The fall real estate market in Northern Virginia is changing, just like leaves on our deciduous trees are undergoing a transformation. Many had become used to the frenzied pace of extreme buyer demand that stormed in during 2020 and lasted through 2021, that had sellers setting record high sales prices and collecting multiple offers. Those for whom that was a baseline for the real estate market are left feeling the market is a buyer’s market now that the frenzy has quieted down. That is not at all the case.
While buyers are enjoying the fact that they no longer have to make rushed decisions and waive every contingency, they are left feeling pinched by rising mortgage interest rates that have doubled since the start of 2022. Combined with housing prices that are still trending up, though not on as steep a trajectory, buyers are acting more deliberately. In a lot of cases, they are requesting seller subsidy to help buy down their mortgage interest rate. These factors that have slowed buyers down, has not changed the lack of housing supply to meet buyer demand. We are NOT in a buyer’s market. Believe it or not, the market still favors sellers.
Being in a seller’s market, however, does not mean multiple offers or always selling above list price. Real estate markets are defined by the absorption rate of available homes on the market. We could still have four months of inventory to sell and be considered in seller favored conditions. Our inventory in Northern Virginia, and particularly my primary service area of Bristow/Gainesville/Haymarket has not seen available inventory measured in months for a long time.
The current seller’s market is one where those looking to sell their homes will be advised to consider more than the most recent SOLD listings to figure out a suitable list price. Yes, sold listings are comparables. However, as we begin to build a bit of inventory, home sellers need to also look to a number of other types of listings.
COMING SOON AND ACTIVE
Looking at the available inventory there is to purchase will help a seller to figure out how to price competitively. Just because there are four comparable sold listings at $450,000 doesn’t mean that is the place you should price, or higher, as you would have in 2020 or 2021. Looking at active listings and those coming soon with similar features to your home is critical. If you have three similar competitors on the market priced at $450,000 that have been on the market for a few weeks and aren’t getting chosen, that suggests $450,000 is no longer a reasonable list price. If it were, those home would be under contract. So what competitors have been chosen?
Competing listings that have gone under contract were chosen by the marketplace. Those list prices are much more valid, if all things are equal from a value proposition, than solds. Maybe the solds are at $450,000 and the three actives are at $450,000, just sitting there, but there are two under contract that were listed at $430,000. Do you think pricing at $450,000 or $430,000 is a better play? Clearly $450,000 isn’t working for the three sitting on the market.
WITHDRAWN, EXPIRED & CANCELED
As we build inventory, there are also clues in the listings that have been pulled from the market. If there is a withdrawn listing at $460,000 that was on the market for sixty days, that is a big hint that if you were just looking at sold listings, going higher is a no-no. The listings not chosen are as full of valuable information to choose your placement in the market as those active and under contract.
Suddenly we are seeing price reductions in the market, where they were unheard of in the previous two years, with the exception of sellers who were really taking the frenzied buyer demand for granted and placing exorbitant list prices on their homes. There are sellers in every market that expect their inflated feelings of values to pan out on the market. It can be crushing when they don’t. Buying into an unfounded value as a list price can also be costly in a market undergoing a shift. Wasted time when a market is building inventory means wasted buyer opportunities and inviting more attractively priced competitors. Looking at who is lowering their prices and still lingering on the market is informational as well.
The real estate market is still favoring sellers, but that doesn’t mean sellers are seeing ten percent lift above their list prices or are getting buyers willing to waive contingencies. As the insane pace of the previous two years is slowing to a more measured pace, sellers are still likely to get under contract quickly and with reasonable terms when their homes are priced right, properly prepared and professionally marketed. Buyer demand is still high and inventory is still not enough to meet it.
Tread carefully when deciding how to present your home to the market of interested buyers. Overpricing is a real pitfall that will lock up sellers unable to grasp that the market dynamics are changing. Partnering with a full-time professional agent with experience beyond a seller’s market where the highest and best offer is chosen from a pile of offers is highly recommended. Skills that encompass all kinds of market conditions are not a given just because someone hold a real estate license. The soft skills to start the conversation that leads to getting an offer are absent in those that thought being a listing agent was putting a sign in the yard and collecting offers. Hire your listing agent wisely.
