Ask McEnearney

This week’s Q&A column is sponsored and written by Rebecca McCullough of Corcoran McEnearney, 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 Corcoran McEnearney via email for response in future columns.

Question: Should I list during the holidays?

Answer: At this time of year, we get many people asking if they should list their home now, or hold on until after the new year? As always, if you need to sell, list it. However, sellers are often inclined to wait until the new year. But should they? Serious buyers are still out there looking. They are still waiting for the right home to come on the market.

It is true we often see an influx of listings and buyers in January. The holidays have a way of making people evaluate their home. We need more room! We need to downsize so we don’t have to host any more. They got engaged, or many other reasons. So with more buyers, come more competition. Smart buyers who are looking now will gobble up good listings coming on the market before the new year.

So what does demand look like now? Even though interest rates are still higher than a few years ago, we still have significant demand for good houses priced well. The need to sell isn’t always something that can be timed. Jobs change, people can no longer take care of their homes, families grow and lifestyles change.

So if the timing is such that you do need or want to sell now, know they are still many frustrated buyers out there still looking for a home. There may not be as many buyers at time of year, but the ones out there are motivated!

Great, you’ve decided to list (thank you!), what do you do about holiday decor. Do you go Christmas Vacation style to bring in lots of interest, or keep the holiday decor packed away? The answer lies somewhere in between. Nobody expects sellers to hide the season just because you’re selling, but this might not be the year to go for the neighborhood decorating award.

Keeping decorations simple, and understated, while still honoring your family customs, is perfectly acceptable. Subtle and understated is the way to go, always keeping the guidelines staging in mind. Accent the best features in your home. Don’t put the Christmas tree in front of the window with the best view, or cover up beautiful mantles and railings with too much greenery. Use the décor to accent areas of the home you want the buyer to see.

This time of year is fabulous to play up the warmth in a home. The smell of fresh baked cookies, glowing flameless candles and seasonal floral arrangements create the ambience to make them want to stay.

Also keep in mind if you are launching your listing during the holidays when your home is decorated, photographs will include the seasonal items. If your home does not sell before the holidays are over, you may want to consider having new pictures done to promote the property in the new year. Even if the decorations brought out the best of your home during the holidays, seeing them in mid January will remind buyers the home has been on the market for awhile and may create red flags.

When it comes to photographs, consider a twilight photoshoot. The images taken at this time of day create a charming glow from the inside of the house. They can really show off some of the best features of your home. Large bay windows, fabulous front doors, spacious patios. Now that the trees are bare and the grass is brown, daytime photos may appear bland, but some carefully hung white outdoor lights accenting a patio or pathway lighting highlighted in a twilight photoshoot can really make the drab appear fab!

In summary:

• Outside lights? Think accent lighting and bows, and less endless light strings row-on-rows.
• Inside decor? Tasteful displays in selected places, not every last bobble in all of your spaces.
• Gramma’s traditional home-made wahovit? Maybe keep a space in the closet to move-it!

So, is selling now, during the holidays a good idea? This year, absolutely. Buyers are looking, and there’s not much to look at. Be careful, and sensible with the decorations, and you can still blend your holiday highlights, with the needs of a staged home. Make sure there are booties and hand sanitizer, and know like any other time of year flexibility will be important.

Wishing you a successful selling holiday season!

Rebecca McCullough has built a successful real estate business in Alexandria and Northern Virginia by providing excellent service to her clients. If you would like more information on selling or buying in today’s complex market, contact Rebecca today at 571-384-0941 or visit her website RebeccaMcCullough.com.

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.

Corcoran McEnearney, 109 S. Pitt Street, Alexandria, VA 22314, corcoranmce.com. Each office is independently owned and operated. Equal Housing Opportunity.

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

Question: How do financing contingencies in a contract impact the home selling process?

Answer: On the winding road from purchase offer to contract ratification to settlement, there are a few speedbumps that both buyers and sellers must navigate together. Contingencies are one type of speedbump, additional agreements that the contract will continue to move forward as long as certain conditions are met.

Sonia Downard, Title Attorney with Vesta Settlements, recently spoke to our agents about guiding clients through the Financing Contingency for sales in Virginia and avoiding missteps along the way. She explained that while the financing contingency can benefit both the buyer and seller in a sale, it is decidedly buyer-friendly with several protections.

