Buying
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Interest Rates And Home Prices Affect Home Sales Trends, But Life Events Do As Well! |
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 It's easy to think, or say, that interest rates and home prices are the largest or main factors affecting whether sellers sell and buyers buy. But... sometimes life events or life changes eclipse the impact of interest rates and home prices. You are a new grandparent and you want to spend more time with your new grandbaby who lives eight hours away? I'm not at all surprised that you plan to sell your home and move. You have a new job opportunity with an exciting company in a city three hours away? I'm not at all surprised that you plan to sell your home and move. You are retiring in northern Virginia and your two kids both went to JMU and still live in Harrisonburg? I'm not at all surprised that you plan to sell your current home and move to Harrisonburg. There are lots and lots of life events or life changes that can cause a homeowner to all of a sudden be ready to sell... or can cause someone to all of a sudden be ready to buy. These buyers and sellers that became such because of life events will still stop and consider interest rates and home prices... but the life event is typically what will actually cause them to decide to make a move. | |
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In Which Room Or Rooms Do You Spend Most Of Your Time? |
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 When you think about buying your next home, think about the room or rooms in which you spend most of your time. Some people spend most of their time in kitchen the kitchen or kitchen adjacent space. Some people spend most of their time in the family room. Some people spend most of their time in a sunroom. Some people spend most of their time in a finished basement. Some people spend most of their time in a home office. Some people spend most of their time on a back patio or in the backyard. Yes, and I know, most people spend time in lots of rooms... but which room is the primary room where you spend your time? Once you have determined that number one room (or numbers one and two if you must) consider prioritizing how that space lives, feels and works when you evaluate homes you might purchase. If you spend most of your time in the kitchen or kitchen spaces, then we shouldn't get too overly excited by the great home office and back patio that a home offers... as that is not where you spend most of your time. Certainly, the patterns of how and where you spend most of your time might change in a new home, but make sure that the spaces in which you currently spend most of your time are going to be just as nice or nicer in your next home. | |
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All The Right Spaces In All The Wrong Places |
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 Sometimes a house will have all of the spaces you're looking for (number of bedrooms, living room, family room, dining room, sunroom, office, etc., etc.) but sometimes... they will be in all the wrong places. Yes, the home has a delightful primary bedroom suite... but it is on the upper level and you would really like for it to be on the main level. Yes, the home has a dining room... but it is on the entirely opposite side of the house from the kitchen, which is not ideal. Yes, the home has five bedrooms... but four of them are in the basement, and you want more main level bedrooms. Yes, the home has both a living room and family room... but they are right next to each other, which makes it more challenging to have to groups socializing in the two spaces. Yes, the home has a delightful office... but it is directly next to the playroom. Yes, the home has a wonderful and renovated laundry room... but it is in the otherwise unfinished basement. And on, and on, and on. When we see a new listing of a house for sale we'll likely be able to discern what spaces that house will offer... but we often won't be able to determine if they are in the right places until we visit the house. | |
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How Many Homes Are Going Under Contract Within Three Days, These Days? |
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 Only about a quarter of homes that are going under contract are doing so in three days or less. And actually, only about half are going under contract within a week and a half... 11 days. So, it's taking 12+ days for about half of homes to go under contract. And it's taking 46+ days for about a quarter of homes to go under contract. All that is to say, homes aren't going under contract quite as speedily as they were a year or two ago. So, with some new listings - yes - you will need to make a decision (and potentially make an offer) very quickly - but not necessarily on most homes any longer. | |
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The Increasingly Difficult Challenge Of Purchasing A Detached City Home |
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 It has become increasingly difficult to purchase a detached home in the City of Harrisonburg... because there simply aren't as many sellers selling right now. Three years ago (2021) there were 253 detached homes sales in the City. In 2022 that dropped to 214 sales. In 2023 that dropped to 155 sales. Thus far in 2024, there have only been 132 detached home sales. Why aren't more City homeowners selling their homes? 1. Many have super low mortgage interest rates, and thus super low monthly housing costs, and wouldn't want to trade that in for much higher housing costs given current mortgage interest rates. 2. While many homeowners have plenty of equity and sell for a very delightful sales price... they would also have to pay a rather steep price for a replacement home if they want to stay in the City. 3. For anyone hoping to stay in the City, it's a vicious cycle... won't sell because what would I buy... which keeps my house off the market... which means there are fewer homes for anyone else to buy, etc., etc. So, if you hope to buy a detached home in the City of Harrisonburg, you may very well have a longer wait than you'd like, you may have more competition from other buyers than you'd like, and you will probably pay a higher price than you'd like to pay. | |
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Is There A Price You WOULD Pay For This House? |
