If you're buying a home, you may find yourself wondering...

• Would it be OK to ask the seller to pay for your closing costs?
• Could you ask if you can move in a few weeks before closing?
• Can you make an offer even though you still need to sell your current home –– and it's not even on the market yet?
• What about offering $50K under asking price? Or asking the seller to buy down your interest rate?
• Could you ask them to replace the HVAC system, even though it's still working fine?

In each of these scenarios, the answer is technically yes –– you can ask.

But... the seller might not agree.

One of the unique things about real estate is that just about anything is negotiable –– as long as both parties agree. The offer you make can include just about any term or condition that feels important to you.

But keep in mind that sellers typically have their own goals, timelines, and comfort levels. Some sellers may be open to creative terms or concessions. Others may not be interested at all –– or might be overwhelmed by the complexity of what you are proposing.

So, don't be afraid to think creatively when putting together your offer. But also recognize that the seller may or may not agree to what you're proposing.

If you're navigating how to make a compelling offer –– and figuring out what's reasonable to ask –– I'm happy to help talk through the strategy based on your situation and the current market.

  

Not every home in today's market is getting multiple offers –– but some are.

I've listed several homes recently that have ended up in competitive offer situations. In those cases, some buyers have included a home inspection contingency in their offer –– and some have not.

Let's step back for a moment.

If you're planning to buy a home, and we're out looking at properties together, we'll most likely talk about the contingencies you might include in your offer. I will recommend that you include a home inspection contingency. It gives you the opportunity to have a home inspector take a closer look at the home and gives you the opportunity to request repairs to the home or decide not to proceed with the purchase based on the inspection findings.

That said, there may come a time when we walk into a house that feels just about perfect. Perhaps it's beautifully maintained, the systems and appliances have been recently updated, and everything looks like it is in great shape.  And... we find out there are already multiple offers on the table.

In that scenario, you might start to ask yourself... am I comfortable making an offer without a home inspection contingency?

Doing so is not a decision to take lightly. Skipping a home inspection carries some risk. You're giving up a layer of protection and relying more heavily on what we can observe during your showings.

So yes –– when it comes to making an offer on a house, I'll usually recommend including a home inspection contingency. But I also recognize that in some specific scenarios, you might decide to move forward without one. That's a decision we can talk through together when the time comes, based on the house, it's condition, and how well it fits your needs.
  

It wasn't all that long ago that nearly every house listed for sale in Harrisonburg and Rockingham County was under contract within 48 hours. Multiple offers, escalation clauses, and buyers waiving inspections were the norm. It was a fast paced market that sellers loved and that frustrated buyers.

But we're not in that type of market anymore.

In today's local market, some homes don't go under contract in the first few days… or even in the first few weeks. And that doesn't necessarily mean there's something wrong with the house.

With higher home prices and still–high mortgage interest rates, today's buyers are often making slower and more thought out decisions. Monthly payments are higher than ever, which sometimes means buyers are taking more time to evaluate their options before making an offer. It's not uncommon now for a buyer to sleep on a decision or visit a home two or three times before moving forward.

As a result, some houses are simply taking longer to sell –– not because there's something wrong with the condition, location, or price of the house, but because the pace of the market has changed.

So, if you see a home that's been on the market for two weeks, three weeks, or even a month or more, don't immediately assume it's flawed or overpriced. It might just be waiting for the right buyer to come along. It might be waiting for you.

   

Let's imagine you're selling your home and we listed it for $400,000.

We receive two offers:

Offer A: $400,000 –– contingent on a home inspection, a radon test, financing, and an appraisal.

Offer B: $375,000 –– no home inspection, no radon test, all cash and thus no financing or appraisal contingency.

Which one would you choose?

Would you prioritize certainty of sale and take the $375K offer, knowing there's very little that could derail it?

Or would you prioritize price, accepting the $400K offer, even though it still has four key hurdles to clear before getting to closing?

Now let's adjust things slightly...

If you chose the $400K offer with contingencies, would you feel differently if the more certain offer had been $390K instead?

If you initially leaned toward the $375K cash offer, what if that offer had been $350K –– would you still lean towards that offer?

