HomeBuying

Who pays for what when you're buying or selling a house: buyer edition. So if you're buying a house, sometimes when you get excited you think about the process, and you're really focused on looking at homes and that whole emotional aspect of it, you don't necessarily think about all of the little things that come along the way, and who pays for them. So when you're buying a home, the first thing once you have found the house that you love, and you're writing the offer, of the first things you're going to do is you're going to write a check to send a wire for the earnest money deposit. Now, that is basically a deposit that is going to be held in escrow. So it doesn't go directly to the seller in the state of Virginia, in the state of Virginia, that is all I can talk about because that is where I am licensed. So in the state of Virginia, it does not go directly to the seller, it gets held by the settlement agent that you're going to use to do your closing, or the real estate company that you are working with to buy your home, that generally needs to be about 1% of the entire purchase price of the home. So if your house is $500,000, you probably want to write about $5,000. As your earnest money deposit, it basically binds the contract again, it gets held in an escrow account until closing. So if you were originally going to have to bring $100,000 to closing, you will then only have to bring $95,000 Because that $5000 gets applied to whatever else you bring to closing for your downpayment, your closing costs. Another thing you're gonna have to pay for as the buyer is any inspections that you have. And we are now still in a crazy tight market, but we are seeing a good number of inspections. And they can range in price from $100 to $1,000, depending on the type of inspection. And what I always tell people is you can have as many inspections as you are willing to pay for. You have to weigh that out and discuss that with your agent, because you may know that you want to have a camera sewer inspection on one house, and on another house, it may not seem as important. So sometimes those numbers and those types of inspections depend on what you're buying, and where and all that good stuff. So remember, the seller is not paying for any inspections except the pest, Wood Destroying Insect, inspection. That is the one that they're paying for and it usually costs them $100 or less. Once you've covered that earnest money deposit and your inspections, your next cost is going to be your appraisal. And if you're going to have a survey. And your appraisal is generally going to be in the 600 to $1,000 range. And that survey, if you want to have one, a lot of lenders don't require them anymore, but they vary widely depending on the property, the type of property, where it is, how difficult it is to survey, and 100 other things. So I can't give you an estimate there. But those generally are going to be things that you're going to have to pay for out of pocket, because should the loan not go through, those people still want to be paid. So they're going to want the money upfront and not rolled into your closing costs that happen on closing day. After you get through those financial hurdles, you're not going to have to pay anything really until you get to the settlement table and then you're going to have all of your lender fees, your attorney fees, your title insurance, your points that you might have with your mortgage, there are a whole bunch of things and I have another video that kind of breaks down the closing costs, so go check that out if you want a little bit more detailed info on what your closing costs entail. But at settlement, you're going to get that earnest money deposit that you paid upfront applied to that number and then you're going to have all of your closing costs and the actual amount that you're paying for your down payment. And then you're done. But those little along-the-way fees sometimes get lost and all the excitement so just make sure that you've budgeted and that you've got the cash, even if you're putting a relatively low down payment, make sure you've got the cash to cover all those other things that you might want to do along the way or that you're going to be required to do. If you have any questions or you want a little bit more detailed information about what things might look like for you in your financial situation with the home that you want to purchase. Give me a call I'd love to chat and help you make your homeownership dreams come true.

If you're buying a home and you write your offer you love the house, the thing that you love the most is that fantastic chandelier in the dining room, and the adorable dog house that looks exactly like the house you're buying. Make sure you write those things in. Here in central Virginia, our contract actually lists out the items that are automatically assumed to be staying when you buy your house. So they're automatically in the contract. We don't need to write those in. They are technically things that are attached to the house, which means fixtures, fans, curtain rods, blinds, dishwashers, microwaves, and stoves. That's basically it. Now, some of the gray areas can be mirrors in the bathroom, sometimes they are attached. And sometimes they're not refrigerators. Well, they're always attached the same way a stove is, why are they not included? I don't really know. But they're not. So we always write those in. If we're buying a home, and you want to keep that refrigerator or the washer and dryer, we're gonna have to write those in because they're not automatically included in the contract. But I would go a step further and say, that if you absolutely fell in love with that chandelier in the dining room, and the seller wants to take it, they should have excluded it. But if we know we want to keep it and we know we don't want any hurt feelings, or kerfuffle, as we go through the process, we go ahead and write that in as well. So to be safe, we're always going to write in all of those little extras, but probably not the window blinds in the bathroom, and probably not the ceiling fan that's in the rec room. If you're looking at homes online, and you are not working with a realtor, I'd love to help you figure out exactly what you're looking for and what's going to stay with that home when you purchase it. So give me a call and let's chat and I can help you navigate that entire process.

