Real Estate
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.
Real Estate
Residential real estate contributed nearly $52 billion to the state’s economy in 2020
Virginia REALTORS® has published a new study conducted in partnership with George Mason University, quantifying the economic impacts of Virginia’s housing industry and demonstrating the vital role the housing sector played during the COVID-19 pandemic and economic recession.
Throughout 2020, Virginia’s housing industry was incredibly resilient, even as other parts of the economy struggled. Unlike in some other states, residential real estate transactions and other housing-related activities were able to continue throughout the pandemic. REALTORS® and other real estate professionals across the state were able to pivot to adapt to changing restrictions.
As a result of the industry’s resiliency and innovation, the housing sector contributed nearly $52 billion to Virginia’s economy in 2020 and supported more than 325,000 jobs in the commonwealth. This economic impact accounts for the effects of transactions related to buying and selling homes, building new homes, refinancing mortgages, renovating and remodeling homes, and managing and maintaining residential properties in 2020.
“One of the key reasons residential real estate is so important to the economy is because it touches so many other sectors of the economy. But the housing sector is also unique because it is an important economic driver across all regions of the state,” says Virginia REALTORS® Chief Economist Lisa Sturtevant, PhD.
In addition to this impact on the economy, housing-related activities expanded state and local tax revenue by more than $2 billion in 2020. This tax revenue relates to real estate activities during the year but does not include property taxes paid on existing homes. Therefore, this number significantly understates the role housing plays in local tax revenue each year.
The full report on the impact of the housing industry on Virginia’s economy is available on the Virginia REALTORS® website.
Real Estate
Get the power of knowledge
In an era when it’s become increasingly easy to DIY everything from our home renovations to our taxes and even business tasks, does it make sense to do the same when it’s time to sell a home?
While a lot of things can be accomplished via YouTube videos, selling a home is one area where professional help is imperative.
How does a real estate agent help in selling a home? Here’s a sampling of ways:
*They know real estate law. Agents must be licensed and then keep up with their education to retain that license. That education includes courses on real estate law, which covers everything from discriminatory practices to disclosures and more. These aren’t always obvious to the layperson, and a misstep — even if you had the best of intentions — can land you in a lot of trouble. Best to let a professional guide you.
* They understand contracts. Similar to the trickier areas of real estate law, licensed agents understand which contracts you need as well as each section of those stacks of paperwork.
* They are bound by ethics. Real estate licensing goes beyond the letter of the law to include strict ethics codes.
* Experience in negotiations. A trained and experienced agent will be able to help you get the best price for your home.
* Market expertise. An agent will know the ins and outs of the real estate market, down to individual neighborhoods and streets. The market can be dramatically different from one area to the next, regardless of what’s happening nationally or even regionally, and agents keep on top of it.
Real Estate
How many bathrooms should you have in your home?
If you’re building a new home or want to renovate an existing property, you may be wondering how many bathrooms you should install. Here are some tips to help you make the right choice.
Know the different types
Bathrooms can be categorized as full baths, three-quarter baths, half baths, and quarter baths. Full bathrooms have a sink, toilet, shower, and bathtub. Three-quarter baths have a shower, sink, and toilet but no tub. Half baths, also known as powder rooms, only have a sink and toilet. Quarter baths have just a toilet.
Assess your family’s needs
It’s important to consider how many people are in your family as well as their accessibility requirements. For exam¬ple, a bathtub may be difficult for a person with limited mobility to step over, but it’s convenient for bathing young children. If you have teenagers, an extra full bath or three-quarter bath is probably a wise investment.
Keep the long term in mind
You should be mindful of the future when installing or re¬novating a bathroom. In addition to considering how the needs of your family members are likely to change over time, you should think about how your choices may impact the resale value of your property.
If you need advice on your renovation project, consult a building contractor in your area.
Real Estate
Should I sell my rentals in a hot market?
It has been a blazing hot real estate market lately, with a shortage of available houses for sale and new construction too pricey (think lumber prices, tariffs, and other factors) to keep up.
