Real Estate

I was reminising about one of my favorite real estate transactions this morning. A dear friend's young adult daughter wanted to make the jump into home ownership and came to me for help. I connected her with a reliable lender and showed her the advantages and disadvantages of a few different homes. She chose a "HUD home," which is a home that had FHA financing that went into foreclosure. My first home was also a HUD home and was purchased for $56K and now has a market value of $325K.  It is not for everyone! Like any great investment, it involves risk. A home is like a spouse: "for better or for worse." Sometimes a foreclosure can be a great opportunity to update an under market value property and sometimes it can involve great unforeseen and unFUN expenses.  And the bidding is exciting and a waiting game. In this situation, I entered her bid to the HUD system, because I have the Registered Hud Selling Broker credentials. We then await a response. She was not the highest bidder, but we agreed to be a Back Up Bidder in case that buyer were to fall through. Because the HUD system is not fool-proof, I have to check the site regularly to see if there has been any change in the status, which would mean we might get accepted, at which time a very short time frame is provided to get ink signatures! 

As it turns out, that day came. I received an email at 8:04AM FOUR MONTHS LATER while in another state sitting at my grandmother's dining room table. My hands started shaking and my eyes got big. "Mamaw!! She got the property!! I can't believe it!!" And as my grandmother looked at me with no concept of the delirium that was setting in, I started making arrangements on getting the contract signed from two states away.  Fortunately, I had pre-written purchase agreement with tabs marking where the signatures were to go. I have never been that organized for an unexpected event in my life.  I directed my self-less Mother-in-Law where to go in my filing...

As independent contractors, real estate agents make the choices for how they manage their appointments.  An unfortunate growing trend is to use an automated scheduling service so the agent does not have to be involved in this part of the process. This service also removes "follow up" from the agent's task list.  At the onset of setting up showings for a buyer, for a listing that utilizes the ShowingTime service, the Buyer's Agent is instructed to call an 800 number to schedule all appointments. They speak to a non-licensed operator who coordinates with the owners or tenants of the property and texts/emails that agent back with showing instructions (where to find lockbox/any special codes). The Listing Agent is completely removed from the process of setting up the appointment. After the showing, the Buyer's Agent receives an email with a few multiple choice options for providing feedback to the Seller.

It sounds simple, but the reality for the Buyer's Agent can be quite the opposite.  If the owner/tenant declines the showing, there is no follow up to reschedule by the Showing Time rep.  I've had this happen multiple times when attempting to show a property.  I have called the Listing Agent to be told that I have to schedule through the service. I have explained that the occupant has twice declined our attempts to make appointments with no explanation. Agent stated she would call me back to set up when they are available, but she never did.  On another occasion, Buyer and I were 15 minutes from our scheduled appointment, to have it suddenly canceled via email due to an illness. In this situation, an agent followed up with a phone call behind her ShowingTime notification to ensure that I was aware of the change. But I never received a call back when the occupant was well again for rescheduling.  I am quite certain the Listing Agent didn't intend to abandon the potential to sell her listing, but it was...

The housing market appears to be suffering from some bipolarity as we close out 2018! I had to give you a more in-depth diagnosis because if you read the headlines, you will have, frankly, an irrational fear about entering the housing market in the coming year.  At the end of 2017, I told you the absorption ratio was the highest it's been since the Recession.  You read also this year about multiple offer situations and offers going way over asking price with few, if any, seller concessions.  And most recently, you've heard some consistently inconsistent economic news. The stock marketed plummeted, only to close out the year with the highest one-day recovery on record in the midst of a government shut down. Unemployment levels are at their lowest in 50 years but wages are still stagnant. Mortgage rates reached their highest point in 9 years and the Fed increased rates for the 4th time in December, but then mortgage interest rates eased down to at 4.63%.  Price gains for sellers have limited affordability for buyers, keeping many willing first-time buyers and move-up buyers/sellers on the sidelines, yet there is still a shortage of homes. Price appreciation reached nearly 6% last year is expected to give way to 3% in 2019 and 2.4% in 2020 as sales cool.  The general economic news is very strong but the housing market predictions for 2019 are overall rather negative nationally.  Do you also feel like hibernating a bit after reading the day-to-day headlines and my recap of the year?

I have a different perspective and am excited about the prospects for buyers and sellers in 2019.  Yes, we have indications that the imbalance in the housing market is surfacing as a correction.  If you keep up with my monthly review, you knew already that our sales in Southside Hampton Roads (SSHR) took a nosedive between August and Sept, but ticked back up to typical off-season levels in October & November. The number of new listings...

