It is always an honor to help someone who has known me my entire life buy or sell a home. In the case of my buyers who just purchased a brand new home in Carter’s Mill in Haymarket, one of them was actually my fill-in babysitter when I was a kid. When his sister wasn’t able to fulfill the duties, it was up to him. The giant age difference as kids to teens means nothing in land of fifty plus years.
He and his wife reached out to me in February. His mother had moved in with them and was having a hard time with the stairs in their home. While he had planned to retire and sell his home a couple years ago, mom moving in with them put the new retirement home in a different place. Retiring at the beach wasn’t fair to mom, taking her away from all that was familiar and her daughter. So they started looking for a home in the active adult communities in Western Prince William County. It didn’t take but a couple home tours for them to identify that they really preferred a new home and the location of Carter’s Mill, a Del Webb/Pulte community off of John Marshall Highway.
They went under contract to purchase their Carter’s Mill home in early March. They fully expected to be moving in at the end of the year. Pulte got the job done quicker than anticipated and today, they closed on their brand new home before the end of September. Everything they need is on one level and they have a fully finished, walk out basement as well. Pulte built them a great composite deck and were still tweaking the details midday today to make sure my buyers were one hundred percent satisfied.
One thing that my buyers were so happy they did was to hire home inspectors for both a pre-drywall inspection and final inspection before closing. And the great thing I noticed was that Pulte was not put off by this at all. Their construction manager welcomed it, went over the home inspection report and corrected issues found. It was never a sore spot for the builder, but a chance for them to rise to the occasion and continue to make my buyers happy.
For anyone looking for fifty-five plus communities in Western Prince William County, I would definitely consider Carter’s Mill. If you want representation while buying, feel free to reach out.
Having been a full-time real estate agent in Northern Virginia since 2005, I have experienced more than the intense seller’s market of 2020-2022. Seller market conditions had been present in 2019, but the market was not as difficult to navigate as it became in 2020 and 2021 for buyers. Escalation clauses became very commonplace in the last two years and right now, they are still present in the market. Unfortunately, the market conditions, while still favoring sellers, is chilling out a bit. Competition is still present, but more limited and buyer actions more deliberate. What concerns me is the buyer and buyer agent perception of how escalation clauses actually work.
When you write an offer with an escalation clause, you are writing an offer that can speak in your absence. I have written about the appropriate use of escalation clauses before which focuses on situations that would call for them. This post is not to rehash that, but to talk about how shifting market conditions are chaning how sellers react to escalation clauses.
The risk to a buyer in writing an escalation clause is that they are showing the seller exactly how much they are willing to pay for a property. In the absence of other offers in hand, a seller is well within their rights to remove that escalation addendum and counter at a higher price, possibly to the max of the escalation addendum. Buyers and their agents tend to think that is not fair, but I am here to tell you that fair has nothing to do with it. When you have shown your upper limit, you need to be prepared for the consequences.
Just in the past month I have represented two sellers who had escalation clauses in offers. Neither had anything above list price when the offer with the escalation addendum arrived. One had multiple list price offers, the other no offers, but lots of traffic. Both buyers were stunned when the seller countered removing the escalation addendum and countering their offer. Cries of, “You can’t do that,” and “That’s not fair,” were made. Well, the seller can and who said life was fair. Mind you, in the ultimate act of fair negotiations, both sellers went midway between the max escalation and list price with their counters. Yet, the buyers were left feeling taken advantage of.
These buyers didn’t seem to understand, that in a market with not enough inventory, sellers still have the advantage. What sense does it make to say you would pay twenty thousand over list, but only if someone else was willing to pay a little less? Do you want the house? Do you want to lock down the deal before a better offer comes in? Especially on properties that you know will get other offers, it is a dangerous game to say no to a counter at a price you would pay otherwise. And if a buyer in this situation has not waived appraisal, there is no way they are going to be forced to pay above appraised value. From even a buyer’s agent perspective, it is hard to see rejecting a counter offer at a price a buyer would be willing to pay.
There is risk to a seller in removing an escalation addendum. Once a buyer’s offer is countered, the first offer that buyer made is no longer valid. It has been altered. This is very important for buyers to understand because their offer with a escalation, once countered by a seller, is not automatically going to best another within a certain range.
