1. Time to Start Running
The most common question we get as Realtors® year in and year out is a simple one: " Is this a good time to buy/sell a house?" The question speaks to the need for information necessary to make significant financial decisions. It is worth noting that in most other professions, timing is usually much less of an issue. How many people do you know ask their doctors, "Is this a good time to operate?" or their plumbers, "Is now a good time to fix this pipe?" In most such cases timing is driven by need.
So, too, is most often the case in real estate. With the rare exception of high level and institutional investors, whether to buy or sell a house has little to do with timing and more often than not immediate need, such as relocation due to a job change, a lease coming to an end, a death, or a divorce when a property needs to be acquired or sold. Whatever the initiating circumstance, the real issue is one of competitiveness in the market. This is what most folks are really wondering when they query as to "good or bad time".
I generally respond with this well-worn business story that you may have heard, and which I think is relevant to this discussion. "Every morning in Africa, a gazelle wakes up. It knows it must run faster than the fastest lion or it will be killed. Every morning a lion wakes up. It knows it must outrun the slowest gazelle or it will starve to death. It doesn’t matter whether you are a lion or a gazelle: when the sun comes up, you’d better be running." Happy hunting or selling…and remember to bring along a guide!
2. Springtime is for Sowing
The reason many adages and clichés survive generation after generation is because they contain some timeless wisdom or nugget of truth. As the 2021 real estate market slips into full swing, don't be surprised if you hear people reciting some well-worn phrases such as, "You can't get something for nothing," or "It takes money to make money," and "People don't plan to fail; they fail to plan."
One of my favorites is "You reap what you sow." Similar to the planning adage, I once heard former Washington Football Team coach, Joe Gibbs, years after they had made it to the Super Bowl and won explain to a crowd that nobody ever won a championship of any kind without a plan and a commitment, and work toward their stated goal, even when things got tough. Things may not always go as planned, but you need a plan to guide you and to refocus you when things go wrong. He added that, "Things always go wrong sooner or later."
You may have also heard some folks say, "Nothing worth having comes easy." While this may be true in most cases, there are things one can do to make things go "easier," like working with professionals to develop a plan after identifying one's goals. For example, many of the clients that my colleagues and I have worked with began with one vision, and after weighing alternatives and options, were able to finesse their vision to one that completely satisfied their true wants and desires
If you believe as most people do, that real estate is one of the best ways to accumulate wealth and work towards financial stability, then I suggest you waste no time in contacting a qualified Realtor® to discuss your current and long-term goals, work together to develop a plan and communicate, communicate, communicate to reach those goals. Let's remember that "A goal without a deadline is just a dream."
At the PJ Team, we help make real estate dreams come true!
3. How to Win in a Hot Market
If you've been paying attention, you couldn't help but notice that the real estate market in Northern Virginia and surrounding areas is already moving at a brusque pace, with many properties commanding multiple competitive offers as soon as they go active on the market, and some even before. While the extent to which this is true may vary from neighborhood to neighborhood, based on such factors as school district reputation or ratings, the number of properties available and rate of turnover in a specific neighborhood, the actual condition of the property when it's placed on the market and those three all important factors; location, location, location; there's no denying that in our area the market is HOT!
Other factors such as historically low interest rates, which increase the raw number of buyers and their buying power, as well as historically low inventory coupled with a pandemic driving many to look for more space, only add to the pressures on both first-time and seasoned home buyers to develop a strategy for success. If time truly is money, then it is even more important not to lose time on failing bid after failing bid. Remember that each bid is preceded by a significant amount of time researching and visiting a property so that each failed bid represents more than the loss of the time it took to submit the offer, it represents loss of opportunity to place a winning bid on another property.
While there are no "one size fits all" or "magic" strategies that will guarantee success, there are a few things that will infinitely improve your chances, the first of which is to work with a skilled negotiator with a track record of success in real estate, otherwise known as a qualified Realtor®.
Any realtor worth his or her salt will tell you that each property and each deal is different and must be evaluated as such, however certain strategies remain universally adaptable and will inevitably improve your position. Among these is the concept of being proactive, not only in selecting a good Realtor® and developing an efficient line of communication, but also in gathering the information necessary to identify "desirable" properties worth investing the time involved in trying to acquire them.
You will want to be proactive in getting your financial house in order by working with a mortgage lender prior to shopping. There's no sense looking at homes that are available today if you are unable to make an offer due to a lack of pre-approval or pre-qualification of your financing. By the way, being pre-approved is much better than being pre-qualified, and having a mortgage lender who will reach out to a listing agent and sing your praises doesn't hurt either.
Beyond being proactive with your finances, you also will want to be informed as to which contingencies can or should be waived on a specific property to improve your chances of having your offer chosen over a half dozen or even a dozen others. Simply waiving all contingencies on all offers may sound like it will give you a competitive edge, but developing a strategy with your Realtor® for determining which (if any) contingencies are wise to waive, will keep you from purchasing a property that is worth significantly less than your purchase price or one in need of significant costly repairs for which you hadn't budgeted.
