HomeBuying

If you've been thinking about buying a home, you probably have been looking at real estate news and just getting fed by the algorithm, all things real estate. You probably have some questions on what all these changes are as a result of the National Association of REALTORS settlement and everything that's coming to the real estate industry. But, how do they impact you as a buyer? Well, first of all, in many cases, it's not going to affect you. Secondly, you want to make sure that the person you're working with to help you buy a home, and this has always been true, but especially now, is the person that you want to continue to work with. Make sure that you're in a good situation. That you feel good about the person you have hired to help you find a home and help you negotiate and get to closing on that new home you're purchasing. So that means, asking a lot of questions. Ask friends. Get recommendations and referrals from friends, so that you're making a conscious decision and not just calling your best friend's cousin who got their license yesterday. Not that there's anything wrong with the best friend's cousin, but just be mindful that it has always been important and is even more important now. You may have heard that you as the buyer are going to have to be paying the commission for your buyer's agent, and that is true, and it is also not quite true. So in my opinion, the buyer kind of pays for everything, right, because until you the buyer, pull your wallet out, get your mortgage, and actually close, the seller can't pay anybody anything, because the money that they're using to pay everybody is your money anyway. So they're not paying anyone until their home sells. So for all intents and purposes, the buyer's money is what is being distributed. Taking that aside, let's say that you fall in love with the house and the listing agent, the listing company, the seller, they're not offering any commission to be paid to the buyer's agent, and you, maybe a first-time home buyer, are like, wait a minute, I don't have the cash to pay. I don't know how I'm gonna pay. I don't know what to do here. Well, there are a few options and the least of them is going to the listing agent. So I would always recommend having your own representation. Work with a buyer's agent that you know, that you like, and that you trust. You are going to be in a contract agreement with that person. As such, it does say in most cases that you're going to have to pay their commission if there's no commission offered, but it doesn't have to be a big deal. Keep in mind that you can get closing costs paid by the seller to cover those commissions. You can sometimes roll the commission into the price of the home and it can be financed into your mortgage. This all depends on the type of loan you have, but there almost always is a way to solve it without you having to take cash out of your pocket or write an actual check to your agent. So while it does sound like there are lots of changes coming that may affect you negatively, just remember if you're working with a great agent, there is almost no problem that we can't solve when it comes to real estate. If you have more questions about agency or you want to look for a home start looking for homes in the Richmond area, give me a call, send me a message, or shoot me a DM. I'd love to help.

What's with all the hate for HOAs? I see people online all the time talking about how much they hate HOAs. If we take a step back, there are a lot of opportunities for great homes that are in an HOA, and here's why you might want to consider them and just be mindful about what you're reviewing when you go to buy in that HOA. First off, remember that there are some upsides to being in an HOA community. One of those is going to be that your neighbors are probably never going to be able to put their RV up on blocks, park three boats and two dead cars in their driveway and leave them there all the time. The grass is probably not going to be knee-high at your neighbor's house bringing your property value down. There are a lot of upsides. Now, if you're the person who wants the RV up on blocks in your driveway, you probably are the person who really does not want to be in an HOA community. But it does offer you some protections for your property value down the line. So sometimes that is worth considering. But here are a couple of things to ask yourself. First off, what is the fee that that HOA requires? And what does it include? Does it include trash removal? Does it include the water? Lots of condos and townhouses, it includes water, sometimes hot water, trash removal, snow removal, things like that, exterior maintenance, etc. Every community is a little different. So make sure you know what you're paying for every month when you sign up to be in that HOA. Then you're going to get a copy of all of the HOA docs before you close. That should be ordered right when you put your offer in and sometimes it can take a little while to get but once you get it, here in central Virginia at least, you have a three-day right of rescission. So read those documents. Yes, they're long. Yes, they're boring. But you want to look and make sure that you can live with the restrictions, the rules and regulations that they have. You want to make sure you know what you're paying for. You want to make sure that their financials look decent, and if you need to have your CPA or attorney or someone look at those and make sure they look okay, do that if it gives you a greater level of comfort. But you want to make sure that they're not gonna get in financial trouble and hit you with an extra three grand special assessments next year or in two years. So don't just look at what the rules and restrictions are, but look at the financial documents that are going to be included in those. If you find something you can't live with within those three days, you can say I'm out. So please, please, please read those. If you have any other questions about buying a home in an HOA community, why you might want to, or why you might not want to, I'm here to help. Give me a call, send me a message, shoot me a DM, and let's talk about it to see if an HOA community is right for you or if you want to do your own thing.

If you've been thinking about getting into the real estate market, whether you're thinking of buying or selling, you have probably heard a lot about all of the changes that are coming primarily regarding commissions in the real estate industry. If I talk to five people a day, I get five different opinions on how they perceive those changes to be coming and how they will affect them. So stay tuned here, subscribe to my YouTube channel, sign up for my newsletter, and stay abreast of all of those changes and how they're going to affect you possibly, whether you're buying or selling. As things change, and continue to develop, we're going to get more information and as I have that more information, I'm going to pass it on to you, because I do think agency is one of the most confusing things in this industry. Certainly right now because everybody has a different opinion. There is lots and lots of misinformation out there, unfortunately, so it is super confusing. My goal is to decode a lot of that for you and make it a little easier for you to wrap your brain around whatever side you're on, buying or selling. So if you have any questions about agency and all of what that entails, shoot me a message, send me an email, or give me a call. I'd love to help you unpack all of the information and get to the bottom of how it will affect you.

If you're thinking of buying a home, you're probably talking to different people, doing some research online, hearing different opinions, and maybe stressing out a little bit about, "What if I make the wrong decision?". Yes, this is a huge decision, but getting some clarity around what you want and what you don't want and what your concerns are, and yeah, talking to your agent about those concerns, can go a long way to helping you make sure you make the right decision when you're buying. Yahoo Finance did a little survey of some of the reasons that people have regret about the home that they bought over the past year and I'm going to go down the list and talk a little bit about each one.

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.

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.

All right, so let's talk about the nuts and bolts when we're talking about appraisals. Who pays for the appraisal anyway? And if I'm selling my home, and somebody's gonna come in and put a value on it, that's different than the value I put on it and my listing agent put on it, who is this person? Who are they working for? And how does this whole thing work? Well, the buyer pays for the appraisal. And yes, if you are the buyer, you are going to have to pay for the appraisal outside of closing. It is kind of sort of rolled into your closing costs, but generally, your closing costs are going to be paid at settlement on the closing day, and the appraisal is going to have to be paid beforehand. Why? Well, because in the instance that the appraisal throws a curveball to the whole situation, and you don't end up closing those appraisers would never get paid, because nobody is going to pay for a sour deal that didn't go through. So your lender is going to require that you pay that appraisal cost up front. And those numbers can vary, but usually between $500 and $1,000, is about where you're going to land in our area. Again, I work in Richmond, Virginia, and all the surrounding counties, you know, in central Virginia, and that's kind of a common cost here. In the event of an appraisal dispute where you or the seller may request a new appraisal or a new appraiser, then that cost can be shared, it can be split, or sometimes the seller might offer to pay. Again, anything like that, as long as it's legal can be worked out as long as everybody agrees on it. Generally speaking, though, the data is what the data is. So you want to look long and hard before you pay for a new appraisal if the data is not going to be any different. First, you're going to try to dispute that original appraisal before you go looking for a new appraisal or a new appraiser. Because, if they're going to pull the same data, then you've just wasted $500 to $1,000. Follow along for more information about appraisers about appraisals, how the whole experience works, and what it can do to affect or impact your transaction whether you're buying or selling.

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.