Connect with us

Real Estate

Home sales in the time of coronavirus

A mixed bag for buyers and sellers in D.C. real estate market

Published

on

homebuyer, gay news, Washington Blade
October home sales, recession recovery, homebuyer, gay news, Washington Blade
Showings are down amid the coronavirus pandemic, but prices are holding steady in D.C.

Spring is almost always the strongest time of year to sell a property: buyers awaken from their winter slumber, all seeming to need to buy at the same time, and homes sell fast and sell high. For agents and sellers, spring is normally a season of plenty.

In the era of coronavirus, however, the market has undoubtedly changed. With government guidelines against gatherings and open houses, the traditional marketing process that is based on getting as many visitors as possible to a listing is turned on its head. One would think the real estate market would never survive such changes, and that prices would be in free-fall.

But interestingly, that is not happening. In fact, prices are, for the most part, holding steady. Many properties are getting multiple offers. Buyers are, indeed, still buying, and closings are still taking place. Perhaps, to the real estate market, COVID-19 might be just a mild cough after all?

Not so fast. It turns out, the effects are a bit of a mixed bag. Regulations restricting showings and open houses, and new procedures that agents and buyers are taking to protect their own health are having a negative impact on many types of properties. This is exacerbated by a tightening of lending in the investor community and an overall sense of caution for properties that are not thought of as mainstream. Some properties, like the recent listing at 142 Kentucky Av., S.E. in Capitol Hill, listed by my colleague Kara Johnson, received three offers and sold in just 4 days. Another move-in ready home at 3206 5th St., S.E. reportedly received 17 offers on April 1. But other properties, like a four-unit townhouse listing we have at 15th Street and U Street for $1.699M, and an enormous Mount Pleasant fixer-upper, are not getting many showings.

Kara, a long-time agent at Keller Williams Capital Properties, attributes her success to the character of the property, its price and the desirability of the location. “It just fits for so many buyers out there. It was a great price and it was move-in ready,” she said. The four-unit, more interesting to investors, attracts a smaller pool of buyers, most of whom would see that investment as non-essential, and possibly more risky, so… crickets. From this experience, it seems that this could be an excellent time to negotiate a great price for investors who have cash and aren’t afraid of our long-term prospects.

The nation’s largest real estate showing tool, ShowingTime, reports that showings in our area are down 70.9% from this time last year. Yet prices have held steady for the market overall. So how are the “mainstream” properties getting buyers in the first place? The process has changed. Tyler Smith, on the Bediz Group team at Keller Williams Capital Properties, recently showed our clients a property in Woodley Park. “It all starts online,” Smith said. “Most good listing agents are spending the extra money for fully interactive, immersive 3-D video tours, which gives buyers a very good sense of the house before they ever leave their couch.”

That technology, developed by a company called Matterport, allows users to tour a home from their computer and see every corner, every angle and basically every detail from their phone or computer. “Once my clients saw all the properties out there online, they only wanted to see one or two in person,” Smith continued. And by altering the normal showing procedure, from driving separately to those two properties, to bringing hand sanitizer and disinfectant spray for doorknobs and lockboxes, to maintaining as much distance on the tour as possible, it seems a showing can be done safely after all.

Once a property is under contract, the process changes a little bit more, but not noticeably. Brock Thompson, also on the Bediz Group, recently had a client go under contract for a condominium in Foggy Bottom. Once the buyer left the initial tour, he and Brock were never face-to-face again. The inspector was able to inspect the unit without interacting with Brock or the listing agent. The appraiser did what is called a “drive-by” appraisal, in which he or she relied on internet-based data, including photography from the listing, to confirm the value of the property. Everyone involved could work on their own. In fact, the buyer didn’t have to meet anyone in person again, until his settlement date. “My client is thrilled he could still realize his 2020 goal of home ownership, and stay safe and keep others safe at the same time,” Thompson said.