Understanding that bold statement above, let’s say Buyer A made an offer at list price, escalating above other offers in increments of two-thousand dollars to a max of twenty-thousand above list. Seller counters Buyer A removing escalation addendum with a sales price of ten-thousand above list price. What is wise for Buyer A to do? If Buyer A was worried that other offers may get higher than that since their original escalation was twenty-thousand above, they would be wise to take the counter. However, if Buyer A wants to counter the seller one escalation above list from their original offer at two-thousand above list, meanwhile Buyer B enters the scene at five thousand above list, Buyer B is now the highest offer. If the seller takes Buyer B, Buyer A will be kicking themselves that while they wasted time trying to get a few thousand lower, they could have locked in a deal still well below their max escalation.
When representing buyers I always make sure they understand the worst that could happen when including an escalation clause in their offer is that they get countered to their max escalation. And common sense says that if they were willing to pay that to begin with had other buyers been present with offers on the table, why wouldn’t they want it in a counter offer?
As far as I can tell from the listing side, buyers seem to think escalation addendums are a way of playing a real estate version of The Price is Right Showcase Showdown. They can best another buyer and be minimally out of pocket. Sellers are under no obligation to take the highest offer. In fact, sellers often times will take the buyer that appeared the most serious from the beginning, even if it costs them one-thousand dollars. An example would be Buyer A bringing in an offer at twenty-thousand above list with no escalation and Buyer B bringing in offer at list, escalating five-hundred above another to a max of twenty-thousand five-hundred above list. Buyer A swung for the fences with their offer. They didn’t need to know another buyer wanted it for just as much. That speaks volumes to a seller.
If you are serious about a home and you are worried enough about other buyers wanting it to include an escalation, try reframing a possible counter from a seller as a positive thing. You may just lose the house you wanted because your perception is that there are no other buyers interested. Better yet, write the max offer you are willing to make without an escalation and get sellers to act vs. waiting a day or two for an offer to escalate you. Buyers are still facing markets with not enough homes to go around.
Selling in a Seller’s Market is Not a Guarantee of Best Terms
As limited housing supply continues to meet unfettered buyer demand, more and more sellers have been overly confident in their place in the market. Believe it or not, not all homes sell in a seller’s market. They will if they are priced right and/or in good condition. Market forces are always at work, which means buyers still compare what is offered to what they have recently seen and what they expect to see in the near future.
It is not uncommon for a buyer to walk away from a perfectly pleasing, over priced home in a seller’s market because they fear it will get bid up above that list price. Preparing market reports regularly for the neighborhoods of Braemar, Dominion Valley and Regency I see sellers getting below list price and selling in weeks, not days. Some even have to give seller subsidy. Why? It’s a seller’s market, right?
When buyer demand is high and inventory is low we are indeed in a seller’s market. That does not mean that sellers can ignore listing preparation, hire low skill listing agents who know nothing of professional marketing and expect to get the top of the market. Consider a top athlete who is a free agent. They will get picked up, but how much money they make depends on the strength of their agent. Agency is all about advocacy. Sellers who hire listing agents are not unlike athletes or actors who have an advocate on their side advising them and helping them negotiate. Talent agents know how to best present their client’s gifts to increase demand to max out the money made.
Bringing it back to real estate and the intense buyer demand our seller’s market is facing, it is fair to say to any seller who asks if they need to complete listing preparation to sell, “No.” If the price is right for the projects left to buyers who are faced with having to pay their own closing costs, down payment and now take on projects in a home, there is no doubt the home will sell. The question is, how much is being left on the table by leaving the preparation undone? More than the cost of the preparation.
Same goes for sight unseen offers. Can a seller get a great offer before anyone has set foot in their home? Sure. If they let showings roll a few days, chances are the offers would get better and better. Why? The pressure to accept sight unseen offers is usually from buyers who know they will not be competitive in a multiple offer situation. And if they will not be competitive in a multiple offer situation, why on earth would a seller who only gets one chance at maximizing their profit not wait to see more than one offer? From my own comps, I recently watched as a seller left approximately $30,000 on the table by not being photographed or going active with their listing agent. Very few sellers I know are willing to walk away from that kind of profit.
