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Advice for buyers in this seller’s market

Hide your love for a property until after closing

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Homebuyers, buyers, Real Estate, Mortgages, Summer, Gay News, Washington Blade

Hide your love for a property until after closing.

As we enter the last month of the fall real estate season, it’s still a seller’s market out there. So in this column I have some words of advice for buyers and a word of caution for sellers.

Last month, I wrote about how to compete in a bidding war, starting with making an offer price at the listing price and including an escalation clause. As you can see from the chart below, properties in Washington overall are selling at pretty much 100 percent of listing price. I have included data from 10 mid-city zip codes to show the minor variations—both above and below that 100% ratio—often within the same zip code at different time in the year. For example, in zip code 2005 (Logan/Thomas Circles), properties were selling for more than listing price (101% average) in March through June, but in August were selling for slightly less (97.3%) than listing price.

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© 2015 RealEstate Business Intelligence, LLC. Data Provided by MRIS as of Sept. 3, 2015.

Usually those slight variations above the average are caused by competitive bidding situations, where the sold price of the property gets bid up above listing price through multiple offers on a property. But what if there are no competitive offers? What if the seller just wants more money?

In my last three bidding transactions representing buyers, we have offered full price along with an escalation clause in the event of multiple offers. However, in all three transactions, there were no other offers; yet the seller still came back with a counter-offer above their listing price. Why? Probably because they had set their original listing price too low, hoping to start a bidding war between multiple offers. So they weren’t really expecting to sell their properties at the original listing price. In two of these transactions, my buyers just walked away. But in the most recent transaction, the buyers accepted the seller’s counter-offer (at 102% of original listing price) because they wanted the property, and because recent sold properties in the immediate neighborhood had sold for 105% of listing price. Additionally, we were still able to negotiate certain favorable terms to the buyers to offset the additional price.

So what’s my advice for buyers beyond caveat emptor (buyer, beware)?

Try not to “fall in love” with the property, or at least hide your desire so that the seller can’t take advantage of your emotional connection. If you really want the property, be ready to spend more than listing price but set a realistic limit beyond which you are unwilling to go. Put additional contingencies and terms in your contract offer that you can use to negotiate with the seller if they counter with a higher price.

And what’s my word of caution to sellers?

Be careful of trying to incite a bidding war by setting an original listing price lower than what you really want. It may backfire if you don’t receive multiple offers. And by setting the price at a level you are willing to accept, you don’t risk alienating your ultimate buyer. After all, you’re going to be dealing with them for at least 4-6 weeks after the sale contract is ratified.

And to both buyers and seller: Make sure you are dealing with an experienced Realtor you like and trust. They can help you navigate some of these pitfalls.

 

Ted Smith is a licensed Realtor with Real Living | at Home specializing in mid-city D.C. Reach him at [email protected] and follow him on Facebook, YouTube or @TedSmithSellsDC. You can also join him on monthly tours of mid-city neighborhood open houses, as well as monthly seminars geared toward first-time homebuyers. Sign up at meetup.com.

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Real Estate

Investing in real estate: What you need to know

From REITs to flips, tips for getting started

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In many cases, buying or selling a home is a very personal experience. Many people buy a home with the intention of living there – making memories, building a family, becoming part of a community. The same is true of sellers. Selling a home, in many cases, is simultaneously difficult and exciting – it means the ending of one chapter and the beginning of another. While the majority of buying and selling experiences may be personal – increasingly, others in the market are interested in real estate not just to find a home, but also to make a great investment.

In our current market, it’s easy to see why real estate can often end up being quite a profitable investment. In 2021, sellers often saw huge profits on the sale of real estate – but even in years where profits aren’t quite as significant as this year, real estate has often proven to be a sound and reliable long-term investment strategy. Real estate investments can add diversification to your portfolio, and a very successful venture, particularly if you buy and sell when the circumstances are right.