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 For quite a while now, we've been operating in a market where nearly everything sells at or over the asking price, sometimes with multiple offers. Thus, many buyers assume a seller will only sell for the asking price and it isn't worth making an offer below the asking price. Sometimes this is, indeed, the case -- especially in the first few weeks that a house is on the market. At this stage, home sellers are typically still rather confident and/or hopeful that their asking price is appropriate for the market. But after a house has been on the market for a few weeks, what's the downside of a buyer making an offer below the asking price? When a buyer views a house that has been on the market for a few weeks, and they don't like it enough to pay the list price... they often just move on and decide not to make an offer. I think many buyers should, instead, consider what price they WOULD pay for the house. If you like a house, but just not at the current offering price -- make an offer of the price you would be willing to pay for the house. Who knows, the seller might surprise you, and might be willing to negotiate to a price that would work for them and for you! | |
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There Are Plenty Of Types Of Houses That Exist That Just Are Not Available To Purchase |
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 I'd like to buy that house, over there... Well, that's great, but... it's not for sale! :-) With some regularity, I'll be chatting with a buyer who describes what they want to buy... and we find that there is nothing on the market that matches their interests. Sometimes we will go a step further and look to see if something similar has sold in the past year... and sometimes we will again find that nothing has sold that matches their interests. But... this doesn't mean that the house they want to buy doesn't exist... it just means that it is not for sale and has not been for sale recently. As you might imagine, this can be frustrating for said buyer... who really wants to buy a house like ___ or in ___ neighborhood... but finds that nobody is selling such a house or a house in such a location. What, then, should you do if this describes your home search? Three main options exist... 1. Continue to patiently (?) wait for such a home to come on the market. 2. Compromise somewhat on the overall vision for your next home and buy something that is close to what you want, but not spot on. 3. Start knocking on doors of homes you think you'd like to buy to see if you can talk a homeowner into selling. | |
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Are You Compromising On Aspects Of Your Next Home That You Can Or Cannot Change Later? |
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 Buying a home inevitably involves making some compromises. It is rare to find a home that fits you perfectly, that has everything that you want, and nothing that you don't. But... there are different types of compromises you might be considering making when viewing any particular home... 1. I like this home a lot, but I will probably want to update the flooring and do a lot of painting, and I might want to try to open up that wall between the kitchen and dining area. 2. I absolutely love this home, and wouldn't really change anything about it, other than that I wish it didn't back up to this busy road as all we hear is road noise when we're out on the back deck. The compromise on the first house is short term, and changeable -- you can (soon or eventually) replace flooring, paint walls, and possibly open up a wall between two rooms. The compromise on the second house is likely long term, and unchangeable -- busy roads almost always tend to remain busy roads or to become busier roads. So, as you are thinking about the compromises you are making in pursuing any given home, think about whether they are aspects of the property that you can or cannot change in the future. | |
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How Much Slower Are The Winter Months In Our Local Housing Market? |
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 It is common knowledge that the winter months are the slowest when it comes to home sales -- in our local market, and beyond. But just how much slower are they? The graph above shows the average number of *contracts signed* per month during the winter (Dec, Jan Feb) as compared to during the spring (Mar, Apr, May) based on the past three years of home sales in Harrisonburg and Rockingham County. So... Is 100 buyers buying a month a significantly slower pace of buyers committing to buy than 142 buyers buying a month? Yes. Is 100 buyers buying a month still a pretty solid amount of buyers buying per month in the context of the spring market only comprising of 142 buyers buying a month? Yes. Is it possible that the number of buyers buying per month during the winter is artificially constrained by a lower number of sellers being willing to sell per month? Yes. So... if you are thinking about selling your home in the next six months... should you wait until spring? You could, but I don't think you need to if you would rather sell and move sooner than springtime. There will still be plenty of buyers buying over the winter, even if it is not as many as will be buying in the spring. | |
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Room Size Is Difficult To Understand Solely From Real Estate Photos |
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 Darn those wide angle lenses. ;-) It's pretty a pretty common phenomenon these days... we'll go walk through a house that looked FANTASTIC online... only to find out that all (or most) of the bedrooms are TINY! I don't really blame the seller, or the seller's agent, or the photographer... it's going to happen these days given high quality photography and wide angle lenses. My takeaways, generally, are... 1. It's important that we go walk through homes to get a sense of room size, house layout, where furniture will and won't fit, etc. Viewing a house online, alone, is not enough. 2. Don't feel bad about taking the time to go see a house that ends up not being a great fit after we walk through... that is often the only way to get a true sense of the house. 3. Sometimes we will be able to review room dimensions or floor plans prior to visiting a house... which might help us notice particularly small spaces... but walking through is still important. 4. I don't think sellers need to mention how small particular rooms are... or not use a wide angle lens... but you should price your home accordingly if many buyers will disqualify themselves based on room size. | |
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Consider The Cost Of Your Planned Renovations When Planning Your Offer |
