Home Buying

Homebuying tips: The pros and cons of hiring a buyer’s agent

buyer’s agentAt a glance, the primary function of a buyer’s agent is to protect the buyer’s interests during the various stages of the homebuying process. Still, some people wrestle with the importance of hiring one. To help you decide on whether you should work with a buyer’s agent or not, here are a couple of pros and cons to weigh in on.

Pro: A buyer’s agent exclusively works for your interests

A real estate agent can help you look for a home and negotiate a reasonable price, but a buyer’s agent goes beyond the call of duty to make sure your interests are protected.

To avoid any potential conflicts of any interest, buyer’s agents normally don’t list properties and work solely to represent the homebuyer. This gives some of mind, knowing you’re not being led to a property just because it’s one of his or her listings.

Of course, the opposite of an exclusive agent is a dual agent—one who lists properties and, at the same time, represents sellers. Unlike a buyer’s agent whose only concern is you, a dual agent will have to balance his or her time to manage both you and the seller he is representing. As implied earlier, this can bring about a fair amount of possibilities that may lead to conflicts of interest.

Although a dual agent can help you negotiate a better deal, you might not be as protected as a homebuyer.

Con: Because of exclusivity, a buyer’s agent costs more to hire

One of the biggest misconceptions in the homebuying process is that sellers shoulder the costs to pay for the buyer’s agent commission. That’s actually not the case. In fact, the homebuyer is the one who’s bringing more money come closing day.

Where should you find a reputable buyer’s agent?

For starters, look to your trusted friends and family members for any recommendations, just like how you would with a normal real estate agent. If you hit a dead-end, it’s time to take your search to the Internet. The World Wide Web is full of recommendations—it’s just up to you to peruse every review and affiliations until they’ve met your criteria.

Once you’ve found a worthy candidate, invite him or her for an interview. If everything went smooth sailing, sign a Buyer’s Broker Agreement.

Do you need more help in finding a home? We’ve got plenty of homebuying tips to share. Just check out our blog here .

Homebuying: Should you buy new or pre-owned?

Relocation (1)It’s safe to say that U.S. real estate composed of two types of homes — pre-owned and new constructions. If you can’t decide between the two, here are four things to carefully consider.

  1. New homes have minimal issues.

    One of the biggest perks of buying a new home is you get a clean slate. Unlike old homes, you can rest assured there are minimal to no underlying issues. Everything is in perfect working order– you won’t need to worry about additional costs for necessary repairs and upgrades.

    New homes are easier to purchase as well. Nowadays, most home builders in the country have their own financing departments. This makes shopping for a loan a whole lot easier. Whether the deal offered to you is a good one, however, is a different question.

  2. New homes are more expensive.

    Although you’ll be facing considerably less competition for a new home, buying one will require you to shell out more money. According to a study by Trulia, new homes are likely to be 20% more expensive that old homes. Yes, you do get newer materials and probably the latest technology, but is it really worth it when you consider the next item?

  3. New homes aren’t built on great locations.

    It’s not a bad thing, per se. We all know there is hardly any space for new residential developments in established or central locations. The thing is, location matters when you’re buying a home. While some new homes are build in "upcoming" areas, others are built on locations that have questionable potential.

    If you don’t mind living a short drive away from the city center, a new home in a new development might be an option for you. If you prefer living in an established neighborhood, close to downtown and a variety of amenities, investing in an old home might be the best course of action.

  4. Old doesn’t mean dull or boring.

    Old homes aren’t always outdated or in bad shape. Some sellers update old homes (even historic properties) to bring life to the residence. They do this so well, some old homes come in even better shape than new constructions. Washington, D.C., in particular, has a number of older properties (rowhomes, for instance) that are modern and highly coveted.

In conclusion, it’s best not to close your doors on either old or new homes. Check out what’s in the market! What is important is you finding a home that suits your needs and lifestyle, regardless of how old it is.

For more resources on homebuying, check out this page.

Homebuying tips: Finding the right mortgage lender

Financing your home is half of the battle, which is why it’s important for you to come across the mortgage lender that is suitable to your needs. To find the best mortgage lender, here are five things to bear in mind.

  1. Make sure you have your credit report.

    The first step when you shop for a loan is to get your credit report. This will help you determine whether you even need to obtain one. If you do, your credit report will also play a role in figuring out the best loan program for you.