Most home sellers put at least some amount of value on certainty –– knowing the deal is almost certainly going to go through. But how much is that certainty worth to you?

There's no one–size–fits–all answer here. Some sellers are willing to trade a bit of price for a smoother, more reliable transaction. Others are willing to take on some risk for the possibility of a higher sale price.

When you are selling your home, how will you prioritize certainty and price?

  

The real estate market in Harrisonburg and Rockingham County continues to move quickly. Many homes are going under contract within just a few days of being listed –– and often at or above the asking price. If you're hoping to buy in the coming months, this fast pace can might make you feel hesitant to make an offer when you go view some houses.

If you tour a house and mostly like it mostly –– but feel the list price is just a bit too high –– should you make an offer?

Yes.

It's perfectly fine to make an offer below the asking price.

Will that offer be accepted? Maybe. Maybe not.

There might be other offers coming in at or above the list price. The seller might be set on their asking price and unwilling to negotiate. But submitting an offer below the list price is a reasonable thing to do.

Most sellers are not offended by an offer that is under the list price (depending on how much under the list price) –– and they typically understand that buyers are trying to make financially sound decisions. If you don't want to pay $X for a house, but you're willing to pay $Y, it's okay for us to make that offer to see if or how the seller will respond.

Of course, your odds of success with a below–list–price offer will depend on several factors –– including how long the home has been on the market, how competitively it is priced, and whether there are other interested buyers.

But don't talk yourself out of making an offer just because you're not willing to meet the list price. It's better to make the offer and see what happens rather than to just walk away without trying.

  

Happy New Year!  

I hope you had a delightful holiday season and enjoyed ringing in the New Year.  Happy 2026!  I celebrated with a few hundred of my closest friends (ok, fine, my running acquaintances) in the VA Momentum Glow Run.

Before we get off and running with the market data (you like it, I know) a few quick notes...

Each month I have a giveaway for readers of my market report.  This month, enter for a chance to win a $50 gift card to Capital Ale House on Court Square in downtown Harrisonburg.  Enter here for a chance to win the gift card.

Now, then, let's get into the latest market data... for December and looking back at all of 2025... in Harrisonburg and Rockingham County.

First, looking at the overall number of sales in the City and County...

December 2025 showed a surprising bump in home sales with 23% more than the prior December... but for the full year, we ended up seeing 3% fewer home sales in 2025 than in 2024.  

Meanwhile, when it comes to the prices of those homes...

After multiple years of faster than normal increases in the median sales price... those increases slowed to a stop in 2025.  The median sales price in 2025 was basically the same (+$460) as it was in 2024.  

And how about how quickly homes are going under contract...

Median days on market (the time it takes for a new listing to go under contract) has risen from 6 days to 8 days.  We'll see this shift a bit clearer in a later graph, but it is taking slightly longer for homes to go under contract these days.

Now, let's look briefly at a few specific market segments, starting with detached homes...

We saw 10% fewer detached home sales in 2025 as compared to 2024... though the median sales price of those homes increased 1% over the past year.  The median sales price of a detached home in Harrisonburg and Rockingham County is currently sitting at $390,000.  That means that half of detached homes that are selling are doing so below $390K and half are selling for more than $390K.

How about those attached homes, which includes townhomes, duplexes and condos...

The 10% decline in detached home sales was accompanied by a 13% increase in attached home sales... furthermore, the median sales price of attached homes increased 4% over the past year.  The median sales price of an attached home (townhouse, duplex or condo) is currently $316,000.

Now, for some geographical comparisons, here's the City of Harrisonburg...

It is becoming more and more difficult to buy a home in the City of Harrisonburg as fewer and fewer are offered for sale.  The number of homes selling in the City of Harrisonburg declined from 303 in 2023 to 295 in 2024 to 279 in 2025.  The median sales price, however, has increased 3% to $304,900.

Meanwhile, in Rockingham County...

We saw a slightly smaller decline in the number of homes selling in Rockingham County... with 2% fewer selling in 2025 compared to 2024.  The increase in the median sales price, however, was also smaller... increasing 1% to $354,900 for all homes sold in Rockingham County.

