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All the things to know about what you see in the news about the real estate industry And wow. There has been a LOT of news out there lately. You’ve probably seen the headlines over the last week or so, about the “seismic” changes coming to the real estate industry. Lots of info out there feels an awful lot like clickbait, to say the least, and in most cases, it's quite confusing and misleading. Here’s a little recap of what’s happened, what’s happening, what’s (likely) to come, and most importantly, how it might affect you if you are thinking about buying or selling real estate. This is all facts, with my thoughts in italics... What's happened: Over the past few months, there have been a couple of class action lawsuits brought against the National Association of Realtors and some of the larger players in the real estate space. In short, a class of homeowners in Missouri allege that they had no idea that they had choices when listing their home, did not know they could negotiate, and felt that they paid inflated fees when listing and selling their homes. While the suits were going on for a while, the big news came in the last week, when the National Association of Realtors agreed to settle this case. IF the settlement is approved by the court, they've agreed to pay out $418m over the next four years, AND make some substantive changes to the way the system works, and the way agents are paid. The changes that will go into place, should they be approved: Compensation offered by sellers will no longer be visible in MLS. What this means: Up to now, commissions have been distributed this way- Sellers list their home with a listing agent for a fee (for the purposes of this exercise, we're going to use an imaginary number of 10%). FROM that fee, they agree to offer compensation to the buyer's agent. (In many cases, half, so in this scenario, from the 10% listing fee, each agent gets half at closing.) This compensation offered to the buyer's agent has always been visible in MLS, and as is to be expected, there are agents who have been accused of "steering," or taking buyers only to see homes that pay them well. This will go away to eliminate any real or perceived steering of clients. Buyers working with a buyer's agent will need to sign a contract with that agent prior to viewing any homes. This is really only a variation of what's going on now, and has from years. You should really always have a very good idea of how your agency relationship works- what your agent does for you, how they get paid, and who is paying them. Part of this is getting it all in writhing. This covers the agents, yes (because we can't and don't work for free), as well as the buyer, who better understands the buyer agency they're in. What these things mean and where I think the media has things a little twisted: There is lots of news out there saying that "The 6% Commission is Gone!" and while that is definitely attention grabbing, it's a bit more nuanced than that. First and foremost, commissions are now and have always been negotiable. Now, this doesn't mean that the agent you want, or the services that you know will fit your needs, will cost what you want to spend- but there are many, many options in the marketplace. I liken it to a little black dress- you can buy one at Walmart, Nordstrom, or Saks Fifth Avenue. They are all a little black dress, but they are definitely not the same price, nor the same quality. There may be a time and a place for each option, but they're not interchangeable.  Our industry was definitely ripe for some change, so this will definitely bring about some interesting changes and business models.  Sellers and listing agents will likely, in many cases at least, still offer buyers' agents commissions as part of the transaction. While there will need to be a contract in place between buyers' agents and buyer clients that states the buyer will pay the commission should none be offered, my expectation is that sellers who want to get the most qualified buyers in there homes will indeed still use this as a form of incentive.  In the cases (and there will be some) where the sellers/listing agents are not offering any form of compensation for the buyers' agent, the buyer will have options on "how" to pay for their representation. It can be negotiated in the contract for purchase (basically asking the seller to "pay"), or the price can be bumped up just a bit to include it. As it must now be made clear to sellers that they do not NEED to offer compensation, one of my largest concerns is that there will be occasions where first time and/or inexperienced buyers will feel like they cannot afford buyers' representation, when in most cases, they can't afford not to. By going directly to the listing agent, they'll be working with the agent who represents the seller, and they'll have no one on their side. (And trust me, that is seldom good for the buyer, even with a very ethical agent.)  Another expectation/concern I have as we navigate through these changes is that while the headlines make it seem as though there will be a big reduction in the price of houses, name me another circumstance where the cost of "goods" goes down and the price of the item to the consumer drops. In other words, I have every expectation that if the neighbor sold their home for $400,000 while paying commissions to both their listing agent and a buyers' agent, the "new" seller is not going to sell their home for less because they're not paying the buyers' agent compensation. They're going to want to list at the same price their neighbor did.  I could go on. But in short, there will be lots to navigate over the next year or so. Please feel free to let me know if you have any questions. The headlines are confusing, so if you're stumped on what's going on, reach out. I'm happy to answer anything you might think of. Onward!      