Having a strong advocate who knows the current market conditions because they are active in them every day is so important. Let’s go back to our talent agent analogy. Do you think hiring a relative who just became a talent agent is what big name athletes and movie stars do? No. Their paychecks are dependent on outstanding representation. They sign with agents with proven track records of success and outstanding reputations. Why don’t sellers when it comes to listing? Part of the problem is that they conflate the cost of a listing agent with the bottom line they will net. They never consider that a more experienced agent will more than pay for themselves in the preparation advice, professional marketing and skilled negotiation. The other part of the problem is they think anyone with a license will do. This job has very minimal standards. Agents who are exceeding industry standards are the ones breaking records with list prices.
When it is time to list your home, even if it is in a seller’s market, pay attention to the marketing done on behalf of the other listings in this seller’s market. Are they offering staging advice and other preparation? Are they hiring a professional to take listing photos? Are they pushing sight unseen offers? There is never an easy button when it comes to getting the absolute max the market will bear. However, if a seller is okay with leaving tens of thousands on the table, any agent will do. If they want every dollar they can get, are willing to do the work and put up with a few days of showings, they will be over the moon with the results when they hire an experienced broker like me to help them through the process.
A seller’s market can be exceptionally profitable, but should not be treated as a lottery. Choosing the path with the best odds of getting top of the market will make a seller successful. That path starts with hiring the right advocate.
On January 21st, I listed 14530 Kylewood Drive for $315,000. Before we hit the market we received a very serious offer from a buyer who was desperate to be in the Gainesville area in an affordable home. Having come off of the second half of 2021, where things had not be crazed, but still favoring sellers, I wondered if it may be the best offer the sellers got. Heck, based on a look at the comps when signing the listing in late December, it was likely to be the only offer. My seller wanted to work something out with the buyer, who incidentally had a home sale contingency. However, when that buyer panicked about the amount over list he had written and didn’t sign my seller’s counter that only shortened time frames, I advised my seller to withdraw his counter offer. Thank goodness he heeded my advice.
Turns out that a condo with fees at just under $500/month, got a total of fifteen offers.
Were any of them just at list price? Not a single one. Every offer was above list price. And surprisingly, buyers willing to waive inspections, appraisals or offer a low appraisal guarantee were back in full force. What a difference a week makes.
If you are a buyer in the western suburbs of Northern Virginia, get yourself an agent that is actively engaged in the market. A full-time professional who notices quickly when the pace or conditions shift. Looking over the fifteen offers I saw submitted, I realized how poorly some of these buyers were being represented. Not my circus. Not my monkeys.
In other news my buyer-clients, who wrote their first offer in a similar price point in Warrenton over the weekend, got their offer accepted. You don’t get winning advice from agents who are barely engaged in the market.
If you need a buyer’s agent, give me a call. If you want the best results and expert evaluation of multiple offers, get in touch with me. This is what I do every day. I make it my job to know the market so I can best represent YOU.
New Year’s Eve 2021 and what is this Bristow/Gainesville Real Estate Agent doing? Starting her yearend market reports and blogging. What better topic to post about on my real estate blog than my predictions for the 2022 real estate market. This prediction is not for the country, nor the entire Commonwealth of Virginia. Instead, it is for the areas with which I am most familiar that are outlined on the chalkboard to the right of this post. Those I am most familiar with are Western Prince William County, which includes Bristow, Gainesville and Haymarket.
The real estate market in the first half of 2021 was more hectic and buyer frantic than it had been throughout all of 2020. Buyers were facing multiple offer situations, having to waive all contingencies and offer well above list price to have a chance at being chosen. The second half of 2021 is where things started to calm down. That’s not to say that the market went from a seller’s market to a buyer’s market. Not at all. It was still a seller’s market, but not as intense. My favorite way to explain the change in the latter half of 2021 was a weather analogy. If it were 120° outside early in the day, but later was 108°, you could say it was cooler than it had been, but 108° would still be considered hot.
