Real Estate

How Do You Know It's 'The One'?

Picturesque Georgetown

Picturesque Georgetown

Some people fall in love with every home they see, while others can pick each one apart — identifying flaws that may be consequential or not. Having spent countless hours working with buyers with a range of budgets and needs, when they find “the one” it’s usually pretty clear to me (then we move onto the harder part of structuring the best offer so it becomes theirs).

While it’s true that you’ll often see a property for 15-30 minutes and then find yourself signing a contract of sale for hundreds of thousands of dollars to buy it, that doesn’t mean you can’t prepare yourself to make that swift decision more easily and recognize if you’re ready to take the next step in the homebuying process.

As you prepare to buy your first (or next home), here are a few ways I guide my clients and help them discern what’s best for them and that you can use to help you (or your clients):

  • Check(list) Yourself: Buying a home is an emotional process and you often have to go with your gut; however, that doesn’t mean throwing reason out the window. I always make sure to place a concise list of needs and wants at the top of showing sheets I prepare for my clients. This way, you can remind yourself that private outdoor space wasn’t a must but storage space was, for example. It’s easy to get distracted by shiny object (that gorgeous soaking tub!), so check yourself.

  • Compare and Contrast: While you definitely should compare each potential new home to your list of needs, you naturally may find yourself comparing it to other properties you have seen. For this reason, if time allows, it is sometimes helpful to see a few more properties after you think you’ve found the one you want to offer on — most likely confirming how your feel and strengthening your resolve to make it yours.

  • Picturing Your Future: One of the telltale signs someone is falling for a home is when they start placing their furniture (verbally) in a home and talking about how they would spend their time in the space. If you can envision not just special occasions but daily life in that home and neighborhood, it may be the perfect fit.

  • What If…: I often ask clients how they would feel if we just found out that the home in question just went under contract with another buyer. If you’d be kicking yourself for not acting faster, the game of “what if,” is a great final check before making your offer.

In the Washington, DC area, the market moves fast and it’s natural to be nervous about making such a big decision so quickly…but by stepping back briefly, holding yourself to a few simple “tests” and, most importantly, leaning on your real estate agent as a trusted advisor will make sure you can act confidently and give yourself the best chance of nabbing “the one” (or the next one)!

Become a Landlord or List?

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It is rare that a person’s first home purchase is their “forever home” for a variety of reasons — from the cost of entering the market (especially in pricier markets like DC) to ever-evolving needs (as people marry, divorce, have children, grow older, etc.). When you make that decision that it’s time to find a new home, you also may have to decide if you want to keep your current home or find a new owner…and that can sometimes be an even tougher decision.

If you have paid off or down the mortgage on your first property, you may be in a position to buy your next home without selling (either your cash on hand and DTI ratio will allow or you may be able to apply some of the equity in your current home to help purchase your new home). When that’s the case, you are going to want to ask yourself a few key questions:

  • Do I want to be a landlord? If the answer is a definite “no,” proceed ahead talking with your agent about the best way to maximize your exit from your current property (considering timing and the three P’s). Similarly, if you live in a condo or coop that won’t allow you to rent out your unit (perhaps there is a blanket restriction or a limit on the percentage of units that can be rented), get ready to sell. However, if the answer is “maybe” or “yes,” proceed to the next question.

  • How will being a landlord impact my bottom line? If you have an outstanding mortgage, use that as the base for figuring out your break-even costs. Then take into account additional recurring costs, like condo and HOA fees, ongoing maintenance and paying a property manager (if applicable). Next, compare this to the going market rate for similar rental homes (have your agent gather comps for you and make a recommendation). If the carrying costs exceed or are close to your carrying costs, are you prepared to subsidize the difference to maintain ownership of the home? Also, don’t forget to keep in mind that your home will most likely not be rented 100% of the year and you will have costs to clean and prepare the home for the next tenant(s). Be conservative and calculate a 70-80% utilization if finances may be tight and re-run your numbers.

  • How will this impact my lifestyle? If you can’t afford to hire a property manager (or prefer not to), are you prepared to play that role, potentially getting late night calls when something goes wrong? If so, will you be local and be able to be hands on to ensure repairs are completed and handled in a timely manner? What if you run into larger issues with your tenant? For many people, this isn’t a bother at all. Thinking about how finances impact your lifestyle, if you will be running in the red to maintain ownership, don’t forget to consider how this will impact your purchasing power for your new home and your budget for daily living.

  • What are the potential long-term financial implications? Real estate is an investment and often the largest source of wealth for people. If you are more risk-adverse, real property can feel like a safe way of saving money (in fact, it is forced savings). However, if you prefer to play the stock market or identify other opportunities to invest, you may be able to put proceeds from a sale to a higher and better use. This is very personal consideration and there are no guarantees on returns in any investment, so engage your financial advisor to model out potential scenarios and choose what fits your risk profile and investment strategy. If you’ve dreamed of becoming a real estate mogul, this could just be the first step!

These are just a few of considerations I discuss with my clients during our one-on-one consultations. Being a real estate agent is about more than selling houses; it’s about helping people make their best housing and life decisions. There’s no singular best conclusion, but by enlisting the help of subject-matter experts — from your CPA and financial planner to a local Realtor — you can best discern the right path to your happiness at home.

And a shout out to Pearl and all the landlords out there…may you never have a tenant like this:

Amber Harris is the owner of At Home DC and a licensed real estate agent with Keller Williams Capital Properties working with clients in DC, Maryland and Virginia. 

Downsizing & Upgrading: Boomers Choosing Urban Life, Amenities

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As people mature, it is common place to “trade up” in various areas of life — from the car you drive to the home you own. It’s a natural progression as salaries increase and investments grow, but it’s a choice many boomers are twisting a bit. Instead of buying that bigger house in the suburbs or country, they are choosing the convenience and efficiency of city living.

In some cases, older owners are selling their suburban homes and buying smaller homes or condos; others choose to keep the equity and decide to rent. In both instances, luxury finishes and ample amenities are often sought — from 24-hour concierge services to on-site pet spas for their four-legged companions. And the potential impact of this trend is undeniable, with the number of people aged 70 and over expected to increase by 90% to 28 million over the next two decades (according to a 2016 report by the Harvard Joint Center for Housing Studies).

