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Increasing mortgage interest rates: what it means for you

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Mortgage rates are on the rise for the first time in years, with 15-year rates expected to rise from 3.9 percent last year to 4.4 percent at the end of this year. Here’s what it means for the real estate market.

What it means for sellers
You should expect your house to stay on the market a little longer before selling it. Taking on a mortgage represents a big commitment, and climbing interest rates are forcing some prospective buyers to stop and think a little harder before buying a house. Also, don’t be surprised if you get fewer offers than you were expecting.

What it means for buyers
While rates are higher than they’ve been in several years, they’re still relatively low. However, the trend isn’t likely to change anytime soon. Unless you’re buying the home with cash, opt for a 15-year fixed rate mortgage and avoid variable rate mortgages as they’ll likely go up again in the coming years.

The bottom line is that sellers should manage their expectations, and buyers should keep in mind that rates will likely continue to go up.

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Real Estate

How to avoid buyer’s remorse

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If you want to buy a home, the fear of regretting your purchase could make it hard to commit to a particular property. Here are some tips for making a good decision and avoiding buyer’s remorse.

Check and double-check your needs list
It’s important to have a clear idea of what you need and want out of a property before you start looking for a new home. When deciding whether to make an offer on a house, check that it meets all of your non-negotiable requirements and that it’s within your budget. Choosing a property that truly meets your needs will help you keep regrets at bay.

Take outside input with a grain of salt

Sometimes avoiding regret means steeling yourself against external influences. Your friends and family probably mean well, but keep in mind that you’re the only one who really knows what you want out of a house.

Trust your real estate agent
One source of advice you should listen to, however, is your realtor. While agents can’t find the right house for you on their own, they can provide you with all the information you need to make a sound choice.

Finally, remember that there’s a difference between wondering if there’s a better house out there and having real concerns. If something about the transaction doesn’t sit well with you or a big issue is uncovered during the inspection, it’s all right to keep looking.

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Why your agent won’t make offers for you

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Real estate agents provide homebuyers with insider information, advice about the local market, and much more. However, they won’t tell you how much to offer for a specific property. Though they may suggest a range, making the bid is your responsibility. Here’s why.

1. The offer may be too low
A lowball offer can dissuade a seller. If an agent encourages a buyer to make a bid that’s judged to be too low, the realtor is likely to be blamed for any consequences.

2. The offer may be too high

If an agent tells their client to make an offer for a specific amount and the bid is accepted immediately, the client may feel like they offered too much. This can lead them to wonder whether the agent really had their best interest at heart.

3. The agent isn’t buying the house
It’s important to keep in mind that while realtors can provide valuable advice about the local market, they can’t tell you how to plan your finances for years to come. You’re buying the home and you’ll be paying the mortgage on it. This is why only you can decide how much to offer for a house.

The bottom line is that real estate agents have a mandate to act in your best interest. Telling you how much to offer for a home could actively work against this duty, and realtors have faced legal action in the past for doing so. For these reasons, bidding on a home is solely the buyer’s responsibility.

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How sellers can add a contingency clause to a purchase agreement

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If the sale of your home is contingent on you finding a new place to live, buyers may be dissuaded from making a bid. However, this clause doesn’t have to be a hindrance. Here’s how to best include this type of contingency in a purchase agreement.

Make it clear
Ensure that the contingency clause is as clear as possible. One of the main concerns buyers have with regard to these clauses is that they’re vague. Understanding the specific circumstances in which a seller may back out is likely to reassure buyers, as they’ll know what they’re signing up for.

Specify time frames

Provide a clear time frame within which you’ll find your new home. Then, determine how this contingency relates to other contingencies in the contract, such as those buyers generally include for things like home inspections.

Typically, the contingency of the seller finding a new home will take precedence on the buyer’s contingencies. In particular, if the buyer has asked for an appraisal or inspection and has specified a time frame within which to complete these, the countdown on finishing them won’t begin until after the seller has found a new property.

Finally, be clear about the seller’s right to extend the closing date should they fail to find a new home within the time originally specified.

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Real Estate

How to quickly sell your home

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If you want to sell your home in a hurry, here are a few tips to help you get it off the market in record time.