If you spend any time at all on social media, you probably hear people talking a lot about buying houses to invest in short-term rentals and what a great source of passive income that is. So you maybe thought, Should I buy a house and use it as a short-term rental? Let's talk about some of the details that you might want to think about. You may have heard the old saying, you know, you make money on the front end, not the back end. So if you're looking at a house, to be a short-term rental, make sure that it's not something that's going to need a ton of work that's gonna then price you out of that short-term rental market to recoup your money. Also, make sure that if you are looking in an area that maybe you're not as familiar with, you are familiar with, or get familiar, with the zoning laws and regulations or short-term rentals in that area. Because they don't allow it and you definitely don't want to buy something to use as a short-term rental, and only to find that you can't. If the property is not currently furnished, or if you don't like the furnishings, then make sure that you're calculating into your budget, all those furnishings that you're going to have to put in to make it be fantastic. Because, you can get a great rate for a short-term rental, but not if it looks like everything came from you know, the goodwill. When you're doing your calculations, you also want to include things like who's going to manage it, who's going to check on it? What are the fees going to be? How is it going to get cleaned? Do you have an HOA in that neighborhood or area that needs to be paid? All of those little things get an idea of the utility costs, that sort of thing, and I have a great spreadsheet that you can plug all those numbers in. So if you want a copy of that or you want to get a little bit more information about buying a short-term rental owning a short-term rental, what to look for, and the do's and don'ts. I'd love to talk to you happy to help and put you on the right track to finding out all of the information that you might need to know to make a decision if it is in fact a good call or if maybe you want to go another direction for your investment.

Well, you've heard the saying "no news is good news," but really, there's not a whole lot of news, and depending on your perspective, of course, not much is that good. What a bummer that sounds like. I know, I know. But let's unpack it a bit. Despite interest rates sneaking perilously close to 8%, which is a 23 year high, it is STILL a seller's market. While the rates have certainly sidelined some potential buyers, the fact remains that we are still in a nationwide, regional, and local housing shortage. Basic laws of supply and demand are in play in the market, with more buyers than sellers, causing prices to continue to rise even with the increase in rates that would normally slow the price increases. (As it is, prices have increased 4% year over year) The hardest hit buyers in the market are obviously those first time buyers and/or buyers in lower price ranges. There are simply not many homes in the $150,000-$250,000 range to be had right now. In fact, I had a client write an offer (not a bad offer, either) on a home that was listed at $150,000 last week, and the listing agent let me know that they had 63 offers. SIXTY THREE. I knew they'd have a lot, but I was gobsmacked by that number. One reason for the shortage, as I know I've mentioned before, is the fact that nearly 85% of homeowners have rates below 5%, and unless they really need to sell, it's not terribly tempting for them to sell and move into a higher rate mortgage. Now, if you have owned your home a while, have great equity and no mortgage, it's still an absolutely terrific time to sell. While we are still seeing lots of multiple offer situations, we're also seeing homes that need a bit of work or that don't show well, sit on the market a bit longer than they would have even a few months ago. So while it is a good time to sell, I cannot overstate that having a great agent who will help you prep your home to sell, market it well, and commit to following up, is worth its weight in gold. Putting in that extra work will not only get you more money, but actually get your home sold in a reasonable amount of time. In this market, the "half baked" listings, or those priced too aggressively, are the ones that are sitting for longer, getting lower offers with less favorable terms, and having to make price reductions to get it sold. I hear your, "But what if I'm a buyer? Should I just give up?" No! But, if you're buying, I definitely have some tips- Broaden your parameters. Yes, sometimes you need to reduce your expectations. Maybe that chef's kitchen isn't in the cards right now, but you can find a home in your "perfect" neighborhood, with less "done" and more potential. Check into loan programs and grants that may offer you downpayment and closing cost assistance. They're out there! If you're stuck on that higher budget home, look into things like rate buy downs that will lower your rate for the first 3, 2, or 1 years. Run all your numbers, though, and please don't jump into the situation that works now but can be a nightmare later! Remember that especially if it's your first home, it doesn't have to be your "forever" home! Getting your foot (or toe!) in the door of the market is still a lot easier than waiting, when prices will definitely be higher (and rates may be the same or higher). It's much better to buy less house and keep your lifestyle than overcommit and end up house poor. Building equity (for most people, at least) is still better than paying rent! How can I help you meet your real estate goals to get you where you want to be? I'd love to answer any questions you might have about buying or selling, and help give you the tools you need to get there. Let's talk!  

