Month: October 2022

When selling your home it is important to use every tool at your disposal to increase the chances of a quicker sale that is close to full price.  One of the simplest things you can do is stage your home so that potential buyers find it pleasant and inviting.  That being said, it is sometimes the case that professional staging companies may not be in your budget, but no worries there are some simple things you can do that won’t break the bank.  

1.) Declutter – Clear away the extra stuff lying around so that buyers can have a clean line of sight.  If there are items that you no longer want or need this is a good time for a garage sale or donate them to a local charity and you’ll have less to pack on moving day.

2.) Deep Clean – Make sure your home is clean from floor to ceiling especially bathrooms and the kitchen (stove, refrigerator, etc.).  This will show buyers that your home was taken care of and well maintained. Never underestimate the power of a clean, fresh smelling home.

3.) Add a splash of color – Liven up your home with contrasting colors, this will draw attention to the positive aspects of your home.  Simple things like throw pillows, colorful table decorations, even a new shower curtain can make a big difference in perceptions.

Some people question the necessity of Real Estate Agents during this age of technology, where individuals have access to information and services that previously were not available to the general public.

Not using a professional real estate agent to save money in your real estate deal may cost you later. Whether you’re buying or selling, you’re negotiating a complex transaction with potential pitfalls that could impact your bottom line. A professional agent can use her knowledge and skills to guide you through the real estate process.

That being said, here are some key factors that make real estate professional invaluable to their clients:

Connections

Real estate agents have connections in the market that benefit buyer and seller. Agents work with many people involved in the real estate transaction process, including loan officers, home inspectors and attorneys. If you have a problem or need a service, your agent has the contacts necessary to help you immediately. For example, if you need a home inspection but can’t find anyone to do the job before the lender’s deadline, your agent may have an inspector she has a relationship with who will help.

Knowledge of Market

Knowledge of the real estate market you’re buying in is invaluable in the home buying or selling process. An agent can give a buyer informed opinions about the home’s future value, the neighborhood amenities and schools and whether the investment is solid. Sellers benefit from an agent’s market knowledge because the agent uses it to market the property to the most interested audience and get the highest price. Proper marketing is crucial. Buyers may be wary of an over-marketed home, while a poorly marketed home may not sell for months. Markets can vary greatly in Hampton Roads, Virginia. The cities of Newport News, Hampton, Poquoson and Williamsburg each present specific challenges when buying or selling, which makes in-depth knowledge of these specific markets essential.

Negotiation Edge

Buyers and sellers both negotiate the home price. The buyer is looking to get the house at the lowest price, while the seller wants the highest price possible. Agents apply their experience to the price negotiations without actively interfering by providing advice to their party. Your agent can help you evaluate the pros and cons of each offer or counteroffer you receive. An agent helps with the legal paperwork required for offers so your interests remain protected during the negotiations.

Legalities

Buying or selling a home involves a lot of paperwork and is a complex process with different deadlines. Since an agent has experience in real estate transactions, he or she can use their knowledge to ensure the process goes smoothly and nothing important is missed. If you have any questions about the papers you’re signing, your agent will help you and get the answers if they don’t know.

Education and Training All real estate agents must have a license in the United States. While the exact licensing process varies by state, professional agents must have some specific real estate education and usually have to pass a test to get one. An agent also has knowledge of the specific real estate laws and procedures in the area she’s working in, as some of the required training is location specific. This is especially true in the Hampton and Newport News area of Virginia as certain procedures vary by location.

An iBuyer is a company that works directly with sellers providing an instant cash offer to purchase the home outright. iBuyers purchase the home as-is without requesting any repairs, upgrades, warranties, closing costs or concessions, or real estate agent commissions.

     Ibuying is advertised as an alternative option that allows homeowners to sell their home without a broker or real estate agent, saving them money and time while avoiding the challenges and costs that can be incurred with the traditional real estate transactions

     That being said, Ibuyers do typically charge a fee ranging from 5-9% of the sales price which can be more than the standard real estate agent’s commission and since the sales price is determined by algorithm it often falls short of the fair market value.

      Some of the company’s currently promoting iBuying are:  Opendoor, Offerpad, Zillow Offers and Redfin . Now, if you are considering going this route make sure to read the fine print regarding seller obligations and fees.   However, if you want to get the best price for your home it would be more beneficial  to deal with an experienced real estate agent who can negotiate the best price and navigate any challenges that may arise. 

