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This week’s Q&A column, sponsored and written by McEnearney Associates Realtors®, the leading real estate firm in Alexandria, is a bit of a departure from our usual format. To learn more about this article and relevant Alexandria market news, contact us at 703-549-9292. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: What do I need to know before renting a home?

Answer: Previously we reviewed the Blueprint for a Renter Bill of Rights, the Federal Government’s recommendations for how to make rental housing more equitable and expand renters’ rights when it comes to rent increases, lease terms, and evictions. This week we’ll take a look at the rental market from the Realtor® perspective.

McEnearney Associates recently convened a “Masterclass” with several of our top agents who have made a name for themselves as rental experts — both for tenants and landlords — as well as staff from our Property Management team. It was a lively discussion and we’re sharing some of the tips and processes that Lauren Budik (McLean), Ann Duff (Alexandria), and Sarah Picot (Arlington) believe will make the rental process more efficient and less stressful for everyone involved.

Stay tuned in the coming weeks for our recommendations for Landlords.

For Tenants 

DON’T: Start your search too early. We understand, it’s exciting to imagine your next home and see all the options out there. But if you are looking to move in May and want to start looking in January, you will be spinning your wheels. Most leases require a 60-day notice to vacate, and the landlord will look to turn them over quickly. Most landlords will not hold a property if you’re not ready to make a move on their terms.

DO: Understand that most leasing documents are standardized and will have to be completed before or during the rental search. Expect to sign a representation agreement that spells out the responsibilities of both you and your agent, review, and sign disclosures about the property, and understand that leases are standard forms used by most landlords and brokerages in the area. Changing boilerplate clauses or asking for too many changes in terms likely won’t be possible.

DON’T: Hide or be shy about sharing credit issues. Financial setbacks happen and the best way to work around them is to let your agent know if there are credit dings that could affect your rental application. Your agent will help to strategize on the best approach, such as offering to pre-pay several months of rent in advance. A letter explaining how your credit was affected and what you’ve done to repair it can go a long way in assuring a cooperative landlord that past issues have been resolved.

DO: Have a good amount of cash ready for securing a property. Between the first month’s rent, security deposits, pet fees, building move-in/move-out fees, and other moving costs, you may need an outlay of several thousand dollars just to secure a lease. Make sure you’ve set a reasonable budget and saved your money for those immediate payments.

DO: Work with a Realtor®! You’ve heard it before: inventory is extremely tight and great properties go quickly. Having a leasing agent working with you in your housing search ensures that you get access to listed properties quickly (and safely), that your application will be submitted correctly with the proper documentation. Helping clients find the right home is what Realtors® do every day so use their expertise to your advantage in this competitive market!

If you would like a question answered in our weekly column or to set up an appointment with one of our Associates, please email: [email protected] or call 703.549.9292.

McEnearney Associates Realtors®, 109 S. Pitt Street, Alexandria, VA 22314. www.McEnearney.com Equal Housing Opportunity. #WeAreAlexandria

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This week’s Q&A column is sponsored and written by Hope Peele of The Peele Group and McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant Alexandria market news, contact The Peele Group at 703.244.6115 or email [email protected] You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: What factors affect home values in this region?

Answer: When deciding to sell a home or purchase a home, it is common to wonder how much each home is “worth”. What some don’t always think about though, is that there are many factors that can influence these prices. Here are some of the main things that can affect regional home prices.

Location

Perhaps the most known cliche about real estate is “Location, Location, Location!” Homes in urban areas, close to shops and restaurants, parks, or schools, are typically valued higher than those that are more rural. This may sound counterintuitive, but even though a home stays where it is, how desirable a location is can absolutely change over time. For example, when a new shopping center is built, homes nearby will frequently see a boost in value, depending on their proximity. Expanding public transportation routes will also have a significant effect on regional home prices.

Market

Many have heard the terms “seller’s market” and “buyer’s market”, but I don’t see them explained much, so I’ll go over what those terms actually mean. Essentially, in a seller’s market there are a ton of buyers looking for homes. This means that if a seller’s home is priced appropriately, it will likely get competing offers, and therefore a higher price. Conversely, a buyer’s market has more inventory than buyers. This gives buyers more options and allows them more leverage for negotiating lower prices.

Interest Rates

Interest rates are just as important to watch as the market conditions — and can even influence them. Buyers have more purchasing power when interest rates are low, meaning that they can afford a mortgage for a higher amount. This results in increased demand and higher home sale prices.