What is my home worth?

This is a question we receive daily in our business and the right answer is, "in whose opinion?"
Ultimately, it is the Buyer, the Seller, and the Appraiser that determine the value--what is one willing to pay, the other willing to accept, and the bank willing to loan against?  However, coupled with that are other valuable considerations that aren't reflected in the recorded sale price, such as Seller Concessions and repairs.  I'm of the opinion, that everyone should have a good idea of their Market Value, just as they know the value of their 401K.  Computer-generated values are available on Zillow and Trulia, however the owner of this company (they recently merged) even admits they can be as much as 10% off the value. Real estate is local.  And when determining value for a future sale, the following must be understood.

The Seller Determines the List Price

After receiving a list of recent comparable sales, and making adjustments for features such as age, size, quality, and condition, a Seller determines the price at which they want to market their home. Receiving reliable information in this regard is a substantial determinant at how successful that Seller will be in reaching their goal of selling.  Some factors in the Seller's Pricing Strategy are how quickly they want to sell, how much they owe on their mortgage, and how many repairs they are willing to do. In my years of doing business, I have heard the accusation that a real estate agent "bought" a listing by telling a Seller that their home is worth more than it is.  While the practice does exist in the industry, a professional agent will educate their client by using adjustments that are typical of a professional appraiser to eliminate unrealistic expectations and wasted time on the market. When that Seller chooses their Pricing Strategy, the Agent may then determines whether they want to accept the listing. Is it worth the marketing expenses...

As most of you know, I update my website monthly with a review of current local housing market results. By examining the same economic factors on a regular basis, I can give buyers and sellers reliable and timely advice. It would be easy for me to provide my readers with a subscription to a newsletter that provides a national outlook, but my value to you as a real estate advisor is in knowing what is happening on a local level, as it happens. I also provide this annual review and forecast for the coming year.

2016 showed steady and healthy improvements in the economy. The United States is currently enjoying full employment (4.2%), a rising GDP, wage increases, and job gains. Job creation was however below expectation for economists and the annual growth rate was less than predicted. Home sales currently are the highest since February 2007 when the Recession began, but they still are $50,000 below the pre-recession sales prices. First-time buyers were at a 30 year low in 2015, but made gains to almost 50% in 2016. 61% of those first-time buyers were under the age of 35. The availability of starter homes, however, have dropped by 10%, making it harder for these young buyers to get into the market. In Virginia Beach, conservative sellers marketed their homes with only a 1% increase in list price from last year, but saw a 3.26 increase in sales prices and a 3.6 month absorption rate. Interest rates defied predictions and stayed below 4% for most of the year. Riding in on the strong economy is a new American President, espousing ideas that promote positive business growth. Stocks soared after the election to record highs. Based on the campaign platform, the technology, industrial, and transportation sectors should see healthy growth. Improvements to the sky-rocketing health insurance costs are expected with a modification to Affordable Health Care. And with a Republican-controlled Congress, the country should see the largest tax revolution since 1986, promoting tax cuts and government...

The December statistics for housing in Hampton Roads just rolled in, and it does appear we are riding into 2016 on a high tide! With the Great Recession officially in the history books, consumer confidence and positive economic data abound, with experience as our compass. I am excited about the opportunities for Buyers, Sellers, and Investors this year and look forward to helping make some goals come to fruition for my clientele.
In October 2015, the Home Builder Confidence Index reached it's highest point in a decade. Housing starts ended 2015 with the healthiest gains in 8 years, mostly in multi-family complexes. As builders are reviving inventory shortages, we agents are experiencing home buyers at unprecedented levels. Boomerang Buyers who survived foreclosures and short sales are returning to the market as their finances have recovered and credit has improved. An estimated 7 million of these buyers are expected to be back in the market over the next 5 years or more. They will be joining the Millennial Buyers, those born between 1980-2000, who are settling into careers and marriages and making the Home Ownership decision. Millennials were the largest percentage of buyers for the second year in a row in 2015.

In the mortgage industry, we experienced some positive change in 2015. Loan Estimates have replaced Good Faith Estimate, encouraging consumers to have a better understanding of the costs to obtain financing and have a firm number three days before their closing date, eliminating many last minute frustrations and misunderstandings at the time they close on their home. Also, the Fed determined that economic conditions were healthy enough to raise the (Federal Funds) interest rate by a quarter percent in December. Some factors used in the decision include the US unemployment rate steadily below 6%, inflationary indexes, and the health of emerging markets. While unemployment has declined, there has been limited wage growth. The expectation is the US will stat on course...