1. We aren’t in a housing bubble 

The U.S. is not in the midst of a housing bubble, which is when the market price of homes sharply increases due to rising demand that outpaces supply. 

The spike in home prices since the onset of the pandemic isn’t an indication of a bubble because the demand is coming from well-funded buyers who are competing for very few homes. 

2. Competition is easing

The once-intense competition to nab a home is declining as more homeowners postpone their housing search. The brokerage noted that many homeowners were either burned out from their search or “priced out.” 

3. Home prices are still climbing 

Although there is less competition in the market, homebuyers still have to make their offers stand out. 

To do so, homeowners will likely have to shell out more cash, effectively driving up housing prices even more. 

However, in order to better navigate the market, consumers shouldn’t rely on asking prices as a “good gauge of the values of a market” rather than recently sold prices. 

So pay much less attention to the percent over asking or under asking that a property sold and look at what it sold at compared to the most recent comparable sale.

4. Relatively affordable places are getting more expensive

Certain cities around the country such as Phoenix, Las Vegas and Sacramento have been popular destinations for homebuyers. 

However, with prices rising, these once-affordable spots are falling out of reach for not only newcomers but locals as well.

5. There aren’t enough homes for sale 

Supply remains a big issue. In fact, some homeowners won’t even place their home on the market out of fear of “entering the high-priced market as a buyer.

Additionally, “builders are held back by high lumber costs and labor shortages,” the brokerage said, adding that this is creating an unbalanced market. 

Prices and competition won’t settle until the “market is more balanced.” 

 Even when the price declines in the near future, homeowners benefitting from low mortgage payments for the long term will likely wait out the market and not sell until they gain equity back. 

As a result, the inventory of available homes will remain low and therefore prevent any sort of substantial drop in values because there will always be enough demand from buyers who have a required move for relocation, more space, less space.

Causes of the 2008 Housing Crisis

In order to understand the differences between what happened in 2008 and what’s happening today, we need to first understand the causes of the last financial crisis. When the housing market crashed in 2008, the problem had started years earlier. In the late 90s, Fannie Mae wanted to make home loans accessible to borrowers with lower credit scores so they could attain the American dream of homeownership. Lenders started offering subprime mortgages with unconventional terms to high-risk borrowers. Meaning, people with bad credit and little-to-no savings were offered loans they couldn’t afford.

Such relaxed lending standards fueled the housing market growth and the corresponding rise in home values. As home prices continued to increase, the rising subprime mortgage market thrived. Then, in the second half of 2007, the housing market slowed down and house prices started to decline nationally. And in 2008, the stock market crashed. The build-up of bad debt resulted in a subprime mortgage crisis and the 2008 housing crisis. Homeowners found themselves “upside-down” on their mortgages, meaning they owed more than their home was worth. Faced with job losses and increasing mortgage payments, many lost their homes to foreclosure.

As you can see, the Great Recession in 2008 was a result of a banking crisis and the loss of housing wealth. Today, the problem comes from a totally external factor (the coronavirus pandemic) and the direct losses of income for people and businesses hurt by it. The underlying cause of the current economic distresses is fundamentally different from that which sparked the Great Recession. Nonetheless, that doesn’t mean that people are less worried about a repeat of the 2008 housing crisis. This leads us to our next question.

Will the Housing Market Crash in 2020?

Investors are worried about economic slowdown from the COVID-19 pandemic that’s threatening to slow growth and eat into corporate profits by closing factories, forcing quarantine, limiting travel, and canceling big events. People are getting the idea that this outbreak is going to cause the US housing market of 2020 to crash as the recession did in 2008. However, according to many experts, this doesn’t fit the pattern of the housing crisis in 2008; the story just isn’t the same. This time the bad news comes from external factors, specifically the COVID-19 virus which has greatly impacted the stock market. Many have stated that the current financial crisis resembles the Spanish flu pandemic of 1919 a lot more than the subprime mortgage crisis that caused the Great Recession.