Finally, positioning yourself to patiently wait and quickly strike when a "desirable" property, as defined by you, arrives on the market will prove invaluable. I know of a young man who purchased his first home after watching a specific neighborhood for nearly a year. He and his mother determined where he was willing to live and how much he could afford to spend. He got his financing in order and waited and watched. When a home became available in his price range in the location he most desired, he was usually the first or second person to visit and inspect the home. After turning down a number of homes that lacked the updates and amenities he envisioned in his dream property, he put in a winning offer the instant the right property came along.
Not everyone has the luxury of time. Some feel the pressure of needing to move for a new job or a lease that is ending, but in my experience, patience, focus, determination, and persistence are the true winning strategies for home buying and in life
4. Statistics: What Do the Numbers Say?
Regional Real Estate Stats from the Northern Virginia Association of Realtors
5. Generating Multiple Offers for Sellers
I heard someone make a comment to a colleague the other day that "If you put a doghouse with plumbing problems on the market today at noon, you would likely have multiple offers by dinnertime." Of course, this is not true, but it expressed the urgency that many are feeling in today's relatively busy real estate market.
The main reason this exaggerated statement is untrue is because the one universally true statement about real estate in any location at any time is, "It depends."
Is the Northern Virginia real estate market exceptionally hot and favorable to sellers right now? In general, some would answer yes, but in truth I would have to answer, "it depends." It depends on the zip code, the school district, the property’s accessibility to major travel routes, the age of the property, the age of the neighborhood, whether the property has been recently updated and whether the other homes in the area have as well. It depends on many other factors too numerous to mention, which is why the market may seem hot one week and flat the next, only to become hot again. This is why one house may sell the first day it is listed and the house across the street may sit for weeks or months.
While some properties are selling off-market, with offers to purchase being made sight unseen by developers interested in specific locations and types of properties, others do seem to languish - sitting two, three, four months, or longer before being sold or withdrawn. What accounts for the different responses by the market to different properties in the same area and price range? Often it can be attributed to a lack of real estate education and lack of proper real estate guidance.
If I see houses on my street selling quickly for relatively high prices and I determine to put a sign in my yard, expecting many enthusiastic buyers to throw money my way, it just may happen; then again it may not.
Did I prepare my property properly for showing? Does my home have the same updates and amenities as those around me that sold so quickly? Did I de-clutter, removing as many of my personal items as possible, allowing potential buyers to envision their furniture and favorite wall hangings, pictures, etc.? Did I spend/invest any money in landscaping, painting, or replacing dated flooring with new carpet or hardwoods? How do my bathrooms, kitchen, and basement compare to those other homes?
Am I trying to sell the home with me still in it? Are the buyers worried that I may make some costly error, trying to sell the home on my own rather than through professional representation? Statistics indicate that FSBOs, homes "for sale by owners," frequently sit longer and bring a lower-than-average sale price.
Finally, there are the issues of timing and pricing. A misstep on either of these can cost sellers thousands, if not, tens of thousands of dollars. As the co-founder and former CEO of Zillow has said so often, "Home values on Zillow are 'Zestimates'. You need to speak with a real estate professional to determine the true value of your home." In the end, the real value is what someone is willing and able to pay when you are willing and able to sell. That price can vary widely depending how much time and money you are willing to spend/invest in preparation for that sale. Remember that price is not the only determinative factor when deciding which is a better offer for your property.
Using a professional Realtor® not only gives sellers more tools and access to larger markets of potential buyers, but it also relieves sellers of the responsibility of holding open houses, scheduling individual showings, and trying to determine which websites to use when marketing. A highly qualified Realtor® at a firm like Long & Foster can create greater interest off market initially because of his/her vast network of colleagues and can then generate additional interest by promoting the property as coming soon to an even larger market of agents.
By the time the property is listed as "active" and potential buyers and their agents are permitted to enter the property, the interest and demand has been built up to a fever pitch, often resulting in multiple offers that can create a competitive bidding process, leaving the sellers with a panoply of offers from which to choose. At the PJ Team at Long & Foster Tysons, we use additional techniques to generate interest and competitive bids for our clients. We also help our clients decipher and compare the offers to make a decision that best suits their needs.
Our advice for maximizing the profit and increasing the ease of managing the transaction when selling a home is simple: do your homework and work with a professional who can represent and guide you. This may be your first or only home sale in years or decades, but qualified Realtors® are actively working in the field every day, year in and year out. Success is not guaranteed by a hot market, "it depends" on you!
Signing-off for now!
We really hope you have enjoyed this edition of the PJ Team newsletter covering news and updates about Virginia Real Estate. To see previous issues, click here. We want our newsletter to address your concerns. Thanks for reading.