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Virginia Beach Real Estate Blog

Judy Reed


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Debating Between a Condo or a House...Which is right for you?

by Judy Reed


Buying a home is one of the biggest and most important decisions you’ll ever make. Whether you are a first-time buyer, or a veteran homeowner looking to trade up or make a new start, you will inevitably be faced with a number of questions. Your answers will lead you to the home that’s right for you.

One of the most fundamental questions all homeowners face is whether to buy a condo or single family house. There are advantages and disadvantages of each and only you can know what’s right for you.
For Boston newlyweds Michelle and Kevin Millsom, 31 and 36, it was an easy decision. With high-powered financial careers and no children, they were drawn to the excitement of the city and wanted their fingers on the pulse. They bought a penthouse apartment with a breathtaking view of Boston’s famous esplanade and Charles River.
“We enjoy everything the city has to offer—the restaurants, theatre, outdoor concerts. We walk everywhere and find the easy access to the airport to be a plus since we travel frequently for work,” said Kevin. “When we have children, we may think about a house in the suburbs, but for now this is where we want to be.”
Like all things, living in the heart of the city comes with tradeoffs. For the price of their two-bedroom/two-bath condo, they could buy a home three times the size, just a short 20-minute commute away. They share decision-making for their building with fourteen other tenants and pay pricey condo fees to cover the costs of insurance and upkeep. Their car sits idle most of the time in a $300 per month rented parking spot only to leave for short jaunts to the grocery store or visits to see family. But for Kevin and Michelle who want to spend their spare time out and about, the location and convenience can’t be beat.
On the other hand, Adriana Forte, 62, lives in a condo in the Boston suburb of Arlington and misses all that a single-family home has to offer. Six years ago, after her divorce, she bought a “condex,” (a two-family home with a shared wall) with the belief that managing a home would be too much for her alone. But it turned out to be the wrong decision for her. Now, she is desperately seeking a single-family house to call her own.
“It’s difficult to live with neighbors so close,” Forte said. “First there was the noise. My neighbors are night people, and every night they are just getting geared up when I’m trying to sleep. Then I found myself handling 100 percent of the finances and maintenance of the duplex—without compensation. I may as well be living in my own house!” Forte also misses the fresh air and private outdoor space. For her, maintaining a home and garden is pure enjoyment. The privacy is what she misses most.
What is most important to you? Give consideration to the following:
  • Location – Where do you want to be? Are there options for both condos and single-family houses in this area?
  • Privacy – Is it important to you to have complete privacy or do you find close neighbors to be a comfort?
  • Responsibility – Do you need total control over decisions affecting your home or are you attracted to the idea of sharing decision-making with your neighbors?
  • Maintenance – Are you a homebody who enjoys getting dirty in the yard or are you delighted with the idea of never having to cut a blade of grass again?
  • Budget – How much do you have to spend? Depending on where you want to live, a condo may be the only option that meets your budget.
These considerations and others will help you determine the best choice for you now. And just remember, if your interests and priorities change in the years ahead, you can always sell your home and make a move, this time with experience as your guide.

4 Steps to Take Now for a Faster Home Sale Next Year

by Judy Reed

A home sale typically comes as a result of a life change or a major decision. These decisions don’t usually happen overnight, providing homeowners with years to plan for a successful home sale. By using your time wisely, you will maximize your home’s value when you want to list and sell.

On your way to this point, you should be open to spending money in preparation. Investing in strategic home improvements will help facilitate a quicker and more profitable sale.

Selling a home is a large financial and emotional transaction — likely the largest in a lifetime. This makes strategic planning and counsel vital. Here are some steps you should take a year or more before you plan to list your home.

Connect with a local real estate agent

Real estate agents shouldn’t just show up, list a home, hold an open house and move on. Instead, they should be valuable assets to you years before listing. Connecting with a local agent and developing a relationship well in advance allows you to start learning the market and transitioning from the mindset of a homeowner to that of a seller.

A good agent will provide helpful information, advice and assistance on an ongoing basis, in hopes of working with you on the eventual sale. Work with an agent who can connect you to local resources like inspectors, painters and other service providers.

An agent can also assess your home’s condition and suggest small to medium-sized improvements that will help boost your home’s value. Prioritize these projects for the months or years leading up to the sale.

Have a formal property inspection

For a few hundred dollars, you can have a licensed property inspector assess the home’s major systems and components. You can take this step up to two years before you will list your home.

Why would you want to have someone come and point out your home’s flaws before selling? Because it’s better to know about any issues upfront so you can address them before your potential buyer discovers them.

Additionally, you can put a financial plan in place to pay for any needed fixes. Dry rot on your back deck could cost $500 to remedy now, but you’d be better off handling it now than having a buyer see it as a major decking/structural issue and request $5,000 when you are weeks away from closing and your back’s against the wall.