In a real estate transaction, the Financing Contingency is the clause that gives buyers time to secure the financing for the purchase of a property — usually through a mortgage with a lending institution — within a specific time period. If a buyer is unable to secure financing, they can void the contract using this contingency and avoid legal penalties or losing their EMD (earnest money deposit.)

The most common types of financing are Conventional (the most popular), VA (for veteran and military buyers), FHA (great for first-time homebuyers and those with limited cash for down payments and fees), and USDA (for properties in rural areas).

Financing contingencies can have an automatic extension or an automatic termination, and a buyer can satisfy or remove the contingency by delivering to the seller a written commitment from the lender for the required financing. If a buyer misses the financing contingency deadline and has an automatic extension, the seller can deliver a written notice to the buyer that they have three days to remove the contingency or void the contract. However, it’s more likely that the seller will allow a contingency to remain in place up until settlement as lenders complete their final underwriting tasks.

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We’re thrilled to share some exciting news with you — McEnearney Associates | Middleburg Real Estate | Atoka Properties has joined forces with Corcoran, one of the most esteemed names in real estate. We are now Corcoran McEnearney!

What does this mean for you? It’s simple: the same trusted service and local expertise you’ve always relied on, now paired with the global reach, cutting-edge resources, and industry-leading innovation that Corcoran brings us.

This partnership enhances our ability to serve you better, whether you’re buying, selling, or investing. With Corcoran’s renowned network and our unwavering commitment to your success, we’re confident this marks a new chapter of possibilities for your real estate journey.

If you have any questions about this exciting change or how it benefits you, please don’t hesitate to reach out. We look forward to continuing to provide you with exceptional service as Corcoran McEnearney.

More Than 40 Years of Exceptional Service

The first McEnearney Associates office opened in 1980 with John McEnearney at the helm, whose personal commitment to offer best-in-class service with the industry’s best agents set the foundation for the company. More than 40 years later, the McEnearney name has continued to uphold this foundation while steadily growing to include more than 420 agents and 40 support staff across 13 offices, located throughout Washington, D.C., Virginia, Maryland, and West Virginia.

Today, Maureen McEnearney Dunn, daughter of John McEnearney, is the President of Corcoran McEnearney, having been a part of the company since its inception and holding her current position since 2007. Throughout her tenure, Dunn has brought visionary leadership to grow the firm sevenfold, transforming its operations and expanding its market presence significantly.

Under her leadership, the firm has recruited top talent and fostered success amongst the agents, while focusing on marketing, education, training, relocation, and technology to keep the company ahead of the curve. Deeply committed to industry and community involvement, she has served on the Northern Virginia Association of REALTORS® Ethics and Professional Standards Committees and has led hundreds of key fundraising initiatives including the Capital Area Food Bank, Arlington Food Assistance Center, At Home in Alexandria, SCAN, Act for Alexandria, Share of McLean, and more.

“The authentic culture and dedication to excellence with the Corcoran^® brand has always aligned seamlessly with the core values of McEnearney,” said Dunn. “Corcoran’s robust marketing strategies and expansive network can help equip our agents to deliver even greater care and support to both new and loyal clients. We are energized by the immense growth potential this partnership brings, reinforcing our commitment to delivering the exceptional service that has defined our company for 45 years.”

Depth of Industry Leadership

As a strategic growth merger, McEnearney Associates joined forces with Middleburg Real Estate/Atoka Properties in June 2023. Having led successful careers as agents, Peter Pejacsevich and Scott Buzzelli founded Atoka Properties and acquired Middleburg Real Estate in 2008. Initially drawn to Middleburg, Virginia, for its strong heritage and deep history, the team channeled their personal interest and successful business into establishing a premier brokerage serving Virginia and West Virginia’s countryside and beyond.

Now operating as Principal & Chief Operating Officer of Corcoran McEnearney, Pejacsevich brings his strong business acumen and global perspective to continue driving the company’s presence and growth throughout the greater Washington, D.C. metro region. His extensive industry experience in luxury sales and track record of success provide him with a profound understanding of every level within the business. This deep-rooted expertise allows him to drive innovation and enhance overall operational efficiency, ultimately contributing to the firm’s continued long-term success.

“This partnership has been a natural fit from the beginning,” said Pejacsevich. “The Corcoran^® brand’s genuine spirit resonated with us – values of service, integrity, market expertise, and neighborhood fluency, affirming that together we could achieve something even more impactful in our market. While maintaining independence, we now gain access to cutting-edge technology, refined marketing strategies, an expanded network, and enhanced resources.”