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 Sometimes we will find a home that is a perfect fit for you. More often, we will find a home that is a relatively good fit, but where you'll want to make a few changes or improvements or renovations after you purchase it. If you are purchasing a $300K home and you plan to paint a few rooms and maybe change out some light fixtures... you probably don't need to think too hard about the cost of your planned renovations relative to your offer price. But... if you are purchasing a $500K home and you plan to remodel the kitchen, remodel a bathroom, replace most of the flooring and most of the light fixtures... you probably should consider the cost of your planned renovations relative to your offer price. In this second scenario, you might end up spending another $100K... on top of the $500K purchase price of the home. As you might imagine, these renovations will not cause your home's value to increase to $600K. You will certainly see an increase in your home's value given those renovations, but you will have invested more in your home than it will be worth even after those renovations. If you purchase the home for $500K and spend $100K on renovations, you've put $600K into the home. If it is then worth $550K, you might be comfortable with that overall scenario if you plan to spend the next 10 years in the home. But... perhaps you'd rather try to pay $475K for the house, and then spend $100K on renovations, to have a total of $575K in the house... with the home that it will then still be worth $550K after renovations. We typically can't have a firm sense of the cost of your renovations, nor the home's value after those renovations are complete -- but the more renovations you plan to make, the more time we should spend discussing these numbers to guide your potential offer terms. | |
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More Than Half Of New Home Buyers Are Buying Attached Homes |
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 Most buyers of new homes in Harrisonburg and Rockingham County are buying attached homes... though just barely. 52% of new home buyers (191) bought attached homes over the past year 48% of new home buyers (178) bought detached homes over the past year Two reasons come to mind as to why we are seeing just as many (or slightly more) buyers buying new attached homes as detached homes... [1] It's what the builders are building. [2] The price point of attached homes is more affordable. Here's how the median sales price of detached and attached homes compare over the past 12 months... Detached Homes = Median Sales Price of $406,250 ($210/SF) Attached Homes = Median Sales Price of $328,955 ($198/SF) Moving forward, I think both of these dynamics (what is being built, price of each) will cause plenty of future buyers of new homes to be buying townhouses. Who knows... within a few years we might be seeing 60% to 70% of new home buyers buying attached homes instead of detached homes. (Attached Homes = townhouses, duplexes, condos) | |
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Is It Reasonable For A Home Buyer To Ask A Seller To Fix Every Item Mentioned In A Home Inspection Report On A Resale Home? |
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 From a local home inspector... "The purpose of a home inspection is to provide the consumer with comprehensive information to help them make a confident and informed decision when buying a home. As we complete your home inspection we have two main goals. Our first goal is to inform you about the status of the structure and systems of the home. The second goal is to explain the unique future maintenance needs of the home." You will learn more about the home you are purchasing through the home inspection process -- and you will learn about deficiencies that might exist in the home -- and you will learn about upgrades you might make in the home. So, is it reasonable for a buyer of a resale home to ask a seller to fix or address every item mentioned in a home inspection report? Usually, no, that is not reasonable. In addition to deficiencies found in a home, a home inspector is likely also going to be referencing... 1. Upgrades you might make to the home later. 2. Ways to make your home more energy efficient. 3. Parts of the home that were to code at the time it was built but that would be done differently now. So, if you're buying a home, don't plan to ask a seller to address every little thing in an inspection report. Focus, instead, on the most significant deficiencies in the home that would be the most costly or cumbersome for you to address after settlement. | |
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Will Your Offer Terms Cause The Seller To Say YES Or To Seek Other Offers? |
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 Clearly, if you are making an offer on a house, it's because you want to buy that house... so, you probably hope that the seller will accept your offer, rather than hold onto your offer for a day or two hoping to receive other more favorable offers. Thus, choose your offer terms wisely... Let's consider a house listed for $475K and the following two offers you might make...
These offers might seem very similar to you -- but they will likely seem very different to the seller. The first offer will likely cause the seller to seek other offers that might have better terms. The second offer may cause the seller to just go ahead and accept your offer. The offer you make on a home you want to purchase will elicit a reaction from the seller -- what do you want that reaction to be? Do you want them to be excited to work with you, or hoping to find another interested buyer? | |
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The Comfortable Feel Of An Established Neighborhood Might Come With, Surprise, An Older Home That Needs Some Updates |
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 An interesting dynamic in the Rockingham County real estate market is related to farmland and trees. Most land that that becomes a residential neighborhood is used as farmland before becoming a neighborhood. Thus, there usually aren't any trees on the property. This makes it easy to build the roads and houses - but means it takes a while for any trees that are planted by builders or homeowners to become established. Many home buyers love the feel of an established neighborhood, often because of the trees and other landscaping that give the neighborhood a comfortable feel. But yet, many home buyers also prefer newer homes that won't need updates and renovations. Thus, some home buyers find themselves choosing between... 1. Newer home in a newer neighborhood with young trees and not much of a feel of an established neighborhood. 2. Older (20+ years) home in a more established neighborhood with mature trees and landscaping. Which would you choose? | |
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Home Sellers And Buyers Will Often Disagree About Needed Updates |
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 A homeowner selling their home, especially if they have lived in it for a while, is often likely to only see small updates that might be needed in the home - and would likely describe them as elective...