Now, let's look just at new home sales...

After only 304 new home sales in 2023... that jumped up to 394 in 2024... and then declined 7% last year to 365 new home sales in 2025.  Over the past year the median sales price of new homes has also declined slightly, by 3%, to $339,500.

But if you're not looking to buy a new home, you might be interested to note these trends in the sale of existing (resale) homes...

We saw about the same number of existing home sales in 2025 (987) as we saw in 2024 (995) and the median sales price of those existing homes increased by 3% to $351,000.

Now, having looked through the main numbers... let's put the data into some graphs to try to get a visual sense of the latest trends through the end of 2025.

A few things to note on the graph above...

[1]  December home sales were quite a bit stronger than expected... with 119 sales compared to only 97 last December.  

[2]  But, keep in mind, November 2025 home sales were sort of slow, so maybe some of those buyers didn't end up closing on their purchase until December.

[3]  Looking back to this past January, February and March – they were quite slow (79 – 84 home sales) and thus we might have a few slow months ahead of us if that pattern continues.

Now, a look at the full year of 2025, stacked up against prior years...

This past year (2025) started off slow and never caught up to 2024.  Both years, though, showed more home sales than 2023.  In a possible bouncing ball effect (down, up, down, up) perhaps we'll see an increase in home sales in 2026.

Here, then, are the slow moving long term trend lines...

Prices are flat... and sales are slowing.  The captions say it all.  After several years of rapidly increasing prices (see the next graph) we are now seeing very little change in home prices, and technically, a slight decline over the past six months.  Meanwhile, we're seeing an overall decline in the number of homes that are selling.

Here's an even longer look back, with year to year sales and price trends...

The graph above shows eight years of increases in the median sales price (from $193K to $345K) followed by last year, with no increase at all.  Last year also showed a slight decline in the number of homes that are selling.

What times next for home sales and prices?  I think we are going to see a slight increase in the number of homes that are selling and the prices at which they are selling, but stay tuned to see how it all shakes out.

Perhaps 2026 will get off to a good start based on what this next graph shows...

We typically see around 86 contracts signed in December... but there were 102 signed in December 2025.  Perhaps this will lead to a slightly stronger month of closed home sales in January and/or February.

Perhaps those higher contract numbers were a result of more homes being available for sale...

We are starting to see inventory levels decline (241 down to 184 over the past two months) but current inventory levels are still quite a bit higher than they were a year ago.  We closed out 2024 with about 138 homes for sale, and a year later, it's 184 homes for sale.  We are likely to see inventory levels continue to increase as we move through the next few months.

Here's the graph I referenced earlier, showing days on market...

Two years ago (late 2023) we saw the median days on market metric increase significantly leading up to and through the new year... and we saw that again this past year.  I'll be continuing to monitor this over the next few months to see if days on market starts to decline again after the spike (like it did two years ago) or whether these numbers remain elevated.

Finally, mortgage interest rates...

This is one situation in which a declining trend is positive news... mortgage interest rates have been mostly declining over the past year (from 6.85% to 6.15%) which slowly but surely makes monthly housing costs (for new buyers) slightly more affordable than previously.

So, what does all of this mean for you?

Key Takeaways for Buyers...

Interest Rates Are Easing – This will either increase your purchasing power, or reduce your monthly cost as compared to if you bought six months or a year ago – good news for you!

More Homes to Choose From – Inventory levels are higher than a year ago (184 vs. 138), giving you more options... and we haven't even reached the Spring market yet!

Prices Are Holding Steady – Home prices flattened in 2025 after years of rapid increases. It is not yet clear how long this level period will last, but enjoy it while it is here.

Key Takeaways for Sellers...

Many Homes Are Taking Slightly Longer to Sell – Days on market have ticked up from 6 to 8 days. While this is only a slight uptick, pricing and presentation continue to be more important than ever to ensure a speedy and successful sale.

Expect Only Modest Price Gains – The market is no longer seeing the large year–over–year price jumps of the past. You should be prepared for pricing that's comparable to or only slightly higher than last year.