Economy

Local economy is yet another… People are more likely to purchase homes when the local economy is strong, and there are a lot of available jobs. National economy on the other hand, might not necessarily have as much of an immediate impact on local prices, but the perception of either strength or weakness certainly can.

Overall, there are many factors that can influence home prices in any given region. It’s important to consider all these factors when buying or selling a home in the area. Your trusted real estate agent will walk you through all of these and help you to take them into consideration when either buying or selling to make the most informed decisions.

By understanding the local market conditions, interest rates, and economic factors, you can make informed decisions about buying or selling a home in Northern Virginia. If you need help determining the value of your home, or a home of interest to you, don’t hesitate to reach out for a market analysis.

Hope Peele is a licensed real estate agent with McEnearney Associates, Inc. in Alexandria, Virginia. She grew up in Old Town and currently lives in Del Ray. As a partner with The Peele Group, Hope is dedicated to guiding her clients successfully through the many-faceted process of buying or selling a home. Contact Hope at 703-244-6115.

If you would like a question answered in our weekly column or to set up an appointment with one of our Associates, please email: [email protected] or call 703.549.9292.

McEnearney Associates Realtors®, 109 S. Pitt Street, Alexandria, VA 22314. www.McEnearney.com Equal Housing Opportunity. #WeAreAlexandria

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This week’s Q&A column is sponsored and written by Peter Crouch & Katie Crouch of McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant Alexandria market news, contact Peter at 703-244-4024 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: What is the difference between Aging in Place and “Aging in Community”?

Answer: We all have heard about “Aging in Place,” and many AARP polls show a high percentage of us want to do just that as we get older — stay in our long-time homes. After all, we are comfortable in our homes, we are near friends and family, and we have our support network.

Our doctors are close by, familiar shopping is near, and the services we rely on are often clustered around our home. If we have concerns about living in our homes, we can look at converting a room to achieve a first-floor bedroom, adding handrails for stairs, improving lighting, and adding ramps as needed. Plus, we can hire people to mow the lawn, rake leaves, or shovel snow. It does mean, however, that one or two people may find themselves rattling around in a large house that is expensive to maintain.

There is, however, an important companion concept to Aging in Place that is often an even better match — Aging in Community. As the phrase implies, many people are deciding to move to more suitable housing locally for their next phase of life. The key is “locally.” They stay near their family and friends, doctors and dentists, shopping and services. They just move to a more manageable home. Sometimes the move is from a detached home to a townhouse, but more often it is to a condo or apartment. Regardless of the scale of the move, the goal is to maintain all the familiarity that they have come to know over the years while making their housing more appropriate — to Age in Community.

The benefits are many. Obviously, maintenance is less, especially in a condo or apartment. Equally as important, people now have closer neighbors — which stimulates engagement. Often it makes it much easier to travel — just lock up and head to the airport. Or just get to the local activities more easily.

Another benefit of selling a long-time home can be financial. In our area, it can be relatively easy for folks to have accumulated a good bit of equity, especially in the last couple of years. However, it is locked away in their homes, almost unusable. Freeing it up gives all sorts of options to move locally — and use the equity to enrich their quality of life and enjoyment!

In addition, the current tax code gives qualifying owners an “exclusion” from capital gains tax of $250,000 per person/$500,000 per couple when they sell a principal residence. That is “profit” that will never be taxed! Plus, as prices appreciate, every extra dollar earned will likely be shared with the Tax Man eventually — why not start the clock over on a new property with a new set of $250,000 exclusions? (Consult your tax person for your own situation.)

So how common is Aging in Community? One of our local Senior Villages, At Home in Alexandria (AHA), which supports older Alexandrians living at home with a variety of services and social activities, has an almost evenly split membership. Roughly half seem to be in their long-time homes, while the other half have downsized to a condo or apartment — and are Aging in Community. Mount Vernon at Home, the Village in the Mt Vernon area, has a similar breakdown.

Our area is fortunate enough to have almost every option available to folks who wish to change their housing. We have apartments, condos, small detached homes, and townhomes for most budgets.

Is Aging in Community for you? Happy to brainstorm!

Crouch Realty Group at McEnearney Associates is honored to have been awarded the National Association of Realtors Senior Council (SRES) “Outstanding Service Award.” Out of 1.2 million Realtors nationwide.

