May continued to show similar trends to previous years. As in 2018, the median days on the market is in the high 20s. This shows that inventory is very low so houses are going under contract quickly. The number of homes sold in May was strong, with 2017 being the only other year in recent years to have surpassed 2019. Year to date home sales is comparable to previous years showing that the market is not slowing even though the number of homes for sale is lower than any of the previous years at 277. So while there may not be as many houses on the market, homes are still being sold and they are being sold quickly. May was an excellent month for sellers.
The truth about open houses.
There is a longstanding myth within the real estate profession that hosting open houses is one of the key steps to selling your home. This notion stems from the fact that back in the day, the importance of open houses was much more established. Before the power of the internet, open houses were one of the only means for an agent to market your home. Today, online marketing, private showings, and networking from your agent, all prove to be much more beneficial in selling a home than open houses. If you won’t take my word for it, just look at the statistics. According to the National Association of Realtors, only approximately 2% of homes are sold directly as a result of an open house.
Why are open houses still so popular?
If only 2% of sales are coming directly from open houses, why are they still around? It basically boils down to two reasons. The primary reason for a realtor to host an open house is because they can find prospective clients. This is a common marketing tactic that most agents have performed at some point in their career. However, as a seller, this is not ideal. Your agent is acting mainly for their own self-interest instead of yours. The second reason why most agents host open houses is to appease the client. Many clients still believe open houses are one of the best marketing tools to sell a home. Agents want their clients to be satisfied with their performance so they agree to host an open house; however, the agent’s time may have been spent better by marketing online and connecting with other realtors.
Other things to consider for open houses.
Many people that attend open houses are not serious about buying the home. These people may simply be curious for various reasons. A neighbor may want to see how you live, or a prospective seller may want to see how you are staging your home so that they can imitate or stage their own house in a more appealing way.
Buyers that are serious about finding a home contact an agent they trust and that agent finds them listings. Most of the time the agent takes the potential buyers to view those listings through private showings, not through open houses. In general, people working directly with an agent in this manner are much more likely to have financing established and will be serious about making an offer.
There are also risks to your livelihood when doing an open house. Essentially strangers are entering your home. While your agent will likely try their best to be present with every prospect, if your open house is quite popular your agent will not be able to supervise everyone. There have been instances of burglary related to open houses. Additionally, if you want to keep the fact that you are moving private (like if you have not notified your work) open houses would be one of the least private methods of advertising your home.
Whether you are a parent, babysitter, friend, or relative, if you are having small children in your home it is incredibly important to make sure you are fostering a safe environment. Childproofing a home is often overlooked or forgotten simply because we as adults do not think of all the potential hazards in a home. From laundry detergent, to sharp corners, there are dozens of potentially dangerous situations a child can get into if the right precautions are not taken. Below is a list that highlights the most common and essential ways to childproof a home. If you have further questions or concerns feel free to reach out to Mattias to discuss these.
Landscaping is one of the easiest options available to significantly improve the value of your home. While there is no magic number for return on investment, it is widely accepted within the real estate community that high quality landscape design can elevate the price point of a home. One study conducted by Michigan State University found that landscape design increases the value of most homes by 5-11 percent. This is of course different for every market and each individual house; however, to illustrate a point, an 11 percent increase for a 200,000 dollar house would equal a 22,000 dollar uptick in value.
It is a simple concept, curb appeal is real. People base their impression of a house off of what they first notice. If they notice a well manicured yard, with vibrant colors, and a consistent design, they are going to be incredibly excited. If there is a disheveled, drab yard, that doesn’t compliment the style of the home, prospective buyers may walk then and there. Obviously hiring professionals is preferred, especially if you intend on making big changes like retaining walls, patios, etc. If you have the means to hire professionals, go for it; however, you do not need to invest thousands to significantly increase the curb appeal of your home. Some basic tips that go a long way are included below. Some may seem like common sense but they have been shown time and again to be important factors for potential buyers.
‘Landscape plant material, size and design sophistication increase perceived home value.’ Department of Horticulture, Michigan State University, East Lansing.
What does it mean?
Selling a home “as is” means that the owner is selling the home in its current condition. The owner is not obligated to repair or fix any faults or issues associated with the home. Furthermore, the owner is not required to give the purchaser any credits that would go toward repairs or improvements. The owner and agent representing the owner are still required to be honest about existing problems with the home.