Chart: Growth of Over 65 Population

In many cases, boomers are moving closer to family, allowing them to help with grandchildren, but there are other benefits to an urban lifestyle, including:

  • More public transportation options — decreasing or completely replacing reliance on driving;

  • Walkability to stores, doctors and more — increasing daily activity;

  • Opportunities for socializing and cultural activities — improving quality of life;

  • Access to more age-specific resources (such a those offered by the DC Office of Aging);

  • and many more.

Moreover, numerous studies point to the fact that people in urban settings, on average, live longer. So, is urban living right for you (or your parents)? Like everything in real estate (and many other areas of life), the answer for everyone is different. And with a boom in new urban suburban developments (like the Mosaic District in Fairfax, VA and Pike & Rose in North Bethesda, Maryland) it doesn’t have to be downtown or dirt roads.

If you or someone you love is thinking ahead to retirement and where to make the most of their golden years, feel free to contact me (just click/tap the button below)!

Amber Harris is the owner of At Home DC and a licensed real estate agent with Keller Williams Capital Properties working with clients in DC, Maryland and Virginia. 

The Amazon Effect: Real Estate Reality or Hype?

Amazon. It has impacted our daily lives — from how we shop to what we watch — for years…but now it may have a greater impact for residents of two east coast communities: Arlington, Virginia and Long Island City, New York.

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The selection process for Amazon’s HQ2 has been in the works for a while, so speculation about how it may impact the communities who were bidding for its business has been going on just as long. With the official announcement this morning that Amazon has selected two sites (and also will be bringing jobs to Nashville), the volume has been cranked up to 11.

Aerial View of Crystal City Circa 1980

Aerial View of Crystal City Circa 1980

From a residential real estate perspective, it is something that homeowners, potential buyers and sellers, investors and renters all should pay attention to (as if you could avoid it). What it is not is something that in and of itself is the reason to make an investment or decision to buy/sell. We will learn more details in the coming hours, weeks and months about the composition of jobs, timeline for hiring, etc. but here are some initial thoughts::

  • Not All Hires Will Be Moving Here: Part of what Amazon was looking for was communities with the right type of talent for their needs, so this doesn’t mean 25,000 new residents for the Washington, DC region necessarily. You will likely see talent pulled from other organizations (for example, Discovery Inc., which has made recent changes to how many employees it has in the area). The net impact remains to be seen, but the DC area is dynamic so, while significant, it’s not as big a percentage change as it could be for a smaller market.

  • Greater Buying Power: With attractive salaries, Amazon will likely bring on new talent who will see a salary bump, which means they may be more likely to make a real estate purchase — whether a first home, a larger home and/or an investment property. Higher salaries and attractive benefits also likely will put pressure on competing employers to match them to retain or recruit talent.

  • More Regional Moves: Current homeowners and renters who are hired by Amazon very well may decide to move to improve their commutes (as is common in an area known for commuter headaches). Expect to see greater interest in properties closest to Metro stations, especially on the Yellow and Blue lines. The region’s traffic woes are not going away anytime soon, so this will contribute to the trend of people seeking walkable communities with easy access to public transportation.

  • Rise in Renters: It is no secret that there has been a shortage of housing inventory for sale in the DC area for quite some time; meanwhile, the rental market has been less competitive. For those relocating to DC, they may choose to rent first and will be looking for nearby, updated options or those that provide a swift commute.

  • Catalyst for Change: The arrival of Amazon isn’t reason alone to buy, sell or invest but it is an important factor to consider — along with increasing interest rates, low inventory, etc. — when deciding what you best next move is.

So, what does this mean for YOU? The short answer is, it depends. If you have been dipping your toe in as a buyer, now may be the time to make that move before competition is likely to increase for the most desirable properties (as it normally does in spring but likely to a greater extent). If you are a homeowner looking to move up, you might want consider finding that new home sooner rather than later and evaluating whether listing or renting out your current home (for both the near- and long-term) is the best financial decision for you. And, if you are an investor or have been thinking about investing, there may be some good opportunities that come of this…but you’ll want to act swiftly (as many have already made their bets/investments).

There is no one answer for everyone and, no matter your feelings about the arrival of Amazon and its potential positive and negative impacts on housing affordability, traffic and more, it is a prime example of the complex dynamics you need to consider when making a real estate decision.

Is there a lot of hype? Absolutely.

Are all the accounts of potential impact exaggerated? No.

But, does hype have an impact on supply, demand and how people will act? Yes. Even if it’s more than it should have, it can work for and against you if you don’t think clearly.

Feel free to share your thoughts below and reach out if you’d like to talk about the potential impact on your 2019 (and remainder of 2018) real estate plans!

Amber Harris is the owner of At Home DC and a licensed real estate agent with Keller Williams Capital Properties working with clients in DC, Maryland and Virginia. 

The 411 on Renovation Loans with Movement Mortgage's Duke Walker

While most buyers want a turnkey new home, many have dreams of finding and updating that fixer upper (thanks, HGTV) or, more commonly, can’t find that “perfect” property in their market due to limited inventory and/or budget.

Fortunately, if you don’t have the extra cash to put into updates (which is not uncommon with real estate prices in the DC area), there are financing options that let you tackle everything from a basic kitchen or bathroom update to more extensive renovations. To shed some light on these, I caught up with Duke Walker of Movement Mortgage, a native Washingtonian and current Capitol Hill resident who has helped hundreds of families in the region with their mortgage needs.

Walker

Walker

With limited inventory in the DC area, are you seeing more buyers considering and purchasing homes that they want to make renovations to right away? What mortgage options are there for those that may not be in a position to self-fund those?

Yes, there has been an increase in buyers looking at homes that are in-between “shell/unfinanceable” and “turnkey/brand new.” At Movement Mortgage, we offer and specialize in many renovation loans, which allow people to finance the purchase of the property in additional to the construction work needed to update the house to their specifications.

Can you briefly explain the different types of renovation loans and who they work best for?

