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July 31, 2016
Regardless of the state of the market, well-priced homes sell many times faster than overpriced ones. Unfortunately, many property owners don’t know how to judge the proper listing price for a house, especially if they plan to offer the home “For Sale By Owner.”
Fortunately, these easy tips will help you price your home to sell:
- Investigate Comparable Homes in the Area. Real estate professionals use “comps” to set the price of a home, by looking for other houses on the market (or recently sold) that have a similar size, condition, and features to the house they hope to sell. Comparable properties normally sell for comparable prices, so find the best “comps” and price your home accordingly.
- Choose a Price That Shows Up on Target Buyers’ Searches. When searching for homes, buyers (and their estate agents) search for houses within a range of target prices. Pricing your home at $499,000 ensures you show up on searches for houses “under $500,000,” whereas pricing the house at $501,000 cuts you out of that search.
- Price to Sell, Not to “Negotiate.” Some sellers price their houses high in hopes of encouraging buyers to “make an offer,” but buyers often don’t want to haggle about an overpriced home. The closer your asking price is to the reasonable value of the property, the more you encourage buyers to make an offer.
- Consult a Real Estate Agent. While it’s not appropriate to interview listing agents merely to obtain a price (and then proceed to list “for sale by owner”), if you don’t understand the real estate market, and find it hard to evaluate comps and set a price without assistance, hiring a real estate agent is wiser than trying to sell a house on your own.
Obviously, nothing can guarantee that any given home will sell quickly, or at a given price. Even experienced real estate agents often consider home pricing a challenging endeavor, and some houses are more difficult to price than others.
If you have trouble pricing your home and don’t want to hire a real estate agent, or if your home’s condition is likely to hamper a rapid sale, consider selling your home to an investor like 4 Brothers Buy Houses; investors can often close a deal in just a few days, without requesting additional price reductions or repairs like many buyers do. For more information, or a free estimate, click here.
July 23, 2016
*Market information courtesy of RBIntel.com
In June, Washington D.C. Area Median Housing Prices Continued to Increase:
The June median home sale price in the D.C. Metro area set a new record, showing an overall increase over both June of 2015 and last month’s sales numbers. The surrounding areas also showed overall increases in the median price of single family homes, though townhouse prices remained about even and condo prices saw a slight average decrease.
The area’s most affordable homes (again, on average) are in Prince George County, while the most expensive place to buyis Falls Church City (June 2016 median sales price: $737,500).
Regional Housing Sales& Listings Increased, but Overall Inventory Decreased inJune 2016:
According to figures published by RBIntel.com:
5,938home sales closed in Washington D.C. and the surrounding counties in June 2016 – the highest number since June 2006, and 12% higher than the five-year average.
5,979 homes were listed as “sale pending” at the end of June, an increase of almost 4% over June of 2015, but almost 6.5% lower than last month’s pending sale numbers.
New sales listings increased slightly, with 7,502 new listings– less than a 1% increase over May 2016, but still a sign of growth. Inventory on the market decreased in June, with 11,301 properties reported as on the market in the Washington D.C. area (and surrounding counties) at the end of the month. Single family homes, townhomes, and condo properties all had reduced inventory available as of the end of June.
Average “Days on Market” Remained Steady.
The median days-on-market for listed properties in Washington D.C. and the surrounding counties in June 2016 was 14 days –one day higher than May’s 13-day average DOM, and only one day less than the 15-day average in June 2015.
Prince George’s County remained the slowest regional market in June (with median days-on-market of18), and Falls Church City replaced Washington D.C. as the city with the fastest-moving market: median DOM was only 7.
Sales numbers vary from county to county, and even among neighborhoods, and the speed and success of a housing sale is dependent on many factors, from listing price to home condition and comparable listings in the area. Your personal experience may vary, but knowing the average numbers is still helpful when making plans to sell your home, either through a realtor or to an investor.
July 17, 2016
Individual home buyers don’t normally pay the entire purchase price in cash. Instead, most buyers apply for a loan (commonly referred to as a “mortgage,” even though many purchase money loans now take the form of a promissory note and deed of trust).
The banks and mortgage companies that make these loans will often charge the borrower (the home buyer) a variety of fees. Some of these fees can be added to the total amount of the borrower’s loan (requiring no out-of pocket cash) while others must be paid by the borrower directly, either during the application process or before the loan is funded.
Here are some common lending fees home buyers may encounter in the Washington, D.C. area:
- Application Fees. As the name suggests, buyers pay this fee at the time they first apply for a purchase money loan—and it’s usually not refundable, whether or not a loan is granted (or accepted by the buyer).
- Origination Fees.These fees are paid to the broker or mortgage company that acts as intermediary between the borrower and the lender who provides the money for the loan. Origination fees customarily average 1-3% of the loan amount.
- Document Preparation Fees. As the name suggests, these fees (which normally range from $50-$200) pay for preparation of the loan documents.
- Appraisal Fees. Before making a loan, lenders require an official appraisal of the home the borrower wants to buy, to ensure the house is worth the purchase price (or, in some cases, the amount of the loan). Appraisal fees run $200-$600, depending on the lender, appraiser, and property being appraised.
- Underwriting Fees.Like origination fees, underwriting fees average 1-3% of the total loan amount. These fees pay the lender for a variety of services, including a variety of loan research, underwriting, and funding services.
- Flood, Survey, & Inspection Fees. These fees pay for flood reports, property surveys, and similar reports and inspectionsthe lender uses to evaluate the property before making a purchase money loan. Fees in this category range from a few hundred dollars to almost a thousand, depending on the area, type of property, and lender requirements.