Marry the house date, the rate, marry the house date, the rate. This is something that if you spend any time on social media, and you've even dipped your toe into thinking about real estate, you've probably heard or seen someone say. It's a phrase that I kind of hate because I think it minimizes the whole experience and doesn't really talk about all of the nuances, but let's unpack it a little bit and look at that phrase in terms of the current market, and why it might be worth digging into a little bit. So simple economic principles, say if inventory is low and demand is high prices are going to go up, we have been in a historically low inventory situation in housing in the entire country for a while now. And that will continue for a while longer. So while the high interest rates have sidelined, some of the I'd like to buy a house people, there are still lots of people who actually need to buy a house and it has not sidelined them. So there's still a good amount of demand, and not a lot of inventory on the market, which means prices will likely continue to rise, despite the fact that interest rates are high. So while they are expected to go down in the probably first/second quarter of 2024, they will first of all, maybe never go back to 3%. So if you're waiting for that, like as my father used to say, if you're waiting for that you're backing up. You're not going to get anywhere, because that's very unlikely to happen. But even if they go down, when they go down, those prices are not going to go down at the same time. Because obviously, interest rates go down, those prices are going to go up because all of those I'd like to buy a house people are going to come back into the market. So demand will go up, and inventory is not going to change radically. And those prices are going to continue to escalate. So if you're thinking about buying and you are particularly renting in the meantime, if you can afford it, if you're ready, buying now is probably going to be a better financial decision than paying rent until six months or a year down the road, when maybe rates are lower, but prices will almost definitely be higher. So if you're thinking about buying or you think, you know, hey, maybe I'll buy a house in the spring, I'm going to save up more money, or whatever your thought process is. If you're thinking of buying anytime in the next six months to a year, give me a call, and let's talk, break down the numbers, look at what the projections are for the area and the type of house that you're looking at, and the price range. All of those things go into figuring out these numbers, but I'd love to talk to you. I'd love to help you determine if now is the right time or if it's the good time to wait and help you make those calculations that fit your personal finances and life plan.

So believe it or not, even in this market, pricing is incredibly important. And if you're wondering why your house has been sitting or why a house hasn't gone off the market that you've been seeing over and over in your search, if you're buying, it is price, it is literally always price. When I was a pretty new agent, I remember sitting in the office, and there was an agent who had a listing that hadn't sold very quickly. And this again, was a long time ago when things didn't fly off the market like they do now. And she was asking everybody to take a look at her listing and see if they could tell why it hadn't sold. And even brand new, I said, I think it's the price. I think you need to drop the price. And she was indignant that it was not the price that it wasn't always the price. But, if you really think about it, think about you having a great house in a great location, but the condition of the house is rotten - price. You have a weird house in a great location, in great condition, what's going to move it - price. If you have any combination of those factors, and one is off, those are generally things that you can't change, or you can to some degree condition, yes, you probably don't want to totally renovate a house if it's got an unusual floorplan. So price is going to be a factor. And obviously, location, location location is something we say for a reason. And that's because it can't be changed, but what can be changed, is always the price. So this goes back to having a consultation and walking through with your realtor when you are starting to think about selling so that doesn't mean if you say I want to sell my house in September, that's when I want to sell that's when I want to move. You should be in a perfect world at least calling your agent a couple of months before so that we can come through, walkthrough, and tell you, Hey, you're going to get more bang for your buck if you paint, if you replace the front door, if you do a little landscaping. All of those little things can improve the condition which can maybe maximize an unusual floorplan and make it seem more livable. So if you're curious about what you might need to do to get your home ready for sale, or if you know you're going to want to sell your house in a couple of months I'd love to talk to you just give me a call. Reach out and let's set up a time to chat and I can walk through and give you a to-do list that will help you get more money for your home because it really is always price.