Pete Crouch is a Seniors Real Estate Specialist, which means he is well-versed in all aspects of moving as we age. His own downsize gave him tremendous insights into what is involved, from emotional matters to real estate considerations. Pete is a Board Member of At Home in Alexandria (AHA), our local Senior Village, and was the 2018 National Recipient of the “Outstanding Service Award” by the National Association of Realtors for his work with Senior Moves. Text 703-244-4024 or email [email protected] for a copy of his Downsize Alexandria! Booklet about living more simply in Greater Alexandria.

If you would like a question answered in our weekly column or to set up an appointment with one of our Associates, please email: [email protected] or call 703.549.9292.

McEnearney Associates Realtors®, 109 S. Pitt Street, Alexandria, VA 22314. www.McEnearney.com Equal Housing Opportunity. #WeAreAlexandria

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This week’s Q&A column is written by Darlene Duffett of McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant Alexandria market news, contact Darlene at 703-969-9015 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: Why do I need an agent when I buy a home? I’m pretty sure I can do this myself.

Answer: There are so many reasons why you need an agent that has your best interest in mind while searching for the home of your dreams. Here are some insights into how a buyer’s agent may help you purchase your dream home.

Guidance: A buyer’s agent is your personal guide through a complicated real estate process. An agent will walk you through the steps and alleviate stress while they are helping you. Buying a home is not as simple as taking a tour and putting in an offer. Your agent has been through this process and brings the experience to ensure a smooth transaction.

Contracts can be confusing. Ask your Realtor to review the entire contract prior to beginning the home buying process. When that day comes and quick decisions need to be made, you will know exactly what each contract section means. Your agent will also be available to answer any question you have throughout the process.

Advocate: A buyer’s agent is your advocate. They have your best interest in mind every step of the way. This may be the most important aspect of having an agent. The agent that represents the seller’s property (that you may tour) has the seller’s best interest in mind. Their goal is to get the best outcome for the seller, period.

A buyer’s agent should be well versed in the local real estate marketing. Furthermore, your buyer’s agent is not influenced by a seller’s interests and will provide an honest assessment of the property. Your agent will be your ally while looking at properties, negotiating, and shepherding the process to get you to the closing table on time.

Lender Introduction: Finding the right lender is incredibly important. It is essential to speak with a lender to receive the proper type of approval to include with your offer. Not all types of approvals are the same and you realtor and lender can guide you through the differences and how to have your offer look more favorable.

Your buyer’s agent can give you lender choice guidance based on years of experience working with the best lenders in the area. The mortgage industry is incredibly competitive. Lenders range from large national providers to smaller local mortgage brokers. Your realtor will make recommendations based on the quality of loan officers and processors.

Save You Money: A buyer’s agent can help save you money. Yes, I said save you money. As a buyer you do not pay any of brokerage fees. The seller’s and buyer’s brokerage fees are paid by the seller. So having a Realtor on your side saves money. Real estate is local. Your agent will know the neighborhood comparable properties that have sold recently along with area trends. Your Realtor will know what you should offer and then negotiate depending on the property and current market.

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This week’s Q&A column, sponsored and written by McEnearney Associates Realtors®, the leading real estate firm in Alexandria, is a bit of a departure from our usual format. To learn more about this article and relevant Alexandria market news, contact us at 703-549-9292. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: What is the Blueprint for a Renter Bill of Rights? New federal guidelines aim to bring fairness to the rental market.

Answer: It has been a tense few years for renters and landlords, with rising housing costs due to shrinking inventory and inflation running headlong into the Covid-19 pandemic and federal and local moratoriums that prohibited landlords from evicting tenants.

Adding complicating factors like the rise of short-term rentals such as AirBnB and VRBO, and private equity investors — many from outside of the United States — who are buying up starter homes, apartment buildings and the land beneath trailer parks, the roughly 35 percent of population — approximately 44 million people — navigating the U.S. rental market may feel like it’s the Wild, Wild West with few places to turn for help.

Enter the White House’s Blueprint for a Renter Bill of Rights.

Released on January 25, 2023, this policy paper areas that the Biden Administration wants to see implemented at state and local levels to follow the lead of “the new commitments by federal agencies to advance a stronger, more equitable rental market.” Included in the new Blueprint is the Resident-Centered Housing Challenge, which seeks input from stakeholders and community leaders and “encourages states, local, Tribal, and territorial governments to enhance existing policies and develop new ones that promote fairness and transparency in the rental market.”

