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.

  So one of the questions I get asked a lot is, "Is Richmond a good place to invest in real estate?". And I would say, yes. I'm probably a little biased, because I love it here, but yes, it is. And there are a few reasons for that. I hadn't really thought about the first one, until the other day when I was with clients who were from New Jersey, and they said, "Wow, your taxes are so low here, that it probably makes sense to buy real estate as an investment.", and I thought ding, you're absolutely right. There are lots of areas of the country where the property taxes are so high, that it pushes the rents beyond, you know, what they would be reasonably able to rent for, and makes it just not a worthwhile endeavor. It just wouldn't be. It wouldn't make sense financially. But in our area, because the taxes are relatively low compared to a lot of other municipalities, you can actually buy a place with a mortgage and include those taxes and your insurance and still have a little bit of positive income every month from that rental. But there are a couple of things that whether you're buying here or somewhere else, as a rental investment that I think it's really good to think of. The first thing you want to think about is, "What's your business plan? What's the business model that you want to use? Are you thinking of buying something and just have it pay for itself? Maybe you're buying it when your children are five, and you're going to keep it until they graduate high school, and that's going to be their college. So you're banking, really on the equity, and not really looking for a positive cash flow situation every month. So think about that, and what that looks like for you. The next thing you really want to think about is, "Do you have a little bit of extra cash, once you put the money down and do anything you need to do to get your rental up and running?" Do you have enough to cover any incidentals that might come along throughout the time that your renter's in there because remember, if you've got a tenant in place, you can't just say, I can't fix that right now, I'll wait until I have a little more cash. If the toilet is leaking, or something's literally not working, they have no heat, for example, you can't kick that can down the road, you will actually need a little bit of a buffer a little bit of a safety net to cover those sorts of repairs. And you will have those sorts of repairs guaranteed. Make sure too that you have a good application process in place. You are vetting your tenants well so that you don't end up having to completely repaint, or refinish/redo at the end of that lease term. So, unfortunately, this is where I get a little emotional with things like allowing pets, make sure that you know what you're in for if you do allow pets because they will oftentimes damage the property. And while many don't, many do, so having that little extra buffer or pet fee is going to make a big difference in what you have to do to the house when those tenants leave. Finally, once you get it rented, you have a tenant in place, you're getting ready to sign that lease, get a security deposit, make sure your lease is very clear on what happens there. Because inevitably, the time that you don't have a security deposit is the time that somebody skips out on their rent the last month, or does some damage that you are not prepared to cover when they move. So lots of things go into real estate investing, but it can be really lucrative and people always need a place to rent so everyone needs a home. I definitely think there's a need for it. If you have any other questions about real estate investing in the Richmond area, I'd love to talk to you and help you determine if it's the right thing for you and how you'd like to proceed. Just give me a call send me a message and let's get talking.

Let's talk about timing the markets. I think it's a thought that sounds really good in theory, but in practice, it's a little difficult. So obviously, we always want to sell high and buy low. I think that's kind of the idea that we all have when we are dealing with real estate. But think about the fact that that generally does not happen in the exact same market. So timing the market, I think, when you are buying not for investment, but for your primary residence, is almost impossible. Because to time the market well, you have to think about not only when you're going to buy, but when you're going to sell. And while that's easy to do or easy to think about in terms of stocks, or investments, it is a little more difficult when we're buying a home for maybe your family because if October turns into the month to sell, you have to then buy something else or have a place for your family to live. So if you're looking at buying a primary residence, I would suggest looking at that whole big picture and not worrying as much about timing the market because it will probably make more sense over time and less sense to try to target the exact buy date and sell date to make maximum profit when it's your primary residence. So let's save that for investments and for primary residence, we're going to look at it in a slightly different way. If you're thinking about buying or thinking about selling, I'd love to talk to you and help you put together a game plan that's going to give you that big picture to make it all make sense for you both for yourself your life, your lifestyle, your family and your finances.

