Washington, DC Metro Area Including Northern Virginia Number 5 Best City For A Job

Congratulations to the Washington, DC metro area including Northern Virginia for being one of the top ten best cities/areas in the country for a job (via Forbes.com). Though it dropped from number one (last year), it’s still number five.

1. Raleigh-Cary, NC
2. Phoenix-Mesa-Scottsdale, AZ
3. Jacksonville, FL
4. Orlando-Kissimmee, FL
5. Washington-Arlington-Alexandria, DC-VA-MD-WV
6. Salt Lake City, UT
7. Honolulu, HI
8. Las Vegas-Paradise, NV
9. Fort Lauderdale-Pompano Beach-Deerfield Beach, FL
10. Virginia Beach-Norfolk-Newport News, VA-NC

How does this effect real estate particularly property values? Well, one of the most important leading indicators of the long-term health of the local real estate market and market values is the unemployment rate/jobs. Northern Virginia has the lowest unemployment rate in the area (one of the reasons why the Washington, DC metro area was number five on the list) and plenty of people are still moving into the area. That helps give the local real estate market (and property values) a healthy long-term outlook.

Loudoun County Real Estate - The Word On The Street

You read the data, you see the graphs and you hear and watch the media comment on the local real estate market in Loudoun County. But what are the active sellers, buyers and real estate professionals saying?

The comments being made by Buyers:

1. "There’s not much to choose from!"
2. "Why are the last three we saw so overpriced?"
3. "I want move-in-condition, but there aren’t many that are."
4. "This property sold in 4 days, but so many have been on the market for 4, 6 or even 12 months."
5. "We can totally beat up every seller out there because _____________ (add in a comment based on an incorrect comment by the media or someone not in real estate)."

Translation/explanation:

1. The inventory is at the lowest point since the peak in the summer of 2005 so there’s not much to choose from.
2. Over 75 percent of the properties currently on the market are overpriced.
3. Sellers may still think that just putting their home on the market will be enough, which is incorrect. Buyers are more knowledgeable and pickier than ever.
4. The properties that are of the best value are the first to sell. With so many homes overpriced and showing poorly, buyers are acting quickly when they come across a "diamond in the rough".
5. The media is typically 6 to 9 or months behind the curve.  What was true last summer or fall is no longer the case. Yes, you can still get great deals and negotiate, but the market is more balanced than it has been in two years.

The comments being made by Sellers:

1. "My home is worth more than my neighbor’s one because ____________ (add in an emotional based comment)."
2. "I can’t get a straight answer from my listing agent on what I should do to sell my house."
3. "The comps from summer and fall of 2006 and the tax assessment clearly show that my home is worth ________ (add in a price higher than today’s market value)."
4. "How come I’m not getting any buyers through?"
5. "How come I’m getting traffic, but no offers?"
6. "I’m glad that I priced the home where I did so that is sold in 30 days!"

Translation/explanation:

1. Sellers are trying to make logical and factual decisions based on emotion. Yes, it’s emotional to sell your "home". But in the end, it’s still a product.
2. Some listing agents are either uninformed, scared to say the truth for fear of insulting the sellers or losing the listing or like to keep the sign in the ground in order to generate more buyer leads. The listing agent’s relationship with their sellers should be based on honesty. It’s better for everyone if the agent were to tell their client what they need to hear, not what they want to hear.
3. Comps older than 3 months are worthless in a changing market. And 2006 tax assessments are not indicative of today’s market values because they are from the beginning of 2006 when property values were 10 to 15 percent higher than today.
4. The most common reason that there haven’t been any buyers through a home is that the property is overpriced. Being off even $15,000 in price may lead to not a have even one buyer through. Other reasons may be that the listing doesn’t have any pictures on the MLS or other sites and/or the information is incorrect and is therefore being overlooked by buyers.
5. Your asking price is close to the market value, but not quite where it should be. Good news is that you’re almost there, but you’d better act quickly before your neighbor comes on and undercuts you and your market value becomes even less.
6. The home was priced correctly and therefore sold! With the first 60 days on the market being the most critical, pricing your home correctly is key. Once 60 days go by, buyers will begin to view your home negatively ("Something must be wrong with the property otherwise it would have sold already").