The second half of 2021, while still presenting a shortage of inventory, compared to buyers in the marketplace, saw less frenzy on behalf of the buyers. Home inspections became a common request again, which was a relief to me having a few buyers actively looking. Marketing times began to creep up and seller subsidy (closing cost help) started to be seen here and there. All of this started about the time the sellers decided in late June/early July to take advantage of the seller’s market. Meanwhile, buyers who had lost out on summer vacations in 2020, were busying themselves with travel and fun. That meant putting house hunting on hold for a bit. The fall didn’t see much of a correction when they returned, rested and relaxed. The buyer frenzy had calmed, but it was still a seller’s market.
The New Year is jumping off from where we left 2021. Home prices are still high and climbing, but the rate of increase is slowing down. It’s far less likely to see a home list a at a reasonable price and see it bid up 7-10% higher. List price or a little higher is what sellers seem to be getting now. Sellers are still unlikely to have to give any closing cost help, but are much more likely to see home inspection contingencies.
No matter the market, my job remains the same–getting my sellers the maximum bottom line they can out of their largest asset. That starts with buyer enthusiasm and maintaining it throughout the process. For buyers it means making sure they find a home that meets their needs and are as protected as they can be throughout the process. Referring to the best lenders, home inspectors and title companies are just the start.
If a home sale or purchase in on your radar for 2022, let’s chat. It is never too early to start talking over the process and getting ready in advance.
The Second Key to Max Profit When Selling Your Home
There are two major things a seller can do, even in a seller’s market, to max out their bottom line. The first I wrote about in detail and is all about creating buyer enthusiasm. This is essentially putting the shiniest, most attractive bait on the hook to the get the best and/or most buyers acting on the listing. The second key is what takes place after a buyer is under contract and it is just as important. It just involves different tasks. Simply put it is:
Maintaining Buyer Enthusiasm and Seller Profit
Neogtiations after a contract sales price has been agreed upon by the seller and buyer can be just as tense as the intial negotiations, if not more so. Buyers can feel they have a seller by the shorts and want to create points of renegotiation along the way. The first point of renegoation is home inspection. Having an idea of how to prepare for a home inspection is so important. Sellers can easily overlook simple things that can cause big panic. Or buyers can feel so entitled they overask. How should a seller respond to an an over indulgent buyer? An experienced, skilled, full-time professional agent knows how to deliver “no” without losing a buyer.
Appraisal is the second hurdle many buyers need to cross as a contingency to a sale. Even if a buyer has waived an appraisal contingency and is willing to eat any difference between appraised value and contracted sales price, there can be a buyer’s remorse issue if the divide exists at all, or is what the buyer considers too big. Not every listing agent meets an appraiser with a package of information to support the sales price. Whether the buyer has an appraisal contingency or not, I know that part of maintaining buyer enthusiasm and my seller’s profit is meeting the appraiser every time.
One of my favorite success stories about meeting an appraiser comes from having a less updated home sell for more than a very updated home of the exact same floor plan. I met the apprasier and though we still appraised low, we sold for more than the updated home. Turns out that discount broker didn’t meet the appraiser and relied on the home to speak for itself, leaving $15,000 on the table. (That was way more than the updated home’s seller would have paid by hiring a non-discount broker.)
In a seller’s market, getting through HOA void periods quickly is important as well. Having an agent that prepares for that ahead of time and doesn’t wait until the seller is under contract is just leaving the right to void period open for a buyer. And that’s not the only pitfall regarding HOAs. Did you know if HOA or condo violations are not corrected before settlement a buyer maintains a right to void under the title paragraph of the contract? Professional, local agents know the most frequently seen HOA violations and can help a seller prepare for their HOA resale inspection before the home is ever listed.
Details abound in the contract to close period of a home sale. Getting the major points of negotiation handled before there is an issue is a major part of that. Hiring a professional agent to lead the way is always the path to the highest profit. Again, it may seem intuitive to cut commission to save money, but he best don’t work for less. If a seller wants the best result (highest bottom line,) the agent they hire matters.
The First Key to Max Profit When Selling Your Home
Getting the maximum profit when you sell your home, even in a seller’s market is not as easy as you think. A seller can’t assume that any old agent that is willing to cut their commission because “it is so easy to sell houses in a seller’s market” is going to wring every dollar they deserve out of their home sale. Max profit doesn’t start with hiring the cheapest agent a seller can find, even though it is an absolute fact that the largest closing cost is agent commission. Reducing the largest line item paid in your closing costs may seem like a natural win, but as my father used to constantly remind us, “You get what you pay for.”
