Area Real Estate News & Market Trends

You’ll find our blog to be a wealth of information, covering everything from local market statistics and home values to community happenings. That’s because we care about the community and want to help you find your place in it. Please reach out if you have any questions at all. We’d love to talk with you!

March 31, 2019

How Much Money Do You Need to Buy a House?

So you're thinking about buying a house...but exactly how much money do you need to buy one? When you're buying a house, there are 3 major components that make up the total fund you need to make a purchase: (1) down payment, (2) closing costs, and (3) transactions costs.

If you don't feel like reading, just watch the video below.

Down Payment

There are many loan programs out there that you can choose from. If you're VA Loan eligible, this is the best option to make a 0% down purchase. For most first-time home buyer, you're most likely will be using a 3% down program. There are several variations of this loan and the one you should talk to your loan officer about is the 3% no PMI program.

Let's assume we are buying a $400k house. This means you will need 3% of $400k or $12,000 for down payment.

Closing Costs

In Northern Virginia and for most loan programs, you're looking at about 3% of the Sales Price in Closing Costs (slightly more in Maryland).

Closing Costs consists of your Loan Origination fee, Settlement Company fee, Appraisal, Taxes, one year prepaid homeowner's insurance, Escrow funding, Property Taxes, Interest, and a bunch of other miscellaneous fees. In total, they add up to about 3%.

In our scenario, you will need 3% of $400k or $12,000 for Closing Costs. In a Balanced Market, you could ask the Seller to help you pay for some or all of the Closing Costs; but in our current market, it is unlikely that you will be able to get any credit.

Transaction Costs

As part of buying, you will have three upfront costs

  1. Earnest Money Deposit - In this area, the typical amount is 1% of purchase price. In our scenario, this is about $4,000. This money is paid to an Escrow Agent who will hold the money until the Closing Date. At Closing, you'll get this money back which you can use toward your Down Payment or Closing Costs. 
  2. Inspection - Depending on what tests and inspections you're doing, you're looking at roughly between $300 to $2000.  Most people will need about $500 for home inspection.
  3. Appraisal - After you start your Loan Application, you will have to order an Appraisal as part of your Loan Approval process. The Appraisal fee is paid to your Lender and it's typically about $500-600.

In our scenario, this adds up to $29,000 of which $4,000 will be credited back to you, so your net expense is about $25,000 to buy a $400k house.

If you have any question, please feel free to contact me.

Posted in Home Buyers
March 3, 2019

The Real Estate Market is Heating Up Fast, March 2019 Report

Based on my daily activities in the field, I can tell you with absolute certainty that the market is heating up fast and it is currently favoring Sellers due to low inventory and large number of Buyers trying to take advantage of the current dip in interest rates.

But we don't want to rely on my gut feeling...

So I pulled some MLS data for Fairfax County Virginia (these trends should apply to other nearby counties as well).

90-Day Sold vs Pending

First we look at 90-Day Sold vs Pending volume. In the lower price segments between $200k to $600k, we can see that Pending Home volume is about half of everything that sold in the past 90 days. This means that we are on track to sell about 2-3 times more homes in the next 90 days.

In the upper price range segments, the volume increase is even more drastic and we are on track to triple or even quadruple the volume.

 

90 days sold vs Pending Volume

90-Day Sold vs Pending Days on Market

Next we look at how long a home sits on the market on average.  In the lower price segments up to about $1.2 million, we can see that homes are selling about twice as quickly as it used to in the past 90 days...confirming that homes are selling very quickly.

Homes in the $200k to $900k price segments are selling in about 20 days!

 Sold vs Pending Days on Market

Sold Price to Last List Price

Next, we look at negotiating power of a typical Buyer. In a market favoring the Seller, these numbers will be very close to 100%. As you can see from the chart, the market is favoring Sellers. There is very little room to negotiate in the $200k to $800k price segments as multiple Buyers are competing to buy in a limited inventory environment.

Sold to List Price

Bottom Line

Our real estate market is heating up fast. If you're thinking about selling, this is a great time to get your house on the market before conditions change. Let's talk about how we can help you sell your house today!