There are renovation loans offered by FHA (203k), Fannie Mae/Conventional (HomeStyle) and the VA (Veterans Affairs).

There are two types of FHA loan, 203k Standard and 203k Limited. Both loans require only 3.5% down payment. Standard covers many “major” repairs, such as structural repairs, moving or altering a load-bearing wall, or even knocking the house down to rebuild it as long as you leave part of the existing foundation intact. 203k Limited covers a max of $35,000 toward repairs. This loan type is intended for less intensive changes or updates such as roof repair, replacement of HVAC systems, flooring or minor remodeling work.

The conventional reno loan is called HomeStyle. It has a minimum of 5% down but no minimum renovation cost required. HomeStyle also has an option for investors. It can be used on a single unit property with all renovation work allowed, including luxury additions, and a minimum down payment of 15%.

Download a chart comparing the various renovation products, courtesy of Movement Mortgage.

What are the major differences in the process between a “standard” mortgage and a renovation product?

The primary difference is that a renovation loan requires a bid from a licensed contractor detailing the work to be done on the home. That bid has to be completed prior to an appraisal on the property. An appraiser will inspect and review the house in its current condition, as well as review the bid from the contractor in order to come up with what’s referred to as the “after improved value.” Often times, waiting on the bid can push the timeline out 7-10 days further than the “standard” mortgage approval process.

Click the image to download.

Click the image to download.

Can anyone do the reno? Could the borrower or a family member complete the renovation?

The work has to be done by a licensed contractor and that person cannot be the buyer or a family member of the buyer.

Are there any frequent misconceptions buyers (or agents) have about renovation loans?

The typical misconception has to do with the length of the process. It does not have to take forever. Most of our renovation loans go to close in 30-45 days, sometimes sooner. If the contractor is on board and motivated to do their part, there’s no reason it should take more than a month to close.

How can current homeowners take advantage of these options, whether they are planning to sell or not?

These renovation products can not only be used in a purchase transaction but also in a refinance. For example, if you wanted to put $30,000 into a kitchen remodel but don’t have the equity position for a HELOC (home equity line of credit) or extra cash lying around, you could roll that cost into a mortgage and build equity!

Is there any final advice you have for buyers, in general, looking to purchase in the coming year?

Don’t be afraid to get your hands dirty with a property. Some of the best deals out there are livable homes that just need a little bit of love. And don’t be afraid to talk with a mortgage lender such as myself. We don’t judge people. Our job is to guide and consult you from beginning to end of the home buying process. It never hurts to see where you stand financially and what possible loan products might be available to you.

Thank you to Duke for sharing his experience and knowledge, and feel free to connect with him on Facebook, Instagram and Twitter, or reach out to him for your specific questions and needs.

Fall Market Update: What's In Store for Sellers & Buyers?

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If you’ve worked with a real estate agent to buy or sell a home, you know we are the first to let you know that we are many things but there are some things we are not — lawyers, accountants, tax advisors, inspectors, etc. You also can add psychic to that, meaning we cannot predict what your home will sell for in three years or what interest rates will rise to. That being said, we are in the field every day and are in a better position than most to spot signs of change in the market that could impact your strategy or decision making.

To that end, I wanted to share some statistics that provide food for thought and observations from my experiences and conversations with fellow Realtors® as we head into the fall market. Knowing when is the right time to buy or sell, while it certainly can be impacted by market dynamics, is really mostly about your personal situation. Have you outgrown your current home or are you moving out of the region? Do you have a new job and need a shorter commute? Is what you spend on rent more than what you would spend to buy a comparable or larger home? And those are just a few.

But back to some recent observations:

Housing inventory continues to be tight. When talking about the supply of housing, we look at the months of supply (i.e., if no other properties come on the market, how many months will it be until there are no homes left — assuming the same absorption rate as today). In August 2018 in Washington, DC, there was only 1.76 months of supply (Source: MRIS), which was actually up 9.5% versus last year. To put things in perspective, six months of supply is considered a balanced market. In Arlington, VA, that number increases to a whopping 1.87 (but that’s down nearly 17% from the same time last year). If we look toward Montgomery County, that number jumps to 2.96 in Bethesda but is the lowest of the four cities at 1.74 for Silver Spring. Of course, these numbers vary depending on the specific neighborhood and the housing type (see above) and size (e.g., for townhouses in DC, there is only 1.37 months of supply).

Interest rates are gradually rising. Interest rates have been slowly but surely increasing. In August 2018, the average commitment rate on 30-year fixed-rate mortgages was 4.55% (Source: Freddie Mac). In August 2017, that number was 3.88% with a 2017 average of 3.99%. By contrast, that annual average was as high as 8.05% in 2000. Overall, interest rates are still competitive (nowhere near the 18% rates seen in the fall of 1981) but locking in a rate now can save you meaningful money on your monthly payment and over the life of your mortgage (or until you refinance). It’s important to note that just because the Fed increases interest rates by 0.25%, for example, that doesn’t mean mortgage rates will go up a quarter point (however they usually trend in the same direction).

Average 30-Year Fixed Mortgage Rates (Source: Freddie Mac)

Average 30-Year Fixed Mortgage Rates (Source: Freddie Mac)

It’s still competitive out there…but not as much as before. It was only earlier this year that we were hearing stories of 15+ offers coming in on area properties. Of late, however, there are still many multiple offer situations and short offer deadlines but to lesser extremes. Many agents attribute this to buyer fatigue (yes, it’s wearing on you to make offer upon offer only to lose out…again). While a buyer last year that heard there was a deadline and multiple offers in hand may have put on their battle gear, some buyers now are talking themselves out of the running and not writing.

Pricing matters more than ever. Pricing is always the most important consideration when taking any property to market. Many sellers (and some agents) mistakenly think that because of the limited inventory and high demand, they can command large premiums. The truth is that while there will always be properties that set new records and buyers willing to waive appraisal contingencies, most buyers are closely examining the comps with their agent-advisor and nervous about overpaying (thinking there may be a growing housing bubble). An overpriced property can sit on the market for weeks or months longer than it should (and time is money, if you’re the seller).

