Pros & Cons: Buying vs. Renting a Home

Is it better to buy or rent a home? I have a few things to consider when it comes to that question.

Looking to buy in the Stafford/Fredericksburg area? Perform a full home search 

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Is it smarter to buy a home or rent in the market right now? The answer to that question will always depend on your situation. So, today, I’ll give you a couple things to think about as you’re trying to make that decision. A recent Fed report said that long-term homeowners have as much as a 36x higher net worth than long-term renters. The important thing to know is that if you put yourself in the right situation when buying a house for long-term residence, it’s usually a good decision. On the flip side of that, there are times when you absolutely should not be a buyer and when renting is a much better option. The first thing you need to consider before doing anything else is whether or not you are financially ready. A preliminary call with a lender can help you figure out what your credit looks like and how your current debts may affect your mortgage qualification. At the lender’s recommendation, you may want to work on paying down debts or making some changes to your credit situation before starting the home buying process. If that means renting for a couple of years while you work through that, then that might ultimately be a good financial decision for you. Next, are you in an overall stable financial position? Do you have an emergency fund that enables you to take care of certain issues that might pop up without warning? The great thing about renting is that the landlord takes on that responsibility if the issue is with the property itself. With renting, you don’t have the long-term gain that you would with owning a home, but you also don’t have the short-term pain of having to pay for the repair of an appliance or roof for example.

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A lender can help you figure out what your credit looks like and how your current debts may affect your mortgage qualification.

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When you feel you’re ready, talk to a lender to get pre-approved. A great lender is there to help you make good financial decisions. They can tell you about the state of your credit, whether your income is large enough to make purchasing affordable, and other critical specifics about your finances. Another benefit that comes from speaking with a lender is that they can answer your questions about down payments. We’ve got a huge military presence locally and the VA loan allows a lot of people purchasing in our area to purchase without the requirement of a down payment. If you aren’t a veteran or an active service member, your lender can discuss different loan options with you that offer flexible down payment amounts; you won’t necessarily need to put 20% down. With cash-on-hand being a barrier to homeownership for many, this is an important call to make. Finally, consider how long you plan to live in that home. You might be in a great financial position now, with qualifications for a good loan and down payment, but if you’re only going to live there for a couple years, you might want to consider your long-term goal before moving forward. During that short period, the market may not have increased enough to cover the expenses to sell. You may be buying with the plan to rent the home and hold it as an investment. This can be a great decision as long as you have spoken with your agent about what’s involved with being a landlord and how to set things up to be successful. If you have any questions about buying or renting or would like to review your current situation, feel free to give us a call. We’d love to help you through the process.

6 Questions That Will Help You Choose a Listing Agent

When interviewing listing agents for the right to sell your home, there are six important questions you must ask to ensure they can sell your house quickly and for top dollar.

Looking to buy in the Stafford/Fredericksburg area? Perform a full home search 

Looking to sell in the Stafford/Fredericksburg area? Get a free Home Price Evaluation

There are six questions you must ask a listing agent when interviewing them: 1. How many homes have you sold in the last year? This will tell you how active the agent is in the market. If they’re only selling one or two homes a year, that might bring up more questions about how involved they are in your market. Inside of that question, ask how many homes they’ve sold in your community. If everything they’re selling is two counties away, they may be a great agent, but they may not have the experience they need in your community to give you the advice you need. 2. What percentage of your listings actually sell? This is critical because if someone is listing 30 homes a year but only selling 15 or 20 of those homes, you have to ask what’s happening with the other homes that aren’t being sold. Look at this ratio and make sure the agent does everything they can to sell their listings. 3. What is your list-to-sale price ratio? When they list a home, are they typically getting 95% of the price their seller asked? Are they getting 96% or 97%? Or is their ratio perhaps lower than that, like 93%? Whatever the percentage is will tell you a number of different things. First, it will tell you how well they typically price homes. It will also tell you how well they can market homes and generate the kind of traffic they need to sell them quickly and for top dollar.

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Don’t lose out on any hot inquiries because your agent doesn’t have a follow-up plan.

