Virginia Real Estate Blog

Pricing your home in a softening market

How to Price Your Home to Sell in a Softening Market

The summer selling season has come. Unfortunately, those home sellers who were looking forward to sky-high prices and multiple offers may be disappointed to find the market softening. In a declining market, pricing a home becomes critical to success.

Pricing your home in a softening market

The first step is to realize the market has changed. Buyers will not overpay for a home in an uncertain market. Whereas just a few months ago it might have made sense to “test the market” and set an aggressive price, sellers who try that strategy today will lose valuable time, risking an even slower market when the home sells.

Home Value Truths

  • ·  What you paid for your home doesn’t affect its value.

  • ·  Your asking price does not affect its value.

  • ·  What it might have sold for 2 months ago does not affect its value.

  • ·  What your agent tells you about price does not affect its value.

    The value of your home is determined by what a qualified buyer in today’s market is willing to pay for it, comparing it to others on the market for sale.

    Pricing Strategy in a Softening Market

    Your pricing strategy should be the same, regardless of whether you are in an accelerating or declining market – to price the home ahead of the market. In a declining market, that means you should price your home slightly below the most recent comp.

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Do you need a backup Generator for your home?

Do You Need a Backup Generator for Your Home?

Many people live where power outages occur quite often. This can be caused by storms or simply an unreliable power grid. If you experience regular power outages, you may be wondering if you need a backup generator. Here are some considerations for you to think about before you buy.

You May Need a Back-up Generator if......
· You store large amounts of frozen/refrigerated food – Do you have a

storage freezer or regularly keep large amounts of food on hand?

· You have life-saving medical equipment on-site – Are you or a loved one reliant on medical devices to stay healthy that require power?

· You need electricity to stay warm in winter – Do you live in a location where temperatures drop to dangerous levels in winter and rely on power to generate heat?

· You have essential equipment on site – Do you have systems that must run constantly to prevent damage? A good example is a sump pump that prevents flooding.

If you do need a generator, there are still options you must investigate. How much power do you need and for how long? Generators need fuel and regular maintenance. They also are loud and emit fumes, so placement is very important. You can also choose from a permanent generator or a portable version.

Power outages can cause serious issues and a home backup generator is a great way to safeguard from loss. Do you need a backup generator? Consider why you want one and then do some homework. Generators are an expensive investment but may be important...

Hedge Against Inflation

Homeownership Is A Great Hedge Against Inflation

Over the past couple of months, the news of rising inflation is fueling concern across the country. Currently, inflation is at a 40-year high. This is impacting household budgets the most as families try to make ends meet with less buying power. For potential home buyers, rising interest rates may cause worry that you will not be able to afford the home you want.

While these are all valid concerns, for those who are still able to finance a home, homeownership is one of the best hedges against inflation and may be worth stretching your budget to do.

The biggest advantage of owning a home in an inflationary period is a fixed-rate mortgage stabilizes your largest household expense. Most people budget 25-45% of their monthly income for housing. As costs continue to rise, rental rates will rise right along with them. These costs can far outpace salaries and increase the burden on families.

The second advantage is that home values historically outperform other assets in appreciation. Owning a home builds equity for the future that is based on a tangible asset. Even if the home loses value short-term, some studies show that over 7-years, homeowners should gain more equity than other investments.

The bottom line is that if you’ve been thinking about buying a home this year, it makes sense to act, even if interest rates are rising. This allows you to stabilize your monthly housing expense while potentially building equity for the future.

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Should you buy down your interest rate?

Should You Buy Down Your Mortgage Interest Rate?

Rising interest rates can be a major concern if you’re shopping for a new home. A higher rate reduces your buying power and increases the home cost thousands of dollars over the course of the loan. One option to avoid this is to “buy down” your loan rate. This allows you to purchase your home at a more attractive rate.

A rate buydown is when you pay an upfront fee in exchange for a lower interest rate. This increases your closing costs and for every 1% of the purchase price you pay in points, your mortgage interest rate is reduced. Buying a lower interest rate may be a good strategy for a home you intend to keep for a long time, thus making up the difference over the life of the loan.

There are a couple options for a rate buydown. The first is a simple payment of increased closing costs up front in exchange for a lower interest rate. The buydown lasts for as long as you have the loan and is requested by the buyer.

The second is a temporary buydown often initiated by a homebuilder or lender to incentivize a purchase. In this case, the buydown is for a set period, two or three years, and then the rate will return to the higher rate if the borrower does not refinance. This strategy is a good one for a starter home or if one believes the interest rates will be lower in a few years.

Utilizing a buydown as part of your loan origination can be a smart way to save money and maximize your purchasing power. It’s important to recognize the breakeven point, however, so that you know when you have started gaining money on the plan.

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Considering Solar Panels

Considering Solar Panels?

With soaring energy costs, many homeowners are turning to solar for both their homes and their cars to save money. With solar companies touting huge monthly savings for electricity costs, how can you know what makes sense for your needs? Here are the basics of solar panels to help you start the process.

How do solar panels work?

Solar panels are positioned on your roof and absorb energy when the sun shines on them directly. The amount of energy generated will be affected by the amount of square footage of the panels. Therefore, your roof must have enough area with extended direct sunlight each day to be effective.

How to find a solar panel company?

There are a lot of solar panel companies advertising their service right now. Some companies specialize in panels as well as roofing companies adding solar as an option and big-box home improvement stores. It’s important to consider both price and expertise when choosing a contractor to install the panels. You should read reviews and get referrals before making a final decision.

How long will the panels last?

Solar panels are typically guaranteed to last 20-30 years. The amount of energy generated will decrease over time and you should choose a warranty that guarantees the amount of energy over the life of the panels.

Summary

Solar panels can offer significant energy savings and lessen your reliance on shifting prices. A solar system is also a large expense, so before purchasing or leasing a system, do your due diligence and learn your options.

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