So. what does this mean for you as a seller and/or buyer?

  1. If you need to sell your home, now is a great time to do so (provided you price and market it correctly). However, be prepared to possibly face challenges buying your next home if you are staying in the region and talk to your lender and agent as to timing and how to best set yourself up for success.

  2. If you’re ready to buy but not in a hurry, run the numbers. Having flexibility as to when you can or need to buy is a blessing and a curse. Having a little bit of urgency is helpful when making a decision but, with limited inventory, you can avoid being forced to make a less-than-ideal choice. As interest rates rise, your lender can help you model out the impact of future increases so you can take the extra cost into account when considering each property and the opportunity cost of waiting.

  3. Always be prepared. As a buyer, if you’re ready to move swiftly, you may come out ahead. With lighter competition, what it takes to go from offer to contract may be less than you think. Consider working with a lender that can underwrite your file prior to placing an offer and be ready to see properties as soon as they hit the market (or to explore off-market opportunities your agent may bring to you).

  4. Don’t decide what’s best for you by what others are doing and/or saying. This is true in life and real estate, isn’t it? I started off this post by reminding us that there are dozens of factors that can come into play when deciding whether to buy or sell. Information and analysis are key, so make sure you have a partner who will ask the tough questions (often more than once) and arm you with insights that will help you make the best decision for you.

Amber Harris is the owner of At Home DC and a licensed real estate agent with Keller Williams Capital Properties working with clients in DC, Maryland and Virginia. 

What to Know When You Are Selling & Buying: Q&A with Greg Kingsbury

In the Washington, DC area, it's not uncommon for homeowners to climb the property ladder, gaining equity over time and upgrading to a home that better fits their longer-term needs (instead of buying that forever home from the start).

Kingsbury

Kingsbury

Some owners will hold onto their first property as an investment but many will want or need to sell it to move onto their next house. In a less competitive market, having a contingency around the sale of a home is not uncommon but, in this region, it can make getting your offer accepted more challenging. However, there are options...and we tapped into the expertise of local lender Greg Kingsbury, who leads the Kingsbury Mortgage Team at Caliber Home Loans, to answer some of the most common questions when looking to sell and buy in short order:
 
What is the #1 question or concern homeowners come to you with when they are looking to sell their current home and buy a new home?

Of course all situations are different so many prospective borrowers will have different questions based on their individual scenarios. If I had to narrow it down to a single question, it would be how to qualify for a home prior to selling their current home. Most of the time this is based upon wanting to declutter and make minor improvements to their home so it looks best and will command the most value on the sale.

The advice that seems to get thrown around the most is to just go get a bridge loan. I find that most clients are told to go get one, but don’t really know what a bridge loan actually it is.  Many think it is some kind of magical loan that just gives you your equity to allow you to buy something new. The truth I find is that most people won’t qualify for a bridge loan. When getting a bridge loan, you have to qualify carrying your current mortgage, the new mortgage and a payment on the bridge loan. There usually also are substantial costs to the bridge loan, generally in the form of a few points paid on the amount (in addition to closing and recording costs). The other common misconception is that you can get a bridge loan for all of your equity.  Most providers of bridge loans don’t want to exceed 80% of the value of the residence you are departing inclusive of any outstanding debt.  

So, what options are available to sellers who are looking to qualify for and finance their new home purchase? 

There are several options to consider when trying to qualify to move up and buy a new home. There is the bridge loa, but often times, as noted above, that doesn’t work or isn’t cost effective.

There is a lot of misinformation out there, so do yourself a favor and talk to someone that is local and, even better, someone that has been referred.
— Greg Kingbsury of Caliber Home Loans

The second option is doing a lower down payment with the intention of paying down that loan after closing with the proceeds of the sale after the departed residence sells. This is usually accomplished by a principal reduction followed by a loan recast. (A loan recast is when your loan servicer re-amortizes your loan after a large principal payment.) Usually the minimum required for a recast is $5,000. This allows you to get a lower payment without having to refinance your loan and allows you to keep your current interest rate. The recast just takes your new principal balance and adjusts the payments to still keep the original loan maturity date.

A third option is a combo loan. This is where you have a first and second mortgage with the intention of paying off the second mortgage after the sale of the departed residence leaving you with just the single first mortgage. 

Aside from working with a top-notch agent, what recommendations do you have for your clients who are looking to "move up"?

Do your homework upfront and budget accordingly. Make sure you get all the numbers and consider things on a worst-case scenario. You never know if the market is going to turn, and you have to hold onto a property longer than anticipated. Consider backup plans in the event you can’t sell. Find out what the rental market would command for your property. Would you be able to carry both payments if you had to hold onto it and rent? 

Are there any potential pitfalls when selling and buying as it relates to mortgages? If so, how can clients avoid or minimize the chance of these?

The only pitfall I can think of is not having everything reviewed up front to make sure you really qualify for what you are hoping to get into. You may have your credit pulled and someone take a quick look and think everything is ok but, if they aren’t asking questions about the total picture, you could all of a sudden not qualify. If the debt ratios are close and a bank is only looking at a credit report and not asking if there are additional items such as condo fees, taxes not included in the mortgage, child support/alimony, etc., it could look on paper like you’d fully qualify and once all the pieces are put together you end up not qualifying.

This can all be avoided by being upfront about everything and making sure that the lender you speak to has the full picture when they are reviewing your file. 

The DC area real estate market is competitive and buyers often need few or no contingencies to win with sellers. How do you work with a buyer’s agent to strengthen their offer?

We try to get as much information at the beginning to make sure that there are no concerns with their ability to get financing. If there is an option to waive contingencies, this definitely helps win offers. However, waiving contingencies can put borrowers in a difficult spot and prove to be very costly if something were to go wrong. But, with the right questions asked and the appropriate documents supplied and reviewed, these risks can be mitigated to protect the borrower while also allowing them to present the strongest offer possible. We’ve been able to help buyers with financing beat out all cash offers with these strategies. 

What is the best piece of advice you have have for prospective homebuyers today? 

