Here are four common myths about real estate agents that you need to stop believing.
1. They always make a six percent commission
This is false. Six percent is the average commission, but the rate can vary between three and seven percent.
In addition, commissions can be negotiated. For instance, agents will sometimes accept a slightly smaller commission to allow a buyer and seller to come to an agreement. When interviewing agents, ask if their rate is negotiable.
2. There’s no problem with a buyer using the seller’s agent
It’s always better to hire someone who can advocate for you. A good buyer’s agent knows the local market inside and out and they’ll be able to provide valuable insights. While the seller’s agent will treat you fairly, their fiduciary duty is to the seller.
3. Agents are interchangeable
Never underestimate the value of experience. An agent who knows the area well and has roots in the community is more likely to provide good advice than one who’s new to the area. In addition, some agents are more interested in making a sale than they are in helping you.
4. You can’t buy a for sale by owner (FSBO) home with an agent
This misconception stems from the idea that if someone is selling their home themselves, then they won’t want to pay the commission for a buyer’s agent. This is mostly false, as by and large sellers understand that offering to pay the agent’s commission is a good way to attract buyers.
Real estate transactions are complicated enough without these misconceptions. Your agent is there to help and can answer any questions you may have.
Ask the Expert
Home prices have been rising fast. Should I apply for a preapproval that’s more than I think I need?
There’s no question we’re in a hot market right now that shows few signs of cooling off. However, the fundamental rule still applies when it comes to getting a mortgage: Stay within budget.
The more prep work you do ahead of time, the better. This serves the dual purpose of helping you move quickly when needed, as well as acting with a cool head. Before you even start looking at homes, figure out your finances and calculate how much you can and want to spend on a mortgage. Remember to factor in insurance, taxes, and a rainy day fund for repairs.
Then you’ll apply for your preapproval. This is the bank’s letter attesting to how much you can afford.
A quick note about preapproval versus prequalification letters: The prequalification is typically based upon self-reported information, while the preapproval involves the bank checking your credit score and verifying bank and income records. Although some institutions may use the terms interchangeably, the preapproval generally carries more weight — and in a hot market, this can give you an edge when making offers. Remember that neither is final, however. Your loan will go through a final round of verifications and include an appraisal and inspection before it becomes official.
Back to how much you should apply for. A common rule of thumb says to keep your mortgage payment — including principal, interest, taxes, and insurance — at or below 28 percent of your gross monthly income, and your total debt service below 36 percent.
When you stick to this formula, you make things easy on yourself. Now you’ve got a definitive number in mind, and you can shop for houses that fit your budget rather than the other way around.
How to successfully transform a fixer-upper
Are you thinking about buying a fixer-upper? If so, you should know the process can have many steps, and that encountering unforeseen issues is fairly common. Here are some tips to help make your renovation a success.
Inspect the property beforehand
As with any home, you’ll want to look for signs of water damage, cracks in the foundation, and other potential problems before you finalize your offer. Hire an inspector to ensure nothing is overlooked. A major renovation could prove quite costly if the home isn’t structurally sound.
Know when to hire professionals
If you’re handy, you might be tempted to take on as many renovation tasks as possible to reduce your expenses. However, when it comes to electrical, heating, and plumbing jobs, it’s best to leave the work to the experts. This will prevent you from making costly mistakes and ensure the job’s done safely.
Look for affordable alternatives
Although you don’t want to skimp on structural materials, there are plenty of ways to cut costs on features that are largely esthetic. For example, consider affordable flooring and countertop options that mimic more expensive materials. You can also rely on paint to create accent walls or repurpose old kitchen cabinets.
Finally, remember to put some thought into the decor. New furniture and decorative accessories can add the perfect finishing touches to a freshly renovated home. Consider hiring an interior designer to help you create a cohesive space.
5 questions to ask before buying a condo
Are you in the market for a condo? Before you make an offer on a property, be sure to get answers to these crucial questions from either your real estate agent, ow¬ners in the building, or the condominium association.
1. What are the main complaints?
Ask to look over the minutes from recent board meetings to find out what issues have been raised and whether they were resolved. Additionally, consider speaking with residents in the building to find out how complaints have been handled in the past.
2. What storage space is available?
In addition to closet space within the unit, find out if each owner has access to a locker in the basement or an outdoor shed. This is a particularly important question to ask if you have bikes, skis, or other large equipment that you don’t want to keep inside.