Hire a realtor
Choose a real estate agent who knows your region well and works for an agency you trust. Consider meeting with more than one realtor before you make a decision. A professional agent will be able to provide clear answers to any questions you have. Throughout the selling process, you should feel comfortable making inquiries about how the sale is proceeding.

Set a fair price

If the price of your home is too high, it could dissuade potential buyers and delay the sale of your home. On the other hand, a suspiciously low price may give people the impression that the house has issues. It’s crucial to draw on your realtor’s knowledge of the market to help you set a fair and competitive price. Additionally, a home inspection will help you determine your property’s value and bring it to light if repairs are needed.

Stage it
Thoroughly clean your home and remove all clutter. This will make each room look larger and more inviting. If you need to refresh the walls, choose neutral paint shades. You should also hide family portraits and other items that personalize the space. This will make it easier for potential buyers to imagine themselves living in your house. Consider hiring a home staging consultant who can help you showcase your home.

Get the word out
To increase the chance that it’ll sell quickly, show your home to as many people as possible. Once your realtor puts it on the market, there are several steps you can take to increase its visibility. Consider promoting the sale on real estate websites, in local newspapers, and on social media. Additionally, make sure the for sale sign is clearly visible on your property and will catch the eye of potential buyers who drive through the area.

Meet with potential buyers
Be upfront and answer visitor questions honestly. Make note of both positive and negative feedback you get about your house. If the buyers you meet have reservations about the property, try to determine the reason. This information can be used to justify a price adjustment or better market your house to the next visitors.

The housing market can be unpredictable, but following these recommendations will greatly improve your chances of selling your home quickly.

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Warren County Market Report – June 2020

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Watch this video for a quick summary of Warren County real estate for June 2020. The charts demonstrate the changes in the market, so be sure to click play!

In general summary:

  1. New Listings are DOWN -9.9%.
  2. New Pending UP 16.9%.
  3. Closed sales are DOWN -4.2%. JUNE 2019 = 72 vs JUNE 2020 = 69
  4. Average Median Sold $255,000
  5. Average Days on Market 38

*If you would like a copy of this report emailed to you, please send request to jenaveryrealtor@gmail.com.

Resource: 2020 Market Stats by ShowingTime
MRIS: Statistics calculated JULY 2020

Jennifer Avery, Realtor
“Your Happy Home Expert”

BPOR, SRS, CNE, E-Pro Certified | Licensed in VA
jenaveryrealtor@gmail.com | 540-683-0790
CRUM REALTY, INC | 318 S Loudoun St., Winchester, VA 22601 | 540-662-0400

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Negotiating tips for buyers and sellers

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Whether you’re a buyer or a seller, you can find something good about the current real estate market.

Interest rates are low, making for more appealing mortgages (and an abundance of available loans). And inventory is a little tight, making for less competition.

So if you’re a buyer, you can find a ready loan at a good rate. If you’re selling, you’ll probably have less competition.

All of this begs the question: How do you negotiate in this climate? Or do you even try to negotiate?

That might depend on where you live. Always consult a real estate agent before making an offer.

As a buyer, remember the number of houses for sale is low nationwide. Even in the coronavirus crisis, median home prices have increased. It’s probably not true that most sellers are desperate because of job losses or financial hits. Buyers really should not expect to get a lot for a little.

In fact, you can easily lose your dream house by bidding low, even in the crisis environment. If supply is low, make a robust offer. Sometimes it makes sense to bid for higher than asking price. Just be sure your price makes sense to you and the bank, as the property will need to be appraised prior to a mortgage gets approved.

Sometimes a personal letter will go a long way to forwarding your offer. Children selling the family home might be encouraged to know that the buyer will love it, for example.

You can also consider requesting repairs, credits, or adjustable deadlines if you offer full price.

As a seller, even if you are in a hurry to sell, resist the urge to lower your price. Home prices are not declining, they are generally rising.

Remember that creativity can make or break a deal. Rather than reduce your price, seek other incentives that appeal to buyers like credits, improvements, furnishings, or more flexible closing deadlines.

A counteroffer doesn’t need to be in the middle. If a potential buyer offers $10,000 less than asking price, the temptation is to split the difference. Consider countering at the price you want, and offering incentives. Or hold firm.

Some real estate pros recommend asking for solid earnest money of up to 5 percent to ensure the buyer is serious.

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