PS: These data were pulled from Bright MLS on 3-3-2019

 

Feb. 19, 2019

5 Free Lead Generation Ideas for New Real Estate Agents

Question: As a new agent coming into the business what marketing, lead generation, should Invest in? Any advice helps. Thanks.


First, I'd find a good CRM platform that can do the following:

  • Allow mass import of contact info
  • Can send eBlast to all contacts
  • Help you keep track of activities

My CRM allows me to do all of the above, plus send market updates, send listings, integrated with IDX site, send email, send text, and more.

Now, to the lead generation part.

5 Free Ways for New Agents to Generate Leads

1. Your Existing Contacts - import all your contacts from your phone, email contact list, LinkedIn, Facebook, and any other contact database you use into your CRM. Let all of these contacts know you're a real estate agent and your available to help.

2. Work Stale Leads - Ask experience agents in your office to see if they would let you work their old/stale leads. Tell them that you're willing to work on leads they no longer have time to work on and that you'll pay them a referral fee for every lead that you convert.

3. Volunteer for Rentals - Ask other agents and your office for rental leads. More experienced agents are happy to give these leads to you to work on. About 5-10% of these will convert to a Buyer in the future.

4. Volunteer for Open Houses - Ask all the agents with a listing if they need help with hosting an Open House. Busy agents do not have time to hold a property open on Sunday afternoon, but you do! This is a good opportunity for you to meet potential clients.

5. Volunteer for Office Hours - If your office gets good traffic or need help handling phone calls, you can volunteer for office hours to meet new prospective clients.

Feb. 19, 2019

Saving Our Buyer Client $42,900 and Counting

This story is about Cindy and Ed (names changed for privacy).

After several tours in different areas in Virginia and Maryland, we start to explore different neighborhoods in Bowie and Upper Marlboro. On that Friday, we found a townhouse in Beech Tree East Village that my clients love. The list price was $430k.

Knowing how quickly properties are selling right now, I called the listing agent to see if there is any offer in hand. Of course, there is one and it looks like this will be a bidding war. Since this is a neighborhood that's still being built, I immediately thought that we should go see the Builder...just in case.

I told my client, "Cindy and Ed, we need to put the rest of the tour on hold and stop by the Builder's office to see if they have anything similar".

They agreed.

If the Builder has something, I know we might be able to get a better deal than going into a bidding war.

A few minutes later...we were in the sales office...and I went to work.

Luckily, they have two quick deliveries left -- one is priced at $409k and another at $429k. Since the $409k one was already in a show ready condition, I proposed that we go see it.

With the exception of a few minor things, the house was exactly identical...and my client loved it.

After a few round of negotiation with the Builder, the parties agreed to $400k sales price with 100% closing costs paid -- that's $42,900 in savings right off the bat!

The story continues....

Since we have to use the Builder's lender and title company, we knew going in that we will not get as good a deal with the interest rate.

Sure enough, the rate was 0.625% higher than our original lender and the fee was slightly higher.

After a few phone calls, I was able to help get the rate reduced. With client's permission, I checked the rate and closing credit with their original lender. Since the original lender was not able to beat the combined rate and credit, we went ahead and lock in the rate.

...one more success story to add to our collection.

Jan. 5, 2019

What is an Adjustable-Rate Mortgage (ARM)? Definition and Meaning

An Adjustable-Rate Mortgage (ARM) is a type of loan that have interest rates and payments that will change from time-to-time over the life of the loan.

There are many different types of ARM. When you apply for an ARM, make sure you completely understand how, when, and why the rates may change, and if there is any cap on the interest rate.

Here are some examples of ARM:

  • 5/1 ARM - Fixed rate for the first 5 years, then the interest rate adjusts once a year.
  • 7/1 ARM - Fixed rate for the first 7 years, then the interest rate adjusts once a year.
  • 10/1 ARM - Fixed rate for the first 10 years, then the interest rate adjusts once a year.
Posted in Real Estate Terms
Dec. 24, 2018

Habits of Successful Agents

I frequently research trends in real estate. Recently, I came across useful information through the National Association of Realtors. Today, I’ll simplify habits of successful real estate agents

Successful agents return calls and emails right away. They don’t mess around when someone reaches out -- they jump on it. They cater to the communication style that fits each client. If someone prefers a phone call over an email, they call them to talk.