Why would one want to sell a home as is?
For most owners, selling a home “as is” is done primarily due to financial limitations. If there is extensive damage to the home, damage that the owners cannot afford to repair, selling the home “as is” may be their best option. Alternatively, some owners may be in a specific situation where they cannot accommodate a drawn out sales process. Whether due to health, location, finances, moving, or something else entirely, some owners may need to sell as quickly as possible. If any of the above situations pertain to you, talk with Mattias. Mattias may be able to come up with some creative alternatives that would prevent you from having to sell your home “as is;” or, if you do decide to sell “as is,” Mattias can give valuable insight into that process.
Why would one not want to sell a home as is? What are the disadvantages?
Many buyers perceive “as is” homes negatively. Some may feel that there are extensive damages or looming repairs that will be either incredibly expensive, or unfixable. This may make the buyer distrustful of the seller. Another thing buyers may perceive is that the seller is desperate financially. This gives the buyer a lot of power, and the buyer may try to negotiate unfairly or lowball the owner. Because there is so much associated negativity with “as is” homes, “as is” sellers generally receive less offers, and are often fighting an uphill battle when marketing their home.
Other things to note with “as is” sales
While some sellers may initially list their property “as is,” many choose to disclose that they are selling “as is” after an offer is received but before an inspection has taken place. Sellers do this largely because a round of negotiation often takes place after the inspection due to what is found. This makes it incredibly important to have a home inspection contingency in the contract.
If you have further questions or concerns regarding “as is” sales contact Mattias.
Summer is coming quickly here in the Shenandoah Valley. While summer brings many wonderful things, one unwelcome thing it brings is a higher prevalence of house fires. A fire to your home can be catastrophically life changing. So why not take a few simple steps that could be the difference in saving precious memories, family heirlooms, or even a house itself? Attached below is a list of simple, relatively inexpensive, fire safety and fire proofing tips for the average homeowner.
This is a video of last years Valleyfest.
ValleyFest Beer and Wine Festival is a wonderful annual festival available for Harrisonburg and surrounding residents. ValleyFest this year is this Saturday, May 25th from 12:00pm to 7:00pm. The festival is hosted at Massanutten resort. Tickets are on sale now at valleyfestbeerandwine.com.
If you are unfamiliar with ValleyFest, it is a beer and wine festival. Many local vendors will be present, and once you have purchased your ticket you can try as many samples of beer and wine as you choose. A large variety of styles and flavors are available.
If you do not drink, or are looking for something kid friendly, ValleyFest is still a good option. Live music is playing throughout most of the day and there is ample space to dance and play! The featured bands this year include: Pebble to Pearl, Mike Davis, The Judy Chops, YARN, and more. There are also several vendors with arts, crafts, and food. Also, important to note, kids 10 and under are FREE! Be aware that no outside food, beverages, or pets are permitted.
So if you find yourself sticking around this memorial day weekend, be sure to enjoy some live music, great drinks, and good food at ValleyFest in the beautiful Massanutten Resort!
Hello Spring market! In April, we saw an increase in sales, an increase of the median sales price, less days on the market, and we still don't have enough homes to sell!
If I were going to highlight one statistic, I would highlight the number of contracts we had in April. Not all of these will become sales but this could be an indication that the sales in May and June will be higher than previous years. This could also indicate that we will catch up with the year to date sales of last year.
To some this may seem redundant at this point but I have to keep saying it, if you are thinking of selling your home, now is an excellent time. For more information on selling your home, click here.
We all hear stories of bidding wars on houses. In some markets, houses sell for above asking price consistently. If you do a little online research, you may find a lot of advice like waiving inspections or getting your family members involved so you can pay in all cash. All these factors could be necessary to win a competitive house in some markets, but how about Harrisonburg and Rockingham? Let's break down the different factors.
Is Cash King?
Here is why people say cash is king. If you pay for a house in cash, you don't need to follow the bank's guidelines to buy a house. In really hot markets, houses sell for more than asking price and the appraisals can't keep up to the market demand. So, by offering a seller a deal in cash (with no appraisal contingency added), the sellers know that you will be able to buy the house at what you are offering.