So if you've followed along thus far with all of my videos about appraisals and how they might impact your transaction, thank you. This is the sort of wrap-up. I'm going to talk about a couple of frequently asked questions, commonly asked questions, and maybe a few interesting experiences that have happened with appraisals, that I don't know, kind of throw a curveball, or give you a little bit more food for thought. So one of the commonly asked questions is, if I'm selling my home, and the house contracted for $450k, the appraisal came in at $425k, does that mean I'm losing $25,000? Well, remember, you never had the $450k. So that's sometimes the data just is what the data is and unfortunately, or fortunately, the appraisers don't really consider the the vibes of the house, the vibes of the deal. So just because you are the purchaser and loved the house enough to be willing to pay $450k, if they don't love the house enough to be willing to pay $450k, and they also have a suitcase full of cash to match their vibes, it doesn't really matter, because most people who are getting a loan are going to have an appraisal, and that appraisal is going to be sort of the buck stops here of the value of the house. So yeah, you didn't get what you wanted to get maybe, or you didn't get what you were thinking you were gonna get. But odds are, you're not going to have a drastic difference in another set of data or another appraiser coming with another buyer, perhaps, if that buyer too does not have a suitcase full of cash to bridge the difference between $425k and $450k. Does that make sense? So let's look at the flip side of the same coin and let's say I'm the seller, and I have my house contracted with a buyer for $450,000, we get the appraisal back. And lo and behold, it came in at $475k. Am I clicking up my heels and saying, oh my gosh, I just made an extra $25,000? Not so fast. So this is great for the buyer. In most cases, the buyer does then have a little instant extra equity beyond what they had thought, but at the end of the day, know that price only shifts downward. Should the appraisal come in low, it never goes up. So while it might be a little frustrating, and you might feel like you lost money or left money on the table, remember, you didn't have that money to begin with. This is just kind of a numbers accounting situation and in many cases, you're not even going to see the appraisal. So don't get real tied up in what the lender or the appraiser determines what the value of your house is. If it goes beyond the sales price that you've agreed upon, just remember that you agreed upon that sales price and unless you have other people who were willing to pay more for your house, this is what you agreed to and this is what the open market was willing to value your house at. Thanks for following along if you have any other questions about appraisals or how they can affect your transaction, whether you're buying or selling, drop in the comments or reach out to me and I'd love to help you get your questions answered so you're more well informed when you're ready to buy or sell your home.

Okay, so let's say you got a contract for $450,000, but the appraisal came in at $425,000. Maybe you don't have $25,000 extra to throw at it. If you're the buyer, you're trying to get creative and think of other solutions. Maybe you go back to the seller and you say, hey, you know, well, we're able to do $435,000, but that's all we can do. We'll put $10,000 extra towards it, but that's all we can do. That's all we're able to do, willing to do, whatever. Maybe the seller comes back and says, yes, that works. Maybe you split the difference. Again, in real estate, as long as everybody agrees almost anything, as long as it's legal, is on the table. Everybody just has to agree and it all has to be in writing. Follow along for more appraisal tips, tricks, understandings, commonly asked questions, and situations that might arise whether you're on the buying end or the selling end.

So what do you do if there is an issue with the appraisal? Let's give an example. You purchase a house for $450,000 and the appraisal comes back and it's $425k. Now, what do you do? Well, in our contract, and again, this is the Central Virginia contract. So I'm in the Richmond area, surrounding counties, we have our own particular contract, the contract where you are may be different. In our contract, it states that within five days of receiving that appraisal, the purchaser has the right to request in writing, whatever sort of resolution they would like from the seller and that can be a number of different things. First off, they can request that the price be reduced. So if the house is $450,000, that's what the contract price is, the appraisal comes in for $425k. Maybe you're the purchaser and you don't have an extra $25,000. You may have to go to the seller in writing and say, 'Can you please reduce the price to $425k'. Now they can say yes, or they can say no, or they can present a different option. But if you cannot come to a resolution, then all parties can walk away. No harm, no foul. Another resolution might be that, say you were in a competitive situation when you wrote the offer and you wrote the offer for $450k. There were a number of other offers, you do have the cash to back it up, and you say, oh rats the home appraisal came in at $425k, but we really want the house. We feel like it's worth $450k. It's worth 450 to us and we're willing to throw an extra $25,000 in there to bridge that gap. Obviously, you need to have 25,000 extra dollars. Or in some cases, you can kind of maneuver your loan a little bit to come up with a little extra cash, but that's between you and your lender. So the buyer can actually pay the cash difference, the lender doesn't care. What the lender cares about is if they're giving you 80% of the value, they're only going to give you 80% of the value that the appraiser says it's worth, period, end of story. They're not going to give you any extra because you really liked the house because it was a competitive situation. They don't care because it's the bottom line number for the lender and that is ultimately who the appraiser works for.