Joining Dunn and Pejacsevich on Corcoran McEnearney’s executive leadership team is David Howell, Executive Vice President & Chief Information Officer. Howell is a recognized industry leader who, among other distinctions, is a member of the Hall of Fame for both Virginia REALTORS^® and the Northern Virginia Association of REALTORS^®, where he also formerly served as President.

The Corcoran McEnearney executive team also includes Scott Buzzelli, Chief Strategy Officer; Jeanne Choi, Chief Marketing Officer; Kristen Doczkat, Chief Financial Officer, and a strategic growth team. Complementing this executive team, Corcoran McEnearney is further supported by five exceptional Managing Brokers, skilled corporate department leads, and dedicated office managers.

“We are thrilled to welcome Corcoran McEnearney, an impressive and well-respected company with a well-earned reputation for excellence and integrity,” said Stephanie Anton, President of Corcoran Affiliates. “By joining forces, our network is gaining invaluable expertise and presence in a major world market, while providing the tools and resources to further strengthen Corcoran McEnearney’s high standards in client service and agent support.”

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.

Corcoran McEnearney, 109 S. Pitt Street, Alexandria, VA 22314, corcoranmce.com. Each office is independently owned and operated. Equal Housing Opportunity.

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 a title company?

Answer: In a Virginia real estate transaction, the buyer is allowed to select which title company they would like to use. Most buyers, however, especially first timers, don’t have a preference, and likely don’t even know what a title company does. So why does it matter? And how do you choose?

Quick Note: “Settlement” and “Closing” are used interchangeably here, as are “Title Company” and “Settlement Company”

Most likely, your trusted realtor will have one or two recommendations for a settlement company that they’ve worked with before, and have contacts that they trust to get you to the finish line.

But what does a Title Company do? To start, they typically hold the Earnest Money Deposit in an escrow account and distribute it accordingly at settlement.

Then, they get to work on the title search.

At settlement, both the deed and the title will be transferred to the buyer. The basic difference between the two is that the deed is tangible, whereas the title is more of a concept.

The deed is a legally binding document that contains a property description, so that it is clear which property is being transferred. The chain of title, however, is all the parties who have rights to the property. If there are unpaid contractor fees, for example, that contractor could have put a lien on the title. That means that they have partial rights to ownership until the debt is cleared.

A title search will ensure that there are no surprises in terms of ownership of the home, and the seller does in fact have the legal right to sell the property. The settlement company will also provide you with title insurance, just in case there is a hidden or fraudulent issue that arises after settlement.

Even though they are chosen by the buyer, the settlement company is a neutral third party who prepares the paperwork, conducts the closing with a settlement agent/notary, records the documents with the county and distributes funds at the appropriate time.

Whichever company you decide to work with, it is important that there is a point of contact who is easily reachable and responsive to questions.

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

This week’s Q&A column is sponsored and written by Brian Bonnet, Senior Loan Officer (NMLS ID# 224811) of Atlantic Coast Mortgage, LLC (NMLS ID# 643114). To learn more about current mortgage rates and the home loan process, contact Brian at 703.766.6702 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: Are there loan options to help a buyer purchase and renovate a fixer upper?

Answer: Let’s face it, when purchasing a new home, most of us would prefer to purchase one with upgraded kitchens and baths, a new roof, new windows, new systems, and our favorite paint colors — oh, and in the ideal location. Most of us would also like to win the lottery.

None of those are realities for most people.

The housing market continues to struggle with a level of supply that is not keeping pace with demand. Buyers are competing for too few available houses and properties deemed “fixer-uppers” get less prospective buyer attention. However, these properties have untapped potential and should not be overlooked if a buyer is willing to take on the home improvement challenge and can identify the means to finance the effort.

As different properties require various levels of effort to improve them, the methods of financing those improvements can also differ greatly. Some buyers are flush with cash and have enough to cover a large down payment, closing costs, and improvements. Others struggle with how to meet the minimum cash requirement just to purchase a home. Just as homes differ in big and small ways, buyers need financing options that differ as well. Here are some general questions to consider.

Instead of making the down payment I had planned, can I make a smaller down payment and cover the cost of improvements with the cash I have retained? 

The smaller down payment means a larger loan, which requires a higher monthly payment. But since we are talking about fixer-uppers, the starting price for the home is presumably lower and therefore the loan amount is lower than would be the case for a home that did not need upgrades and improvements.