  2. Narrow down your search through referrals.

    To get names of potential lenders or brokers, turn to your trusted friends and family, or your real estate agent. Once you have some names, it’s time to take the search online and read reviews. From there, you can reach out to lenders or brokers you like.

  3. Ask questions.

    Now that you have names of potential lenders, it’s time to ask the right questions. Raise topics like their preferred means of communication, turnaround times, and lender fees. The sooner you know, the better.

  4. Don’t be afraid to disclose your financial situation.

    When shopping for a loan, communication is important. In order for lenders to offer the best loan program for you, you need to provide them the essential information. You might feel uneasy, but sharing all the significant details will make a ton of difference. Remember: potential lenders won’t be able to provide solutions if they are kept in the dark regarding your situation.
  5. Look at the bigger picture.

Get quotes from different mortgage companies, then compare. Some people stop at the principal and the interest rate, but it’s best to include all the points, so you can compare the full package. There are plenty of costs associated with homeownership, and reading the fine print and asking questions will help you make an informed decision.

Buying a home? Read more homebuying tips here.

Homebuying tips: from starter home to forever home

When it comes to real estate investments, we want to be fully sure we’re going to make the most out of it. First-time homebuyers might be inclined to buy a starter home, or rent a property first and save up for the home that’s going to be theirs forever.

If you can’t decide between the two, here are a few tips and considerations that will help you make up your mind.

Buy a starter home first

A starter home is a house you can afford now without compromising your funds. You’ll get to benefit from historic low interest rates, which will greatly impact your monthly payments.

Take advantage of this, and pick a home you can turn into a rental property as time goes by and you have enough funds to finance your forever home.

Save up for your forever home

This is the type of home you see yourself living in for the next 20 years. You might even pass this on to your children, turn it into an ancestral property of sorts. The thing about forever homes, however, is that it’s out of the league of most 20- to 30-somethings.

You can save up for your forever home by choosing to rent a reasonably-priced home for the meantime. As long as you have a clear set of goals as well as self-discipline, you’ll be able to finance your forever home. This might take a while, however.

You can also buy a starter home for now — a property that has the potential to appreciate and build enough equity you can put into your forever home. You can sell your home once you’re ready, but if the conditions aren’t ripe, have it rented out instead.

Compromise

If the price difference between the starter home you’ve been eyeing and the forever home you’re interested in can be saved up in a span of year, you might want to hold your horses and wait it out until conditions are right.

If it’ll take you more than five years to save up for that price difference, however, perhaps it’s time to compromise and look for another property that’s right on the middle ground.

Remember, this is not an all-or-nothing game. You can still find a home that suits your needs for the meantime until you can finally purchase that home of your dreams.

Check out this link for more information and tips on homebuying.

Top 10 Negotiating Tips You Need to Know

Once you’ve found the condo of your choice and secured financing, you’re ready to place an offer on the unit. But before you do that, go through the checklist below.

  1. Look at the unit’s sales history
    Research the building’s sales history and pricing information on similar units that have been sold prior. This will help justify the price stated in your offer letter.
  2. Find out why the unit is being sold
    Is the seller under any pressure to sell as soon as possible? If so, it’s the kind of information you can use to your benefit at the opportune time.
  3. Ask if other buyers have made offers
    If there are other bidders, you’ll have to make an offer that’s close to the listing price. However, you should still withhold your true level of interest to retain the upper hand.
  4. Keep your finances confidential
    Avoid talking about financial information in the presence of selling agents. This might give them the impression that you can afford more, or that you’re not qualified as a buyer.
  5. Don’t make lowball offers
    Making a really low offer could offend the seller and dissuade them from doing any business with you. Consult with your Realtor to make an informed offer.
  6. Set a ceiling
    Determine how much you’re willing to pay for a unit. This will guide your decisions, and will let you know when to walk away from negotiations.
  7. Avoid seeming too eager
    Remain neutral during talks with the seller. This keeps the other party from thinking that they can appeal to your emotions when negotiating.
  8. Don’t give your best offer right away
    Putting everything on the table at once will make the seller think that you’re hoping to get more than you can expect. Proceed with your offer and concessions gradually.
  9. Discuss the counteroffer with your Realtor
    The amount of the counteroffer is an indication of how low the seller is willing to go. Talk to your Realtor and come up with a price you think is fair.
  10. Don’t ask for additional concessions
    If the seller agrees to lower the price, don’t push your luck by asking for more concessions. Arrive at a compromise in order to close the deal.