I have been at this since 2005. Making deals that put my sellers ahead of market conditions is what I do, no matter the current dynamics of the market. My listing process starts with detailed analysis of the market and listing preparation advice that will lift buyer enthusiasm. Combined with professional level marketing, sellers go under contract faster and walk away with more money than their competing listings. It would be a pleasure to help you do the same.
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.
Just Sold: Grand Colonial on Ten Acres in Haymarket
Any day that a listing goes to settlement is a good day. This grand colonial, sitting atop ten acres in Haymarket, located at 15315 Mountain Crest Court happened to close today, June 14 (2021.) Of course, when it was first listed on May 12th, we were attempting to conduct settlement sometime between June 1st and June 10th. Some sellers need specific closing dates and this was one of those cases. The reason being, they were coming back into the country for a short time and would not be available other than e-notary when they returned overseas. E-notary services are great, but can get complicated quickly if the identity verification process goes awry. I have witnessed one of those debacles first-hand. So signing in person was preferrable.
With two sight unseen offers in hand when they hit the market, the sellers allowed the property to be on the market for two days. This allowed the buyers that wrote sight unseen to come by and take a look, and for any other interested buyers to come by. Two days may not seem like it was long enough, but the sellers ended up with four offers total and were under contract in two days WITH a settlement date that worked, June 4th.
The buyers had no contingencies in the contract, but needed an appraisal done for their loan. Due to a mix up at the lender level, an appraisal was inadvertently done on a neighboring property that was smaller and the appraiser couldn’t understand why he was seeing such a big discrepancy. This was due in part to doing a contact-less appraisal where the appraiser didn’t actually visit the property. Oops.
A ten day delay was needed for the appraiser to get the job done on the right property. Thank goodness he came to do the inspection in person the second time around. And thank goodness there was a post-settlement occupancy planned for the sellers anyway to move out their furniture and ship it overseas. The delay didn’t have the buyers scrambling for temporary housing.
The sellers were still able to sign in person during their stay in the country, which was a relief. And today, the buyers signed. This gorgeous home had listed for $1,050,000 and sold for $1,111,000.
Preparation and professional marketing were the key to getting this home sold quickly and above list price. New carpet, paint, staging and professional photos made the home look like a model by the time it hit the market.
When you are ready to sell, get in touch with me to find out what my professional marketing, combined with listing preparation, can do to increase the buyer enthusiasm for your home. After all, it is buyer enthusiasm, even in a seller’s market, that truly gets you the most the market will bear for your home.
The home right in the middle of the aerial shot above is 15315 Mountain Crest Court. With over 6,500 finished square feet and true model home finishes, this ten acre estate home listed on May 12th (2021) for $1,050,000. While that may have been the beginning of the story for a lot of buyers in the market, the true beginning was mid-February when I was contacted by the seller with some questions about the market, how quickly homes like theirs sell and at what price. That’s not a question you can answer without seeing the home and running recent comparable sales.
Once inside, I saw a gorgeous home that needed a bit of improvement to be at its best. Going over strategy with the sellers on timing, preparation and price got us to late April/early May when projects in the home started. Carpet was replaced. Paint freshened up and the home was staged. Mind you, the sellers had purchased a good deal of model home furniture from the builder when they originally purchased this furnished model. The whole picture just needed editing which took imagination and a lot of elbow grease. The latter is often a component of professional marketing.
The finished product was stunning and you can see the professional photos by clicking this link. Here are some of my favorite shots:
While this home had two pre-market offers during its “Coming Soon” marketing time, the winning buyer got even more ambitious after seeing the marketing and touring the home. They improved their pre-market offer and made it impossible for any other buyer to win in the stack of multiple offers.
Professional marketing makes a different in every price point. Buyers are driven to do better in their offers when the home shows well online and in person. Preparation, professional photography and a top notch listing agent are the key ingredients. When you are ready to sell, get in touch with me and let’s discuss how to get your home sold for more than you imagined.
