the market, or by the time it is under contract, the chances are that the house you wanted to buy will then be under contract to another buyer. Ugh. So -- what is someone in this situation to do? Option 1 - Do what is described above, and hope you get lucky. Wait to list your home until you see something you really want to buy. Hope that nobody else wants to buy it, somehow. List your home. Get a contract in place on your home. Make an offer on the house you want to buy. But perhaps you'll try Option 1 a few times and fail - losing the house to another buyer, which leaves you with two other options... Option 2 - Secure financing to buy a new home before having sold your current home. This way you can commit to buying the new house before having a contract on your current home. That isn't a possibility for all buyers, so you may also have to consider... Option 3 - Be willing to move twice. List your home for sale, when you get an offer, ask for a longer than normal closing timeline - perhaps 75 days instead of 45 - 60 days. Then, hope that the house of your dream comes up for sale in the subsequent 30 days so that you can contract to buy the new home and close on them simultaneously - but be ready, willing and able to move twice if you need to do so. You may, with this option, have to move out of the home that you own - because you sold it - before you have found and secured a contract on the new home you'll be buying. This might mean moving in with family, and it might mean renting before buying the next home. In the end, given how quickly the market is moving, you may have to decide if you are willing to move twice in order to make a transition to your next home. | |
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Home Buyers Were Busy In March 2019 |
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 I'll publish my full monthly market report later this week, but wow, home buyers were busy in March! After the usual slow start to the year with 84 contracts in January and 92 in February, things started to pop in March -- with a sharp uptick to 134 contracts. For some context: JANUARY: This Year = 84 contracts Last Year = 85 contracts FEBRUARY: This Year = 92 contracts Last Year = 90 contracts MARCH: This Year = 134 contracts Last Year = 128 contracts So -- thus far it seems that this may be another robust year of home sales in Harrisonburg and Rockingham County. | |
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How To Be The First To Know About New Listings |
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 The market is moving QUICKLY -- homes are often going under contract in a matter of days instead of weeks -- so it is essential that you know about new listings immediately when they hit the market. Most of my clients use NewListingsInHarrisonburg.com to keep track of new properties coming on the market in Harrisonburg and Rockingham County. You can quickly and easily scroll through the most recent residential listings in Harrisonburg and Rockingham County, view the pertinent details, all of the photographs of the home, an area map, and then quickly and easily share that new listing with a friend, your spouse, your Realtor, etc. You can also sign up to receive an email alert every time there is a new listing....  Check it out, at NewListingsInHarrisonburg.com. | |
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There Are PLENTY Of Buyers In Our Local Market, Ready To Buy |
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 On one of my recent listings we received three offers within the first week. On another, we -- again -- received three offers within the first week. And on a third, we received seven (!!!) offers within the first two days. These 13 buyers were all ready, willing and able buyers - anxious to buy a home. They came to see the listings in the first day or two (or three) that they were on the market. Most of them had already talked to a bank or mortgage company to become prequalified. They made serious, reasonable offers - some with escalation clauses. And yet -- only three of the 13 would-be buyers were successful at securing a contract to buy one of these homes. My main conclusion - there are PLENTY of buyers, ready to act. I suspect we will continue to see homes go under contract quickly (often with more than one offer) when they are prepared well, priced well and marketed well. To the other 10 buyers -- I only wish my clients had duplicates of their homes to sell to you -- and I feel for your plight. Several of these would-be buyers had already made another offer on another house in the recent past and missed out on that one as well. | |
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Your Ability To Buy Your Dream Home May Have More To Do With Others Than Yourself |
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 Imagine that you *finally* find your dream home this Spring or Summer. I hope you do! But then, imagine that, despite your best efforts, you are not able to buy it - you do everything you can, but factors outside your control limit your ability to make that dream home YOUR home...
As you can see, there are any number of reasons why your ability to buy your dream home might have more to do with others than yourself. Sort of reminds me of the Serenity Prayer that my parents had hanging on the kitchen wall when I was growing up... God, grant me the serenity to accept the things I cannot change, Courage to change the things I can, And wisdom to know the difference. I know, I know, it's not always possible to achieve serenity in the current strong seller's market -- but just keep in mind that there could be some factors that affect your ability to buy your dream home that - again - have more to do with others than yourself. | |
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A Strong Hand (Offer) Does Not Always Win |
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 I don't play poker regularly - though I have played a few times over the years. Whenever I do, I can become caught up in my excitement to see a straight, a flush, or full house in my hand. Wow! This pot is mine! I am bound to win this time! And often, that might happen with a strong hand in poker -- but not always. Sometimes, another player will have an even stronger hand, and I'll lose despite my strong hand. Here are the rating of poker hands, in increasing strength...
And here are some generic types of offers that might exist on a house, in increasing strength, generally speaking...