Can I borrow from my active retirement account to increase my cash to cover the down payment and the costs of improvements?

Most qualified retirement programs allow active participants to borrow for the purchase of a new home. The funds available can supplement or replace other savings, which can then be used to cover the cost of repairs and improvements.

Does an FHA 203K loan make sense for my particular fixer-upper scenario?

Some lenders provide FHA 203K renovation loans for home purchasers that allow them to finance 96.5% of the cost of the purchase price plus qualified improvements and renovations.

• The streamlined 203K program allows for the purchase price plus non-structural renovations and upgrades up to an additional $75,000 in cost.
• The full 203K program allows for a purchase with major renovations, up to a maximum loan amount in the Washington metro area of $1,149,825.
• The FHA programs require only 3.5% of the combined cost of the home purchase and renovations or upgrades from the purchaser.

Am I ready to take on a construction loan to turn the fixer-upper into my dream home?

Some lenders provide true construction financing, which can finance anything from a major kitchen and bath renovation to buying a vacant lot and building a new home and can be an effective method to finance the complete renovation of a true fixer-upper. Often there is great value in the “bones” of the structure and the location of that structure, but very little value in anything else associated with the property. A construction loan may be the best approach to acquiring and bringing new life to a tired, old, fixer-upper.

If you are lucky enough to find your perfect turnkey home in this competitive market, you can expect to pay top dollar for it. But savvy home buyers will tell you the best value is in properties that require some sweat equity and TLC. Keeping that in mind and identifying the best way to finance those efforts can open more homebuying opportunities in our tight housing market.

Please reach out to me or my colleagues at Atlantic Coast Mortgage to have a conversation about whether a construction loan works for your homebuying goals.

If you would like more information about financing a mortgage in today’s market, please contact Brian Bonnet at [email protected] or call 703-766-6702.

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

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: When do you need a licensed contractor vs. a handyman?

Answer: There comes a day in every homeowner’s life when you realize it’s time for reinforcements. Whether it’s a leaky pipe, a new electrical box, replacing an appliance, or drying a wet basement, finding a fix starts with choosing the right expert for the job. However, not all home projects are created equally, so how do you know whether to call a handyman or a licensed contractor?

(Renters, you will call your Landlord or Property Manager!)

The main differences between a licensed contractor and a handyman are the type and size of jobs they work on, their licensing requirements, and how many people they supervise. Contractors typically work on larger projects, like home additions or renovations, while handymen usually work on smaller projects and home maintenance.

When it comes to licensing, do your research for the requirements in your area as some handyman work may require a contractor’s license. For example, there are three levels of general contractor license in Virginia, based on the size of the job being performed. The lowest level of general contractor’s license, a class C license, allows for residential contracting jobs between the amount of $1,000 and $10,000, including materials and labor, while Class A contractors perform or manage construction, removal, repair, or improvements for projects $120,000 or more, or when costs for any12-month period is $750,000 or more.

A handyman may do work that includes painting, drywall repair, window or door repair, replacing faucets or electrical outlets, swapping out light fixtures, laying carpet, hanging curtains, or installing shelves.

For smaller jobs that can be completed in a couple of hours or a day or two, homeowners can check out popular options on sites like TaskRabbit and Thumbtack — like Uber or DoorDash for home projects, complete with client reviews — or Angi (formerly Angie’s List), which also offers contractors for larger jobs. Handyman fees can be charged by the hour or per the project and generally don’t require signing a contract.

States often require a contractor’s license for jobs that cost more than a certain amount, require structural changes, or involve electrical, plumbing, or HVAC work. Sometimes the project may require a permit for work being contracted, including these examples:

• New windows. Replacing an existing window does not need a permit, but cutting a hole for a new window does. This includes new doors and skylights.
• Most municipalities require permits for siding projects whether you use strong cardboard or other materials.
• Not all fencing projects require a building permit, but cities often place restrictions on non-permitted fences. For example, in Maryland’s Montgomery and Prince George’s Counties, a permit is needed for fences 4-feet or higher while in Howard County it’s 6-feet or higher and in Calvert County it’s 7-feet or higher.
• Electrical and plumbing. If you’re installing new or removing current plumbing permits, you’ll need a permit. Any improvement project that includes installing a new electrical system also requires a permit.
• Water heater. You need a permit if you want to replace your water heater.