These are not new laws but instead are a set of principles that the White House and participating agencies — including the Federal Housing Finance Agency (FHFA), Federal Trade Commission, Consumer Financial Protection Bureau, Department of Housing and Urban Development, Department of Defense (involved on behalf of military personnel) and Department of Justice — say will “support the development of policies and practices that promote fairness for Americans living in rental housing.”

According to the White House announcement, the Blueprint “sets out five common-sense principles that create a shared baseline for fairness for renters in the housing market,” including access for renters to:

  • Safe, Quality, Accessible, and Affordable Housing
  • Clear and Fair Leases: Lease with defined rental terms, rights, and responsibilities
  • Education, Enforcement, and Enhancement of Renter Rights: Federal, state, and local governments should do all they can to ensure renters know their rights and to protect renters from unlawful discrimination and exclusion.
  • The Right to Organize: Renters should have the freedom to organize without obstruction or harassment from their housing provider or property manager.
  • Eviction Prevention, Diversion, and Relief: Renters should be able to access resources that help them avoid eviction, ensure the legal process during an eviction proceeding is fair, and avoid future housing instability.

However, without judicial consequences behind this effort, what the Blueprint means for the local Washington-Metro market is still to be worked out. But rising eviction rates in all jurisdictions makes this an issue that local leaders are being pressed to address.

For more information about rental assistance in a specific local area, please visit these resources for additional information:

Virginia

Maryland

Washington, D.C.

If you would like a question answered in our weekly column or to set up an appointment with one of our Associates, please email: [email protected] or call 703-549-9292.

McEnearney Associates Realtors®, 109 S. Pitt Street, Alexandria, VA 22314. www.McEnearney.com Equal Housing Opportunity. #WeAreAlexandria

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This week’s Q&A column is sponsored and written by Hope Peele of The Peele Group and McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant Alexandria market news, contact The Peele Group at 703-244-6115 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: What if I start to feel buyer’s remorse as I approach the closing table, or even after?

Answer: It’s not uncommon for even seasoned buyers to feel a little bit of buyer’s remorse as they begin to move forward with their new home purchase. Let’s talk about how to avoid buyer’s remorse before you commit to a purchase!

Know Your “Why”

Whether you’re downsizing to a smaller home, or vice versa, there are likely both special and financial reasons that you have for moving. Maybe a growing family needs more elbow room, or maybe empty nesters prefer fewer stairs. It’s important to keep in mind the benefits of your new home and how they will make you feel in the long term. Whether it’s a smaller space with financial benefits or a larger payment for a lot more room, knowing your “why” is the key to long-term happiness and to a positive home-buying experience.

Know Your Needs

Make a list of your goals, and needs versus wants, then revisit it often. This will help you both during and after your purchase. If you spend some time thinking about what you are realistically looking for in a home before ever stepping foot in a listing, you will be able to make the most out of the visits that you make. If a fenced yard is an absolute need, then it’s important to know in the beginning so that you only look at homes either with fences or within your budget to add one.

Stop Shopping

It’s typical to still be in the habit of looking at new homes that come on the market after you go under contract and even after you’ve moved into your new home. It can be tempting to keep checking out the new listings. Like most things in life though, once you’re completely committed it’s not the best idea to keep looking.

Keeping HomeSnap on your phone after you’ve purchased your new home, is like keeping Hinge after you’ve gone exclusive with a partner — it could end in a broken heart. If you stick with your commitment, you are still likely to think about what could’ve been (but realistically probably could not have been…) and if you break your commitment to go with something new, it will likely come at a cost. It’s best to know the reasons that you want the home when you make the offer and keep moving forward in a positive manner.

So, once you are past the home inspection process, the time for the nitpicking mindset is over. Try to refocus that voice in your head to take pride in your favorite parts of the home and put energy towards small things that can emphasize those parts.

Start Making Memories!

You likely have a ton of great memories of past homes, and, as much as you may love your new home, it can sometimes take a while to get that same fuzzy feeling about it. Think about it like a new friend — experiences will create a bond. Whether it’s entertaining friends and showing off the new place, or just cooking a private meal in your new kitchen, spending some time with your home will secure that special place in your heart for that place called “home”.

So, you know your why and you’ve stayed focused on your wants and needs. You may still feel a bit uneasy. Buying a home is a huge decision and it is normal to experience these feelings. You may even feel a pang of nostalgia for what might have been — especially if you are selling a home and it’s now show-ready and beautifully staged!