The comments being made by Agents/Brokers:

1. "There are only 5 properties that fit my buyer’s needs that are of great value in all of Ashburn."
2. "An undervalued property that shows well that fits my buyer’s needs?! Quick, let me call my client immediately because it won’t last long!"
3. "I need to just tell the sellers that I can get the price they’re looking for because I need the listing and the sign in the ground for the advertising and seller and buyer leads."
4. "I can’t sell your home for that much because the market value is __________ (add is a lower amount). So you don’t want to use me as your listing agent because of that? Ok. Good luck!"
5. "I can’t get my clients to adjust the price to market value even after the same model in better condition down the street just sold for $20K less!"

Translation/explanation:

1. Great deals are few and far between. Finding the best valued properties is not an easy task these days.
2. With buyers all looking for the best deal, chances are that you’re not the only agent or buyer that ran across this great deal. Buyers and sellers are even seeing multiple offers (I personally know of 4 instances in the last 2 months that had between 2 and 8 competing offers). The early bird catches the worm!
3. I call this "Buying A Listing". The agent/broker is lying to the seller, putting their own interests before those of their client and is hurting all consumers as well as fellow agents/brokers. It does absolutely no one any good especially the seller. I personally think that this practice should be punishable by a heavy fine to the agent and their supervising broker, suspension of the agent’s license and possible license revokation.
4. This is what an agent/broker should say rather than "Buying A Listing". No matter how good of a salesperson you are, you can’t sell something worth $500K for $600K. Consumers are armed with more tools and information than ever before. It’s easy for consumers to see that a property is overpriced even from just searching Realtor.com, Homesdatabase.com or any MLS Listing Search/IDX feed.
5. If, from the start, you had devised and agreed on a clear game plan that also addresses the issue of your neighbor undercutting your price, you would have no problem taking the proper course of action. If you didn’t do this, get all your comps and data together and clearly explain the market conditions and how they will effect your clients - you owe it to them and yourself. If they still don’t get it, you may have not been clear and/or had enough data. If you did everything you could and they still don’t get it, you may want to cut your losses and move on. Yes, I mean fire your client. It may sound ludicrous especially with the market being extremely slow for most agents, but don’t ever forget the 80/20 rule.

To sum it up:

Buyers  -  Don’t get discouraged. Though they’re few and far between, there are great deals out there. Just make sure that you and/or your agent is finding these deals for you and act swiftly once you find them.

Sellers  -  Price your home correctly and choose an experienced and honest (if not painfully blunt) local agent/broker to sell your property. If you don’t, you will just sit on the market and watch your market value diminish while your competition sells. 

Agents/Brokers  -  Do your homework, know what the hyper-local market conditions are, be honest and upfront from the start regardless of your fear of rejection and refuse to take a listing that you know will not sell at the pie-in-the-sky price the seller wants.

Moving To Loudoun County, Virginia? How Far Will Your Salary Go?

If you’re relocating to the Loudoun County/Washington, DC metro area, you’re probably wondering how far your salary will go and how your cost of living be affected. If you’re moving from the midwest, you may get severe sticker shock when you see real estate prices as well as taxes, etc. If you’re moving from California or the North East, you may find the area a bargain.

For example, if you’re making $75,000 per year and moving from Austin, Texas to the Washington, DC/Northern Virginia area, here’s how the cost of living will compare on average:

• Groceries will cost 17% more
• Housing will cost 141% more
• Utilities will cost 32% more
• Transporation will cost 10% more
• Healthcare will cost 15% more

If you’re making $75,000 per year and moving from San Jose, California to the Washington, DC/Northern Virginia area, here’s how the cost of living will compare on average:

• Groceries will cost 25% less
• Housing will cost 11% less
• Utilities will cost 18% more
• Transportation will cost 5% less
• Healthcare will cost 8% less

To run the numbers for your specific salary and area you’re moving from, check out this CNNMoney.com article. For a more detailed cost analysis for a specific city or area within Northern Virginia, feel free to email us for a Relocation Package and Specific Local Market Analysis.

The Real Estate Buyer’s Guide To The Home Buying Process - Part One

The process of buying a home is overwhelming to many, especially first time home buyers. Even veteran home buyers may not be aware of new laws, customs, loan options, technologies and market trends that have changed the home buying process since their last purchase. Being the biggest single investment most people will ever make, how come there is so little information on what the process truly involves? And why is there no well-known site or publication that informs consumers of changes and updates as they become available? Well, we’re here to address that issue and provide you with the first edition of The Buyer’s Guide To The Home Buying Process. Here is the first part in a three part series outlining what goes into the entire home buying process.

"Now that I’ve decided that I want to be a home owner, where do I start?"