So maybe you've followed along with my appraisal series, maybe you're in a transaction, maybe you're contemplating what might happen in a transaction and you're thinking, but Cindy, we don't want to put an extra $10,000, $20,000 in a house if it didn't appraise. What do we do now? Well, obviously, nobody wants to feel like they're overpaying and I think overpaying is a real relative term when we are in the market that we've been in for the last few years really. Overpaying really is a nebulous idea. If 10 people want the house and the house was listed at $410k, and it gets bid up to $450k, and there were multiple offers. You competed against nine other people, you got the house at $450k. Good for you. You won. But now the appraisal comes in at $425k and you don't know what to do. You don't have an extra $25,000 to get you there. So there are a few options. And I've talked about some in other videos. But what if you want to dispute the appraisal? What if you feel like hey, this is not right. I feel like this house is really worth $450k and I want to make sure that my deal doesn't fall apart because we love this house. Or maybe you're the seller and you say listen, I had 10 people want to buy my house, and fair and square, we got bid up to $450k. Now some person is coming in and telling me and the buyers that it's only worth $425k. You're really throwing a wrench in my plans. What do you do in those cases? Well, you can dispute an appraisal, but it is a process. Because the lenders really want to make sure that it's an unbiased sort of set of data and an unbiased opinion of value, they're not real keen on the agents, whether listing or buyer's agents, or the buyers and sellers getting real involved in that process and trying to manipulate that data. Because again, unbiased means they're looking at data, and the data is the data. But I have had situations where we were successfully able to dispute the appraisal. It doesn't happen often though. You really have to have, again, data to go back to the appraiser and say, here is a comparable that you did not use. Why didn't you use this comparable? It almost never works, because these people do their job and the appraisal has to be reviewed by someone else in their office as well. It's not a one person saying check, yes, this house has, you know, everything that it takes to be a $450,000 house. It really has to have all of the supporting information and it gets reviewed a number of times before that stamp goes on to say this is complete. So if you do have comparables that show something or when you look at the appraisal, they have missed something that is an integral part of your house, it's got a brand new roof, but they noted that the roof was old because maybe they made a mistake or you know, they're human. So maybe somebody didn't have all their coffee that day and thought the roof looked old. There is a process, through which it's a little different with every lender, you can dispute the appraisal, but just remember that odds are it's not usually going to go in your favor. So you may need to look at some of the other options to work that appraisal out. If you have any questions about the appraisal process or the appraisal dispute process, drop them in the comments or reach out to me. I'd love to help you. Figure out how you might deal with such an occurrence. But if you're currently in a transaction, I'm going to say reach out to your lender, your agent or your attorney and figure out how to best deal with that situation.

So we know what the appraiser does, who they are kind of, but who picks them? And okay, I can't pick them. But who does? And how does that affect me? Well, if you're the purchaser, you really don't have any input on the appraisal process or who gets to do your appraisal or anything like that. Ultimately the appraiser works for the lender. They are making sure that if the lender is going to loan you $400,000, that the property is actually worth $400,000. Now, maybe you're paying $450,000 for the home, but the lender is only going to be loaning you $400,000. The lender needs to make sure that whatever they're giving you is, if it's an 80% loan, if it's a 75% loan, whatever, that they are covered for the amount that they have invested in the property. In other words, the lender usually has a larger financial stake than you do in the property and they want to make sure that should you stop paying and they get stuck with that house, that they can actually sell it for what it's worth, not just what you think it's worth. Follow along for my whole series on appraisals and appraisers, to get a little better feel about what goes on in the appraisal process and why it matters to you whether you're a buyer or a seller.

So I've seen a couple of things in the past day on social media talking about getting your pre-approval letter, getting pre-qualified with a lender, and getting ready to buy a home. So I wanted to clarify a couple of things. One thing that I saw was in The Wall Street Journal, and it said that you as a buyer, get a real leg up if you have your pre-qualification or your pre-approval ready to go. Here in the Central Virginia, Richmond metro area, sure, we'll call it a leg up. I'm actually not going to call it a leg up and I'm going to call it just like literally where you have to start. If you are working with me, and we're looking at homes, it is not a purposeful use of our time to look at homes if you do not have a pre-qualification, and you're not ready to go, because we are 100% never going to submit an offer on a property that you like, without having a pre-approval with that contract, period, end of story. It's not going to be accepted, it's not going to be taken seriously, it's not going to be considered. So if you really like the house, you like the house enough to write a contract on it, you want to buy a house enough to go look at houses and potentially write a contract on them, get your pre approval. Talk to a lender. Get all of your ducks in a row so that when you do find that house that you love, you can move forward on it. It's not a leg up, it's just what you need to do. Another thing I saw was Barbara Corcoran mentioned that getting all of that pre-approval, getting all of the lender hoops to jump through, getting your income verified, getting your tax returns to the lender, all of that stuff makes you a cash buyer. It actually does not make you a cash buyer. It just makes you a viable buyer. So it's going to be hard to compete with cash with a loan, but it is impossible to compete with anybody if you don't have that pre-approval. So that's my little two cents. If you're seeing people say it's really great to have a pre-approval, it is necessary to have a pre-approval. It's not like an extra step. It is the first step. If you have questions about buying a home, especially if it's your first home and you don't really know where to start, but even if you've bought a whole bunch of homes and you know that you can get qualified or you know you've got somebody that you've worked with and like I'll just give Bob a call and he'll give me a letter, call Bob now, before you start looking. But give me a call if you don't know a lender. I know lots that are fantastic and I'd be happy to put you in touch with them and then we can get started on your home search.

