Connect with us

Financial

Practical prices

Realistic expectations yield real results on the real estate front lines

Published

on

Last weekend I toured two Capitol Hill homes with clients from out of town. The first was priced at $1.1 million and had been renovated nicely, but had no parking and only one full bathroom upstairs. It had an unfinished basement, and it also didn’t have a single closet in the whole house.

The second house literally backed up to the first: they shared the same alley for rear access. It needed a little work, but it had parking, a master bathroom en-suite, and a second bathroom upstairs, a separate apartment downstairs, plus almost all the original mouldings and hardware, including three pocket doors, for $949,000.

I knew the first home was overpriced without even seeing the second and when the agent asked my opinion, I was frank about my feelings. She tried to justify the price using other smaller, more expensive properties that, not suprisingly, were also not yet sold. She also mentioned that the current owners had put a lot of money in the renovation. Neither of these are justification for my buyers to overpay for the home, especially when there is another home with a better layout in virtually the same location for $150,000 less. At last, she conceded that the list price was set by the sellers and it “is what it is.”

I understand the thought process those sellers must have went through — I’ve been a seller many times myself and I see other sellers doing the same thing all the time. Seemingly sound strategies take hold in their heads, but end up ultimately wasting a lot of time and costing them emotionally and financially too. Some of these thoughts are:

“I’ll just price it higher than it ought to be listed, because you never know if someone will come in and really like it.”

“I put so much in the renovation that I couldn’t imagine taking a hit.”

“I won’t take a penny less than what I bought it for in the first place” or better yet: “I won’t take a penny more than what I bought it for plus what it will cost me to sell it.”

“I’ll price it higher so I can give myself some room to negotiate.”

These “strategies” are all invalid. A home should be listed at its market value, perhaps just a hair more, in order to sell. And the truth is, most homes are usually pretty easy to value. Even in D.C., where homes can vary in size, condition, layout and finish level in infinite ways on just one block, these variations can all be accounted for and used to adjust the estimate to find a valid range of possible sale prices. A good agent will perform almost the same research procedure that an appraiser would, with a little more leeway to adjust for their own hunches based on their market experience. This research involves searching past sales, using a price-per-square-foot as a basis, adjusting based on differences in size, finish, amenities and other considerations, and also comparing the home to others currently being marketed.

Once a range of values is found, I usually arrive at an average value for the suggested listing price. Of course, if the home has certain problems with it (poor view, awkward layout, iffy location, etc.), it will be priced toward the cheaper end of the price spectrum. A home with all the bells and whistles, no real problems and all the latest improvements would be at the top of the spectrum.

My suggested listing price is not necessarily the price we take to the marketplace, however. Sellers must buy into my research and understand the thought process so they can actually choose the listing price themselves. This is the point where the reality of the marketplace meets the fantasy of some seller’s expectations, for a bloody fight to the death. The thoughts I identified above rear up and challenge the cold, quiet numbers on the page that show the value without much emotion at all. Sellers dream of a fantasy buyer with so much money they don’t have to worry about overpaying. They wring their hands and fear their own self-deprecation for having bought an investment that may have lost some value. They think they can plan each step in a high-stakes dance with buyers to haggle to a higher sale value by shooting for the moon with the asking price.

In the end, no matter what the seller decides, reality will win.

If sellers let their fantasies and fears set the strategy, the listing will sit on the market for months, maybe even years. Agents will waste their time, resources and sometimes their reputations trying to sell a lousy deal and never collecting a commission. And worst of all, if the home ever does sell, it will undoubtedly sell for less than its true value because of the daily drop in value from the stigma of ever-increasing days on market.

If, however, the cold, hard truth of the value of their home sets in, sellers generally will sell quickly, with better terms, and sometimes even have competing offers.

So, to the seller of that million dollar mistake, look clearly in the mirror and see the reality that your home needs to have more bathrooms, a closet or two, a finished basement and parking before you can even think of listing higher than your neighbor’s, renovation or not. And to the other seller, kudos for not using an active comparable (overpriced) property as a basis for your own list price. But, you haven’t sold yet either, so it could be that your price was a little aggressive too.

To everyone else out there thinking of selling: whether you may sell for a profit or for a loss, you’ll only sell for the home’s actual value at the end of the day. A good agent will identify the value and any easy ways to increase it and market it to feature all its good qualities. But ultimately, it’s the seller who must understand the realities of the market and choose the listing price rationally without giving way to fears or fantasy.

David Bediz is a principal of the Dwight & David Group at Coldwell Banker Residential Brokerage. He is also on the Board of Directors for GCAAR, the Greater Capital Area Association of Realtors. He can be reached at 202-352-8456 or through dwightanddavid.com.

Advertisement
FUND LGBTQ JOURNALISM
SIGN UP FOR E-BLAST

Real Estate

Don’t procrastinate buying your home

Some experts predict rates will fall in June

Published

on

Spring is in the air and it’s a great time to buy a new home.

As springtime fills the air, cherry blossoms are blooming, much of the year still lies ahead and many have started to think about how they are progressing with their 2024 goals. If the dream of buying a house was put on hold when the interest rates went from 3% to almost 8%, and life got in the way of an idea that had gotten onto your to-do list, maybe now is the time to dust it off. 