Today, the banking system is actually on solid footing. Banks are on more solid footing than they were before the 2008 housing crisis, with higher capital and limited direct exposures to the riskiest loans. All of this could keep any messiness in the banking sector from turning into a full-blown financial crisis as before. Government regulations also made credit requirements more stringent to make sure borrowers are better qualified. In addition, new changes were made that discourage lenders from extending new mortgages and lines of credit during times of stress. All of this created a more stable mortgage industry as mortgage default and foreclosure rates are significantly lower than they were in 2008. So, how is the coronavirus going to affect the real estate market?

Coronavirus vs the Real Estate Market

If you’re a real estate investor, you must be wondering how this pandemic is going to affect you. Experts say it’s hard to tell seeing that no one really knows how long this is going to last. However, a few housing market predictions could be made after studying how previous pandemics affected the real estate market. Many experts say that the travel, hospitality, and tourism industries will continue to be the main sectors hit directly by the coronavirus outbreak. For example, United Airlines, Apple and Microsoft supply chains from China, and dozens of other companies have warned that the virus will hurt their profits.

As for traditional long term rental property investors, the main US housing market predictions you should know include lower inventory, a slight drop in home prices, and lower mortgage interest rates. In other words, it seems that the fundamental housing market indicators are going down. However, experts say this downturn will be a lot shorter and shallower than the 2008 housing crisis.

One way to conclude this is to think of COVID-19 as an earthquake. This natural disaster can easily cause production to decline in one part of the country as stores close, shipments are delayed and people stay in their homes. But, the economy should snap back once the ground stops shaking. Actually, natural disasters are often followed by a temporary increase in economic activity as people rebuild. So in that way, disasters are different from financial crises which don’t just reduce spending and investment in the short term, but also make people and companies less willing or able to spend for months or years. So far, the coronavirus pandemic looks more like an earthquake than a recession that could cause a repeat of the 2008 housing crisis.

Most economists still expect the US to escape a recession, but that could change quickly as there is still a huge amount of uncertainty. No one can predict the economic impact with any confidence, so we highly advise you to stay updated on coronavirus trends and their impact on the US housing market 2020.

Whether you’re selling or buying a house, you’ve decided to hire a real estate agent to help with the transaction. They can help you get the best price for your home, or negotiate a good deal on a purchase. But what type of agent should you hire?

When looking for an agent you could stumble across the term “dual agent” and wonder what it means. Are they the right real estate agent to list your home, or should you keep looking? Find out what you need to know before signing a contract to work with an agent.

What is a Dual Agent in Real Estate?

A dual agent represents both parties in a real estate transaction. They help the seller with staging, marketing, and more to sell their house. When a buyer is found, or the agent brings them to the seller, they also represent them.

Because they represent both sides of the transaction, it’s called dual agency.

Is Dual Agency Allowed?

Yes, dual agency is allowed by most brokerages. But many real estate professionals, including many in the Hampton Roads area, consider it to be unethical. This is because buyers and sellers often have competing interests.

The seller wants to get top dollar for their house, whereas the buyer wants to get a good deal. Given the amount of negotiation involved in a home purchase, a dual agent might not advocate fully for either party. Since an agent’s commission is based upon the home’s final selling price, an unethical agent could push the price higher rather than negotiate effectively on the buyer’s behalf.

If an agent or brokerage is a dual agent, it’s illegal for them to not disclose this.

Is Dual Agency Legal?

Dual agency isn’t legal in all 50 states. It’s banned in Alaska, Colorado, Maryland, Texas, Florida, Kansas, and Oklahoma. Legislators in those states believe that potential conflicts of interest in dual agencies outweigh any of their benefits.  Dual agency is legal in the Hampton Roads area, although many brokerage companies discourage it due to the potential for ethical issues.

Dual agency is sometimes confused with a designated real estate agency, which some of these states allow.  Designated Agency is one that represents both buyers’ and sellers’ interests. One agent, working for the broker or agency, represents the seller and another stands in for the buyer. It’s a requirement that certain procedures are put in place to ensure that client information is kept separate.

Should you use a Dual Agent?

There are times where using a dual agent could work out.  If you need a fast close, a dual agent can streamline the process. Instead of your agent calling the seller’s agent with a question, and then waiting for their call back, you have one source of information.  However, if you want an agent that is going to put your best interests first, then I would strongly caution against entering into contract with a dual agent.

Real estate agents who work as dual agents cannot disclose confidential information to either party in the transaction.  In my opinion the mere fact that an agent has confidential knowledge pertaining to both parties automatically puts the both the buyer and seller at a disadvantage.