Who can apply for permits, expiration dates, and other details vary based on the type of permit required so be sure to check your local jurisdiction to confirm whether it will be you as the homeowner or the contractor who will apply for the appropriate permits. Regardless of whether you’re hiring a handyman or a contractor, interview a few professionals to see who fits best based on their expertise and how they answer these questions:

• How long has your company been in business?
• What experience do you have with this type of project?
• Do you have the necessary permits or licenses?
• Do you have references?
• What is the cost estimate?
• What is the timeline for this project?
• Are you insured?

Big or small, it can feel daunting to start a home improvement project, especially if it comes up unexpectedly due to damage or a breakdown. But with a bit of research and planning, you can find a home improvement professional who will work with your timeline and budget.

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

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: How can we prepare our children to move into our new home?

Answer: I recently helped friends of mine find a home for their growing family. Moving to a new home is an exciting milestone for any family, but it can also be a challenging experience, especially for children. The process of relocating involves more than just packing boxes and signing papers; it requires careful planning and communication to ensure your children feel comfortable and secure throughout the transition. Here’s a comprehensive guide to help parents prepare their children for a move and home purchase.

1. Involve Your Children Early in the Process

Children, especially older ones, often appreciate being included in family decisions. While the final choice might rest with you, involving your kids in discussions about the move can help them feel like active participants in the process. Explain why the move is happening, whether it’s for a new job, to be closer to family, or simply for a better home. Allow them to voice their concerns and ask questions. This openness will help alleviate any fears they might have.

2. Visit the New Neighborhood

If possible, take your children to visit the new neighborhood before the move. Show them the nearby parks, schools, and other places of interest. This can help them visualize their new life and feel more at ease about the transition. If an in-person visit isn’t possible, use online maps, virtual tours, and photos to familiarize them with the area.

3. Create a Moving Timeline Together

A visual timeline can be a great way to help children understand the moving process. Include important dates, such as packing days, the last day at their current school, moving day, and the first day at their new school. Marking off days on a calendar can also give them a sense of control over the situation.

4. Encourage Open Communication

Moving can stir up a range of emotions in children, from excitement to anxiety. Encourage them to express their feelings and reassure them that it’s okay to feel nervous about the change. Regular family meetings can be a good opportunity to discuss any concerns and offer reassurance.

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This week’s Q&A column is sponsored and written by McEnearney Associates Realtors®, the leading real estate firm in Alexandria. 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: How should I prepare financially to buy a home?

Answer: September brought several positive changes to the real estate market for homebuyers, including the Federal Reserve’s decision to cut rates for the first time in more than four years, an improvement in the home affordability index by 4.1%, and an increase in household income by 3.1%.

There are even signs that home prices, while still continuing to rise in markets with limited housing inventory, are increasing at a slower rate, reporting just a 0.01% uptick for the most recent report in July.

Even better news for homebuyers in our region, seasonally adjusted monthly price changes from June 2024 to July 2024 were down by -0.7 percent in the South Atlantic division. Both presidential candidates have also announced their plans to increase housing affordability, following up President Biden’s White House proclamation in May with initiatives for tax credits, cash grants, elimination of some fees on federally-backed mortgages.

While homebuyers in our area are definitely feeling the effects of a strong seller’s market, these small but steady shifts mean that those in the market to buy in the near future have reasons to be hopeful that a home purchase is within reach… with a bit of planning and a smart buying strategy.

Determine Your Budget & Timeline

Homebuyers should start their strategic planning by taking a detailed look at their monthly income and expenses along with their timeline for making a move, reviewing how much they need to save on a monthly basis to ensure that short, intermediate, and long-term savings goals are funded.

“There are many people who will give you the ‘Starbucks Example’ of savings and advise, ‘Just cut back on your weekly Starbucks runs, put that money into savings and you’ll start to see your nest egg grow,’” explains Chris Woods, a Certified Financial Planner and Founder of Silvis Financial.

“But it’s the overspending on the Big-Ticket items (like vehicles and vacations) that can significantly hamper someone’s ability to save money over the immediate long term. These are some of the most consequential financial choices you can make, and it’s important to think through and plan for the impact it will have on your household budget for the years and decades to come.”

In addition to keeping an emergency fund of 3+ months of monthly expenses to cover unexpected and onetime expenses, Woods advises buyers to consider other life events and goals that they might also be saving for: a vehicle, wedding, children, tuition, travel, monetary support for family members.