The demand for rentals has also skyrocketed in most places and with it, rental rates. With rental units so desirable, does that mean this is a good time to sell off some or even all the rental properties you own?
Ultimately, the answer is the same as it always is with real estate: That depends.
On one hand, you might be able to command higher rents, which would make your properties more profitable. Rentals are traditionally a long-term strategy meant to produce a (relatively) passive income, and as long as you’re turning a profit and paying down the principle, many owners like to hold off on selling.
Except when they don’t.
If you stand to make a good profit by selling — good being a subjective term based upon your unique circumstances and goals — then perhaps this is a time to cash out. Maybe you need the capital for medical expenses, tuition, or other reasons. Or maybe you’re eyeing another market.
You might want to sell and roll the money into another investment, perhaps using a 1031 exchange that allows you to defer paying capital gains taxes (consult with a professional for how to do this properly). Many an investor trades up in this manner.
A variety of factors are at play in the “When should I sell?” scenario, and above all, cool heads should prevail. Take your time and approach it analytically, not just in reaction to an up or down market.
Real Estate
5 living room design tips
Your living room is one of the most important rooms in your home. It’s where you entertain guests, read, watch movies, and more. Here are a few tips for making your living room both stylish and functional.
1. Position the couch
Since it’s likely the biggest piece of furniture in your living room, you should position your couch first. If the room is small, push it up against the wall to create more space. However, if you have an open-concept home, pull the couch into the middle of the space to create a distinct living area.
2. Set up the TV
Your television should be visible from the sitting area. However, don’t place it in front of a window, as viewing will likely be impacted by glare.
3. Add an area rug
On top of being comfortable and stylish, an area rug can help soundproof your living room. As
a rule of thumb, it should fit under all pieces of furniture in the sitting area.
4. Optimize the lighting
Since your living room is a multifunctional space, getting the lighting right can be a challenge. The best approach is to incorporate a combination of overhead, accent, and task lights. In addition, installing dimmer switches will allow you to adjust the ambiance as needed.
5. Choose complementary furniture
You should choose furniture that complements the space. For example, bulky furniture can easily make a small living room feel crowded. However, investing in a good coffee table and stylish entertainment unit is a must.
Given that you probably spend a lot of time in your living room, it’s worth making the effort to ensure it’s as comfortable as possible.
Real Estate
4 things to consider when choosing a shower
If you need to install a new shower in your bathroom, the dimensions of the area where you’ll place it are a key consideration. Here are several other things to think about when making a purchase decision.
1. Type
There are several kinds of showers to choose from, including:
• One-piece showers. They’re watertight and affordable but a little bulky.
• Modular showers. These are suitable for most bathrooms but difficult to maintain.
• Traditional shower cabins. They’re affordable and compact but utilitarian.
• Tiled showers. They’re beautiful and durable but a little pricey.
• Adapted showers. These are spacious and accessible but difficult to install.
2. Material
When it comes to materials, you can choose from:
• ABS plastic. It’s lightweight but difficult to maintain.
• Acrylic. It’s esthetically pleasing but scratches easily.
• Fiberglass. It’s affordable but prone to cracking.
• Polymer. It’s easy to install but not very durable.
• Tempered glass. It’s scratch-resistant but heavy.
It’s up to you to determine your needs and find the best value for your money.
3. Door
When it comes to shower doors, each type has its pros and cons. Options include:
• Sliding doors. They’re space-saving but difficult to clean.
• Pivoting doors. They’re versatile but prone to leaks.
• Swinging doors. They’re roomy but require more maintenance.
It’s important to decide which features are most important to you before making your choice.
4. Accessories
Faucets are available in a variety of styles and materials including chrome, stainless steel, and brushed nickel. In addition, when it comes to showerheads, you can opt for a fixed, handheld, high-pressure, rainfall, or body jet system.
If you take the time to weigh your options, you’ll be able to create a shower that meets your needs.