No matter the market conditions present when you are selling your home, the first key to success lies in three words:
Creating Buyer Enthusiasm
In one of the hottest seller’s markets on record, I have met two For Sale By Owners (FSBO) who had cut their commission line item in half by going it alone. What were they lacking? Besides buyers willing to write offers despite enough buyer interest to get it done, someone on their side to help them see their home through a buyer’s eyes and present it to the market in a manner to lift buyer enthusiasm. That is what generates higher prices, and in a seller’s market, bidding wars. Despite popular opinion on FSBOs, neither one was priced higher than the market would allow. They just had no clue how to create buyer enthusiasm and get legitimate offers. That’s where a professional marketing agent is worth their weight in gold.
Once I was hired as the professional listing agent, the focus shifted from how much could be saved on commission to how to get buyers to want this listing before they have even seen it in person. In each case, that involved staging, but not to the degree you might think. Simple rearranging of furniture to show a floor plan’s utility or larger amounts of space. Placing punches of color to draw attention to the home’s best features. Getting buyers to see how they would live in the property vs. seeing how a seller is currently living in a property. How someone lives every day in a home is not how they sell.
Once the stage is set, a professional listing agent knows to hire a professional photographer. Just like a seller who wants to cut commission believing it will net them more money, I fought hiring a professional photographer for too many years. Looking back, I can’t believe I ever took my own listing photos. The professionals in any field can not be matched and are a huge component of success. And naturally, the biggest compliment I get from my top notch photographers is that they love taking pictures of my listings because they are always primped for photo day and make great subjects. I like to say they are smiling and saying cheese when the photographer arrives. Still, it is unbelievable to me that a lot of listing agents don’t worry about what they photographers are taking pictures of if they are just professional.
While words used in describing a listing are also very important, they are a second to photos. Listing preparation and staging are vital to making sure your photos leap off the screen of the buyer’s phone, tablet or keyboard and plant that fast growing seed of buyer enthusiasm. Making sure the home presents the same in person to build on that level of enthusiasm is where all the preparation a seller did and maintains throughout showings is important. Making beds, clearing clutter, emptying litter boxes daily…you get the idea.
As I tell all of my sellers, the minute a buyer slumps their shoulders or sighs at clutter, condition, painting projects, old carpet…whatever…you have lost the chance at a full price offer. The cash register in the buyers head is running and they are overestimating the cost to get the home to look the way they want it. And the reality is that getting a home to look they way most buyers want is not as difficult, or costly, as a seller may think. Listing preparation is critical to buyer enthusiasm. Skipping it all together and relying on a hot market to bring you tremendous results is costly mistake.
Both of my FSBOs listed at the same price they had gone it alone and both got multiple offers and ended up selling above list price, which paid for the fee they had tried to avoid when unsuccessfully listing alone. However, it wasn’t just as simple as making sure the home looked great. That’s where we come to the second key to max profit when selling. Click the link to find out more.
Today marks my nineteenth sale of 2021, but you never heard about the listing. Back in June, I was connected with a seller who was out of the country and relocating to the United States. His home in Haymarket was tenant occupied. Because he was getting relocation benefits for his move back to the states, I was tasked with putting together a Broker Market Analysis. Getting into the home was a feat in and of itself. The tenant was not very responsive.
When I finally got inside the property, I saw more deferred maintenance, at the hands of a long term tenant, than I had expected. In my report was a roof in need in repair, drywall in need of replacement and the standard stuff that comes from a long term rental property: new paint, new carpet and some minor updating.
The seller and I discussed the situation and agreed, despite the desire for a fast sale, it was not prudent to start fixing and updating the home until the tenant vacated. Around that time, the tenant wanted to throw their hat in the ring to purchase the property. The offer was so low it never got off the ground. After years of neglect on the tenant’s watch, they wanted to cash in and get a deal.
The sellers realized that the cost to do a deal with the tenant was not out of the tenant’s reach and threw a number at the tenant, taking into account their cost of updating and the loss of their relocation benefits. The number was significantly higher than the tenant had offered. And about a week before the tenant’s scheduled move out, with no warning it was coming, the offer the sellers had verbally made was in our lap from the tenant.