“A hefty, fixed monthly mortgage payment can keep you from saving for some of your life goals and limit the discretionary spending on activities that you love to do,” says Woods. “A more manageable mortgage payment will give you margin in your budget in the event that your expenses increase or your income decreases down the road.”

Build a Nest Egg

As to how to help savings grow, Woods suggests that buyers who are looking to purchase in the next 3-12 months should put their money into a high-yield savings account, adding that sometimes online savings accounts will offer higher interest rates than brick-and-mortar institutions. He suggests checking out options at NerdWallet, an online resource for many financial milestones and experiences.

For a longer timeframe, say up to 3 years, Woods suggests parking cash in FDIC-insured CDs. Keep in mind that as the Fed continues to cut rates, CD returns will also decrease, and locking in a rate now can ensure a higher return.

Line Up Your Financing

The next step in a buyer’s strategy is connected with a local lender or their current financial institution to determine a budget, clear up any credit or debt issues, and establish a timeline for the homebuying process. One reason to consider working with a local lender over a national bank is their knowledge of local programs that can provide additional money and grants to buyers who qualify. (Tip: Realtors® are a fantastic resource here, too, and can help buyers find a great lender to speak with.)

“Be firm in what you know you can afford before a lender tells you what you qualify for,” advice Woods. “This is important because a lender will look at a buyer’s income and current debt to determine the amount of loan they would qualify for, but those ratios aren’t taking into account savings and financial goals along with discretionary spending.”

Woods advises that when trying to determine how much a buyer can afford, factor in all these items alongside known fixed costs to determine how much to spend on a mortgage payment.

He shared a story about clients who looked for properties that were 20% less than what they qualified for, which allowed them to continue to fund their other financial goals while also giving them flexibility if they found themselves competing for a home and needed to escalate their offer.

A reminder for renters: utilities, parking, condominium/HOA fees, and other housing expenses are often built into the monthly rental amount. Being able to afford $3,000 in rent doesn’t necessarily mean that the same $3,000 for a mortgage is equally affordable.

Buying a home involves many moving pieces, but it doesn’t have to be overwhelming. Whatever your plans are, start a discussion now with your Realtor about getting started on the path to home ownership.

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

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: How much money do I need to buy a home?

Answer: I work with a lot of buyers and the #1 concern is — “Will I be able to afford the costs of buying a home?”

My best suggestion is to talk to a lender as soon as you are considering buying a home. They can help you strategize, even if it’s not for a year or more that you plan to buy. They can save you precious time in avoiding looking at homes that will not work for your budget. They can help you fix things on your credit report so that you aren’t surprised at the last minute with issues that can increase your interest rate. They may even surprise you with how easy it could be to buy a home.

Here are some key points to consider when buying a home.

Downpayment

While you will usually need a down payment, the most important thing to know here is that it doesn’t always have to be 20% down. In fact, most of the buyers that I work with are putting much less of a down payment towards the purchase price.

If you are past or present military, you may qualify for a VA loan, which does not require a downpayment at all. Most buyers will need to put something down, though.

For a conventional loan, you will need to put between 5% and 20% down. The lower amounts usually apply to first-time home buyers, and if you can afford the 20% down, it will help you avoid a monthly mortgage insurance fee (PMI). Again, a lender can help you figure out your options.

There are also some First Time Home Buyer Grants. Virginia has a Down Payment Assistance Grant that never needs to be repaid. There are income limits, but last time I checked, the limit for 2 people was $141K and the max home sale price was $750K. Be sure to ask your lender about this. I have some lenders that I can recommend that know about this program. Just ask!

Closing Costs

When purchasing a home with a mortgage, there will always be some closing costs. This tends to be about 2% of the sales price, but every situation is different, and they could be higher, depending on your situation. It depends on the type of loan you are using, plus there are standard costs factored in, such as appraisal, title insurance, attorney’s fees, taxes, and more. It’s best to discuss this with your lender in advance.

Your Realtor can send a specific home to the lender and they can give you an estimate on all costs. They can also send the info to their trusted settlement company for an estimate. However, your lender will need to weigh in as well.

Realtor Costs

You should also find a great realtor early in the process. They can help you start shopping neighborhoods and understand the process of buying a home. They have a fee for their services, and when you sign your buyer representation paperwork with your Realtor, this fee is outlined.