Mortgage lender Tina Del Casale from Sandy Spring Bank says, “There is still hope the Fed will be happy with inflation numbers by June to finally pull the trigger on lowering interest rates.”  

The rates might not be as low as they were in 2021, but historically, they are still not as high as they were 20 years ago. Some people’s parents remember getting interest rates that were 12%, 14% or even higher.   

One of the biggest questions I get at homebuyer seminars is about is the process. What is buying a house ACTUALLY like?  I usually tell them that it’s like anything else. One step at a time. One form at a time. One bank transfer at a time. One house showing at a time. One home inspection at a time. If you have the wherewithal to plan a vacation, you can buy a house. 

  • Finding a Realtor
  • Finding a lender to get pre-approved (how much is your budget and what is a comfortable monthly payment)
  • Are there any first-time buyer programs that could be used? Is there down payment assistance?
  • Looking at the houses.
  • Finding one you like, and putting an offer together:
    • An offer usually involves a sales contract, any special forms that the jurisdictions require (lead-based paint acknowledgements, what appliances and systems in the house are included/excluded, if the home is part of a homeowners association, or a condo association, etc.)
    • Any forms related to getting an inspection done.
    • Who is selling the house, who is buying the house, how much is it being sold for, where it is exactly, and who are the others involved in the transaction (title company, agents, etc.)?
  • Getting any inspections done.
  • Negotiating any changes in the sales price or terms, or credits for inspection items.
  • Getting the final approval for the loan and then going to settlement.

Many people get interested in buying a house, but the “unknown” of it all can be daunting. It could be that the best way to think about it, is that like most things in life, you can’t cross every bridge BEFORE you get there. You just take it one day at a time. Some things will be surprisingly easy. Some things will require the advice of experienced lenders, Realtors, home inspectors and title attorneys.  

But if the process doesn’t begin somewhere, somehow, the idea just stays in one’s head in the “to do list” file.  And then 3 years go by, 5 years go by, 7 years go by. And your friends that DID buy a house laugh themselves to the bank when they go to sell the house they bought 3 years ago, 5 years ago, or 7 years ago.

If you need any recommendations for a local lender or Realtor, please don’t hesitate to ask.

Joseph Hudson is a referral agent with Metro Referrals. Reach him at [email protected] or 703-587-0597.

Continue Reading

Real Estate

Down payment strategies: Financing your home purchase 

Understanding the options key to unlocking the door to a dream home

Published

on

Looking for your dream home? First, you need to understand how to make the down payment.

Navigating the path to homeownership can be a complex journey, especially when it comes to accumulating the necessary down payment. For members of our LGBTQ community, understanding the available options for saving and financing this crucial aspect of home buying is key to unlocking the door to their dream home. Let’s explore effective methods and resources specifically designed to support LGBTQ individuals on their path to homeownership.

Traditional Savings Strategies

Saving for a down payment often begins with traditional methods such as setting aside a portion of your income into a dedicated savings account. High-yield savings accounts and automated savings plans, some offering up to 5% interest in today’s market, can expedite the process, providing a disciplined approach to accumulate funds over time. Additionally, exploring investment opportunities that match your risk tolerance can offer potential growth for your down payment savings.

Down Payment Assistance Programs

A variety of down payment assistance programs exist to help homebuyers with their initial costs. These programs often offer grants or low-interest loans to first-time homebuyers or those who haven’t owned a home in the past three years. 

It’s essential to speak with a GayRealEstate.com agent to determine what programs may be available, plus online research into local and state assistance programs, as many are designed to support individuals in specific communities, including the LGBTQ+ community.

For medical professionals, police, teachers, firefighters, and other community heroes, there are several special loan and assistance programs designed to help with home purchases, often offering benefits like down payment assistance, reduced closing costs, and more favorable loan terms.

The Hero Home Loan Program provides first responders, including police officers, firefighters, and paramedics, with benefits such as lower interest rates and reduced closing costs. This program aims to make homeownership more accessible by offering more flexible credit score requirements and down payment assistance .

For educators, firefighters, law enforcement officers, and medical professionals, the Everyday Hero Housing Assistance Fund (EHHAF) offers closing cost assistance through gift funds. This program is designed to support those who serve their communities by making homeownership more affordable, with no repayment required for the grant funds​​.

The HUD Good Neighbor Next Door Program offers up to 50% off the list price of homes for law enforcement officers, pre-Kindergarten through 12th-grade teachers, firefighters, and emergency medical technicians. This initiative aims to encourage community revitalization by assisting these professionals in homeownership within the communities they serve​​.

Homes for Heroes provides assistance specifically to first responders and offers significant savings through Hero Rewards when buying, selling, or refinancing a home. On average, participants save $3,000, with the program offering real estate and mortgage specialist connections tailored to the needs of first responders​​.

LGBTQ-Friendly Lending Options

Finding a lender that understands and supports the unique needs of our LGBTQ community can make a significant difference. Some lenders and organizations specialize in offering inclusive financial products and resources to assist LGBTQ+ homebuyers. These may include specialized mortgage products, financial planning services, and guidance through the home buying process.