To learn more, check out our comprehensive Buyers’ Guide. You can also call 410.371.0581 and 202.483.6300 or email andy@LNF.com.

Is Condo Living Right for You?

Condo living has its pros and cons. Before you start talking to a real estate agent, here are some things to consider.

  1. Maintenance and repairs
    The great thing about condo living is that you have fewer responsibilities when it comes to maintenance and repairs. Building management takes over. However, you might not get to decide when these repairs will be made.
  2. Amenities
    Condo living gives you access to a pool, gym, or sauna that you might not be able to afford otherwise. If you use these amenities regularly, you’ll get more value for your fees. Otherwise, you’ll end up paying for a perk you have no use for – and that’s money down the drain.
  3. Security
    Living in a condo lets you enjoy the building’s security features like controlled access and video surveillance. Aside from this, you can go out of town knowing that neighbors are within close proximity of your unit and can alert management if anything suspicious occurs.
  4. Restrictions
    Since you’ll be sharing a building with a lot of neighbors, there will be restrictions on noise levels, pets, smoking, and even interior and exterior décor. The same applies to any remodeling work you want to have made to your unit.
  5. Privacy
    Having just a wall separate you from your neighbor may turn out to be a privacy issue. If you can hear their comings and goings, chances are they can hear yours. You’ll also bump into them frequently in the corridors and shared areas – which is fine if you’re the friendly sort, but uncomfortable if you’re a little more reserved.
  6. Space
    You’ll have to make do with less space when living in a condo. This means being very selective when it comes to buying stuff for your home, and minimizing clutter as much as possible.
  7. Neighbors
    Condominium buildings attract individuals with all kinds of personalities and lifestyles. You might not necessarily get along with all of them. On the bright side, you can look forward to community-organized social events and recreational activities.

If you think that condo living is for you, check our listings. You can also call 410.371.0581 and 202.483.6300 or email andy@LNF.com.

Your Guide to Buying Your First Condo in D.C.

You’ve finally decided that you’re tired of renting and hauling your belongings from one unit to another. Now that you’re ready to commit to a mortgage, here’s what you need to know about buying a condo in D.C.

Buying guide

Condo Buying Trends

  1. Small is in

    The tiny condo movement is gaining traction in downtown D.C., and developers are marketing the units to millennials. A tiny studio, for instance, affords 300 square feet of livable space. What makes it attractive is the price point – a unit sells for about $275,000, or half the median price for a typical home in the area.

  2. First-time buyers can get tax credit

    First-time home buyers may be eligible for a tax credit of up to $5,000 as long as they meet set requirements. To qualify, you should have purchased your home within the current tax year, and you mustn’t have owned a home in D.C. the previous year. Moreover, the tax credit gets phased out depending on your adjusted gross income.

  3. The FHA has made purchasing easier for first-time buyers

    The Federal Housing Administration, which helps first-time buyers get mortgages, lowered their fees in 2015. Fees were again cut in 2016 as the FHA’s financial situation gets better. Getting an FHA-approved condo in D.C. is also helpful because the agency will insure your loan, which mitigates risks and minimizes costs for the lender. You’ll also be required to give a down payment of only 3.5%.

  4. Condo living in D.C. is synonymous with lower maintenance and better lifestyle choices

    Condos are easier to maintain than single-family homes and townhouses. Their affordability also lets you live in the city and gives you access to cafes, shops, restaurants, and events. Condo living also allows you to enjoy the walkability of the city, which either minimizes or completely does away with your commute.

Neighborhood Guide

Still wondering which area in D.C. is for you? Here’s a quick rundown of local neighborhoods.

  • Woodley Park, Kalorama, and Chevy Chase are affluent neighborhoods. Here’s you’ll find good restaurants, ethnic eateries, and cafes.
  • Kalorama residents prefer to keep the area’s noise level down, which makes it perfect for retiring homebuyers.
  • Petworth is a close-knit community, with a mix of long-time residents and creative types who have just started moving to town.
  • Shaw is known for U St., where residents go for food, drinks, and retail. Currently in the midst of a renaissance, the area is one to look out for over the coming years.
  • Along with Shaw, Ivy City and Southwest Waterfront are considered to be up-and-coming neighborhoods. Condos are still affordable and yet are expected to gain value in the next few years.
  • Columbia Heights is known as one of D.C.’s grittier areas, but an influx of retailers and increasing entertainment options serve to gradually change its reputation.
  • As the name suggests, Mount Pleasant has a small-town vibe that active community members want the neighborhood to retain. There’s a crop of independent businesses worth checking out and supporting.

