The term “mortgage” is one you will often hear thrown around a lot when it comes to monthly bills or in conversations about debt. The reality is that you actually don’t have a mortgage in the commonwealth of Virginia.
Virginia uses a form of IOU called a “deed of trust.” The biggest difference between a deed of trust and a mortgage is that a deed of trust shortens the amount of time that a foreclosure takes. With a mortgage, there is a judicial timeline that has to take place for a foreclosure; meaning that the eviction process has to go through the court system.
With a deed of trust, after you have missed a specified amount of monthly payments (typically 120 days late) the foreclosure process can begin without going through the court system. Case in point, a regular foreclosure process with a mortgage would take about 60 days whereas a deed of trust could take as little as 37. With that being said, surprisingly, Virginia is not even in the top 10 when it comes to US states with the most foreclosures. I hope you found this fun fact helpful! Stay warm everyone!
Mitchell Smith | REALTOR
NextHome Realty Select | Licensed in Virginia
210 E. Main St, Front Royal, VA 22630
Virginia’s housing market begins seeing some “typical” patterns after an upended year
According to the August 2021 Home Sales Report released by Virginia REALTORS®, Virginia’s housing market has begun to exhibit the seasonality that characterizes a typical housing market, a pattern that was upended last year during the pandemic.
Home sales were up over last year’s strong August totals, while sales dipped slightly between July and August, which is typical of a late summer market. In total, there were 14,443 home sales in Virginia in August 2021, a 5.1% increase over last year. The dip in sales between July and August was 4.2%.
Virginia’s statewide median home sales price in August was $355,000, a 7.6% increase over the August 2020 median price, a gain of $25,000. In total, there was approximately $6.2 billion in sold volume in Virginia last month, an influx of about $700 million from a year ago, representing a 12.6% gain.
“As housing markets around the state begin to return to somewhat normal seasonal cycles, we should expect activity to cool this fall,” says Virginia REALTORS® Chief Economist Lisa Sturtevant, PhD.
One of the biggest challenges in the market continues to be a lack of available inventory. However, the rate of inventory declines has begun to slow. At the end of August 2021, there were 20,363 active listings statewide, which is 10.6% lower than the supply level at the end of August 2020. This represents the smallest year-over-year supply drop Virginia’s housing market has had in more than two years.
“Inventory has expanded somewhat in recent months, which has offered buyers more options,” says Virginia REALTORS® 2021 President Beth Dalton. “However, supply is still at historically low levels and is far below what is needed.”
The Virginia Home Sales Report is published by Virginia REALTORS®. Click here to view the full August 2021 Home Sales Report. Current and past reports are available to members, media, and real estate-related industries through the organization’s website.
Ask the expert: We are going to sell. Should we pay cash or finance at least part of the new house?
Your decision depends on your financial and life circumstances.
If you are retired and the kids are gone, you might be one of the millions of people who want to downsize.
When you bought your last house, the house and location probably made a ton of sense for raising kids. But, now a different home makes sense.
With your mortgage paid off and retirement at hand, you now have a pleasant problem you may not have considered 30 years ago: Should you pay cash or finance?
Part of the answer depends on what you think about homeownership. Owning a home outright is satisfying and seems very secure. No more mortgage payments.
A study by Redfin found that one-third of U.S. home purchases were paid with cash. That is the largest share of cash buyers since 2014. According to HousingWire, some of these moves are because remote work has allowed people to live in less expensive areas. If you sell your house in Seattle, you can buy twice the house at half the price in Boise, for example, and walk away with cash to invest.
On the other hand, if you are retired, you might want to invest some cash. After all, mortgages are at 3 percent while the markets continue to dish out good returns.
Plus, you can use the cash for anything you want, including travel or just life.
If the cash from your house represents all of your savings, paying cash for another house might not make sense, since real estate prices don’t rise as quickly as stocks. You’ll want the home proceeds to be easy to access to help finance retirement. So at these low-interest rates, taking a mortgage could make sense, especially if you finance just part of the purchase.
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.
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.
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.
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.