Coming Soon: Luxury Single Family Home on Ten Acres in Haymarket
As I sit down to tell you about this gorgeous home at the base of Bull Run Mountain, I wish I had interior photos to show you. At the moment, this home is undergoing its final preparations before hitting the market. That includes new carpet on the upper and lower levels, freshening up paint and staging.
In the meantime, close your eyes and imagine living on a ten acre lot. Would you want to live an equestrian lifestyle? You can do that here. Just want to have the space or maybe built an incredible in ground pool and outdoor entertainment area? This property will become your personal oasis. Take in morning sun from the back of the home and watch the sun set over the mountain in front.
Inside is a grand floor plan with hardwood flooring throughout most of the main level. Formal dining room connects to the kitchen by way of a butler’s pantry. Gourmet kitchen has more granite counter and island space than you will likely ever require. Enjoy the morning room off the kitchen. Love the time you spend in the two story family room with floor to ceiling custom windows and coffered ceiling.
Beside the family room, discretely closed off by French doors is a large study for your home office. Make your way back around to the front and enter the formal living room next to the conservatory that catches all the day’s sunlight from its three walls of windows while the tile floors cool your feet.
Curved staircase invites you upstairs to see four generously sized rooms, each with their own bathroom, only one of which is not en-suite. The owner’s suite is expansive, offering sitting area, two walk-in closets and a spa-like bathroom.
Fully finished, walk out level basement houses a fifth legal bedroom with its own sitting room, located across the hall from the fifth full bathroom. Down the hall the basement opens up to a huge recreation space with an oversized den, currently in use as a sixth bedroom.
Inquiries are already coming in about this home. It is not likely to linger on the market. Professional photos are being taken next week and this home will be ready for showing appointments beginning May 12th. Schedule yours now so you don’t miss out.
Appraisals are top of every listing agent’s mind in the frenzied seller’s market that all of Northern Virginia,mm and most of the country, is experiencing in 2021. Homes, even listed for reasonable prices, inevitably get bid up seven to ten percent of list price on average. A lot of times, it is even higher than that.
Most savvy listing agents are advising their sellers about sky high offers with appraisal contingencies. Those offers are only going to be as good as the appraised value. It’s a number meant to make a seller say yes, without thinking of the ramifications of low appraised value.
The way that buyers are getting sky high offers accepted is by waiving appraisal all together, or by offering low appraisal guarantees. Back to the practices of savvy listing agents, those are the ones that understand the importance of appraisal coming in as close to that offer price as possible. A buyer can feel immediate remorse if they are shelling out tens of thousands of dollars just to make up for a short fall in appraised value. So meeting the appraiser is critically important.
Knowing the appraisal process, as taught to me by an actual appraiser when I studied for my broker’s license, I know what they have access to, what paperwork they get and what they are looking for when they are putting together a report. It is astounding how many agents don’t. Some think that if they just raise the list price to the offer price after the contract is ratified, it helps with appraisal. Not in the least. In fact, it may hurt your seller if that deal falls through and the entire MLS service area now knows exactly how much your seller had. They may come in slightly below once you hit the market again. They sure aren’t coming in over.
Appraisers are members of the MLS. They can see what we do to listings. They can see original list prices and the changes we make and when. They get copies of the sales contract itself. They know what the buyers have offered. Finally, they don’t care about your list price. They don’t care about the neighbor’s list price. They care about recent sales in the neighborhood. Sometimes, they care about pending sales. They also care about seeing the multiple offers on the property, as that is a demonstration of what the market thought the value was. Really important, they like seeing a list of major updates by year, going back at least five years, no more seven or eight. Let’s face it, an HVAC isn’t new just because it isn’t original.
Changing list price to reflect the contracted sales price is a poor business practice. It tells the world what the seller accepted before the deal is done. That’s a big no-no in real estate. And since the appraiser has a copy of the contract, it is truly pointless.