So we've talked a lot about whether it's a buyer's or seller's market and obviously all the data shows, and anecdotally, I can attest to the fact that it is still very much a seller's market here in central Virginia, in the metro Richmond area. But why? Why are we still in a seller's market? What is going on? And is it going to change? So a lot of buyers are out there thinking, I'm gonna wait, I'm gonna sit it out until it turns back into a buyers market. And I wouldn't really recommend that and there are a couple of reasons why. And they go back to the reasons why we are still in a seller's market. So one of the reasons why we are still in a seller's market, and we have not actually been in a buyer's market since 2013, or so, is throwing back to the mortgage crisis of '06 or '07, '08. When mortgages were crazy, everything kind of went kablooey. After lenders were giving people mortgages that probably shouldn't have gotten mortgages, and people didn't really have any skin in the game, so to speak. I think the lowest amount I had a buyer, during that time period, bring to closing was about $100. I think there were some people who brought $0 to closing and that just doesn't really give you a great incentive to pay things off. You don't have anything to lose if you walk away and just can't pay your mortgage. A lot of things changed after that period and put us in a position where a lot of builders went belly up. A lot of things just shifted in the whole industry. Buyers were sidelined. It was harder to get a mortgage. There were a whole lot of reasons, but one big piece of fallout that came from that was people stopped building. We just didn't have the construction that we had had up to that point and we just haven't caught up. So there are literally not as many housing units as the market needs nationwide. Everywhere you go. Almost anywhere, there are not enough units of housing. So that means rental homes, apartments, condos, townhomes, single-family homes, all that stuff. I have also seen during the course of my career that things have gotten a little different from the perspective of buyers. I think 15 or 20 years ago, buyers were more likely to come in and buy a fixer upper. I say all the time that with Pinterest, Instagram, HGTV, and all of these things showing great transformations, my natural thought would be that people would be more open to a fixer-upper and they would see the potential more because they've seen it on TV or Instagram or whatever. And it's almost the opposite. So it's a little counterintuitive to me that with the popularity of those things that buyers tend to walk in and see just a couple of things that might just be cosmetic, or just beyond cosmetic and they will walk out of a home. So the deals to be had in this market generally are the real fixer-uppers because a lot of people are just completely, no thank you, on those. They won't even go or they walk in and turn around and walk out. So there are a few reasons why we are still in a seller's market, but there are always deals to be had. If you're thinking of buying, there are always opportunities out there. So don't sit on the sidelines because you may be sitting for a long time. But if you have any questions about buying or thinking about a game plan to get you into a home and you think it's maybe unattainable, I'd love to talk to you because I bet you can actually make it happen.

It's January, and everybody's making their list of things that they want to accomplish in 2024 and I'm right there with you. But if one of the things that you want to do this year or hope to do this year is buy a home, one of the questions that you probably have is 2024 gonna be better to buy than 2023 was, because it was not that easy last year to buy a house, especially if it was your first home. So here are my predictions for what 2024 is going to look like if you are a homebuyer. We've already seen interest rates drop and that is fantastic because last year they inched up and inched up and inched up to a point where for a lot of people, it was just too expensive to buy a house. But we've already seen them come down and the Federal Reserve has already said that they're going to reduce rates a few times over the course of this year. So I think that we have some good predictions that rates are going to come down to a more attainable, not 3%, but a more attainable spot. So we are unlikely to see those 3%, sub 3%, rates anytime, possibly ever. So if you're waiting for rates to drop back to three, you're going to be waiting a really long time, most likely. And you probably don't want to do that if you're seriously thinking about buying. But as rates come down, it will be more attainable payment wise. But what I want you to keep in mind is if you've been waiting on the sidelines thinking maybe I'm gonna wait to buy a house, remember that right now we're in January, the market is tight with inventory, we still don't have a ton of homes out there and as rates go down, more buyers are going to be entering the market. So if you're thinking you'd like to buy this year, maybe you're thinking I want to buy in spring, you're thinking sometime this year I want to buy I'm going to wait until spring when more homes are on the market. Start looking now because there is less competition out there now in January and February then there will be trust me in March, April, May. So if you're thinking and you're able to buy now with the rates as they are, get out there now, start identifying what you like, what you don't like, and figure out when you can actually move forward because this year is shaping up to definitely have lower rates than last year. Maybe a little bit more inventory though it might be the same and we are gonna see a lot of competition. So get your head in the game. Give me a call. Let's chat. I'll put you in touch with a lender and let's make a game plan to get you in a home in 2024.