Slower Months Ahead – January and February typically are slower months for contracts to be signed, though plenty of sellers who have listed their homes thus far in 2026 have found success already.

If you are considering selling your home this Spring (or sooner) or if you are getting ready for a home purchase in 2026, let's set up a time to chat to talk about the market, the process and your dreams and goals.

If you've decided that you'll be selling your home in the near future, you may be asking the same question that many other homeowners are pondering right now... 

Should I go ahead and list my home now, or wait until spring?

I can't offer one perfect answer for all sellers and all homes... but let's explore some reasons why each option might make sense depending on your situation.

Why You Might Wait Until Spring

1.  Improved Curb Appeal

Spring will bring greener grass, blooming flowers, trees on the leaves –– all of which will improve the presentation of your home in listing photos and in person. 

2.  More Buyers Enter the Market

As we head into March and April, more buyers typically start their home search. Listing in the spring might mean more buyers checking out your home and possibly more buyers ready to make offers.

Why It Might Make Sense to List Now

1.  Less Competition from Other Sellers

Right now, fewer homeowners are putting their homes on the market. That means if you list now, your home could stand out simply because there aren't as many options available to buyers.  Less competition might lead to a faster sales.

Every home –– and every market segment –– is a little different. The ideal timing for your home sale may depend on factors like the price range, location and even the condition of your home.

If you are trying to decide whether to list your home now or wait until spring, let's talk things things through related to your home and your situation.

  

Over the past six months, mortgage interest rates have been steadily trending downward. After rising above 7% earlier in 2025, the average 30–year fixed mortgage rate ended the year at 6.15%... well below the 12 month average of 6.6%.

So, what might this mean for buyers and sellers as we head into 2026?

Buyers...

Lower mortgage rates can potentially translate into more affordable monthly payments. If you were priced out of the market over the past few years in part due to high interest rates, declining rates may make it more feasible for you to purchase a home in 2026.

Sellers...

On the selling side, declining rates may mean (slightly) more buyers can consider your home. In much of 2025, sellers were selling in a market where buyers were very cautious due to higher borrowing costs. If interest rates continue to ease, we may see more buyers ready to make a get into the market –– particularly if they've been waiting on the sidelines for lower rates.

What's next for 2026?

If rates remain in the low 6% range –– or dip further –– buyers may have more confidence and purchasing power, and sellers could benefit from increased activity.
  

Listing inventory has been trending upwards for most of the past year.  

Each data point on the graph above shows the average inventory level for the 12 months leading up to that date.  Here are a few of the specific data points shown above...

December 2023 – average of 162 homes for sale for the 12 months of 2023

December 2024 – average of 169 homes for sale for the 12 months of 2024

Today – average of 199 homes for sale for the 12 months of 2025

What will we see in 2026?  Will inventory levels continue to trend upwards?  I suspect we will see these levels continue to rise through 2026, though it won't be in all price ranges or for all property types.

   

Were my predictions for 2025 accurate?  Well, not exactly.

But... nonetheless... I'll go ahead and throw some predictions out there for 2026.  Let's start with how many homes might sell in 2026...

After a 4% decline in home sales in 2025, I am predicting a 2% in home sales in 2026.  This would bring annual home sales up to 1,360 for 2026... above 2025 but not quite as many sales as 2024.  I think slightly lower mortgage interest rates and slightly more listing inventory will create a slight uptick in home sales activity in 2026.

What about home prices?

After a 4.5% increase in the median sales price in 2024... we saw only a negligible change (+$980) in the median sales price in 2025.  I am predicting a modest, 1%, increase in the median sales price in 2026.  While lower mortgage interest rates and slightly higher inventory levels might cause sales to increase a bit in 2026, I don't think there will be enough buyer activity to cause prices to meaningfully increase in 2026.

What are your predictions for 2026?

  

It's hard to believe it's already 2026... but here we go with another new year!

Before I get to 2026 predictions, let's see how 2025 finished out compared to my predictions a year ago...