3. What does the insurance cover?
Be sure to get a copy of the building’s condo corporation insurance policy so you know what’s included. This will help you determine whether you need additional insurance for your unit and what type.
4. What are the rules of the building?
Every condo has its own set of regulations that re¬sidents must respect. This may include rules about owning a pet, planting a flower garden, or renting out your unit. Make sure these rules don’t clash with your needs and lifestyle.
5. What do condo fees get spent on?
In addition to knowing the amount you’ll have to pay every month, it’s important to know what the money collected is spent on. This will give you an idea of how well the common areas of the building are maintained and whether the board has an emergency fund.
Remember, your real estate agent can help you navigate this process, so don’t hesitate to reach out.
Virginia’s hot summer housing market shows signs of cooling
According to the June 2021 Home Sales Report released by Virginia REALTORS®, while June sales numbers were strong, several signs point to a slowing of the housing market over the second half of the year. A cooling in the market will help ease the frenzy that has led to bidding wars and major price escalation all across the state.
There were 16,393 home sales in Virginia in June 2021, which is a 24.4% increase over June 2020. Sales were up 15.9% between May and June. The median home sales price statewide was $372,500 in June, up 17.1% from a year ago, a gain of $54,500. While the housing market delivered these high numbers in June, the number of homes available for sale is also increasing.
Most markets across Virginia are seeing expanding inventories, and some markets are seeing a slowdown in buyer activity. At the end of June 2021, there were 19,346 active listings statewide, which is 17.9% lower than the level at the end of June 2020. However, the number of month-end active listings increased by 7.5% between May and June.
In recent months, a lot of the expanding inventory has been driven by more listings of condominiums and townhomes, particularly in Northern Virginia. However, more single-family homes are coming onto the market, and it is expected that overall inventories will be greater over the summer and into the fall in most markets in Virginia.
“It remains a seller’s market, although buyers likely will find less competition and more options this summer and into the fall,” says Virginia REALTORS® Chief Economist Lisa Sturtevant, PhD. “Inventory will remain tight, and demand will stay strong, but the pace of home sales activity and the increase in prices should begin to return to a more normal state throughout the rest of the year and into 2022.”
The Virginia Home Sales Report is published by Virginia REALTORS®. Click here to view the full June 2021 Home Sales Report.
5 tips for negotiating on a new construction
Are you interested in building a house or buying one that’s under construction? Here are five tips to guide you through the process.
1. Negotiate the product rather than the price. Many builders will refuse to go below their base price. However, they may be willing to install additional fixtures or upgrade certain features. It’s worth finding out if you can get more for your money.
2. Maintain your poker face. You might be emotionally invested in owning your dream home, but treat the negotiation like a business transaction. Hire a realtor who understands your needs and can negotiate with the builder on your behalf.
3. Opt for a home that’s almost done. Since the cost of building materials can vary from one month to the next, it can be difficult for the contractor to provide an exact price. If a house is close to being completely built, you’ll get a more accurate estimate of the total cost.
4. Read the contract carefully before you sign. Don’t be afraid to ask questions, and make sure you don’t overlook the fine print. Ideally, the contract should be more advantageous for you than the builder.
5. Keep mortgage rates in mind. If you can get pre-approved by a lender, you’ll be able to determine if the monthly payments for the new home will be within your budget. This can help you figure out whether you’re better off with a house that’s already been built.
For more personalized advice about buying new construction, consult a real estate agent who’s familiar with the area.
4 tips for installing wood siding
Are you thinking about installing wood siding on the outside of your home? If so, here are four things you’ll need to do to protect the wood from getting damaged.
1. Properly fasten the siding
You must use the correct type of fasteners to prevent your wood siding from buckling or becoming stained. In addition, using the appropriate number of fasteners and properly positioning each one will keep your siding looking its best for years to come.
2. Stain the wood
Stain helps protect wood siding from rot and deterioration. That’s why it’s important to apply it to any bare wood and along with all cut and planed surfaces, even if they won’t be visible after the siding is installed. In addition, wood siding should be refinished every five years to prevent premature aging.
3. Create an air gap
It’s important to leave a small gap between the wood siding and the exterior wall. This allows moisture and warm air to circulate and escape. Without a gap, there would be a risk of water seeping in and damaging the wood.
4. Install flashing
You should install flashing both above and below all windows. This will help prevent water and snow buildup from compromising the integrity of your wood siding.
Installing wood siding requires special care. If you want to ensure yours is properly mounted, consider hiring a contractor.