Take some time to set up a call with a trusted loan officer before you go out looking at anything. You should be able to have a conversation about your individual situation and get a real understanding of your options. From there, ask for scenario sheets to show you perspective loan options.

There is a lot of misinformation out there, so do yourself a favor and talk to someone that is local and, even better, someone that has been referred. A random contact from the Internet has no vested interest if they steer you wrong or something goes wrong. They can just move on to the next online lead. A local person lives on the referral. They have a more vested interest to see you succeed as their livelihood depends on satisfying each customer to keep the referrals coming.

Thank you to Greg for sharing his experience and knowledge, and make sure to connect with the Kingsbury Team on Facebook and Twitter for more mortgage insights.

Three P's of Selling Your Home

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In a hot real estate market, like the Washington, DC area, there sometimes is the misconception that all you need to do to sell a house is put a sign in the yard and list it on the MLS. However, there is much more that goes into selling a home...and doing it for the maximum price possible in the current market. 

While there is a list of more than 100 things I do before listing a home for a client, I like to focus on the "Three Ps" when advising homeowners on what to expect in our initial consultation:

1. Preparation: Depending on the condition of your home, the market and your ability to invest in repairs and updates, there may be a short or long list of recommended items to tend to. Some will be absolutely necessary, like ensuring major systems are operational or that there is fresh, neutral paint throughout; while others may be advisable to increase your potential of top dollar, like updating features and fixtures in kitchens and bathrooms or staging your home.

Every property is different, and we'll talk through the reasoning behind each recommendation and why it may be a smart investment. Some projects may take a quick trip to Home Depot and a day of labor and others may require more planning and a professional. For this reason, you should consult with a real estate agent as soon as you know (or are fairly confident that) you will be selling. This allows Realtors like me to prepare a recommended plan and timeline, so you don't add undue stress to the homeselling process.

2. Pricing: At every initial consultation with a client, I will be prepared with a range of market insights, including relevant comparables (aka comps), so that I can make a recommendation on list price after seeing a client's home. That recommendation begins as a narrow range and where we land ultimately depends on the repairs and updates made, recent sales and available inventory at the time we list and other circumstances and requirements (e.g., you need a buyer who will allow you to rent back your home for 30-60 days). 

Pricing, ultimately, is a means to an end...maximizing your net after paying off your mortgage (if applicable) and other closing costs. The right price will get the greatest number of potential buyers in the door and, in some cases, you may get multiple offers that could escalate above list price; in other instances, you may find the market telling you that it thinks your home is priced too high -- either by a lack of offers or only offers that are effectively below list. The goal is to price right from the beginning leveraging data but to be prepared to make a swift changed if needed.

3. Promotion: Preparing your home with repairs & updates, as well as staging and pricing it correctly are the foundation, but promotion is key to ensuring that you reach the right audiences. Promotion spans dozens of activities, including:

  • Professional Photography
  • Signage & Flyers
  • Custom Websites, Tours & URLs
  • Email Marketing to Agents & Potential Buyers
  • Open Houses for Neighbors, Agents & Buyers
  • Social Media Content, Especially Graphics & Video
  • Buyer Incentives, Like Home Warranties

There is no one-size-fits-all when it comes to promotion, so having an agent versed in PR, marketing and social media strategy is a huge asset. Strategic promotion will try to maximize the reach, but be targeted toward those who have the greatest potential of bringing or being a buyer.

As you can see in this brief exploration, there are seemingly limitless considerations that can have clear consequences on how much your home sells for (and how quickly). Ultimately, you're behind the wheel...but let a trusted agent be your navigator and partner on the road to the closing table. 

 

Amber Harris is the owner of At Home DC and a licensed real estate agent with Keller Williams Capital Properties working with clients in DC, Maryland and Virginia. 

Setting the 'Stage' for a Successful Sale

Staging. If you turn on HGTV or talk to anyone who actively stalks neighborhood listings online (you know you do!), it's a hot topic that generates various opinions — from being expensive and overrated to a must in this market.

As an interior decorator and real estate agent, I have clearly seen the value of staging for sellers but also know that the process can be challenging for homeowners. With that in mind, I thought I'd share a few tips for those selling their home on how to approach the topic when the time comes to list:

Property Staged with Owner's Furniture & Accessories

Property Staged with Owner's Furniture & Accessories

  1. Staging vs. Interior Design: While it is not uncommon for interior designers and/or decorators to run staging businesses, interior design is not the same thing as staging. Staging focuses primarily on the visual aspects of spaces, while interior design (well, good interior design) focuses on the function just as much, if not more. 
     
  2. Staging Is Expensive: While staging an empty house is not inexpensive, market research has proven time and time again that staging has a positive correlation with the contract price and length of time before contract. It is important to look at staging as an investment and not simply an expense because, if done well, you will recoup and make money because of it.
     
  3. It's All or Nothing: While you certainly will have more work to do if you are starting with an empty house, staging doesn't always mean fully furnishing every living space. For properties with more than two bedrooms, I sometimes recommend selective staging. You want to focus your efforts on the most important spaces to most buyers (living room, kitchen, master bedroom, etc.) and then add on other spaces as need and budget allows. For example, you may want to stage a smaller or potentially awkward space to illustrate how it can function, say as an office or nursery. 
     
  4. No Need to Stage If I'm Living Here: If you are living in a house while it's on the market, that's an even bigger reason to stage your spaces. One of the services I offer my clients (and other Realtors) is working with their existing furniture and accessories to highlight their home and appeal to the most potential buyers. Decluttering and depersonalizing spaces is the first step in any staging plan. 
     
  5. It's Personal: Selling a home is an emotional process, and it's important to realize the moment you decide you are selling that the home is no longer yours. As an agent, my goal is to help you meet yours — whether that's a high offer, quick close or any other number of terms. When you separate yourself from the property and realize the recommendations made and actions taken are necessary to reach your goals, you can appreciate (or at least tolerate) creating and living in a show home temporarily. 
Leave Room for Buyers to See What a Space Could Be

Leave Room for Buyers to See What a Space Could Be

If you are thinking about selling your home, you have many choices when it comes to hiring a Realtor. Beyond setting the appropriate list price, marketing (which includes staging) is the most important factor in optimizing your outcome. Make sure your agent is an expert in real estate as well as all aspects of marketing (design, social media, digital advertising, etc.) and you'll be on your way to the closing table. And, of course, if you need that breadth and depth of experience in the DC metro area, you know where to find me!