That order isn't actually always 100% accurate - it can depend on the property, the seller, etc. But the point should be clear... Even if you make a full price offer, with what would be considered to be normal contingencies (financing, appraisal, inspection) you could still lose in negotiations in several different ways. So -- play your strongest hand, but always know that there could be a stronger hand out there! | |
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Would Be $500K+ Home Sellers in the City Should REALLY Have Their Homes On The Market NOW! |
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 OK -- given a tiny data set (7 home sales) this **could** be a data anomaly. But I think it's still worth noting... Last year, of all of the (seven) buyers who contracted to buy homes over $500,000 in the City of Harrisonburg -- they all did so between February 1 and June 30. Maybe a lot of these buyers have kids and were looking to transition homes during the summer? Of note -- since that last sale (that went under contract in June 2018) there have not been any additional buyers who have contracted to buy homes over $500K. Again -- this is a rather small portion of the market -- but it seems that high end buyers in the City are mostly (almost all!?) contracting on their homes exclusively during the Spring and Summer. | |
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Assigning Blame for the Slow Winter Housing Market |
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 So -- who's to blame for the slow real estate market in the Winter? This year? And every year? Ever!? It's the Buyers!!!! Sellers would list their homes for sale if buyers would be willing to buy in the Winter months -- but buyer activity just slows to an absolute crawl during the Winter months, and that is why home sellers just don't find it to be worth their time to list their homes for sale. It's ALL the buyers' fault! It's the Sellers!!!! Buyers would be jumping out of their socks to buy homes during the Winter months if sellers would just go ahead and put them on the market, already!? The depressingly low inventory numbers of the Winter months limits buyers from showing up to the party in any meaningful way. It's ALL the sellers' fault! Hmmm... Maybe we'll never solve this chicken and egg conundrum -- let's just be glad it's Springtime now? Spring officially started last week and we're starting to see listings coming onto the market with greater frequency. Sellers -- Great news, the buyers finally broke free from their winter doldrums and are ready to buy! Buyers -- Great news, the sellers finally broke free from their winter doldrums and are ready to sell! ;-) Happy Tuesday, folks. It's Spring -- and buying and selling activity is starting to speed up! | |
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Unique Properties Either Sell Vry Qwkly Or Verrrrrrry Sloooowwwwly |
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 Unique properties can sell practically overnight -- or can languish on for months and even years. What makes the difference? Whether the buyer or the seller is the needle in the proverbial haystack. Sometimes, the needle is the seller. Practically everyone wants a house that is "this type of house" in "this type of location" on "this size of a lot" with "these types of finishes" -- wow -- a house doesn't come along like this very often. It will probably have lots of showings in the first week and may be under contract within the first few days. ...or... Sometimes, the needle is the buyer. I'm sure there must be some buyer out there, somewhere, hopefully, that wants this unique layout combined with a unique location combined with a unique design and style -- right? There must be a buyer who could live with this unusual combination of all of these features? Right? So -- if you have a super unique property, and you're getting ready to sell it -- give some thought to whether it is "like no other" because every time a similar house is available a buyer buys it and lives there forever -- or because there has never really ever been any buyer demand for this type of property and thus not many of them exist. Oh, right, and then price comes into play... If you have a highly unique, and highly desirable property -- you'll likely sell it for a bit more than you would have hoped. But if you have a highly unique, and hopefully, possibly desirable-to-atleast-one-buyer property -- you'll likely sell it for a bit less than you would have hoped. | |
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The Two Things We Might Mean By Affordable Housing |
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 "We need more affordable housing in our area." I hear it regularly, and perhaps you do as well. But I think it's worth pointing out that when people say this they might mean two very different things... When talking within the context of folks buying homes -- "affordable housing" often means homes in a price range that makes them affordable for first time buyers in our market. That could mean "under $150K" for some folks, or even "under $200K" in some situations. But wait -- is a home that can be purchased for $145K (for example) an affordable housing option for everybody living in our community? Nope! Not at all. There are plenty of folks who can't afford the accompanying monthly payment, or don't have a downpayment, or don't have money for closing costs, or who wouldn't have savings if a home repair became necessary in the first year or two of homeownership. So, it seems there is another thing we might mean when we say we need "affordable housing" in our community - and that would be rental properties with a low enough monthly rental rate to be feasible for low income earners in our area to still have decent housing options. I think it is important for elected officials and other City and County staff to be thinking about how decisions that are made and policies that are set can encourage the development of affordable housing - but we'll need to make sure we're all on the same page about what kind of affordable housing we're encouraging - and perhaps they need to be two completely separate priorities. Encouraging the development of affordable housing for renters and affordable housing for buyers -- for lack of any better way to express it. Anyone have other thoughts on how to best describe or name these types of housing and the need for them in our community? | |
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What To Do When Recent Comparable Sales Prices, Tax Assessments, Zestimates and Competing List Prices Vary SIGNIFICANTLY |