2024 Home Sales = 1,389

My Prediction for 2025 = 1,400 

Actual Home Sales in 2025 = 1,330

So... there were fewer home sales in 2025 than I expected... and fewer home sales than in 2024.  

How about median sales prices...

2024 Median Sales Price = $345,000

My Prediction for 2025 = $359,500

Actual Median Sales price in 2025 = $345,460

The median sales price did not rise in 2025 as I expected that it would... it finished out the year right about where it started.

So... my predictions did not pan out all that well in 2025... the market was slower (fewer home sales) than I expected and prices did not increase.

Stay tuned for my predictions for 2026... though keep the inaccuracies of my 2025 predictions in mind when reading my predictions for 2026.  ;–)

    

Buyers (and thus, sellers) were active this past November and December... compared to the same months last year.

In the last two months of 2025 we saw 190 contracts signed... a 17% increase over the 162 contracts signed in the last two months of 2024.

What did these 190 buyers contract to buy in the last two months of 2025?

  

If you're looking to buy a $400K home in the City of Harrisonburg in the New Year, here's a look at what you might finding yourself buying!  

Over the past six months, ten homes have sold between $375K and $425K in the City of Harrisonburg, nine of which are shown above.

What did those ten buyers buy over the past six months for around $400K?

Happy New Year!

  

Would you be comfortable with a contract that only says this...

"This contract is contingent on the sale of 123 Main Street."

What if that one sentence is all that your contract includes when it comes to the buyer needing to sell their current home?

If that's the case, I'd suggest you might be missing out on several key protections –– protections that could make a big difference in whether (and when) your home actually sells.

A simple home sale contingency, without any additional terms, leaves quite a few questions unanswered:

1.  When will their current home be listed for sale?

If it's not even on the market yet, there's no telling when –– or if –– it might sell.

2.  How long will it take to go under contract?

You could be tied up for weeks or months with no progress.

3.  Will it ever actually get to closing?

Even if they find a buyer, things can still fall apart before settlement.

4.  What if another interested buyer comes along?

Are you stuck, or can you accept a stronger, non–contingent offer?

Fortunately, all of these concerns can be addressed if we add some specific parameters and protections to the contract.

Here are some common examples:

1.  The buyers will have their current home listed by [insert date].

2.  If the buyer's home is not under contract by [insert date], you can terminate.

3.  If the buyer's home has not closed by [insert date], you can terminate.

4.  You can continue to market the home and accept backup or non–contingent offers.

Now, this isn't the exact wording we would use in a real contract –– but they give you a sense of what's reasonable to include when a buyer needs to sell their home in order to buy your home.

And there's more to consider…

What if the buyer already has their home under contract –– but that contract falls through? How do we handle that possibility?

If you're selling your home to a buyer who needs to sell theirs first, we'll want to talk through each scenario carefully and make sure the contract is written to protect your interests.
   

Sometimes a fast home sale becomes the priority –– and for good reason.

Maybe you've already moved out and would rather not keep making a mortgage payment on a home you no longer live in. Perhaps you're relocating and need to sell quickly so you can move forward with buying a new home elsewhere. Or maybe you've just had tenants move out of your rental property, and with no rental income to offset the mortgage, holding onto the property no longer makes sense.

Whatever the reason, some sellers tell me they are focused on a speedy sale –– and that's perfectly reasonable. But if speed is the goal, we need to make sure our pricing and marketing plans will support that goal.

Preparing your home well for the market and ensuring it's marketed thoroughly and professionally are both important steps toward a speedy sale. But one of the most important factors –– is pricing.

If recent comparable sales in your neighborhood have been around $300K, a price of $295K, $299K, or even $305K could make sense for your home. But pricing it at $325K? That's probably not going to help you achieve that faster than normal sale.

Likewise, if similar homes have recently sold around $210K, then pricing yours at $205K, $209K, or $215K keeps you in the right range. Pricing at $230K may only lead to a longer time on the market –– the opposite of what you said you wanted.

Bottom line –– if selling quickly is truly the priority, then pricing your home appropriately from the start is essential. The right price, combined with good preparation and effective marketing, will give us the best chance of achieving your goal.