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4. What’s the average time it takes you to sell a listing compared to the market average? Again, this will tell you a lot about what the agent does to market homes and how well they do against the competition. If the average home sale in your price range takes about 30 days and the agent’s average is two weeks, they’re probably doing a great job. On the flip side, if they average 90 days to sell a home in a market when most homes take only 30 days, there might be something wrong. 5. What is your advertising budget? Marketing a home involves more than just putting it on the MLS. There are websites that your home needs to be advertised on and get great exposure. Ask the agent about their marketing budget and where that budget is spent. Also, make sure they have an advertising and marketing plan. Doing the data entry into the MLS is part of what your agent needs to do to get your home exposed, but if that’s all they’re doing, there may be a piece of the puzzle that’s missing. 6. What is your follow-up plan when someone inquires about my house? In a lot of cases, if an agent gets an inquiry from Zillow, it goes to their email and they can respond to it whenever they finish an appointment or as soon as they get to that email. The thing is, though, if you look at studies about online consumers, you need to find a way to get back to them as soon as possible. MIT did a study declaring that you need to get back to an inquiry like that within five minutes. This is really hard to do, so you have to ask the agent what their plan is to get back to online consumers who want information about your home within five minutes. A lot of times, it takes a combination of technology, manpower, and good follow-up plan. We have a full list of 25 important questions you should ask a listing agent before hiring them. If you'd like a copy of that list or if you have any other questions about this topic, don't hesitate to reach out to us. We’d be happy to help you.

New Year – New Home! Get Prepared!

Are you thinking of buying a home in 2018? Here are a few tips that can help.

Looking to buy in the Stafford/Fredericksburg area? Perform a full home search 

Looking to sell in the Stafford/Fredericksburg area? Get a free Home Price Evaluation

The new year is here – this means new beginnings, new resolutions and for many, new homes! Today I’ll go through a few tips to help you prepare to buy a home in 2018. Even if you aren’t sure exactly what your timeline is, the best thing you can do is to begin the process early and take time to prepare. But that doesn’t mean that you need to make any major decisions or lock yourself into anything before you’re ready. There are a few steps you can take that will help you be ready when the time is right. First of all, have an idea what your credit looks like. You may have things on your credit report you aren’t currently aware of. There are free sites you can use to help you check your score so that there aren’t any surprises when you're ready to move forward with your home purchase. The next thing you should do is talk to a reputable lender. If you don’t know who to talk to, I’d be happy to give you some recommendations. Talking to a lender early on will set you up for a more efficient home buying process and will help you feel secure in your decisions about what to look for. A great lender will be able to guide you toward the right loan program and show you some real numbers to give you an idea of what your payments will look like. 

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WHEN BUYING A HOME, TAKE THE TIME TO PREPARE.

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Once you’ve talked to a lender, you should interview real estate agents. Too many buyers fail to be their own advocate when choosing an agent. It’s very important that you get information on an agent’s experience, where they are market experts and what sort of systems they have in place to ensure a smooth home buying process. This will allow you to make an informed decision about which professional will represent your needs the best. Many experienced agents offer a home buying consultation. This helps them understand your wants and needs and he or she will give you a clear picture of what you can expect from the rest of the process. This includes things like inspections that will be conducted, out-of-pocket expenses and deposits. You’re likely to spend a lot of time with this person so you want to make sure they’re someone you’re comfortable with and enjoy being around.
After you choose the right agent, PUT THEM TO WORK! They should start sending you property listings based on your specific criteria. Have conversations with your agent about which homes you like and don’t like – the more they know about your perfect home, the more they can do to help you find it. Finally, when the time is right, get out and look. Doing so will give you a better idea of what you like and what you should expect from the market. Seeing homes in person, even if they’re not the home you fall in love with, will give you great perspective so that when you see the right home, you know it. Buying a home doesn’t have to be a super-fast process. Take your time, be well prepared and have the right pros on your side. If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

How Title Insurance Keeps You Protected From Unforeseen Problems

What is title insurance and why is it so important? Today, I’ll be explaining why title insurance is essential for homeowners.

Looking to buy in the Stafford/Fredericksburg area? Perform a full home search 

Looking to sell in the Stafford/Fredericksburg area? Get a free Home Price Evaluation

What is title insurance and is it something that you need when you purchase a property? Title to a property describes the rights the owner has with regard to that property. In a nutshell, title insurance provides protection for the owner of a property in a case when an issue arises regarding their ownership and the rights provided by title. This policy can help to cover homeowners in a number of circumstances. For example, what happens if someone receives a contract to sell their property only to discover during the contract period that there is a lien they didn’t place on the property dated before they even bought the home? Having purchased a title insurance policy when closing on the home in many cases will allow the seller to move forward with the sale without jeopardizing their contract. The title insurance company signed off on the title at the time of purchase and will stand in for the seller to insure it’s marketability. There are many other situations where title insurance can provide coverage as well. Another example is a situation wherein a buyer had a survey done to determine the property’s boundary lines prior to closing. After the fact, the boundary lines come into question or an encroachment is discovered from a neighboring lot. Having the combination of a survey and title insurance will provide protection against these issues negatively affecting your interest.