Utilize the latest technology. They use a smartphone and tablet with data plans to read about the local market and industry. They go paperless. 

Know their neighborhoods intimately. A true “local expert” can answer questions on the spot about the market climate.

Explain everything they do. They explain every step of their processes to clients. They communicate with their clients each step of the way, especially when they are negotiating.

Creatively seek leads. They scope out every venue from postcards to social media to ad campaigns. They experiment. They study what methods work and don’t.

Maintain a helpful network. They know the best contractors, appraisers, lenders, and insurance providers in the business. They understand the importance of a network all the time, instead of only when you need one.

If you’ve been thinking of ways to step up your game, I’ve done the work for you already. Join our team, or if you have any questions, please reach out to me. You don’t have to worry about obligations of any sort. I am happy to help in any capacity.

Have a Merry Christmas!

Dec. 19, 2018

How Long Does It Take to Buy a Home?

This is a fairly tricky question since it depends on the market condition and on how selective you are about the home you are buying. Home buying can be broken down into two phases.

The Searching Phase

Searching for the right home to buy could be fast or slow. Some people find their perfect home on the first day of viewing properties. Some people could be searching for months before finding a home they like enough to buy.

Market Condition

During certain period, there are more homes for sale than other. For example, during late Winter to early Summer, there are generally more homes for sale.

However, there are generally more Buyers in the market as well. This means that even if you find the perfect home, you could lose out in the bidding process.

Selectivity

What are you looking for a home. The more requirements you have for a home, the longer it will take to find the perfect home. At the extreme, your requirements could make it impossible to find the right home. So talk to your REALTOR and see if your requirements are realistic.

The Contract-to-Close Phase

Once you find the right home, your REALTOR will help you put in an offer. The offer negotiation step should only take a few days. Once you have the house under contract, the time it takes from contract to closing is usually between 30-60 days. This is typically dictate by the lender (some are faster than others).

Lenders that I normally work with can close within 21-30 days depending on the type of loan.

Posted in Home Buyers
Dec. 19, 2018

What the First Step of the Home Buying Process?

If you are thinking about buying a home, but not sure where to start, I recommend you talk to a local REALTOR. A good REALTOR can walk you through all the steps and help explain each in detail. Here's a brief outline of what to do:

  1. Talk to a local REALTOR. Your REALTOR should be able to recommend a good lender that you can work with.
  2. Talk to a lender. A good lender will be able to gather information about your finances and provide you with options that are most suitable for you. Make sure you ask the lender for Estimate of Closing Costs and Monthly Payment. You can use this to compare different loan options (and later different lenders)
  3. Once you have your pre-approval letter, you can work with your REALTOR to search the targeted area(s) for desired home.

From there, your REALTOR will walk you through each step.

If you like to learn more on your own before talking to someone, you can view our Home Buying page and download our Buyer's Guide.

Posted in Home Buyers
July 31, 2017

Curious About Local Real Estate?

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Curious about local real estate? So are we! Every month we review trends in our real estate market and consider the number of homes on the market in each price tier, the amount of time particular homes have been listed for sale, specific neighborhood trends, the median price and square footage of each home sold and so much more. We’d love to invite you to do the same!

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You can sign up here to receive your own market report, delivered as often as you like! It contains current information on pending, active and just sold properties so you can see actual homes in your neighborhood. You can review your area on a larger scale, as well, by refining your search to include properties across the city or county. As you notice price and size trends, please contact us for clarification or to have any questions answered.

We can definitely fill you in on details that are not listed on the report and help you determine the best home for you. If you are wondering if now is the time to sell, please try out our INSTANT home value tool. You’ll get an estimate on the value of your property in today’s market. Either way, we hope to hear from you soon as you get to know our neighborhoods and local real estate market better.

Posted in Market Updates