As a Realtor, I've enjoyed witnessing the modernization of the split-level home.  Once known as "Cadillac splits," this home design lost popularity in the 80's & 90's, as buyer trends moved toward a separation of family activities and the McMansion was born. After the Millennium, "open concept" became the style du jour.  One draw-back to that style was lack of separation and sound levels in homes rose in these areas as well. Teens retreated to their bedrooms (which had also grown in size) and the "man-cave" was prevalent. As family values and needs have changed, the split-level home is getting it's second chance at being the darling of the American family. Homeowners, today's Millennial and Sandwich Generation buyers, and designers with vision are learning how limitless this floor plan is in providing comfort, convenience AND style to today's family home.   

Growing up in a split-level home in Virginia Beach, I enjoyed the many benefits of this unique home design. Originally designed by Frank Lloyd Wright, they gained popularity in the 60's. As Carol and Mike Brady moved their 6 children into a split-level in 1969, the style became known for it's family-centric virtues. The principle design features staggered floor levels, with the main living space (kitchen, living, and dining area) between the upper bedroom floor and a lower/garage level. The lower level usually contains the laundry room and access to a crawl or basement area.  In our home, that basement area attached to the inside of our house made for our "safe room" during major storm events. Many of the homes enjoy the utility of a proper foyer. Cathedral ceilings on the main living floor provide a more spacious feeling while still maintaining a relatively compact area.  For some this translates to more economic benefits in purchase price, for others it means less space to clean!  The configuration of the living room, dining room, and kitchen allows...

An insider's perspective provided by Mike Miller of Monarch Mortgage.

Last week I saw a restaurant review on a local blog that touted “The New York Times says  . . .” and I thought, wait a minute, the Times didn’t “say” anything, somebody that works for the Times did!  One person, one opinion, not the entire staff and their collective opinion, but one individual.  Invoking the mighty Times just because the reviewer works for the NY Times, transfers the credibility and credentials of the institution to the individual and turns an individual opinion into a powerful endorsement.

The mortgage lending business is hyper-competitive and mortgage originators come in all forms of education, training, experience and affiliation. With 25 years in the trenches, an undergraduate finance degree from a reputable university, countless hours of training and continuous education, and the trust and goodwill I have built with the many sources that refer their clients to me, you would think my capture rate would be bullet proof.  Not even close! I have lost business to mortgage people with less experience, less training and less education, simply because they work for lenders with household names.  A prospective client will tell me that they have “talked to” Wells Fargo or NFCU or TowneBank or whoever, and they have adamant and unwavering faith in the information they received.

When I hear “Wells Fargo told me” or “Chase told me” or “(lender name here) told me,” I recognize that I am competing with the institution and not the rep or employee of the institution that the borrower actually spoke with.  I am thrust into a mortgage contest with the Great and Powerful Wizard of Oz with the booming voice and the pyrotechnics, not the little man behind the curtain.  And it is the little man behind the curtain that is quoting terms and offering up the advantages of working with the “biggest”...

When showing a couple of painted brick ranches this weekend, my clients asked if there was a benefit to painting brick beyond aesthetic.  I replied that some people have strong feelings of opposition to painted brick.  Buyers can be concerned that evidence of settlement or foundation issues can be hidden, however foundation issues can usually be observed in other ways. What I see as more of a concern is that if brick isn't properly painted, it will generally need to be repainted every 3-5 years, according to the Brick Industry Association. So a product that was essentially zero upkeep or expense has been changed to an item of regular maintenance and cost.  Further, after it has been painted over a number of times, it can look gloppy. A better choice if you absolutely have to change the look of the natural brick, is to stain it or use a lime wash. Stain absorbs into the brick surface better and therefore lasts longer. If considering painting brick to improve your curb appeal, consider that a future buyer might shy away from the unknown potential for future expense.  Plan the job carefully, have the job done professionally, and keep that information to earn the confidence of future buyers!

To show my sellers where advertising for open houses is most effective, I have produced this poll. Anyone attending my open house tomorrow will be provided with the multiple choice code to text their response. That information will be graphed and provided to my seller.  If you intend to come out tomorrow, during National Open House weekend, please make your selection either here or via text.

Thanks for your feedback!

Windy