  

Home buyers over the past few years would likely describe their home purchase as anything but affordable.  Home prices and mortgage interest rates were both rising, causing a buyer's monthly payment to increase year after year.  But looking ahead to 2026, there are a few trends that might combine to bring at least some relief to buyers.

Let's take a look at three factors that could make home buying slightly more affordable in 2026...

1. Wages Are Slowly Increasing

Wages don't always rise quickly, but over time we've seen consistent upward movement. Even a small increase in income can improve your purchasing power –– especially when combined with stable home prices or lower borrowing costs. If wages continue to trend upward into 2026, it could give you a bit more breathing room.

2. Mortgage Rates Are (Slowly) Heading Down

After a few years of sharp increases, mortgage interest rates have been trending downward –– though at a slow and steady pace. If this trend continues into 2026, even slightly lower rates can make a meaningful difference in monthly mortgage payments. Lower rates = higher affordability.

3. Home Prices Have Flattened Out

Locally, we have seen very little change in the median sales price over the past year. That's a significant shift after several years of rapid price growth. If home prices remain stable moving into and through 2026, that will help keep monthly payments under control for new buyers.

So, Will You Be Able to Buy a Home More Affordably in 2026?

It's possible. If wages continue to inch up, mortgage interest rates continue to inch down, and home prices remain relatively flat –– the combined effect could be a slight increase in affordability if you are looking to buy a home in 2026.

Of course, each of these trends could shift in a different direction –– but if they move in the directions that are expected and predicted, you may find more success in buying a home in 2026 than you did in 2025.

  

If you've been casually keeping an eye on the local housing market, you may have noticed something lately –– there just aren't that many homes for sale right now.

That's not unusual for this time of year. As the holiday season rolls in, inventory levels often decline. Some sellers decide to take their homes off the market in December, choosing to focus on holiday gatherings, travel, or simply to avoid showings during a quieter time of year.

But many of those homes –– and others that didn't make it onto the market before the holidays –– often come back on the market after the first of the year or in early spring.

What This Means for Buyers

If you're house hunting right now (or even just thinking about it), you're likely seeing fewer options than you did a month or two ago. You might even be putting your search on pause as the year winds down.

The good news? You'll likely start to see more listings pop up in January, and even more as we approach the spring market. So if you're not seeing a good fit today, there's a decent chance more options will be available in the coming weeks and months.

What This Means for Sellers

If your home is currently on the market, you may be benefiting from reduced competition. With fewer listings available, your home may stand out more to the buyers who are still actively searching during the holidays. That said, there are often fewer buyers shopping right now too –– many are waiting until after the holidays to re–engage in the process.

If you're planning to put your home on the market in the new year, be prepared for more competition. Inventory typically rises in January and February, and then again as we head into the spring season.

Of course, every seller's situation is different. It may make sense for some to leave their home on the market through the holidays, while others may benefit from taking a short break until after the new year.

Curious about what makes the most sense for your situation?

Let's talk. I'd be happy to help you weigh the pros and cons of timing your home sale –– or your home search –– as we head into the new year.

   

One of the decisions you'll have to make when you're thinking about buying a house –– or when you're in the process of making an offer –– is whether or not you'd like to have a home inspection.

You may be wondering: What does a home inspection actually involve? What does a home inspector do?

At a basic level, a home inspector's job is to evaluate a house's condition. But that can mean many different things, so let's break it down.

What a Home Inspector WILL do

A home inspector performs a non–invasive evaluation of a home.

They assess the home's major systems and visible components, including the roof, structure, interior, plumbing, electrical, heating, and cooling systems, among others.

They also test many of the everyday items in a house––appliances, outlets, faucets, toilets, and more.

They aren't looking for perfection. Every home has issues, even newer ones. Instead, they're looking for signs of problems or clues that could point to current or future issues.

What a Home Inspector WILL NOT do

A home inspector won't open up walls, cut into ceilings, or tear systems apart. They won't do anything that causes damage or involves invasive testing.