However, the fee is usually not collected until the time you purchase the home. When you make the offer on a home, you can ask the seller to pay the Realtor fees, which can be 2.5% to 3% or you can pay the fees. In my experience, sellers have been willing to pay the buyers agent compensation.

In conclusion, my best advice is to talk with a lender and a realtor very early in the process. They are there to help you and to be sure that you are super happy with your home when you do buy. As you probably already know, lenders and realtors are your advocates for life.

Whenever you need advice on the best updates for your home over the years, or a refinance if the rates get better, and when it’s time to buy again, they want you to reach out to them and refer your friends and family. So, find those relationships early in the process, and trust them to lead you to your next home!

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

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: Is staging a home worth it?

Answer: At some point in every listing appointment, the topic of staging comes up. Should I stage? Is it worth the money? In a word, absolutely!

There are countless articles and statistics that talk about the return on investment for each staging dollar. This is twofold. First, professional stagers know how to lay out a home to maximize the impression through photographs that will bring buyers in from online searches.

Secondly, the wow factor when you walk into the home. A well-staged home is often sold before the buyer leaves the main floor. First impressions can mean everything!

So, What is Staging?

Staging is the process of preparing a home for sale. There are many levels and elements to staging. It can be as simple as decluttering. Or it may mean full professional staging. There is also painting and remodeling. Does the home need a little touch-up paint or a new kitchen? Obviously, homes vary greatly depending on the condition and the means and goals of the sellers.

First things first. As Realtors, we would like every seller to understand when discussing staging. We are terrified we are going to offend you and we have no desire to do so. This will likely be the most uncomfortable, difficult conversation we will have with you. We are not looking forward to telling you that gorgeous expensive antiques need to go. It’s not personal. We simply know, homes that are staged with fresh paint, house appropriate neutral furnishings, and carefully arranged accessories sell faster and for more money. Blame HGTV if you would like. But it’s true.

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This week’s Q&A column is sponsored and written by Brian Bonnet, Senior Loan Officer (NMLS ID# 224811) of Atlantic Coast Mortgage, LLC (NMLS ID# 643114). To learn more about current mortgage rates and the home loan process, contact Brian at 703.766.6702 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.

Question: Is that condo you’re eyeing (or selling) on a lending naughty list?

Answer: Stricter lending guidelines for condominium sales mean some properties may not be eligible for certain financing.

Underwriting a residential mortgage loan involves a detailed review of the prospective borrower’s financial picture. It also involves a review of the property to be pledged as collateral for the loan. In the case of loans for condominiums, that review extends beyond the information included in a property’s appraisal report.

Most lenders choose to make sure the entire condominium project is approved by the U.S. Department of Housing and Urban Development (HUD) for FHA loans and the Department of Veteran Affairs for VA loans.

In the case of conventional loans, both Fannie Mae and Freddie Mac loans require completed condo questionnaires and are obliged to check the Fannie Mae Condo Project Manager (CPM) system to determine whether a loan in a condo project is eligible for sale to Fannie or Freddie. Depending on the responses provided in the condo questionnaire, the lender may then require additional documentation from the condominium association.

The collapse of the Champlain Towers Condo building in Surfside Florida in 2021 has prompted many condo projects to undertake engineering studies of their structures and the lending industry to ascertain whether a condo project presents collateral risk. This increased scrutiny has led to a considerable number of condo projects being listed as “unavailable” within the CPM system.

My recent review of the “unavailable” condo project list for the District of Columbia revealed 30% of projects were on the list because critical repairs are needed and/or the project has significant deferred maintenance. As more condo projects undertake engineering reviews of their structures and facilities, it is likely more projects will be listed as “unavailable” and therefore ineligible for conventional financing until those identified deficiencies are corrected.

The inability to obtain financing for a unit in a condo project is problematic for both purchasers and sellers. Condominium Associations and management companies should be proactive in understanding the requirements of the mortgage industry in order to avoid being deemed ineligible.

When a project does obtain the status of “unavailable,” those condominium associations should be equally proactive in making corrections and communicating with Fannie Mae in order to be removed from the unavailable list as quickly as possible.

Please reach out to me or my colleagues at Atlantic Coast Mortgage for more information about condominium loans and how to find the right lending program for your needs.

If you would like more information about financing a mortgage in today’s market, please contact Brian Bonnet at [email protected] or call 703-766-6702.

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