Dreams versus reality. Here are a couple of things that I implore you to please not do if you are thinking about starting to look for a home. In a perfect world, when we start looking for that perfect home for you we are able to find something that fits all of your needs, is going to be able to be your forever home, and is of course going to be totally Pinterest-worthy. The problem is that sometimes the Pinterest dream does not hit the budget reality. And if you're starting to shop for a home, whether it's your first home, your fifth home, or anything in between, our budgets are just a little bit less than what our dream looks like it's going to be. So while I do always encourage buyers that I'm working with to fill out a have-to-have list and an absolutely not list, make sure that those are actually giving you enough opportunity to be open to the possibilities that are actually available in your budget. Because otherwise, trust me it is a very discouraging process. Make sure that when you're talking about, thinking about, and writing down those must-haves they're things that are actually possible within your budget. And sometimes that really means looking at your whole house budget, your whole life budget, and talking to a lender to get that pre-approval number first. But remember, your first home doesn't have to be your forever home, your second home doesn't even have to be your forever home. So, spend more time with the lender and your budgets and looking at the houses that are actually available, rather than spending your time building your dream mansion that may be completely unattainable at this point in your life. Trust me, you can get there, but sometimes it takes a couple of houses to land where you really, really want to be. So when you're writing that list of must-haves and absolutely do not want to make sure it's a little more rooted in reality and a little less rooted in Pinterest. Sometimes it's really hard for those things to match perfectly, but we can usually get pretty close to the things that you need, the things that you want. And a lot of times a little special touch from you will get right back into that Pinterest or Instagram category. If you want a copy of my buyer's guide, or you're thinking about starting to look on your own, give me a call, reach out, or send me a message. I'd love to talk to you and help you get started building that wish list for that home that you might be ready to buy in six weeks, six months, or even a year. I'd love to talk.

So you want to buy a house and you definitely want to have a home inspection, but how does that whole thing work? So for the last few years, I've been saying, we're in a weird market, and a lot of people have waived home inspections. We've seen different sorts of clauses for home inspections, but sometimes you just want to have a regular old full home inspection and you're able to do it with the contract that you have. So let's talk about that really basic, such is the home inspection process. What is a home inspection gonna do? Well, I always look at a home inspector as sort of like your general practitioner. Keep in mind that in most contracts, and in our basic boilerplate contract here in central Virginia, it's going to give you the ability as the buyer to have as many inspections as you want to pay for. But the default home inspection that most people think about is your general home inspection. So that means they're going to go in the crawlspace. They're going to check out the insulation. They're going to make sure the structure looks generally good. They're going to run your faucets, flush the toilets, look at the electrical panel, and test your outlets. All of those things that you're going to be using and living in the house all the time to make sure that they look generally good. So a couple of things to know. Make sure that if you have a question about something, the HVAC looks old, the roof looks old, or you're concerned about the crawlspace, point those things out to your inspector. I have never met an inspector who is not happy to take a closer look at something that you have a particular concern about and just give it an extra once over. I personally usually try to do the home inspections sooner in the timeframe so that if there is something that we need a specialist for, we can get them over there to take a look. So remember, just like you can go to the doctor on Monday and get a cold on Wednesday, the same thing can happen with your home inspection. Your home inspector's gonna have a contract that's gonna say don't hold them liable for things that happen later, because things will always happen later and there's no such thing as a perfect house. Even a house that was finished, new-build, yesterday. So obviously, always get a home inspection if you can. But make sure that you understand what that inspection entails. Make sure that you understand that that inspector is going to answer your questions, they're going to look out for you, they are working for you. Make sure you're comfortable with the inspector and get any specialized inspections that you need, if it's something that you're concerned with. So ideally, whenever you're buying a home, you're gonna get to have a home inspection. If you have questions about great home inspectors or buying a home in general and you want to find out more about that whole process. I'd love to talk to you. Give me a call or reach out to me here or an email and let's set up a time to chat.