Amber Harris is the owner of At Home DC and a licensed real estate agent with Keller Williams Capital Properties working with clients in DC, Maryland and Virginia. 

DC Real Estate: 2017 Market in Review

There's no question that Washington, DC is a hot market for real estate. With a growing population and limited inventory, the city is still what we consider a seller's market. 

Copyright © 2018 MarketStats by ShowingTime. All Rights Reserved. Data Source: MRIS. Statistics calculated January 4, 2018.

Copyright © 2018 MarketStats by ShowingTime. All Rights Reserved.
Data Source: MRIS. Statistics calculated January 4, 2018.

A few 2017 stats of note (with more in the chart above and downloadable here):

  • With 9,250 sales last year there were nearly 9% more transactions in 2017 vs. 2016 (but demand still dwarfs inventory). 
  • Average Days on Market continues to decline year of year and, while the average was 35 for 2017 we saw a peak of around a week at times during the year. Nearly half of those homes sold in 10 days or less.
  • Average Sold Prices are up nearly 5% vs. 2016, with detached units outpacing attached counterparts. 

What does that mean for you? Well, if you own property in DC (or one of the nearby Virginia or Maryland suburbs), now is a great time to sell if you are looking to move up or downsize or (gasp!) leave the region. However, if you are looking to enter the market as a buyer, you likely will still need to call upon your preparation, patience and persistence...but you can do it!

In order to best prepare, consult with a local market specialist well in advance when you want to make your moves (and move). If I can be of assistance, reach on out

Amber Harris is the owner of At Home DC and a licensed real estate agent with Keller Williams Capital Properties working with clients in DC, Maryland and Virginia. 

Fall Is the Perfect Time to Start Getting Ready for the Spring Market

As the leaves are just starting to turn, spring may seem ages away...but not when you are considering selling and/or buying a home.

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Whether you are a first-time buyer or a veteran property owner, now is the time to start making your to-do list so you can be prepared when April and May arrive and so you have a head start on the competition.

Below are a some key tasks and tips for both buyers and sellers to get you going, but please reach out if you'd like to discuss your needs in more depth. I am already holding appointments with spring clients, and I'd love to meet with you!

Selling Your Home

  1. Forget spring cleaning, fall is the time! We've all been there when moving day is around the corner and your plans to organize and purge are thrown out the window in favor of dumping a drawer at a time into a box labeled "stuff." Take advantage of the cooler days to sort through everything from books and clothes to those dusty bins under beds and in closets. If you have't used it in the past year, if you have multiples or if it doesn't fit, it's likely time to find it a new home. By paring down your belongings (including furniture), you'll be a step ahead when staging your home (where less is always more) and when it's time to ultimately pack and move.
     
  2. Make those fixes you've been putting off. When you live in a home, you tend to overlook little imperfections -- from a cracked tile or two to a window that sticks. However, it's the little things that often catch the eye of potential buyers and leads them to assume they could be an indicator of bigger problems. Walk through your home with a critical eye and identify the fixes, big and small, that need attention and then tackle one a week.
     
  3. Interview and select your REALTOR®. Most agents, including me, are already looking toward spring and filling their books with clients. Partnering with an agent now allows you to develop a rapport and prepare a detailed marketing plan to maximize the potential return on your sale. 
     
  4. Identify smart upgrades that can help your house stand out with buyers. If you've done #3, this is something your agent will happily do with you, walking your home and identifying updates that will likely yield a faster sale and higher sales price. Upgrades may be painting woodwork white, upgrading a kitchen counter or even replacing light switches that are yellowed and showing their age. Together you can prioritize based on level of effort/expense and potential return.
     
  5. Follow the market! While spring undoubtedly starts the busiest time of year in real estate, there are lots of dynamics at play that can affect a market, such as rising interest rates and changes to consumer confidence. Your real estate agent will be your guide, but you should be engaged as well...especially if you are planning to buy!

Buying Your Home

  1. Check your credit. If you don't do so regularly and have not done so recently, get your free credit report from all three bureaus and make sure all the information is accurate (if not, you have time to try to remove incorrect information). You also can look for ways you can improve your credit score, such as lowering or eliminating credit card balances. 
     
  2. Interview and select your REALTOR®. While there is usually less lead time in getting ready if you are just buying, having an agent take you through the current market dynamics and home buying process (especially if you are a first-time buyer or someone who hasn't bought in many years) is essential.
     
  3. Understand your buying power and define your budget. You may already have a lender but, if you don't, your real estate agent can recommend trusted lenders...and you always should shop around. While you may have used an online calculator or app to approximate what you would be approved for, an experienced lender can give you the best idea of your buying power and what to expect in the coming months. This means you'll go into the spring market with clear expectations of what's attainable and ready for pre-approval.
     
  4. Start to research and explore neighborhoods. While you might have a good idea of where you want to live, now is the time to expand your consideration set (for example, if your budget means your ideal location may not be in reach). Read hyperlocal blogs, like Petworth News or Brookland Bridge, grab drinks or dinner at new-to-you restaurants and talk to friends about their communities. In the end, your new home may be where you least expected!
     
  5. Mind your finances. Even if your credit is stellar and you have a healthy amount in the bank, pay close attention to your spending habits to avoid penny pinching and stress closer to when you buy (and after). Most everyone is aware that there are closing costs associated with purchasing a home, but also remember you may need to hire movers, buy new furniture and more.

To set up a time for your free listing or buyer consultation, contact me today

Amber Harris is the owner of At Home DC and a licensed real estate agent with Keller Williams Capital Properties working with clients in DC, Maryland and Virginia. 

Avoiding First-Time Home Buyer Flubs

There's nothing more exciting than making the decision to go from tenant to homeowner, but buying your first home can be daunting (the number of legal documents and signatures required before you even go under contract can be maddening enough).