Do you want to watch the game (or maybe just the commercials and snippets of Taylor) and love the energy of a crowd but don't want to be managing the food and friends at your place? I've got you. Here is a short list of some places you can watch the game, AND get great food, great drinks, all without having to cook or clean up! Where are YOU watching?     Island Shrimp Co. Super Bowl Luau  Head to Island Shrimp Co at Rocketts Landing for a full spread of island-inspired eats through halftime including Island BBQ Wings, Kalua Pork Sliders, ISCO's signature shrimp, veggie fried rice, and more! Each ticket comes with 2 Painkillers to get the party started with a taste of the islands. They're even hosting some giveaways at halftime! $45 (tickets required) Cabo Fish Taco Cabo Fish Taco is hosting a great watch party, with 7 screens,  an All You Can Eat Taco Bar and drink specials all evening for $20. (tickets required) Always good for a game, snacks, and drinks...(just arrive early!) Address: 3022 W Broad St, Richmond, VA 23230 Wood & Iron Game Day Short Pump: 12288 W Broad St, Henrico, VA 23233 Midlothian: 11400 W. Huguenot Road, #109B, Midlothian, VA 23113 Scott's Addition: 1405 Roseneath Rd, Richmond, VA 23230 Pizza and Beer Richmond The Fan: 2553 W Cary St, Richmond, VA 23220 Hanover: 9325 Chamberlayne Rd, Mechanicsville, VA 23116 Gus' Bar and Grill Address: 2701 W. Broad St., RVA 23220 HomeTeam Grill Address: 1630 W. Main Street, Richmond, VA 23220

Two Ingredient Chocolate Mousse Ingredients 1 1/2 cups cold heavy cream, divided 1 cup good-quality chocolate chips or coarsely chopped chocolate (6 ounces) Garnish options: grated chocolate or crunchy toppings, such as chopped nuts, toffee, or brittle Directions Heat 1/2 cup of the cream in a microwave-safe bowl for 1 minute. Add 1 cup chocolate chips and stir to combine. Set the bowl aside for 5 minutes for the chocolate to melt. Whisk the chocolate and cream together until smooth. Set aside to cool while you whip the remaining cream. Place the remaining 1 cup cold cream in a medium bowl. Beat with an electric hand mixer or with a whisk by hand until soft peaks form. Transfer 1/2 cup to a small bowl and refrigerate for topping the finished mousse before serving. Continue whipping the remaining whipped cream until stiff peaks form. Fold the whipped cream into the cooled chocolate mixture with a large spatula in three additions. Work swiftly and gently and don’t stress if there are streaks of cream in the chocolate mousse. Divide the mixture between 4 ramekins or cocktail glasses. Refrigerate at least 1 hour and up to 4 before serving. Dollop with the reserved softly whipped cream and sprinkle with grated chocolate, chopped hazelnuts or toffee, or anything your heart desires!

I may have mentioned before, back in the olden days before the mortgage crisis of 2007/2008, the appraisers were able to be chosen. So, maybe somebody had a specialty in the city of Richmond and that is the appraiser that everybody would call if they had a property in the city of Richmond, especially if it was a property that I don't know might be a little trickier to appraise, and the lender and or the agents were able to request a particular appraiser. That is no longer the case, because the appraisal companies, the appraisers themselves, work for the lender. The lenders have to have an unbiased opinion of the value. Somebody who is not necessarily chosen, they just get handed the name of that appraiser and when that happens, we do get a more unbiased opinion of value. But sometimes it can create a problem if an appraiser is not totally familiar with the nuances of a particular area or neighborhood. In most cases, it's fine because the data is what the data is right? But trickier appraisals can happen. And there are ways to deal with those too. So, follow along for my whole series on appraisals and get a little bit more information about what can happen, what the pitfalls are, why you want an appraisal or maybe you know that you're going to have an issue and you want to know what might happen and how to deal with those problems.