The journey to homeownership is a milestone that requires careful planning and support. Remember, every step taken towards saving and financing your home purchase brings you closer to the dream of homeownership.

(GayRealEstate.com offers valuable resources and advice tailored to meet the unique needs of our LGBTQ+ community in their journey towards homeownership. For more comprehensive guidance and support in navigating the home buying process, visit GayRealEstate.com choose an agent and start a no-obligation conversation today.)

Jeff Hammerberg is founding CEO of Hammerberg & Associates, Inc. Reach him at [email protected].

Continue Reading

Real Estate

Turn your bare walls into captivating focal points

Paint, wallpaper, statement installations and more

Published

on

Whether you prefer artwork, paint, wallpaper, or statement walls, there are countless ways to adorn and decorate your walls.

Are you tired of gray walls and white kitchen cabinets with white granite or marble countertops? Have you gone back to the “Builder Beige” that was popular in the ‘90s?

Your walls are the blank canvases of your home, waiting to be transformed into stunning expressions of your personality and style. Whether you prefer vibrant artwork, paint, eye-catching wallpaper, or statement walls, there are countless ways to adorn and decorate your walls to elevate your space. Here’s a guide to help you turn those bare walls into captivating focal points. 

Wallpaper: Wallpaper has again become a versatile option for adding texture, pattern, and color to your walls. Whether you prefer subtle designs or bold prints, there’s a wallpaper to suit every taste. 

It now even comes in peel and stick rolls, so you don’t have a mess of water and paste. For some new designs, check out www.spoonflower.com

Before selecting wallpaper, consider the scale of your room and the atmosphere you want to create. For small spaces, opt for light, airy patterns to make the room feel more spacious. Conversely, in larger rooms, you can go bold with intricate designs or vibrant colors to make a statement. Don’t be afraid to mix and match wallpaper with paint, or even wallpaper the ceilings for a unique and dynamic look.

Statement Walls: Statement walls are a bold way to add personality and drama to any room. From accent paint colors to textured finishes, the possibilities are endless. Consider using a contrasting color or texture to highlight a specific wall and create visual interest. For a contemporary touch, try incorporating geometric patterns or asymmetrical designs with strips of wood. Hand-painted murals are another option for creating striking statement walls. Choose a mural that reflects your interests or transports you to another world for a truly immersive experience.

Paneling/Brick: The shiplap phase may be dying out, but there are still many ways to use wood and paneling in your wall décor. Reclaimed wood is a popular option, as are wood slats such as the ones found at www.woodpanelwalls.com. Use them on walls or ceilings, or as a background for wall-mounted televisions and sconces. Amazon also has lots of options for wood veneer available and exposed brick is popular in many contemporary homes. If you don’t have a brick wall to uncover, select from options such as lightweight faux brick or stone.

Artwork: Art has the power to breathe life into any room. When choosing artwork, consider pieces that resonate with you personally and complement your existing décor. Experiment with a mix of styles, sizes, and mediums to create visual interest. Hang artwork at eye level to ensure it is easily visible and balanced within the space. Enhance gallery walls by arranging multiple pieces in a cohesive layout. Remember that art is subjective, so whether you choose an inexpensive poster or a gallery quality painting, select pieces that speak to you.

Photo Displays: Showcase your favorite memories and moments with a curated photo display. Whether it’s a collection of family photos, travel snapshots, or artistic prints, arranging photos on your walls adds a personal touch to your space. Try out different frames, sizes, and layouts to create a gallery-style display that reflects your unique style. It makes a nice presentation on that odd wall going up your stairs. 

Mirrors: Mirrors are not only functional but also serve as decorative accents that can enhance the visual appeal of any room. Strategically placing mirrors on your walls can create the illusion of space, brighten dark corners, and reflect natural light. Choose mirrors with interesting frames or shapes to add an extra layer of style to your décor. Try different sizes and arrangements to find the perfect balance between form and function.

Textile Hangings: Textile hangings are a bohemian-inspired alternative to traditional wall art. From tapestries to woven rugs, textile hangings add warmth, texture, and color to your walls. Hang a large tapestry behind your bed as a dramatic headboard alternative or layer smaller textiles with framed artwork for a cozy, eclectic look. Consider mixing and matching different textures and patterns to create visual depth and dimension.

Adorning and decorating your walls is a creative and personal process that allows you to infuse your space with personality and style. The key is to trust your instincts and have fun with the process. Use different techniques, colors, and textures until you find the perfect combination that speaks to you and transforms your walls into works of art. With a little imagination and creativity, you can turn any blank wall into a stunning focal point that reflects your unique taste and aesthetic.

Valerie M. Blake is a licensed Associate Broker in D.C., Maryland, and Virginia with RLAH Real Estate/@properties. Call or text her at 202-246-8602, email her via DCHomeQuest.com, or follow her on Facebook at TheRealst8ofAffairs.

Continue Reading
Advertisement
Advertisement

Sign Up for Weekly E-Blast

Follow Us @washblade

Advertisement

Popular