My husband is being transferred to another city for five years. We are going to sell our house and we are excited to buy in the new city. However, we will be somewhat cash strapped. I’ve heard it is possible to get a no closing cost mortgage. How do they work?
The bottom line is that you still pay for a no closing cost mortgage. The difference is that the fees, which can total thousands of dollars, are wrapped up in the home loan.
Closing costs include such charges as the loan origination fee, appraisal, title search fees and title insurance premiums. You’ll find these vary between states.
On a $200,000 loan these service fees can amount to more than $2,000.
However, as you might imagine, getting a loan with no closing costs won’t be free. Usually the lender will offer you a loan with a slightly higher rate to account for these costs. For example, you might be offered a 4.39 percent rate on a 30-year fixed or a 4.765 rate for a no closing cost loan.
Luckily, you are looking at a 5-year horizon and if you plan to sell at that time, it can make sense to wrap the closing costs into the loan. It usually takes more than five years to recoup the costs of closing costs if you were to pay cash.
What doesn’t make sense is wrapping costs up in a mortgage and keeping the mortgage for more than five years. Then the difference will be much more expensive. Be sure to calculate the extra money it costs you to wrap the costs into the mortgage. If it is $50/month, for example, in five years you will pay $3,000 extra. That might be close to the closing cost amount. If you sell in five years, you will break even on the closing costs. But, suppose you like the area you move to and decide to stay? You will be paying $18,000 over the life of the mortgage — a hit you might not like to take.
Sharp drop in home sales this month as higher mortgage rates continue to cool the market
According to the October 2022 Virginia Home Sales Report released by Virginia REALTORS®, there were 8,828 homes sold in Virginia in October 2022. This is 3,828 fewer sales than last October, representing a sharp 30.2% decrease in sales activity. This is Virginia’s largest year-over-year decrease in sales in more than ten years. While there were far fewer sales, it’s important to keep it in context, as last year was an unusually busy year. The sharp slowdown in sales is also partly a result of the market responding to climbing mortgage rates, which rose quickly in October. The average on a 30-year fixed mortgage jumped up nearly half a percentage point in October alone.
Statewide, October’s sold dollar volume was lower than last year, and, on average, homes are taking longer to sell. The average days on market statewide was 29 days, four days longer than October of last year. These trends are allowing the state’s inventory of available homes to build up.
At the end of October, there were 19,523 active listings across Virginia, 764 more listings than a year ago, a supply increase of just over 4%. “We’ve been reporting on Virginia’s waning inventory of available homes for years now,” says Virginia REALTORS® Chief Economist Ryan Price. “In October, we saw the largest inventory build-up the state’s housing market has had in more than eight years.”
“As interest rates have increased and some buyers are choosing to pause their home searches, listings are staying on the market longer, causing the inventory to grow,” says Virginia REALTORS® 2022 President Denise Ramey. “We expect this trend will continue into the near future as buyers continue adjusting to the higher mortgage rates.”
Despite the supply growth, overall inventory remains tight, keeping upward pressure on home prices in many local markets. The median sales price statewide in October was $365,000, an increase of $15,000 from October 2021.
The Virginia Home Sales Report is published by Virginia REALTORS®. Click here to view the full October 2022 Virginia Home Sales Report.
Do solar panels add value to your home? Sometimes yes, sometimes no
Asphalt shingles are so 20th century. Take a peek at roofs these days; there’s a good chance you’ll spot solar panels. By the end of 2020, roughly 2.7 million solar panel systems had been installed on American homes, and the White House believes that 7.5 million systems will be installed by 2034. Many homeowners install solar panels to lower utility bills and perhaps raise their home values. But do solar panels actually add value to houses?
Research supported by the Energy Department and Fannie Mae examined the value of homes with solar panels installed. Researchers found that solar panels owned outright increased the value of the home by roughly the same amount as the cost of the system itself. Leased solar panels, however, didn’t add value and could, in fact, create some hassles when it came time to sell.
If the solar panel equipment is owned outright, it typically doesn’t add any entanglements to the sale. But if the systems are financed or leased, it can add some complications.
For one, these systems are expensive, and lenders may get cold feet if the added debt pushes the would-be purchasers above maximum mortgage thresholds. In response, many prospective buyers actually solicit lower bids to account for the monthly costs of the equipment. Complications mount if the home seller is behind on payments. A purchaser may demand that the costs to catch up payments be subtracted from the sale.
Homeowners should consider other factors as well. On one hand, panels may reduce utility bills. On the other hand, you may end up on the hook for expensive repairs later on, and solar panels right now have a lifespan of just 25 years.
Community News & Real Estate (November 2022) with Jen Avery, REALTOR
Humane Society of Warren County
- Tails & Ales – to benefit the Humane Society of Warren County
November 19 – Moose lodge starting at 5:30pm. Cash party, raffle, games and more!
- Pick of the Litter – supporting the Humane Society of Warren County
New thrift store in town with the best deal around! Please check them out off 450 Commerce Avenue, Suite F. Front Royal VA.