Home with Key on Wood.jpeg

At times we all fancy ourselves chefs, handy(wo)men and more thanks to technology, social media and a generous dose of can-do spirit, buying a home is a big decision and commitment. While a wealth of information and tools — from seemingly up-to-the minute listings arriving in your inbox to mortgage calculator apps — are a great start for the novice, this is one area where a dollar spent (specifically on a real estate agent), will net more than that in one or more ways.

It's true there are about as many tales about challenging first-time home buyers as there are about annoying agents, but I find working with first timers enjoyable and rewarding. For that reason, I thought I'd share a few myths I have had to debunk with clients if you are considering starting your search:

  • Pre-qualification or pre-approval...it doesn't matter which I choose. If you are looking to buy in the Washington, DC area, you will likely face stiff competition. One of my key roles as a Realtor is to help you make the most competitive offer, and financing is a big component of that (we include a copy of your pre-approval letter in your offer). Before you walk in the door, you should know that you have the ability to buy that property if it's "the one." Pre-approval is one step beyond pre-qualification and means your lender has done due diligence and is even more confident that it can handle your mortgage needs (giving the seller confidence that if they accept your offer the deal will close).
     
  • As long as I have the money in time for close, I'm set. With the high price of real estate in the area, often clients are relying on family loans or gifts to help them with closing costs. As a part of the pre-approval process, you will need to document the sources of your funds, and extra scrutiny is usually placed on funds that haven't already been in your bank accounts for at least a few months prior. This means it's wise to have the funds in place as soon as possible and to be prepared to provide a loan agreement, letter or other documentation (sometimes from the person lending or gifting the money) in order to have your loan underwritten.
     
  • Every renovation is created equal. In the local market, many buyers want properties that are new construction or that have been recently updated. While those white kitchens with quartz countertops look amazing in the photos, not all updates are created equal. Look at the quality of the finishes when you visit the property and for signs of cutting corners (which sometimes can also been indicative of shortcuts taken behind the fixtures and walls).
     
  • New is always better. While I caution first-time home buyers against biting off more than they can chew (financially, maintenance-wise, etc.), some buyers are open to renovations — from a fresh coat of paint to kitchen and bath updates. If you can look past outdated fixtures, you may get your hands on a great property that others have passed over. Whether you have the cash in hand or are considering a 203k loan, make sure to add a healthy buffer in terms of budget and time to your plans. 
     
  • It's only a starter home... When you buy a new home, you invest more than just the down payment at closing. For this reason, it usually is beneficial to own property for several years before selling. If you think you are going to stay in the area, you may want to expand your search to find a property that meets your anticipated future needs (or that could). For example, if you are thinking of starting a family, you may want to find a home that allows you to not just comfortably raise a baby but also a young child (and that takes into account their educational needs). If your budget does not allow you to buy as much house as you know you will want (with the features you want), look for properties that may need cosmetic updates you can do over time or that have a lot that would allow you to expand the house to add livable space. 

As I mentioned at the top of this post, technology, social media, a can-do spirit and even a blog post are not substitutes for a professional. If you are (or know someone) thinking about buying your/their first home, please reach out!

Amber Harris is the owner of At Home DC and a licensed real estate agent with Keller Williams Capital Properties working with clients in DC, Maryland and Virginia. 

When Perfect Isn't Available or Affordable

Perfection. While we all realize it's in the eye of the beholder and can be overrated, when you are looking for your new home, it's where we start. 

When I am meeting with a buyer, a good portion of our initial discussion involves their must-haves, needs, wants and nice-to-haves. While there are many reasons to hire a real estate agent to help with your home search and purchase, having a partner and consultant to regularly remind you of your motivations and musts is one of the top reasons.

In the DC metro area right now, we still are experiencing limited inventory (aka available houses), which means it is even harder than normal for most to find their perfect home. Given this, it's easy to get discouraged, especially when you find "the one," make an offer and lose out to another. But...that doesn't mean you should lose hope; rather, you should open your eyes to other possibilities.

In the past few days, I've talked to two buyers who have chosen/are looking at two alternative paths that often are ignored:

1. Buy & Renovate with a 203(k) Loan: While most people want to offer, close and move in as swiftly as possible, you can gain the edge and equity if you consider buying a property that needs some work to make it livable, to your taste or both. In today's "need it now" culture, finding that hidden gem means we might be able to negotiate a better purchase price and you'll get exactly what you want in the end. With lots of 203(k) loan options that allow you to access the cash you need to renovate (everything from a kitchen remodel to full gut job), if you can muster some patience, you can land that perfect home. (Check out Lauren Bowling's experience for more insight.)

2. Explore New Construction: If you have even more patience, you might want to consider designing and building your new home. While the DC area is much more densely populated than other areas of the country, there is available land (or land that can be made available by razing a poorly maintained/unsalvageable structure. Most home builders offer a range of plans that can be customized in countless ways to help you get just what you want - from layout to finishes. And, while a builder may tell you otherwise, you should make sure you have buyer representation with your own agent before heading into a sales office. (Learn more about the process from The Balance.)

In either scenario, a REALTOR® can help you consider all the options and direct you to qualified professionals to help you create your own brand of perfect. So, would you consider a rehab or new construction?

Amber Harris is the owner of At Home DC, an interior decorator and a licensed real estate agent with Keller Williams Capital Properties working with clients in DC, Maryland and Virginia. 

Am I Ready to Be a Landlord?

For Rent

After you transition from being a tenant to being a homeowner, many people come upon a new decision point: becoming a landlord or not. That juncture could come about for a few reasons, including:

  1. You have to leave your beloved city/neighborhood for work, family or other pursuits.
  2. You need to up or downsize in the same market.
  3. You are contemplating investing in real estate and building a secondary (and maybe, eventually, primary) income source.

Whatever the reason, there are several important factors to consider before becoming Mr. (or Ms.) Roper (pretty sure at least 50% of my audience might need to Google this reference). In no particular order:

  • What is your motivation? Perhaps the property holds sentimental value for you or you see an opportunity for even more equity by holding onto it. Either way, make sure you can articulate your motivation and use that to evaluate whether you become (and remain) and landlord.
     