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This week’s Q&A column is written by David Howell, Executive Vice President and Chief Information Officer, of McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant market news, contact David at 703-855-5089 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: How did the Alexandria market finish 2022?

Answer: Last week in our Ask McEnearney column, McEnearney Associate Rebecca McCullough presented a compelling look at what to expect from the Northern Virginia Real Estate market in 2023. She included some statistics comparing the end of 2022 with the end of 2021 for context, but didn’t do a deep dive into specific markets.

This week we are taking a closer look at contract data for the 4th quarter of 2022 compared with the same time in 2021 for the City of Alexandria and South Alexandria (Fairfax County portions of Alexandria). The charts below look at number contract activity by price range and by property type (condos, attached homes, and detached homes) and the average days on market.

City of Alexandria

New Contract Activity

  • Contract activity in the City of Alexandria decreased 44.1% in the 4th quarter of 2022 compared to the 4th quarter of 2021.
  • Contract activity was down for all price categories.

Number of Condo, Attached Home, and Detached Home Contracts

  • The number of detached homes, the smallest part of the City of Alexandria market, going under contract in the 4th quarter of 2022 decreased 48.9% compared to 2021.
  • Contract activity in the condo market decreased 44.4% and attached homes activity decreased 41.5%.

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 This week’s Q&A column is written by Rebecca McCullough of McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant Alexandria market news, contact Rebecca at 571-384-0941 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: What does the 2023 Northern Virginia real estate market hold in store for buyers and sellers?

Answer: Let’s take a quick look back to 2022. In the first half of 2022 we were still riding a very strong seller’s market. Interest rates were in the low threes, inventory was scarce, and buyers were in abundance. We saw lots of multiple offers and very happy sellers.

By mid-June we had seen a rapid increase in mortgage rates, to the point Realtors could feel buyers slamming on the brakes. By mid-summer interest rates peaked at 7.4%. This meant buyers essentially had a 50% increase in their potential payments vs. what they would have seen at the start of the year.

By the end of 2022 interest rates had calmed down, closer to 6.5%. Not surprising, the fall market was significantly quieter than the previous couple of years. Buyers decided it was time for a break and were reconsidering if it was a good time to make a purchase.

Some interesting statistics comparing the real estate market at the end of December 2021 versus the end of December 2022:

  • Listings down 20.8%
  • 30-year fixed mortgage rates finished the year at 6.4%
  • Mortgage applications down 86% — 22 year low!
  • Sales down 24.4%

BUT, despite this, home prices were up over the year, and we still only have a 1.6-month supply of properties for sale. This is still very much a seller’s market. A balanced market supply would offer 4 to 6 months of supply.

So, what’s ahead? Industry experts are anticipating a fairly flat increase of less than 1%. Keep in mind real estate markets vary significantly from one neighborhood, city, state to the next. It is really important to know what is happening in a particular neighborhood vs. comparing it to any national statistic you may hear. Historically, NOVA has been somewhat sheltered from the drastic fluctuations seen in other parts of the country. This is where an experienced agent can advise you of current trends in the neighborhood you are considering.

Lack of inventory, and continued population growth in our area support a seller’s market. The shortage of home building and the growth of the population since the financial crisis in 2008 has left buyers with not enough inventory to purchase from. Even though interest rates have gone up, they are still below historical trends.

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This week’s Q&A column, sponsored and written by McEnearney Associates Realtors®, the leading real estate firm in Alexandria, is a bit of a departure from our usual format. To learn more about this article and relevant Alexandria market news, contact us at 703-549-9292. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: Are there ways to lower my interest rate when buying a house?

Answer: The new year will shake up how everyone involved in the home ownership process as consumers, lenders and Realtors explore solutions to keep the housing market moving at a healthy pace. The days of throwing a home on the market and watching multiple offers roll in is probably a thing of the past, but there are still advantages available to both sides to ensure people can buy the homes that are available, even with rates at their highest in several years.

For buyers, taking an (honest!) inventory of finances and speaking with a lender is the first step. While it is advisable to have a healthy cash reserve when buying a home, the old standard of 20% down is rarely the case today. The National Association of Realtors 2022 study of homebuyers and sellers showed that the typical down payment for first-time buyers was 6% while for repeat buyers it was 17%.

But even with lower requirements for a down payment, buyers will still have to qualify for financing and bring money to closing. What are some options to make every dollar count on the pathway to homeownership?