Facebook page: facebook.com/pickofthelitterthrift
Rotary Club of Warren County
- Boots & Bourbon Fundraiser
The event was a great success. We brought in approximately $28,000. It might be enough for 2 book vending machines!
Full album of memories: photos.app.google
Warren County Market Report for October 2022 with Jen Avery, REALTOR
Watch this video for a quick summary of Warren County real estate for September 2022. We are in the red once again for new listings, new pending, and closed listings.
In general summary:
- New Listings are DOWN -28.4%
- New Pending DOWN -35.6%
- Closed sales are DOWN -37.1%
- Average Median Sold $320,000
- Average Days on Market 23
*If you would like a copy of this report emailed to you, please send request to email@example.com.
Resource: October 2022 Market Stats by ShowingTime
Bright MLS: Statistics calculated November 2022
Jennifer Avery, REALTOR® “Your Happy Home Expert!”
BPOR, SRS, CNE, E-Pro Certified | Licensed in VA
firstname.lastname@example.org | 540-683-0790 | www.jenaveryrealtor.com
CRUM REALTY, INC| 318 S Loudoun St, Winchester VA 22601 | 540-662-0400
Take advantage of the holiday mood in November real estate, 304 words
At this time of year, everyone else is going over the river and through the woods to grandmother’s house, but a brave few are headed into the real estate market. Is that a smart move?
Depends on how you look at it. There is no doubt that the real estate market slows down at the end of October. According to the National Association of Realtors, sales of existing homes drop about 30 percent between December and January. Home sales traditionally do not pick up until the end of January.
For sellers, the holidays can still be profitable. Holiday home buyers are usually serious about buying quickly. The buyers are hitting open houses while the browsers are off at the mall. Plus, for sellers, there is no better time to show a house than the holidays, when a tasteful Christmas tree, wreath, and sparkling lights can make a house feel like your future home.
For buyers, it’s a great time, too, because, with less competition from others, buyers have a good negotiating position with sellers who want to move quickly. If a buyer finds a house during the holidays, it is possible that he or she will be able to come to an agreement with the seller to accommodate holiday plans.
If you are selling your home during the holidays, take this advice from home staging experts:
* Stick with simplicity. Take down your personal pictures and collections. Put up simple Christmas decorations, including a tree, wreath, and a few strands of lights outside. Put a few nicely wrapped presents under your tree.
* Build a fire in the fireplace. Play holiday music softly. Display potted evergreens in place of potted flowers.
* Some sellers even place photos or a scrapbook of the home pictured during the summer.
Some Virginia regions seeing more homes on the market as sales slow statewide
According to the September 2022 Virginia Home Sales Report released by Virginia REALTORS®, there were 10,172 homes sold in Virginia in September. This is 3,062 fewer sales than September 2021, a decrease of more than 23%.
So far in 2022, the largest drops in sales have occurred in coastal communities such as Northern Neck and the Chesapeake Bay & Rivers region, along with Northern Virginia and parts of the Shenandoah Valley.
In total, there was about $4.5 billion of sold volume in Virginia in September, about $1.1 billion less than a year ago. This drop is more than 20% lower than last September’s volume, reflecting the commonwealth’s slowdown in home sales activity.
Despite the cooling market, the statewide median home price last month was $365,000—a gain of nearly $15,000 in the past year alone. While prices are still trending up, mounting evidence continues to suggest the upward pressure is easing. “In September, Virginia’s average sold-to-list price ratio, meaning what a home sold for compared to the price it was listed for, was 99.9%,” says Virginia REALTORS® Chief Economist Ryan Price. “While this may not seem significant, it’s actually the first time this ratio has dipped below 100% since January 2021.”
Another piece of good news for home buyers is that the inventory of available homes is continuing to grow in many parts of the state. Some of the largest growth in supply has been in the New River Valley, the Winchester area, and parts of Central Virginia.
“Last month, about 44% of all counties and cities in Virginia had more inventory on the market than at the same time last year,” says Virginia REALTORS® 2022 President Denise Ramey. “While our inventory levels remain historically low, we’ll likely see them continue to build as the market continues cooling.”
The Virginia Home Sales Report is published by Virginia REALTORS®. Click here to view the full September 2022 Virginia Home Sales Report.
Real estate viewings: what to expect
If you’ve recently put your house on the market, be prepared to welcome several types of visitors into your space, especially if you host an open house. Here are the kinds of viewers you’re most likely to meet.
• Future sellers are more interested in the real estate market than buying your home. They’re often neighbors who want to compare your home to theirs and appraise its value.
• Curious visitors aren’t ready to buy right now. They’re mainly interested in seeing what properties are available and what they can afford.
• Shoppers visit several open houses before putting in an offer. They’re looking for a good opportunity and will often ask specific questions and try to determine if you can negotiate.
• Convinced visitors are enthusiastic. They’re convinced your home is the perfect fit and can imagine themselves living there. They’ve fallen in love with the property and are only touring it to confirm their decision.
Simplify the selling process by engaging the services of a real estate broker. They know how to deal with each type of visitor.