Over the last several years, many gay neighborhoods around the country have shown steady appreciation, leading investors, and particularly LGBTQ investors, to consider whether the time is right to consider adding real estate to their investment portfolio. For those considering real estate as an investment strategy, here are a few helpful tips:

• Consider REITs: For those just getting started with real estate investment, Real Estate Investment Trusts, or “REITs” for short, might be a good option. These provide the opportunity to invest in real estate without owning the physical real estate yourself. They are often compared to mutual funds, and you invest in a company, a REIT, which owns commercial real estate like office buildings, apartments, hotels, and retail spaces. Generally, REITs pay high dividends, which make them a popular investment in retirement, as well as for investors not wanting to own one particular piece of property.

• Consider investing in rental properties: Rental income can often be a steady, reliable source of income if you do your due diligence researching the property itself, the surrounding neighborhood, and the potential community of renters. While maintaining a rental property will certainly require some investment of time and energy on your part, it can be a profitable long-term investment and one that is appealing to many people.

• Put your skills to work: If you have a skill set that includes being able to renovate and upgrade homes – or if you know a trusted person or team of people who does, flipping a home that could use some renovation can be quite a profitable investment indeed. Getting a home that could use some extra TLC at a good price and updating it can result in a sales price that is significantly higher than the purchase price. This can certainly be a very good investment – and a fulfilling project too.

• Be willing to listen and learn: When trying something new, it is almost always helpful to talk to those with experience in that area. Investing in real estate is no different. Having a mentor who can give you some tips and advice from their own experience is invaluable.

• Get to know the neighborhood: When making any real estate decision, whether you’re going to live in a home yourself or purchase property for investment purposes, knowing the neighborhood and community you’re interested in is important. A key part of that will be finding a real estate agent who knows and loves the community that you’re interested in, and who understands the market in that area. This can make all the difference between a smooth and successful process, and a stressful one.

(At GayRealEstate.com, we are dedicated to our mission of connecting LGBTQ home buyers and sellers with talented, knowledgeable, and experienced real estate agents across the country who can help them to achieve their real estate goals. Whether you’re interested in buying or selling a home that you live in personally, or buying and selling for investment purposes, we can connect you with an agent who knows and loves the community, and who can help you achieve your goals. Contact us at any time. We look forward to helping you soon.)

Jeff Hammerberg is founding CEO of Hammerberg & Associates, Inc. Reach him at
303-378-5526 or [email protected].

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Real Estate

Dining without a dining room

Today’s hosts are likely more casual than in the past

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The large formal dining room is a thing of the past. Here are some tips for a more modest Thanksgiving set up.

With Thanksgiving quickly approaching, you may be thinking about gathering your loved ones and kindred spirits to celebrate the positive things in your life, praise your higher power, pay homage to indigenous people, or just stuff your face and fall asleep in front of the television at the traditional Thanksgiving after-party: the football game.

Thinking back to my childhood, I remember the wonderful smells coming from the kitchen. The elegant table in the formal dining room was adorned with a crisp, white tablecloth, “the good china,” sterling silver place settings, a variety of serving dishes for the forthcoming bounty, and a cornucopia centerpiece containing dried fruits and vegetables.

My dad, Ozzie, would carve the turkey and my mom, Harriet, would bring out the pecan and mincemeat pies for dessert…wait a minute…did I really grow up in a 1950s sitcom? Yup, I did, although Ozzie was Don and Harriet was Grayce.

Sometimes we would visit my maternal grandparents in Maine, whose formal dining room was less so – an extended part of the living room in the 1940s version of an open floor plan in their three-bedroom apartment over the general store and gas station that my grandfather owned.

On occasion, we would go to Massachusetts to spend a day or two with my paternal grandmother and her extended clan. There was nothing “formal” about the dining room there. Dinner took place on a litany of card tables set up on the jalousied porch off the kitchen.

When dinner was over, my grandmother would rise from the head of the table and declare, “I made the dinner. Now you do the dishes.” My father and his sisters would scurry like baby chicks to adhere to her demand.

As I grew older, I rarely lived near family. Every so often, I would be invited to dinner as the obligatory guest – the girlfriend of whatever young man I was seeing at the time. Later, I would become part of the restaurant holiday dining crowd.

For several years, I had a standing date with a good friend for dinner and a movie on Thanksgiving Day. We would choose restaurants that advertised dishes like Lobster Thermador, Champagne Ravioli, or Boeuf Bourguignon, but would invariably select the traditional turkey dinner with dressing and all the trimmings from the prix fixe menu.