So you’ve decided to purchase a property…now what? Well, the first step is to analyze your credit worthiness, assess your overall financial situation, explore your financing options and obtain a lender letter. This is the first and probably most important part of the process.

• Do you know what your credit score is?
• Do you know if you’re viewed as favorable, mediocre or high risk to a lender and how that directly effects your interest rate and which of the 250+ loan options you qualify for?
• Do you know how much of a down payment you will need?
• Do you know how much you truly have to put down once you factor in closing costs and Paid-Out-Of-Closing Items?
• Do you know what information and paperwork you will need to provide the lender before they can qualify you?

You want to make sure you know your credit and financial situation in detail, work with a lender in choosing a loan program that best suits your specific needs and make sure you’re comfortable with the monthly payment. And in today’s market, having a lender letter is essential to a strong offer and gives you increased leverage when negotiating on the price and terms of the offer.

You should consult a reputable and experienced lender to get a Good Faith Estimate (GFE) in order to answer these and other questions as well as obtain your lender letter. The GFE will also break down all of the costs associated with the purchase of a home including the interest rate of the loan and your monthly payment of Principal (P) and Interest (I). You will need to factor in Taxes (T) and Home Owner’s Insurance (I) in order to come to your final monthly payment (PITI) and lenders will typically ask you for that information prior to providing you with a GFE. You can get tax information on any property off of public records sites (the County or State you are looking to move to) or the lender or your Buyer’s Agent can research that for you.

If you are unsure as to which lender to use or who is reputable and experienced, here are some suggestions:

• If you are a member of a Credit Union, check with them. Their rates and closing costs are usually very competitive.
• Check with your banking institution. They may offer incentives to those who have an extended banking history with them and/or a certain minimum daily balance.
• Check with your coworkers, friends or Buyer’s Agent to see who they have dealt with in the past and their experience with them.
• We suggest speaking with two to three lenders and getting three different GFEs for comparison purposes. Make sure that you speak with them all within a span of one to two weeks. They will each pull your credit and it will hurt your credit score if they are too far apart.

A good lender is more than just someone who approves you for a loan. A good lender will act as a credit counselor as well and will offer you explanations and suggestions for improving your credit and financial situation so that you can obtain a more favorable interest rate or loan program. Examples of suggestions are "Why don’t you pay off the two credit cards with a $500 balance and close them out in order to increase your credit score so that you can get a better rate?" and "Even though you paid off that loan, it still shows open on your credit score. You should write them a letter asking them to formally close it and alert the credit bureaus of it being closed. That will improve your credit rating and you’ll have to put less money down in order to purchase."

But don’t confuse these suggestions with just "buying down the rate" to get a better rate. Yes, it does get you a better rate, but if you don’t live in the property for more than 7 years, what you save each month with a lower rate may not outweigh what the cost of the point was.

Once you receive the GFEs from the two or three lenders you’ve checked with, make sure to compare them side-by-side. You can do this with your financial planner, friend or family member who has bought five to ten or more properties in the last several years or your Buyer’s Agent. Understanding the entire GFE is key to knowing whether it just looks like a good deal or if it really is a good deal.

One thing that is intangible is the service and performance of the lender. Sometimes, if it’s too good to be true, it is. The lowest quote may not always be the best one. What if it looks good, but the lender is sloppy, procrastinates or just doesn’t have a good work ethic and your loan isn’t ready come settlement date? Well, there are no current laws holding lenders accountable and YOU pay the price.

That’s right…if the lender screws up and the loan docs are not ready or the lender pulls a bait and switch with higher closing costs or a higher interest rate and you don’t want to move forward with the purchase of the home, you will be in default of the contract and may lose your earnest money deposit, etc. This is why it is so important to work with a reputable and experienced lender.

Sounds scary, but it really isn’t. Seventy percent of Americans are home owners, which means that 210 million people have had to obtain some sort of financing and went through a similar process as you. And if you’re informed and have people on your side looking out for you, you should have no problem.

If you wish to get a list of information you will need to provide a lender, a rough estimate of what you can afford and further information on financing and what to look out for, refer to The Buyer’s Guide To The Home Buying Process. The Financing section provides information on interest rate tables, lender’s calculations, maximum monthly debt ratios, a check list of items to provide the lender, etc.

Click here to request a free copy of the Home Buyer’s Guide To The Home Buying Process to be sent to you directly via email.

Click here for Part Two - to use or not use a Buyer’s Agent, finding the right home for you and preparing and negotiating an offer in your best interest.