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 Which one of the values above is the "market value" of the imaginary home in question? The answer is -- the GREEN bar -- a home's value is most often determined by how much other buyers have recently paid for similar properties. A would-be buyer might WANT the home's value to be the "tax assessed value" -- but that might be quite a bit lower than the recent sales prices -- so a home's tax assessed value is not necessarily the home's market value. A would-be seller might WANT the home's value to be the "Zestimate" from Zillow -- but that might (often, usually) vary quite a bit from a home's market value -- so a home's Zestimate is not necessarily the home's market value. A would-be seller might REALLY WANT the home's value to be the same as the list price on competing properties currently for sale -- but those listings might sit on the market forever with unreasonably high list prices -- so the list price of competing listings is not necessarily the home's market value. Now, this scenario would be much easier...  As you can see here, there isn't too much of a difference between the different values -- so it matters a bit less which of the value perspectives we use when estimating a likely sales price and planning for a potential list price. But in the case where there is quite a bit of separation in these different value perspectives -- stay focused on what other buyers have recently paid for similar properties -- this alone is your best guide as to what you can/should expect the next buyer to be willing to pay for your house. | |
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I Know You Know This, But These are RECORD Low Inventory Levels |
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 I looked back further, and further, and further, and could not find ANY time in the past 10 years when there have been fewer houses listed for sale than there are RIGHT NOW! And yet, despite the fact that we keep starting off each year with FEWER homes for sale...  ...somehow buyers are able to buy pretty much the same number of homes for each of the past three years:
What does this mean? How can it be? Stop making my/your head hurt!? Well, basically, the inventory level DOES and DOESN'T matter. If 1,000 homes are listed for sale each month in 2019 and 1,000 go under contract and 1,000 sell -- we would have an absolutely outlandish year of sales (12,000 home sales) but inventory would have started and finished at 269 homes for sale. So -- buyers certainly have fewer choices at any given moment, but as more and more listings come on the market this Spring, they are likely to have more and more choices, though they will be competing against lots of other buyers and the properties are likely to go under contract quickly. | |
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Needing vs Wanting A Home Sale Contingency |
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 If you're looking to buy a house this Spring or Summer -- but -- you own your current home -- this morning's ramblings are for you... Selling (for some houses, in some price ranges, in some locations) can seem like a breeze these days -- inventory is low, buyer interest is high, homes are going under contract quickly -- all good news for sellers. And buying (for some houses, in some price ranges, in some locations) can be quite difficult these days -- inventory is low, interest from competing buyers is high, homes you might want to buy are going under contract quickly -- all less than exciting news for buyers. And when you wrap those two realities together -- buying and selling in the current market -- things can get tricky. Because it can be hard to find something to buy, many would-be seller-buyers aren't listing their home yet despite their desire to make a move. After all, they don't want to find someone to buy their home when they don't have somewhere to go. But then, the perfect house comes on the market! So, now what!? Do we quickly (quickly!!) list your home for sale and try to secure a buyer in time to make an offer on your dream house that is contingent on the settlement on the sale of your current home that is under contract? Hoping some other eager buyer has not already secured a contract on your dream house by the time we have your current house under contract? OR -- do we make an offer on your dream home, contingent on the sale of your current home, even though your current home is either not yet on the market or not yet under contract? (Hint, hint - the seller of your dream home probably won't be be interested in this proposal.) OR -- do we make an offer on your dream home WITHOUT a home sale contingency. That was a lot of build up to get here -- but this is the central item you may want to think about as you consider a sale and purchase this Spring or Summer. First - Do you NEED a home sale contingency... This can be pretty quickly determined in a conversation with a lender. Let me know if you need some recommendations of who to call for your next mortgage. They will essentially be asking you questions about your income, recurring monthly debt (house, car, student loans, etc.), and assets (cash) on hand. They'll be trying to determine whether your income (and offsetting expenses) qualify you to get a mortgage to purchase the new home while still owning the current home. Again - this is rather cut and dry from a lender's perspective, so if you're thinking (even a little bit) about whether you could / should / would buy without having first sold, then start with a conversation with your lender. If they can qualify you for a mortgage to purchase your dream home without having first sold your existing home, you will then move on to the next question... Second - Do you WANT a home sale contingency... Perhaps you own a $250K house and you're thinking about buying a $350K house. And perhaps your lender says it is no problem at all - they'll give you a mortgage to buy the $350K house even if you still own the $250K house. And perhaps you are quite certain we'll be able to speedily sell the $250K house. But yet, still, you might decide that you don't WANT a home sale contingency. Maybe you don't want the risk associated with having to pay both mortgage payments until the $250K house sells. Perhaps you don't like the loan terms that will be required on the $350K purchase without having freed up some equity from the $250K sale. Whatever the reason, there may in fact be a reason why you WANT a home sale contingency. Alright - the ramblings will stop for now. As you may have figured out if you made it this far -- selling and buying at the same-ish time can be relatively complex -- and we can't always figure it all out by thinking through a formula or checklist. As such -- if you're thinking about selling and buying this summer, let me know if you'd like to chat more about all of these topics, in person, as it relates to your own particular scenario. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
Licensed in the
Commonwealth of Virginia
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