Fast-forward to 2020 and we may not have gathered at all, content to have Whole Foods or Door Dash deliver Thanksgiving dinner to be eaten in front of the television while watching Hallmark movies.

Now here we are. The formal dining room has gone the way of the good china and the sterling silver. For most of us, they are simply not necessities in our lives any longer. So how do you host a dinner party when there is no room specifically designated for dining?

First, you don’t need to purchase things you have no room to store later. Although “rent” can be a four-letter word to a real estate agent, a party rental company’s website allows you to select items online and have them delivered and removed at a fraction of the cost.

Are you trying to seat a large group for dinner? Let’s start with the premise that all your guests do not need to be at a banquet table. Consider having several tables for two or four placed around the room. It will give you the ambiance of your favorite bistro and still allow for conversation among your guests.

You can also rent folding chairs, linens, place settings, and stemware. Once your order arrives, just set the tables and add candles or your favorite centerpieces to complete a festive look.

If you have no room for a seated event, you can order standing cocktail tables. Your breakfast bar or kitchen counter will make a perfect buffet line.

Better yet, have an open house, inviting guests at slightly different times so you see everyone without feeling like you’re in the middle of a crowded concert.

Is your style even more casual? Rather than worrying about recycling plastic cups and sporks, pick up a bunch of Oftast dinner or dessert plates for 79 cents each at Ikea. Add a 6-pack of Svalka wine glasses and cutlery service for four from the Mopsig collection for $5 each. Pull out some pillows and eat while sitting cross-legged on the floor surrounded by family and friends.

Some of us may have trouble getting back up, but we’ll be in perfect position to fall asleep during the football game.

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

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Real Estate

How has the meaning of ‘home’ changed during COVID?

People want peace — a place to get away from it all

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Many buyers are still looking for space in a new home.

During the pandemic, “Home” must have taken on different meanings for many people.  As was reported often in the news, many people found themselves dissatisfied with the home they bought before the pandemic, and now, several months or a year and a half later, the home that was meant to be for dinner, sleeping, and the occasional breakfast was now frequently central operations for a squad of 4-6 people, 24 hours a day, all working, zooming, streaming, in class, learning how to cut their own hair online, looking up recipes online because they were tired of the same five meals they have had for four months at a time, and the balcony that was nice to have for a Friday evening glass of Sauvignon Blanc at sunset was now not enough for Mom, Dad, the 3-year-old and the baby on the way.  

So off they went to find a new “home” and then put the old home on the market. But now that older home is sitting, getting showings but no offers. Did they make a mistake? Are they now going to have two mortgage payments? Well, probably not indefinitely. What I am seeing is that home purchasers were quick to pull a trigger and go aggressively after the new home that was going to be the solution to all their woes, but the buyers for the first home are much slower.  Less rushed. They are entering the market maybe. Taking advantage of lower interest rates. They are not feeling rushed and are not competing as much for properties. One agent reported multiple offers, but after the place was on the market for almost a month. Again, people are taking their time.  

Basically, what I am seeing is that people want space in their new homes. They want room to relax, spread out. They might even want a relaxing environment. A quiet night’s sleep.  Many people in the past year have reported higher anxiety levels than at any point of their lives.  A good night’s sleep can mean the difference between sailing through that meeting or appointment the next day or feeling like you have to cancel everything and call your therapist.  People want peace. Our lives are spent arguing online and hearing news headlines that are more “breaking news” than they were an hour ago. It’s natural to want a refuge. A place to feel you can get away from it all.  They don’t want sirens and people wandering the alleys at night.  They don’t want fixer uppers as much. They want to move and move now into something they can feel comfortable in.  That’s what I am seeing.  

People want a place they can work in, but still feel at home. They don’t want to feel that their work lives and their home lives are literally on top of each other – they want some separation. Whether it’s a separate room, or an entire floor that is dedicated to work, they want to feel they can step away from it when they need to.  

I also have a homebuyer seminar on Zoom next Thursday evening at 6 p.m. Feel free to contact me to get the access link. 

Joseph Hudson is a Realtor with The Rutstein Group of Compass. Reach him at [email protected] or 703-587-0597.

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