Another big factor is financing takes longer than cash deals. You can close on a house in two weeks with cash deals. Most of the time, getting a mortgage will take 30-45 days.
So, do you need to bring cash to close on a competitive house in our market? Most of the time, no. It's not unheard of to have cash deals in the area, but prices are not going drastically above appraised value, therefore, waiving appraisal contingencies is not common practice.
So How Do You Win Your Dream House?
For the most part, the highest price will win. The best way to secure the house and not give too high of an offer is by doing an escalation clause. An example of an escalation clause looks like this: John Smith offers $200,000 on 1234 Main St but John is willing to go $10k above the seller's offer price.
In the event of multiple contract presentations for the property located at 1234 Main St, John's offer increases by $500 above any alternative offer, providing that the maximum purchase price shall not exceed $210,000. If Seller receives an offer from a third party which is higher than the offer contained in this contract, Seller will provide John (likely via his agent) with a copy of that higher third party offer. Seller reserves the right to delete the name of the third party offeror to protect privacy. Seller represents and warrants that the third party offer is bona fide.
Aside from purchase price, there are other factors that can greatly help you win a competitive house.
The more money you put towards a down payment, the more secure of a buyer you are in the eyes of the seller. The loan programs that let you put little to no money down are excellent programs, but they can often come with difficult stipulations. For example, you can't have cracked windows on a house if you use an FHA loan. Also, having a full down payment can be an indication that you are financially secure and there won't be any insurmountable surprises with your credit.
Another factor that ties into financing is how long will it take you to get the loan.
If your offer is the same as someone else's but you are able to close faster, you may win the bid. Being flexible on timing is important because if the seller has to find another house to move into, a fast closing will only stress them out. On a vacant house, faster is generally better and the main factor is getting the mortgage. In a pinch, I can get you financing faster than 30 days. Contact me directly to talk more about how to get the fastest financing possible.
The less contingencies you have the stronger the offer will be. This mainly refers to the home inspection contingency since we already addressed the appraisal. That being said, if you are not an expert, I do not recommend you waive your home inspection contingency. In this market, it is very common to get a home inspection and this will likely not cost you the bid.
Offering higher amounts of earnest money helps show how serious you are about the house. In some markets, people offer $60k as earnest money. In our market, $500-$2,000 is more common. If you want a full description on earnest money and how I would help you protect it, click here.
If you have any other questions about how to compete in a bidding war, call or email me.
Saving money is one of the main reasons people sell For Sale By Owner (FSBO). It makes logical sense. If a person sells their house for $200,000, they don't have to pay any commissions. If they use an agent to sell their house for $200,000, they will have to pay the commission. This obviously means less profit.
The biggest thing FSBOs overlook is what they can actually get for their house when they sell by themselves vs. with a Realtor. The idea that money is being saved is not only appealing to a home seller, it is also appealing to a buyer looking for a bargain. To analyze this further, let's look at the 4 buyer types and their exposure to FSBO homes.
1. First Time Home Buyers- First time home buyers generally seek as much help as possible. They want to make sure that the biggest purchase/investment of their lives goes smoothly. This is why the majority of first time home owners use a real estate agent. This agent will be using the MLS to find and show them properties.
2. Repeat Home Buyers- The majority of homes are sold with an agent. Most repeat buyers are not only loyal to the agent who sold them their last home but they are likely using an agent to sell their current home. This means the majority of repeat home buyers will be using an agent to find and purchase their home. Again, the agent will be using the MLS to find and show them properties.
3. Relocation Buyers- Relocation buyers generally use an agent because they want a local expert to help them find their next home in an unfamiliar area. Furthermore, the moving can be very stressful and the more they can hand off to an agent, the better. Once more, the agent will be using the MLS to find and show them properties.
4. Investors- Investors will use agents but they will also do a lot more leg work to find themselves a bargain. They are not in a rush to buy and readily throw out low offers. Investors concentrate on areas they can find good deals. This includes foreclosures, bank owned properties, and FSBO. This is why the majority of interest FSBOs get is from investors and the offers are generally a lot lower than they had hoped.
Altogether, the majority of interest a FSBO gets is from investors who are looking to make a profit. Not only will a real estate agent help expose a house to the maximum amount of buyers, they will use their expertise to analyze the market to ensure you are getting the most for your house.