The settlement process itself has also changed, albeit slightly. Rob Rothstein, a title attorney at Paragon Title & Escrow, developed an ingenious way of keeping buyers and his staff safe during this pandemic: drive-through settlements. While his office, in the heart of Logan Circle, is convenient enough, he knew that buyers, sellers and those refinancing would want to be able to do their business with as little human interaction as possible. He arranged to have all documents sanitized and brought to their customers in their car as they waited in front of his office. Once they complete signing and presented their identification cards, he is able to notarize the documents, then scan copies to them. For cash deals and with limited banks, he can even perform settlements using an “e-notary” service that eliminates the need for clients to even leave their homes. “Electronic signing isn’t here yet for most real estate settlements,” Rothstein said, “but perhaps one good thing that could come out of this is greater pressure to allow for it.” Currently, electronic closings are not accepted by most mortgage lenders and jurisdictional recorders of deeds, but laws and lender requirements have been loosening slightly.

All in all, our experience shows that as a buyer, you may have an opportunity to buy with less competition at the moment, but just as in any market, the most appealing properties are likely to get multiple offers. Savvy investors, handy homeowners and cash buyers might be able to get a better deal on properties that don’t appeal to mainstream buyers. And anyone concerned about safety can rest assured they can complete the journey to homeownership with little risk of infecting themselves or others in the process.

David Bediz is the 15-year veteran leader of Bediz Group, LLC, a boutique real estate team at Keller Williams Capital Properties in Dupont Circle. He is licensed in Maryland, Virginia, Delaware and the District and can be reached at bediz.com, [email protected] and 202-352-8456.

Continue Reading
Advertisement

Real Estate

5 tips for novice house flippers

Hire an architect, budget for overruns, and more

Published

on

Do your homework before entering the home flipping market.

If you still use Facebook, you know that there is a group for everything, from different breeds of dogs and cats to silly games that lead to data mining of your information for business or nefarious purposes, to groups that offer advice on certain medical issues, to everything real estate.

One of the Facebook groups in which I participate allows users to share do-it-yourself home improvement tips. It’s a bit like HGTV or the DIY network, with a dose of reality thrown in.

Simple topics might include improving curb appeal, selecting paint colors, installing flooring, replacing an electrical fixture, or changing a toilet. 

Sometimes contractors weigh in on more complicated work and even give an idea of how long a project might take and how much it might cost in a particular area of the country. 

It constantly surprises me how little people know about how their home works. I fault the seller’s market over the past years, where inspections are either short or non-existent, for much of that.

It used to be that an inspector would spend several hours with a buyer, going through the condition and operation of a home’s systems and fixtures, providing a written report, and even including a binder that outlined how to fix simple items or when to conduct general maintenance. 

The advent of the “walk and talk” inspection, conducted prior to making an offer, shortened that process. A buyer would have to take his own notes while the inspector was talking and pointing things out. Often, the buyer would go home with information in cryptic shorthand that made no sense a few weeks down the road.

Some people still fancy themselves as house flippers, intent on making a massive profit by making a few choice renovations and reselling a home. My Facebook group often brings out those who have the desire but lack the skills or funding. 

One person recently posted photographs of a house he was interested in renovating for profit. His first question was whether he could remove all the mold himself or whether he should hire a professional mold remediation company.

I looked at the photos and immediately thought of Tyvec suits, respirators, and those movies where CDC warns of a toxic environment that must be contained and the toxins eradicated — not my idea of a DIY project.

Another unrealistic aspect of this renovation was his cost estimate — $100,000 to cover mold remediation, a new roof, central air conditioning and heating and, of course, new electrical, plumbing, drywall, fixtures, cabinets, and appliances. Even with a price of $175,000 for the house and a potential value of $400,000 after renovations, the professional flippers told him he was living in La-La-Land.

Amateur flippers in the DMV have seen their options dry up in the past five years, as even distressed properties left in disrepair can sell for half a million dollars or more. Even the professionals are knocking on doors, sending postcards in desired neighborhoods, and calling or texting owners and real estate agents, looking for properties to fix and flip.