- Credit Report Fees.Lenders will want to view the borrowers’ credit report before agreeing to grant a loan; the credit report (which normally costs around $50) will also impact the terms a lender is willing to offer.
- Points are fees (typically valued at 1% of the loan amount per “point”). Buyers often pay optional “points” to reduce the interest rate of a home purchase loan.
Additional fees may also apply, depending on your lender, the amount of the loan, and whether tax and mortgage insurance escrows are required as part of the lending terms. Some unique loans, like those obtained through the VA (Veterans’ Administration) and other special housing programs, may have fewer (or different) borrower fees.
Some lending fees are negotiable, and your particular circumstances may vary based on a variety of factors, so always consult a knowledgeable broker or real estate attorney before agreeing to the terms of any mortgage loan.
July 10, 2016
In real estate sales, “closing costs” refers to the costs and fees involved in buying or selling a home. These costs are normally paid through an escrow company, and may be split between the buyer and seller or paid by one side alone. In some cases, closing costs are negotiable (meaning the parties can decide who will cover the expense). Other closing costs are always paid by a specific party—either by custom or by law.
Although the specific costs associated with a home sales can and do vary, here’s an overview of the more common closing costs seen in Washington, D.C. area real estate:
- Broker & Agent Commissions. Real estate agents who list a home, and those who represent the buyers, normally receive a percentage-based commission on the sale. The amount—customarily 5-6% of the sale price—is set in the listing contract, and the fee is usually split between the buyer’s agent and the listing broker.
- D.C. area home sales normally trigger payment of three different taxes: a transfer tax(equal to 1.1% of the sales price for sales under $400,000, and 1.45% of the sales price on higher amounts), a recordation tax(calculated using the same percentages as the transfer tax), and property taxes due and unpaid before the date of sale.
- Water Bill Escrows. Sellers normally have to escrow a few hundred dollarswith the settlement agent to ensure they don’t leave buyers with an unpaid water bill.(This gets returned to the sellers if their final water bill is paid before closing.)
- Recording Fees. The costs of recording the transfer deed and the deed of trust (a document evidencing the buyers’ loan) normally run around $200.
- Lender Fees.Lenders may charge buyers a variety of fees, which also vary by state, loan type, and loan amount. Before buying a home, it’s wise to interview various lenders and ask for a breakdown of the costs and fees that might apply to your new home loan.
- Settlement Fees.These fees (normally a few hundred dollars) are charged by the settlement agent (customarily a title/escrow company or a lawyer), in return for performing services related to the sale.
This isn’t an exhaustive list of D.C. area closing costs (and different fees may apply in other places). Additional costs associated with selling a home may include the cost of home inspections, insurance, powers of attorney and other legal documents, as well as advertising, staging, and repairs. While not all considered “closing costs,” sellers should keep them in mind as well when listing a home for sale.
A less expensive alternative to traditional listings involves selling your home directly to an investor, like 4 Brothers Buy Houses, which reduces many of these costs and eliminates others altogether.Click here to learn more, or to obtain a no-obligation quote today.
July 3, 2016
Many costly home repairs arise as a result of plumbing issues; broken and leaking pipes can cause structural damage, foundation cracks, and prompt the growth of toxic mold. Learning to spot the warning signs of potential plumbing problems can save you thousands of dollars and prevent the need for expensive and inconvenient repairs.
Here are a few of the common early warning signs of plumbing issues:
- Low Water Pressure. Drops or changes in water pressure—especially sudden ones—are often a sign of dangerous clogs or leaking pipes. Clogs may lead to ruptures, which in turn may damage your home’s foundation, walls, or roof, and allow the formation of dangerous toxic molds.
- Rusty, Cloudy, or Discolored Water. Contaminants in the water are often visible as discoloration or “clouding.” While some contaminants may result from problems in the water supply, old or leaking pipes and water heaters can also contaminate and discolor the water in your home.
- Frequent Toilet Clogs or Backed-up Drains. Clogging drains and toilets often indicate a problem with the sewer line. Adhesions, invading tree roots, and sewer clogs are among the major causes of backed-up drains and uncooperative toilets; worse, if not resolved, these problems may cause a rupture in the sewer line, requiring a costly replacement.
- Gurgling Drains, Bubbling Toilets, and Gasping Faucets. When air becomes trapped in plumbing lines, your faucets, drains and toilets may produce bubbles, groans, and rattles. Unfortunately, these noises may also result from pipes coming loose from their fittings and rattling in the walls. Call a plumber to identify and solve the problem promptly, before serious damage can occur.
- Flooding or Moisture in Basements and Ground-Floor Rooms. Homes flood for many reasons, including rain, seepage from groundwater sources, and missing or improperly-installed gutters and drainage, as well as broken pipes. However, flooding that has no other obvious cause is often an indicator of a serious plumbing issue.
- Mold Growth On or Inside Walls and Cabinets. Mold grows best in damp or humid environments, and although some homes do carry enough humidity for mold to grow even in the absence of leaking pipes, mold colonies often spring up when leaking or broken pipes provide a higher than normal level of water in the walls.
If you notice these or any other signs of unusual moisture or “strange behavior” in your faucets, pipes, and drains, consult a plumber immediately. Early diagnosis of plumbing problems can save you thousands of dollars and prevent significant damage to your home. It’s particularly important to keep your plumbing in top condition if you plan to put your house on the market; buyers shy away from homes with plumbing problems, mold, or similar issues. In the alternative, you can always sell that leaky plumbing to 4 Brothers Buy Houses—we buy homes in any condition, including those with plumbing, roof, and foundation problems. Want to know more? Click here for a no-obligation quote today.