Mind you, the tenant did try to haggle some repairs for their own deferred maintenance issues along the way, but it didn’t fly. The tenant got a great deal on a house in need of serious repair. Is it a comparable sale for the rest of the gated, golf course community in which it is located? Heavens no. So today, I announce my ninteenth sale of 2021 with no final sold price and no fancy marketing pictures. This was between the parties involved and it is done.
Since beginning my real estate career in 2005, I have encountered many unwanted leave behinds in listings. They are brought to my attention by buyer agents on my listings and buyer-clients I represent doing final walk throughs. The latter I can report to listing agents and know they are not my responsibility to remove. The former often become my responsibility to avoid my seller-clients being charged unreasonable fees to pick up less than six paint cansm especially if they have already moved out of the area. My rule of thumb is simple, if it won’t fit in the trunk of my car, it is getting kicked to my seller-clients. And only one seller in all these years has required a junk removal fee. Not bad.
Paint cans and cleaners, toilet brushes and plungers are among the top items I remind sellers to get rid of as they move. If we get a communication from a buyer that they want paint cans and cleaners, great. Leave them. If not, get rid of them. And as far as my personal experience, no buyer wants toilet related products (outside of toilet paper on the roll) left behind. If there is a chance there is fecal matter on it, get a trash bag and dispose of it.
Recently, I was caught off guard by a buyer agent who flagged a coffin in the shed that needed to be removed from my listing the day before settlement. As I recalled, the seller had power to the shed. Were they talking about a coffin freezer? I reached out to the buyer agent and got clarification. No. It was a coffin, in the traditionally known shape of a coffin. However, he clarified it was small and light and should be easy to remove.
When I found it in the shed, standing about five feet tall, I hoped beyond all hope that it was made of lightweight plywood or balsa wood. Nope. It was going to be a two person job, only I was the only person there to move it. And naturally, it was one of the hottest days of summer. I hauled it out of the shed and used gravity of the downward slope of the back yard to get it started. Then it became a matter of hauling it to the curb. Oh the glamorous life of a real estate agent.
At that moment I heard the many voices of people I had encountered that had day dreamed of becoming a real estate agent with the phrase, “I really enjoy looking at houses. It must be so fun.” Really? How do you feel about hauling a sturdy Halloween coffin prop to the curb while in work clothes between appointments on a hot summer day? Too many times, being a real estate agent includes getting the dirty deeds done.
The coffin was truly the most bizarre unwanted leave behind I have encountered to date. And thank goodness for Facebook marketplace. Do you know how many people clammored for the free coffin? It was gone in fifteen minutes of posting after two dozen inquiries.
Bottomline for sellers is this: If you don’t want to be bothered moving it, odds are the buyers aren’t going to want it either. If you want clarification, alert your listing agent about items you wish to leave behind and see if they are indeed wanted by the buyers. If not, try giving it away on Facebook marketplace or taking it to the curb for trash pick up. Paint cans and cleaners will be considered hazardous waste and will require a special trip to the local landfill.
High School Districts in Bristow & Gainesville are Changing Fall 2021
If you are looking for Bristow or Gainesville home with a particular high school district in mind, bear in mind that high school districts are changing in the fall of 2021. The much anticipated Gainesville High School will be opening its doors for the first time, taking students from Unity Reed (formerly Stonewall Jackson,) Patriot and Battlefield.
The MLS (Multiple Listing Service) doesn’t have Gainesville High School as an option for listings that will be attending it in the fall when it opens its doors. The best a listing agent can do is fill in “Call School Board” and state in the remarks that the high school district is changing for grades nine to eleven as of 2021 to Gainesville High School. Buyer-clients of mine found out today, after two weeks under contract, that the school district they thought they were buying in has changed. The listing stated Battlefield as the high school. Whoops! It is now Gainesville. Thankfully, they still have an out in the contract. Others may not be so lucky.
If you are moving with only a twelfth grader in the home, you need not worry. Twelve grade in fall 2021 goes to the school the home had been districted to for the previous years.
House hunting right now, for buyers with specific high school districts in mind in Western Prince William County, just got a bit trickier. Do not rely on the information in the MLS. Independently verify which high school district any property is zoned to in Prince William County by clicking this link.