  • What is the rental market like currently? Do you live in a neighborhood near a hospital where you are likely to get residents or in a community that has a large expat population? And, just as when you are buying or selling, you must consider inventory levels - total volume but also the availability of and demand for homes like yours.
     
  • Does it make financial sense? It is hard to perfectly predict what will happen to any given market or economy, but you should start by running the numbers. Look at what similar properties are renting for in your neighborhood, itemize other anticipated expenses such as maintenance and costs for acquiring tenants (whether or not using a real estate agent) and determine if you want to manage the property yourself (harder to do if you are moving out of town) or higher a professional company (and pay a percentage of each month's rent). This is where a spreadsheet with formulas will help you run various scenarios. And don't forget that you may not have a tenant 12 months of the year, so you have to be prepared to carry your mortgage (if you have one) during periods of vacancy.
     
  • What are the business and legal implications? In order to be a landlord, you should make sure your property is legal and licensed (UrbanTurf has a great writeup). You also need to make sure you are in compliance with any condo/HOA bylaws (if applicable) and are insured appropriately. Every market is different but some (like Washington, DC) are more tenant friendly - meaning a problem tenant can be an even bigger problem. If you're in D.C., you likely have heard of (or are familiar with) the Tenant Opportunity to Purchase Act (TOPA). If not and you intend to rent a property in DC, familiarize yourself with it. 
     
  • Will this impact other real estate transactions? If you intend on buying a second (or third) home, keep in mind that your existing mortgage on a rental property still counts toward your debt-to-income ratio (most lenders don't want to see this higher than 36% of your monthly pre-tax income) and can affect being approved for (and your interest rates and down payment required for) any additional mortgages. Talk to your mortgage broker to understand your options.
     
  • Do you want to be a landlord? Your time is money. Whether or not you higher a property management company, think about the demands (and potential stress) being a landlord places on you and proceed with what feels right!

Finally, remember that real estate is not an incredibly liquid asset, meaning that it cannot be quickly sold (in comparison to stocks, etc.). If you anticipate a scenario where you may need the capital invested more readily, you might want to consider investing your dollars in other ways.

I have several clients that are thinking through becoming a landlord or selling right now, and there isn't one right answer for everyone. Consult with your Realtor and financial advisor to land on what's best for you - personally and financially.

Amber Harris is the owner of At Home DC, an interior decorator and a licensed real estate agent with Keller Williams Capital Properties working with clients in DC, Maryland and Virginia. 

5 Tips to Land Your Dream Home This Spring

Spring. The time of year when tulips, daffodils and cherry blossoms bloom (even if they are delayed)...and when homebuyers are ready to move! While market activity picks up across the country with the warming weather, it also means more competition - which can be a problem when there are inventory shortages.

U Street

U Street

According to Bright MLS, the Washington market has seen declines in year-over-year inventory for nine months (as of January 2017). This is great news for sellers, but it can lead to greater frustrations for buyers - especially first-time homebuyers who have not yet experienced the process. Of course, this doesn't mean you should throw your hands up in the air and stay put in a less-than-ideal home. Here are five tips to help put you in a better position to land your dream home in the DC area:

1. Enlist the help of a Realtor® now. Finding the perfect home is a stressful process for any buyer, so add a licensed real estate agent to your team. They'll shepherd you through the process, put your interests first and allow you to focus more on all the joys of homebuying and, eventually, homeownership. Even if you're not sure if now is the right time to buy, having an agent on your side can help you make that determination and be ready when your dream home hits the market.

2. Spring clean...your credit! If you haven't already, take a close look at your credit and take steps to bolster your credit score and increase your ability to get approved for a mortgage at the most favorable rates. This may mean reducing existing credit card debt and paying extra close attention to avoid late payments on any bills (more tips from MyFICO.com). 

3. Have your list of must-haves and nice-to-haves, but be open. Most of us have pictured our ideal home for years but they almost always are out of reach. The homebuying process is rooted in trade-offs but talk to your real estate agent about options you may not have considered, such as a fixer upper (and a 203k loan), alternate neighborhoods and properties with income potential (such as a basement unit you can rent out).

4. Be the early bird and catch the worm. In a market with low inventory, preparation and timing is key. In addition to being pre-qualified or pre-approved for a mortgage, take advantage of your Realtor®'s access to information not yet available through the many online real estate search portals. Agents - through relationships and their tools - often know about inventory three weeks or more before it hits the market (allowing you to see properties first and, if it's a fit, make an offer).

5. Choose an agent who knows your target neighborhood(s). DC and its neighborhoods are unique and diverse (part of what makes our region so great), so find an agent who knows (or, better yet, lives in) the neighborhoods you are honing in on. Google and public records can only tell you so much, so tap into the knowledge and expertise of your agent.

Here's wishing you luck on your homebuying journey this spring. If you are looking in DC area - and especially if you are interested in Petworth, Columbia Heights and Brightwood - I'd love to meet you and discuss your needs

Amber Harris is the owner of At Home DC, an interior decorator and a licensed real estate agent with Keller Williams Capital Properties working with clients in DC, Maryland and Virginia. 

To Rent or To Buy?

"The rent is too damn high." 

While that phrase was popularized several years ago thanks to mayoral election activities in New York and a certain Jimmy McMIllan, if you're a renter in DC, you are not imagining things when you think you may be paying much more than in other U.S. markets.

Nested released their 2017 Rental Affordability Index earlier this week, and Washington, DC is the fourth most expensive city for U.S. renters (San Francisco, New York and Boston take the three top spots). The Washington Post breaks things down further, but it begs the question: Is it better to buy or rent?

Chart via Nested.com

While financially it may make sense with our still low interest rates and the tax benefits of home ownership, any potential buyer must consider a range of factors - from how much you can put down to how long you plan to stay in the home or area. Realtor.com has a calculator that is a great starting point if you are a renter (in any market) who is considering buying. 

If you think homeownership might be right for you, reach out to a licensed real estate agent (yours truly included) who can consult with you as you evaluate if you're ready and can help make the process of homeownership as enjoyable and effortless as possible!