Still, if you are inclined to try rehabbing, even for your own home, here are my top five things to consider before diving in.

• Get to know what permits you will need and the process and timeline for obtaining them, or else you may face the dreaded orange Stop Work Order slapped on the home’s window.

• Find an architect and/or engineer to help with planning the layout. Remember, not every wall can come down to make an open concept floorplan without shoring it up in another approved manner.

• Learn about “hard money.” Unlike traditional home loans that are based on income, assets, and credit, these high-interest, short-term loans rely on the difference between what you pay for the house (“as is” value) and what the “as renovated” value is estimated to be upon resale.

• Consult with a real estate agent about popular features and finishes to help you sell the house quickly and get the highest price. Purchase those items locally to avoid supply chain delays.

• Budget for unexpected cost overruns of 10-15%. Even with an interest-only loan with no payments due until resale, you will still owe taxes and insurance and make periodic payments for materials and labor. Don’t forget to add commissions and closing fees on the purchase and sale.

Your first project may not result in the profit you anticipated, but it will give you a sense of whether it’s worth trying again or leaving renovations to the professionals.

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

Real Estate

Mortgage rates continue to drop while rent skyrockets

Start living for yourself and not your landlord

Published

on

Remember you can always refinance a high interest rate down the road.

There are several sayings that I keep in my “Realtor tool kit,” aside from those catty, snarky comments, I hold two true and use them on a daily basis: “Date the rate – marry the home” and “You’re paying a 100% interest rate when you rent.”

It’s pretty simple. As we have seen rates fluctuate as much as some of our waistlines — mine included. Let’s look at the housing market in terms that we all know and understand: DATING! 

It’s important to realize that we are NOT marrying the interest rate we purchase our home with, instead we are merely dating — for however long or short it may be. Here in D.C. it’s often short; can I get an amen? But in all seriousness, we see rates come and go up and down. We were spoiled with the unsustainably low rates for the past several years below 4% and now that rates are, frankly, where they should be, we are claiming the victim role. Today is still a great time to buy. The rates we are seeing today are still historically low when you think about it. We are lucky to live in an area such as the D.C. metro where demand is always strong and a change in party means more than a recession in regards to the housing market. Rates have continued to drop in the past few weeks. 

Aside from the current rate that you are paying, it’s important to realize that you are marrying the house and just simply dating the rate. You can refinance your interest rate whenever you want. Trade that baby in for a new model with a lower rate. You are, however, married to the home that you decide to purchase. If you are currently in the market and see a home that you absolutely love — or in my case is like 80% okay because we all know that you are the arm candy here and hold up the relationship — or I mean the house has a dishwasher and central AC, then buy it. You can always refinance later to a lower rate.

Looking at the second saying in my bedazzled sparkling Realtor tool kit we have the saying “You’re paying a 100% interest rate when you rent,” which is for sure factual. You are paying someone else’s mortgage and as such that interest rate is 100%. Don’t get me wrong, when I first moved to D.C. from quaint Bethany Beach, Del., I rented as I was unsure of what neighborhood I wanted to call home. But once I got my bearings I stopped paying 100% interest and helping pad the landlord’s pockets and started living for myself, my future, and married the house. I would encourage everyone that is reading this and who is currently in a rental to speak to a mortgage broker – see what you can afford and if it makes sense for you to buy — I bet it will. In most cases, it is less expensive to buy than it is to rent in cities, including in D.C. Not only is it less expensive, but there are several grant and down payment assistance programs available to district residents to help with making homeownership a reality for you.

Start living for yourself, not your landlord, and always remember to date the rate and marry the home.