Rate Buydowns

Buyers over the past several years were treated to historically low interest rates in the high 2-percentiles to low three-percentiles. With rates now in the low to mid six-percentile, diminished buyer power is leading to creative solutions in adjusting where buyers start out with their rate — and where they might end up.

Brian Bonnet of Atlantic Coast Mortgage shared insight into two buydown strategies — one that’s traditional and one that has been sparking conversation among Realtors looking for every option to help their clients. The tried-and-true rate buydown is where buyers lower their interest rate by buying “points” at the time of closing. The lowered interest rate is fixed for the lifetime of the loan and offer buyers a consistent amortization schedule.

The “2-1 Buydown” is a temporary rate adjustment where a buyer uses cash to lower their interest rate by 2% in the first year of their mortgage and 1% in the second year of the mortgage, coming back to their full rate at the 25th month of mortgage payments. For example, the buyer who would qualify at the loans note (which is generally slightly higher than the current market fixed rate — let’s say 7% — would pay to bring their rate down to 5% in 2023, 6% in 2024 and back to 7% — the rate at which the buyer was qualified — in 2025.

The benefit of this scenario is that buyers will have a cushion of two years before they start paying the fully amortized rate, and the cash can come in the form of a seller credit (see more on this topic below). Bonnet points out that consumers can’t assume rates will drop or that refinancing will be cheaper in 2025, and must think carefully about whether they will be in a better or worse position when the full rate goes into effect.

“Will rates be better after two years? Will you be in a better financial position to account for the increased interest payment? Will you be able to refinance if you aren’t?” Bonnet said the 2-1 buydown option is good for buyers who don’t expect to be in their home long-term, such as a military buyer who isn’t using their VA opportunity and plans to sell at the end of their assignment. “The typical buyer is not a 2-1 buydown consumer.”

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This week’s Q&A column is sponsored and written by Hope Peele of The Peele Group and McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant Alexandria market news, contact The Peele Group at 703-244-6115 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: What is the difference between a VA loan and a conventional loan?

Answer: If you are considering purchasing your first home, you may have heard about the different types of loans available to buyers looking to finance their purchase. Let’s talk about two that are frequently used — Conventional and VA.

Conventional loans are fairly typical and are able to finance most types of properties. A VA loan, on the other hand, is available only to those who have served in a branch of the military. Their entitlement is determined by their years of service.

Conventional loans are flexible, and almost all properties are eligible to finance with a conventional loan. This means that even if you are purchasing a vacation home, or investment property, this loan is available to you. A VA loan, however, can only be used on a primary purchase of a home. You would need to take out a conventional loan for any second purchases you might make.

Many who have the option for a VA loan choose that because a VA loan allows you to purchase with either a zero down payment or a minimal down payment.

Also, a VA loan does not require monthly mortgage insurance. There is also no minimum down payment or private mortgage insurance. Conventional loans usually require at least a minimum of 3% down and often times more, and also, private mortgage insurance is required with a down payment of less than 20%.

For many, a VA loan is not an option. However, for those who do have eligibility, it is a great way to purchase your first home. VA loans can often be assumed by a future buyer on your home, which is another added benefit. It allows you to pass along an excellent interest rate, which can be a selling point for your home in future. Of course, there are other caveats and requirements, so this should be explored fully before attempting to utilize this VA benefit.

Mortgage loans are tailored to the specific needs of the buyer. Both VA loans and conventional loans are excellent products. For more information about these types of loans and other mortgage loans, we have great lenders who we can recommend to you.

Nancy Donovan (NMLS #483536) of Atlantic Bay Mortgage Group contributed to this article and many of our buyers have worked with her. For a more in-depth discussion on all the types of loans available to you, give her a call at 703-408-8252. And as always, please reach out to me if you would like to discuss your options for buying or selling a home in 2023!

Hope Peele is a licensed real estate agent with McEnearney Associates, Inc. in Alexandria, Virginia. She grew up in Old Town and currently lives in Del Ray. As a partner with The Peele Group, Hope is dedicated to guiding her clients successfully through the many faceted process of buying or selling a home. Contact Hope at 703-244-6115.

If you would like a question answered in our weekly column or to set up an appointment with one of our Associates, please email: [email protected] or call 703-549-9292.

McEnearney Associates Realtors®, 109 S. Pitt Street, Alexandria, VA 22314. www.McEnearney.com Equal Housing Opportunity. #WeAreAlexandria

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