Should you even really buy a house in 2023? The market seems like it's totally crazy and interest rates are bananas. Even in this high-interest rate environment, there are some really good reasons why buying a home still may be a better option than renting. Probably the biggest one is that owning a home really is kind of an inflation buster. So what does that mean? Well, if you notice, if you rent or you're looking at rentals, you probably see that rentals continuously go up almost every year, rents are going up in almost every area. So if you're renting, you are hoping that you're going to continue making more to get maybe a nicer place a bigger place, whatever, or to just stay in the place you are, that's going to continually get more expensive. When you buy even with interest rates being a little higher, you are locking in that payment for usually a 30-year term, a 15-year, 20-year, or 30-year term, you kind of can't beat that if your payment is say $2,000. Today, it's still going to be $2,000 in 20 years. Whereas if you rent something that maybe costs $1,500 today if you stayed in that same place, I couldn't even begin to tell you what you're going to be paying in 15 or 20 years. Now, that's not to say that there aren't some extra expenses and things that come along with owning a home. So over time, you do gain appreciation, which is a really great investment when you're living there anyway because you're always going to pay to live somewhere. And the benefit of sort of stockpiling that money for yourself rather than paying someone else's mortgage, as you often hear it referred to in a rental. There's a value in there not just monetary, but a pride of ownership. Additionally, sometimes your landlord may not be really keen on you painting the kitchen cabinets, a mural in the kid's rooms, making some renovations to the bathroom, that sort of thing. And when you own your home, you really can customize it to just what you want it to be. There are also tax benefits that come with owning a home as opposed to renting. But always consult a tax professional when you're thinking or talking about any sort of tax-related things because I am not one. And remember, even though interest rates are higher right now if you can afford the payment right now, you are pretty, I'm not going to say guaranteed but almost guaranteed, that at some point rates will tick down and your payment is likely to become less rather than more (if you refinance). Whereas with renting it is 100% guaranteed to go up over time. So if you're thinking maybe I would be interested in buying a home, I'd love to talk to you and help you walk through all of the steps. Look at all the information and see if it is the right choice for you right now. Or maybe it's something you want to do in the next six months to a year. I'd love to talk to you give me a call. Reach out via email and let's set up a time to chat to see if it is the right decision for you.

So great, waving an inspection is a great way to get your contract at the top of the heap in a multiple-offer situation, but should YOU do it? I am going to tell you that if you don't have some sort of risk tolerance, don't do it. But if you do have a little bit of risk tolerance, there are ways to get around it. So you can pay an inspector a couple of hundred dollars to walk through the property with you and give you a general idea of how those systems, that you may not know how to assess, what kind of condition they're in. But at the end of the day, you are 100% going to have something happen, whether you have an inspection or not. I call these oh s**t moments, it might be six weeks, it might be six days, it might be a year. You can also buy a home warranty, the seller can buy a home warranty for you, or you can buy one yourself, but they're not going to cover everything. So you're still going to need a buffer. It is always a bit of a risk when you have a home that things might go wrong. So if you are on a razor-thin margin, a razor-thin budget, and you can only afford your mortgage payment, that may not be the house you want to buy anyway, inspection or not. But ultimately, your options are probably to pay way more than the asking price and ask for that inspection, giving the seller some sort of security, that they're going to have still a higher offer, even if they end up with items that they have to repair. Or you're gonna still probably pay more than you want in this market and waive the inspection. It's kind of up to you and where your risk tolerance is. But remember, at the end of the day, if everything is equal, that seller is always going to pick the offer that is the least risk for them. So the more risk you can take on the better price you are going to get on the house that you're purchasing. If you want to take a look at more ways to build an offer, write an offer, or buy a home in general, check out some of my other YouTube videos. Or better yet, give me a call. I'd love to talk to you and I'd love to help you find your dream home.