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IT IS IMPORTANT TO BE PROTECTED FROM THE UNEXPECTED.

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Situations like the ones above (and many others) bring the ownership interest the buyer has in the property into question. Title insurance is there to help guarantee that the ownership and rights a buyer receives when buying their property are protected. Ultimately, no one expects to need this kind of insurance. Nevertheless, it is important to be protected from the unexpected. I receive a number of requests each year from title companies asking for the seller’s title insurance policy due to something unexpected being found during the title search. In most cases, once the seller provides the policy the sale continues forward without issue because the insurance policy stands in for the seller. If no policy was in place the sale could be delayed, cancelled and the seller could be stuck with a sticky situation and no safety net in place. Consider if you were to drive without auto insurance. People don’t get in their car anticipating a crash—but things sometimes happen. This is also the case with title insurance. You may never use it, but you don’t want to be without it when you need it. If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

How to Handle a Multiple Offer Situation as a Buyer

If you’re a buyer and find yourself in a multiple offer situation, here’s what you need to know to get the home you want.

Looking to buy in the Stafford/Fredericksburg area? Perform a full home search 

Looking to sell in the Stafford/Fredericksburg area? Get a free Home Price Evaluation

As the spring roars into May, it is very common for buyers to find themselves competing against multiple offers on a home.  If you find yourself in this situation, how do you set yourself up for success?

The first thing you can do is be well prepared. Have a strong pre-approval letter. How that letter is written by the lender is very important—sometimes the way they write it can make you sound like a rock star, while other times they leave the seller with more questions than answers regarding how far along you are in the process and how qualified you truly are.

Once you know you’re well prepared to make a strong offer, focus on the contract terms that really matter. If you find a hot property that’s got everything you’re looking for, don’t quibble over something immaterial or ask for a home warranty when the house is in great shape and you know you can get away without it. If you’re going to ask the seller for closing costs, make sure you know how much you actually need to make the purchase.  Spend your time analyzing the very best offer price and closing cost combination.  Your agent should help you with this by completing a pricing analysis and working with your lender to make sure you’re not asking for more closing cost subsidy than is needed.  These terms determine the seller’s net proceeds and will weigh more heavily that most other terms in a seller’s decision.  That said, things like flexibility with closing date, choice of financing and down payment and other terms can be offered in a way that shows the seller you’re all in on making the sale easy and successful!

Don’t think of a multiple offer situation as a bidding war.

Finally, have good information so you can be confident in the offer you write. Get hooked up with an all star real estate professional. A comparative market analysis isn’t restricted to sellers getting ready to list a home. A good buyer’s agent will have knowledge of the market and be able to objectively show you the value range for the house you’re offering on. Once you’ve got good information like that, you’ll be able to make a confident decision regarding how much you offer.  If you are confident in the value you can make a strong offer based on this data.  If another buyer chooses to offer more than the value number you’re comfortable with you know you avoided paying too much due to the frenzy and excitement involved when a hot property gets a ton of interest.

If you have any more questions about this topic or would like to set up a consultation with one of our buyer specialists, please don’t hesitate to reach out to us. We’d be happy to help!

Finding Real Estate Help in a New Town

Looking to buy in the Stafford/Fredericksburg area? Perform a full home search 
 Looking to sell in the Stafford/Fredericksburg area? Get a free Home Price Evaluation

When moving in the Stafford and Fredericksburg area, how can you best prepare yourself? Many people try to start this process alone and start their search online. Although this is a great start, there’s so much you can’t find online. When you’re first planning your next move, you should talk to two people.

First off, you need an exceptional lender to know what price range you can afford within your budget. An online calculator isn’t enough. This person mediates the financing process and provides you the resources you need to make an educated decision for your family.

Secondly, you need an outstanding agent to fight on your behalf. They should be active in the specific neighborhood you’re looking to purchase a home in. They’re familiar with the school districts, builders, and more.

When you hire us, we can help you pre-screen Realtors to pick out top talent. Remember to not only put your ducks in a row in town, but the area you’re moving to. We understand how crucial it is to plan a move before you start packing up that first box. Utilize our team as a resource to mediate this process for you and your family.

As always, if you have any questions about buying or selling a home in the surrounding area, consider me your local real estate resource. Contact me by phone or email with any needs you might have!