They also won't tell you whether a house is “good” or “bad,” or whether you should or shouldn't buy it. Their job is to present the facts clearly and objectively. They aren't there to point out minor cosmetic flaws, like small scratches, a speck on the floor, or normal and expected signs of aging.

The goal of a home inspection is to give buyers clear, useful information, so they can move forward with a better understanding of what they're buying.

The Takeaway

A home inspection isn't about finding a "perfect" house. It's about understanding the one you're buying.

If you're wondering whether a home inspection makes sense for your situation, how it might affect your offer, or who to trust for the inspection itself, I'd love to help point you in the right direction.

When you're considering a home purchase, you might find yourself glancing at the tax assessment and compare it to the list price.

Sometimes the two numbers line up nicely –– within a few percentage points of each other.

Other times, the difference is a bit more dramatic.

For the sake of this discussion, let's assume the list price of a home reflects its market value. Yes, I know that's not always true –– but it's a useful perspective for considering this topic.

When the tax assessment and market value are rather far apart, there are usually one of two explanations.

1. The home has been over improved in ways the City or County has not fully realized.

If a homeowner has made significant improvements over time –– such as a new roof, replacement windows, updated siding, new flooring, a renovated kitchen or bathrooms, modern lighting, or a new heating system –– the assessor may not be aware of all of those changes.

Some improvements get picked up during reassessments. Others do not.

When that happens, the assessed value can lag behind reality, and the market value (and list price) ends up being noticeably higher than the tax assessment.

In short, the house is worth more than the public records suggest.

2. The home has been under improved in ways the City or County cannot see

The opposite situation also happens quite often.

A homeowner may have owned a property for decades and made very few updates. From the outside, everything looks fine. But inside, the home may need substantial investment just to bring it up to average condition for its age.

In that case, the tax assessment may assume a level of condition and functionality that simply isn't there –– and the market value (and list price) ends up being lower than the assessed value.

Why this happens so often

Tax assessments are based on the assessor's best estimate of value using public records, exterior observations, permits, and broad market data. Assessors typically are not walking through homes.

And without going inside, it can be very hard to know whether a 1950s home feels like a 2020 home… or like a 1900 home.

If a 1950s house feels like a 2020 house, it will probably sell for more than its assessment.

If a 1950s house feels like a 1900 house, it will probably sell for less than its assessment.

The takeaway

When you see a home for sale with a list price that is significantly higher or lower than the tax assessment, don't jump to conclusions.

Instead, let's go take a look at the house if it is of interest.

The explanation is often found inside the home –– in the level of updates, maintenance, and overall condition –– not necessarily in an unreasonable asking price.

The assessment is a useful data point, but it is frequently not an accurate proxy for market value.

  

If you are buying a home with less than 20 percent down, you will likely run into something called private mortgage insurance, or PMI.

PMI is insurance that protects the lender, not the buyer. When a smaller down payment is used, the lender takes on more risk, and PMI helps cover that risk.

When PMI is required

PMI is usually required on conventional loans when the down payment is less than 20 percent. The smaller the down payment, the more likely PMI will be part of the loan.

How PMI is paid

There are a few common ways PMI shows up.

1.  Most often, PMI is added to the monthly mortgage payment. 

2.  In some cases, it can be paid upfront at closing. 

3.  Sometimes the lender pays it, but the cost is built into a slightly higher interest rate.

You are paying for PMI in any of these scenarios, but how it appears can look different from loan to loan.

When PMI can go away

On most conventional loans, PMI can be removed once you reach about 20 percent equity in the home and is automatically removed around 22 percent.

Equity can come from paying the loan down over time or from the home increasing in value.

Not all mortgage insurance works this way. For example, FHA loans usually require mortgage insurance for the life of the loan unless it is refinanced.

Is PMI a bad thing

PMI is not ideal (since it increases your monthly housing cost) but it often makes homeownership possible sooner. Many buyers use PMI as a temporary cost while building equity.

The important part is knowing how much PMI will cost you and when it can be removed.

The bottom line

PMI is common, manageable, and usually temporary.

If you are putting less than 20 percent down, make sure you understand how PMI is being paid and when it can be removed.