Justin Noble is a Realtor with Sotheby’s International Realty licensed in D.C., Maryland, and Delaware for your DMV and Delaware Beach needs. Specializing in first-time homebuyers, development and new construction as well as estate sales, Justin is a well-versed agent, highly regarded, and provides white glove service at every price point. Reach him at 202-503-4243, [email protected] or BurnsandNoble.com.

Continue Reading

Real Estate

Making the most of the housing market

Tips for buyers and sellers

Published

on

The market is cooling off — exponential growth can’t continue forever.

After being on fire for the last couple of years, the housing market across the United States is finally starting to cool down. Various reports over the course of recent weeks have shown that record price growth and sales activity are finally starting to taper off. The long-range outlook throughout the end of 2022 and into 2023 is that the housing market will continue to cool down, at least slightly, from its current state.

It’s not entirely unexpected – after all, exponential growth can’t continue forever. Even so, any shift in current conditions can be slightly unsettling, and whether you’re a buyer or a seller, it can bring peace of mind to feel prepared and know how best to react when the market changes to maximize the chances of reaching your real estate goals.

So the question is: How do you prepare and maximize your potential? Let’s take a look at a few tips together.

TIPS FOR BUYERS

Be budget conscious: As a buyer, it is always a wise decision to decide on your budget and stick with it. Particularly with interest rates on the rise and home prices still generally higher than ever before, although trending downward slightly, it is easy to get carried away and decide to exceed the budget you planned on. Particularly over the last couple of years, scarcity in the market has led buyers to feel a sense of urgency about buying a home immediately, exceeding their budget, or paying over asking price. As the market begins to cool down, buyers should realize that they have some breathing room and that the right home will come along and is worth waiting for.

Finalize your finances: Be certain you have your financing secured and preapproved prior to making an offer. While not mandatory, this step can certainly give buyers an advantage in any market. Really think through your wants and desires in a house and what you can afford, and then seek a preapproval. Getting preapproved allows you to show a seller that you will be able to follow through with the deal if they accept your offer, and that offers peace of mind and assurance that many sellers find appealing.

Find an agent you trust: The importance of this step cannot be overstated. An agent who knows and loves the community that you’re interested in will be familiar with the market there. They will be able to advise you as to the trends in the area and whether the offer you are making is competitive, but not over and above what you should be spending on a particular home, particularly as the market calms down. They will also be able to help guide you toward a variety of homes that are within your budget, and truly fit your needs and desires.

ADVICE FOR SELLERS

Price your home competitively: As a seller, it is important to realize that as the market begins to cool down slightly, you will want to keep your home priced competitively. It can be tempting to ask for as much as possible and hope that you’ll receive it, but you may risk leaving your home on the market too long because it is priced too high, which can make some buyers wary. Consulting with an agent who knows your community well and can help you price your home competitively. Doing so can make a significant difference between a quick and successful selling experience and a stressful one.

Don’t forget curb appeal: Not all homes need major renovations, nor can all sellers afford them, and that’s okay. A little bit of hard work and sweat goes a long way. Clean up, declutter, and try to present your house in the best possible light. Presentation is important and can be a deciding factor in getting that  offer that you truly want.

Choose the right agent: In any real estate transaction, finding the right agent can make all the difference. Especially as markets begin to shift, cool off, and change, you will need an agent on your side who can help you price your home competitively, market it effectively, and generally work with you to achieve your real estate goals.

Ultimately the good news is that whether a buyer or a seller, and whether a hot market or one that is cooling down slightly, achieving your real estate dreams is possible and well within your reach. 

(At GayRealEstate.com, it’s our mission and our passion to connect LGBTQ buyers and sellers across the country with talented, and experienced LGBTQ-friendly realtors who know and love their communities. We know that having the right agent can make all the difference in the real estate process – and we believe you deserve the very best. If we can help you with any of your real estate needs, we’re ready to connect with you today and get started.) 

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

Continue Reading
Advertisement
Advertisement

Follow Us @washblade

Sign Up for Blade eBlasts

Popular

[class^="wpforms-"]
[class^="wpforms-"]