What’s the practice of the listing agent you have in mind to sell your home? Might want to make sure you are working with a listing agent that understands the appraisal process and won’t compromise your negotiating position if your first buyer gets sudden remorse. Take a look at my service areas to the right on the chalkboard and let me know if you would like my expertise on your side to get you those multiple offers, keep a buyer in a deal and never compromise your negotiating power.
Not all listing agents do the same job for their sellers. Some listing agents may not even know some of the informational options at their disposal when inputting a listing. It’s important to know what differentiates a great listing from a listing that is so non-descriptive it may be backfiring on a seller.
From the start, when I take a new Bristow/Gainesville listing, or anywhere else, the process is the same. Get the home owners to see their home through the eyes of a buyer. Clean. Organize. Rearrange furniture to highlight the space and utility of your home. Paint. Make sure small details are covered, like getting dust off of ceiling fan blades, cleaning or replacing switchplate covers and so forth. Only then is the home ready for professional photography.
Pictures are worth a thousand words, which is why they are so important and should never be done by anyone but a professional. However, in addition to the photos, going from room to room and taking measurements and notes about the types of flooring, number of ceiling fans, types of ceiling and any points of architectural interest like cathedral ceilings or bay windows. These are put in the MLS to flesh out the listing and sometimes used to caption photos with more information about something a buyer may not know about that room by looking.
Finally, having a list of improvements and updates to the home, done by year, is an important marketing piece, particularly if you have done a lot to the home. It helps buyers understand the higher asking price and appraisers justify it in their evaluations.
If you hire a listing agent that slaps a sign in your yard, put a price and basic info on the MLS listing with crappy cell phone photos, you have missed the fact that marketing matters, even in seller’s markets. Will your home sell with crappy pictures and a bare bones MLS description? Sure. However, you aren’t going to get to the highest levels of price in offers if you don’t have professional marketing from top to bottom.
When it’s time to sell and you want professional grade marketing behind your listing, give me a call. My primary service areas are Bristow, Gainesville, Haymarket, Manassas and Centreville. Other Northern Virginia locations are served by request and availability.
Though all real estate agents in Virginia must be licensed by DPOR (Department of Professional and Occupational Regulation,) the amount of knowledge or skill each real estate agent licensed in our Commonwealth varies greatly. If you are looking for someone with a pulse that will give you a rebate, if you get your rebate, you have gotten what you hired. If you are looking for someone to truly protect your best interests as a seller or buyer, there is unlikely to be a rebate offered, or a super low commission.
Agents with superior skills and knowledge know their worth in the market place. And you before you get twisted about how much a real estate agent earns, you probably should understand some things:
Real estate agents are not paid anything but commission when they sell a home.
Real estate agents don’t have taxes withheld from their paychecks.
Real estate agents, unless running their own brokerage, must split their commissions with their brokerage.
Real estate agents must pay for their own business expenses, be it gas, marketing materials, MLS fees, etc.
In any profession, the best results come from the top notch professionals. And I don’t know of any top notch professionals not charging more than their competitors. Does that mean you should just run out and hire someone charging you the most? No. Here are some tips:
Ask your friends or family if they have an agent they have used and liked.
Peruse sites like Zillow to see sales history of various agents and reviews. There you can learn how active the agent is, the areas where they specialize, and what their clients have to say about their services.
Call and have a conversation with an agent that you find well versed in your needs. You can tell a lot by talking to an agent. Great agents ask a lot of questions and will rarely be caught off guard.
Does the agent you are considering have reasons and “war stories” about why they are advising you the way they are? If not, they may not have much experience.
Ask the agents you encounter what additional qualifications they have beyond holding an active license. An agent that wants to invest in their own knowledge will either have a higher level of license or some designations. They will likely also have earned levels of noteworthy achievement by their brokerage or association.
Hiring an agent based on how low of a commission they offer or what rebate they will give you usually lets you know that you are not working with the cream of the crop. And your results may be less than stellar. If results matter to you (that’s getting the best deal with buying or selling,) don’t hire assuming we are all the same. We are not.