But a potential home buyer considering a purchase of that same house might see things quite differently...
I'm not here to say that either party is right or wrong - I understand where the seller is coming from (the house doesn't need many updates) and where the buyer is coming from (I would want to make lots of updates). The challenge, of course, is when all of this is converted into pricing. A seller will likely price (value) the home higher given their minimal view on needed updates. A buyer will likely value the price at a lower price point given their broader view on needed updates. | |
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You Cannot Hear Traffic On A Nearby Road By Looking At Photos |
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 You can learn a lot from looking at the photos of a house that was just listed for sale. But, you can't... 1. Hear traffic on a nearby road. 2. Smell the odors of a nearby factory. 3. Feel the texture of the walls. (yes, a bit of a stretch) 4. Taste the well water. (also, a bit of a stretch) For these and plenty of other reasons, it is crucial that we go see a house in person to fully understand a house with all of your senses. Driving by the house will get you one step closer to a fuller understanding of the house - but seeing the house (walking around and through) is our best bet. | |
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Sometimes An Offer Is So Strong A Seller Will Not Wait For Other Imminent Offers |
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 Wahoo! An exciting new listing just hit the market. You are excited to go see it and will definitely consider making an offer. You know it will likely be a popular listing, with the potential for multiple offers, but you have already been pre-approved for your mortgage, you are going to see the house on the first day it is on the market, and you will likely make an offer on the second day that it is on the market. That should be enough, right? Well, maybe. Sometimes, an offer shows up that is strong enough to cause a seller to adjust how they were otherwise planning to receive and consider offers. If an offer comes in on the fictional house above on the afternoon of the first day that it is on the market... that is above asking price, cash, without an inspection, with a closing to take place in 20 days, with the seller able to rent back for free for up to three months... 1. Who could blame the seller for going ahead and accepting this very (very!) strong offer. 2. Who could blame buyers if they are disappointed when they find out on the second morning that the house is on the market that they are too late to submit an offer. So... 1. Buyers - Be willing to make a strong offer, quickly, if you want to try to get the seller to respond before considering other offers. 2. Also, Buyers - Know that an early offer from a motivated buyer might very quickly eliminate your opportunity to compete to buy a house that you really like - so, make an offer just as quickly as you are ready to do so. | |
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Sometimes It Makes Sense To Just Adopt The Timetable The Seller Prefers |
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 In a seller's market, which we are in... Sometimes It Makes Sense (for a buyer) To Just Adopt The Timetable The Seller Prefers Conversely, in a buyer's market, which we are not in... Sometimes It Makes Sense (for a seller) To Just Adopt The Timetable The Buyer Prefers Let's get into why... If you are about to make an offer on a house... and the seller prefers to close in 90 days, and you could, but you would prefer not to wait to long to close... sometimes it may make sense to just go with the timetable the seller prefers. After all, it is a seller's market, and if you don't go along with their desired timetable, they may choose to work with a buyer who will. Similarly... If you are about to make an offer on a house... and the seller prefers to close within 30 days, and you could, but you would prefer not to close quite so quickly... sometimes it may make sense to just go with the timetable the seller prefers. After all, it is a seller's market, and if you don't go along with their desired timetable, they may choose to work with a buyer who will. There may very well be costs to you (dollars, logistical headaches, stress) of going along with the seller's timetable -- but if you actually get to buy the house that you want to buy, maybe it will be worthwhile. P.S. Did you enjoy the AI generated image of a "man looking at a wall calendar"? ;-) | |
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How Will You Value Logistical Ease When Selling Your Home? |
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 For anyone who is selling a home and buying a home at the same time, there are some logistics we'll have to work through... If you are using the proceeds from your home sale to purchase the next home, there might be some wrinkles as to the closing and occupancy timeline. Do you move everything out of your current house on Wednesday, close on Thursday on both the sale and purchase and move into your new house on Thursday? That sounds simple enough, but it would likely be much easier if there were some overlap of occupancy of the two houses. What if you could move into your new home a week before closing? What if you could wait to be completely out of your current home until a week after closing? The buyer of your current home, or the seller of your new home, might be willing to participate in making the moving logistics easier for you... but that logistical ease might come at a cost. Would you be willing to sell your current home for $5K less, or buy the new home for $5K more if you could have the logistical ease of having access to both houses to aid in the move from one to the next? How much value does this logistical ease have to you? | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
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