One of the questions that I get asked all the time in every season, at a party by clients, whatever, "Are we in a buyers market or seller's market?". If you look at real estate news across the country that answer varies greatly from location to location, region to region, but here in central Virginia in the Richmond metro area, we are still in a seller's market. Now, what does that mean? That means that a balanced market is basically six months' worth of inventory. That means that if we had no more homes come on the market, that we would have six months to sell through all of the inventory that's currently on the market. So if a balanced market where it's not preferring or leaning towards buyers not leaning towards sellers, a balanced market is six months' worth of inventory. We are currently still, here in January of 2024, with less than two months of inventory. If we had no more homes come on the market with the buyers that are currently in the market, it would be at a zero within two months, like all of the houses would be sold. That's going to continue to a greater or lesser degree throughout 2024. We will still find ourselves in a seller's market. But with rates coming down, there are a lot more opportunities for buyers, especially first-time buyers or buyers who are very dependent on those rates. So if you're thinking about buying a home, reach out, I'd love to talk to you, and help you navigate that process, whether it's your first home or your tenth. And if you're thinking of selling, yes, it is still a great time to sell and I'd love to talk to you about the best strategy to get your home on the market before the spring when there is still pretty little competition right now. So give me a call, send me a message, and let's set up a time to chat.

Who is the appraiser anyway? How did they get picked? How did they come into the transaction? What did they know? One of the most commonly asked questions about an appraiser or the appraisal process, especially if it's not going the way everyone wants it to go is," Who the heck is this person anyhow?". Appraisers are not just real estate agents. So in terms of "just" a real estate agent, they actually go through a lot of the same or similar licensing process, but they also have to apprentice under another appraiser for a period of time. So, they have to really not only do their homework, but take a lot of exams, and they are constantly having to update their information and their knowledge to make sure that they are doing their job correctly. They have a lot of responsibility, and nobody picks them. So back in the olden days, it used to be that if an appraiser worked in a particular area, the lender and or the agents can say, Hey, we should have SO and SO appraised this property, they know the neighborhood, maybe I've known them for 10 years, they live in the neighborhood, or they work a lot in this county or municipality. After the mortgage crisis of '07/'08, the consumer protections that were put into place after that made it so those appraisers were chosen almost by a lottery. It's like their name just gets spit out as this is who does it. Because they want to make sure that it is a totally unbiased opinion of value. Follow along to the rest of my series on appraisals and get all the information about who they work for, why they do what they do and how it affects you. When you are in the midst of a real estate transaction.

If you're thinking of buying or selling a home, one of the things that's going to affect you on either side is the appraisal. So I'm going to do a short chapter, series, number of episodes on appraisals and tackle some of those frequently, commonly asked questions or situations that come up in the appraisal process. First things first, what is an appraisal? An appraisal really is an opinion of value. It is the most objective opinion of value because it is made by an uninterested party, right? It's not what the seller thinks the property is worth. It's not what the buyer thinks the property is worth. Nor is it what the agent thinks the property is worth. It is really an opinion of value by a an educated appraiser who only does appraisals. They are not involved in the transaction and it's based on the comparable sales around the property. So, you cannot use a property that's 50 miles away. You cannot use a property that is unlike the subject property. But it is an opinion of value, so they're not always going to be exactly the same, but they have to use information to back them. If you're curious about how appraisals work, what goes into the appraisal process and how it can affect you. If you're a buyer or seller follow along for the whole series and I'm going to answer all the questions you can think of about appraisals.