Sorting through Your Options

As a first-time buyer, you have a lot of options when it comes to condo units, amenities, and location. When choosing a condo, find a building and a neighborhood that will match your budget and complement your lifestyle.

Buyers also tend to look for condos that they can rent out when they feel ready to move up to townhomes or single-family homes. If this is something you plan to do, then you have to find a unit that’s likely to attract tenants, and which will grow in value over time.

Get started by checking out our Condo page to look for the unit you need in the area you’re interested in. You can also call 410.371.0581 and 202.483.6300 or email andy@LNF.com.

Overpriced Homes and How to Identify Them

First-time homebuyers should be wary of overpriced homes. Lenders think twice about approving a mortgage if the appraisal is lower than a home’s sale price, forcing buyers to pull more of their resources to reach a deal.

Here are some indicators that a home is overpriced.

  1. The home has been in the market for several months
    Overpriced homes tend to languish in the market for a good many months. Also called a “stale listing,” these homes leave buyers cold. Homes that are priced correctly usually get offers within weeks.
  2. It’s priced higher than its neighboring properties
    A quick survey of homes within the neighborhood will give you an idea if a piece of property is overpriced. Check listings within the community or ask around to make sure the home you’re eyeing isn’t worth less than its asking price.
  3. It’s priced higher than comparables
    A comparable property is one that’s similar in size, features, condition, and neighborhood to the property you’re interested in. Their list price should be roughly the same.
  4. It’s the last home standing in a hot neighborhood
    Take it as a red flag: a home that remains unsold even as buyers are making offers on, and purchasing, other properties in the same neighborhood.
  5. It’s priced for custom amenities that don’t have wide appeal
    Indoor basketball courts or special purpose rooms that are difficult to convert are custom amenities that can unnecessarily drive up the price of the home. Few buyers may find such novelties useful or worth paying for. The same goes for expensive upgrades.
  6. Few show up during open houses
    Once a home is on the market, there’s usually a lot of activity associated with it within the first few weeks. However, if open houses aren’t bringing in traffic and offers, then it’s a sign that the home is overpriced.

To learn more, check out our comprehensive Buyers’ Guide.You can also call 410.371.0581 and 202.483.6300 or email andy@LNF.com.

Checklist for first-time buyers

Buying a home for the first time can get pretty hectic, to say the least. There’s tons of details to keep track of, decisions to make, and things to do. Needless to say, it can get quite overwhelming for anyone.

One of the smartest strategies for first-time buyers is to keep everything organized. Staying organized will make the buying process easier and less stressful, allowing you to make the right decisions.

Below is a handy checklist that will help you prepare for your first home purchase:

  • Get your finances in order. Before you even start looking for a home, make sure to get your finances in order. Request your credit report from the three bureaus (Equifax, Experian, and TransUnion), and make sure it’s accurate. Compile all necessary documents such as bank statements, pay stubs, and tax returns from the previous year to present to a loan officer.
  • Do research on mortgages. Take a look at helpful sites such as Trulia.com’s mortgage tools, where you can find information on a wide selection of reputable lenders from all 50 states. You can get a personalized quote and read lender reviews from other users in order to determine the right lender for you.
  • Find a reliable real estate agent. A good real estate agent will make the buying process quicker, easier, and more stress-free. Find an agent who’s familiar with the local market, and has experience with multiple transactions in the area.
  • Research about the neighborhood. Search online for information about a specific neighborhood. Know what schools, major highways, services or other attractions are located nearby. Visit an area’s local precinct to find out about crime activity, ask potential neighbors, and drive during different times of the day to gain a clearer picture of what a neighborhood’s like.
  • Know what you’re looking for. List down features you’d like to have in a home, and keep this list handy when you’re looking at properties. Once you’ve gathered several options, see which of the homes is the closest to your idea of a dream home, and make your decision.

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Andrew Pariser, Realtor®
Licensed in DC, MD, & VA
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    Washington, DC 20008
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