Make improvements

A year before you will list, spend the extra time and money ensuring that your home both appeals to mainstream buyers and passes a potential buyer’s property inspection.

If your agent suggests cosmetic fixes like laying new carpet, painting cabinets or cleaning the yellow grout in the bathroom, put a plan in place to tackle each of the projects. Waiting to the last minute will be too stressful, plus you won’t get the enjoyment out of the cosmetic fixes.

If you know your roof is at the end of its life, it might be more economical to replace it so that you can advertise a new roof. Today’s buyers want homes that are move-in ready. They don’t have the time or resources to take on projects. The more issues you can resolve for them, the more successful your sale.

Get a home warranty

A home warranty is like a one-year insurance policy that addresses your major (and minor) appliances and most systems. If something breaks, you can call the home warranty company, not the appliance repair technician or plumber. For a small co-pay, they will come out and repair or replace the item swiftly.

If your home has some issues, a home warranty is a great way to address them without having to spend weeks or months shopping around, getting bids for work and seeing through each repair. A warranty works well when you list the home and are too busy to call around getting bids.

Moving is tough, in and of itself. Add prepping a home for sale and your move becomes more emotional and stressful. Planning ahead can help you address issues in advance.

Don’t wait until the last minute, or you risk leaving money on the table. Meet with an agent early on and put a timeline in place to get the most of your home’s sale — fast.

5 Credit Habits to Break in 2015

by Judy Reed

Ready to win your financial resolutions? Find out how to succeed in 2015.

If you’re identifying 2015 — or even 2016 — as the year you make a major housing change, you’ll want to confirm that your credit behaviors are at their best. Buying a house is probably the biggest expense most of us ever take on in life. Your credit plays an important role in affording you access to the best terms available from your lender.

If credit is on your list of things to improve next year, there are many options to tune up the ways you think about and interact with your credit. Knowing the smart solutions to improve your credit habits can take you far in the new year — especially with a big purchase ahead.

1. Being disconnected 

Habit to break: Not checking your credit report

Resolution to make: Check your credit report regularly to know where your credit stands, and to make sure you’re prepared when it comes time to buy a home. Consider your credit report the road map to all your credit behaviors: It’s important to know how your report will look to lenders and others when they see it for the first time.

2. Overspending

Habit to break: Running up or maxing out your credit cards

Resolution to make: To show others you’re using credit responsibly, keep your spending under control and in accordance with the budget you’ve set. Keeping tabs on your spending now will also help you benchmark how changes to your budgeting will affect how you spend after your home purchase.

3. Managing balances

Habit to break: Just paying the minimum balances due on your accounts

Resolution to make: Bring down the balances you’re carrying by upping your payment amounts above the minimum — this can also save you interest over the long term. You’ll want to keep that extra money in your pocket (and hopefully earning some interest) while you look for that dream property.

4. Seeking too much 

Habit to break: Applying for credit indiscriminately

Resolution to make: Seek out and accept new credit sparingly, so your credit-utilization rate won’t be seen as too high when applying for credit during your home-buying process. Lenders can be wary of applicants they feel might be trying to amass excessive credit and overspend.

5. Getting behind 

Habit to break: Making late payments on your accounts

Resolution to make: Stay on top of your accounts to keep all your payments on time, every month — it’s even more important in the months you’re considering a big purchase like a home. It may be the most basic but most important way to show you’re consistently being responsible with your credit obligations.

Challenging yourself by making it your New Year’s resolution allows you to take advantage of the months before your new home search begins to kick bad credit habits to the curb for good. You’ll want the peace of mind of knowing that when you discover that perfect listing, your credit is already in tiptop shape.


How Does the Color of Your Home Affect Buyers?

by Judy Reed


It’s no secret that color is crucial when marketing a product. In fact, consumers come to a subconscious conclusion about a product within 90 seconds of viewing, and much of that judgment (62-90 percent) is based solely on color, according to the Institute for Color Research. Retailers apply these findings every day (think red sale signs) to encourage consumers to purchase their products. Can the same be said in real estate?

Consider this: If color influences product marketing strategies, the color of a home can be a decisive factor when selling.

“Your home’s exterior color is literally the first thing a buyer will see and comment on,” says Suzanne Otto, home stager and owner of Six Twenty Designs in Montgomery County, Pa. When preparing a home for the market, Otto recommends shades within the white, tan or gray color families. These colors resonate beyond pure aesthetics – according to e-commerce giant eBay, white indicates safety. For a homebuyer, a home with a white exterior can translate to concepts like “shelter” or “safe haven.”

Similarly, understated browns (including the aforementioned tan) signal security. Homes painted in sandy or mushroom hues read comfort and warmth. Colors like taupe, which falls somewhere between brown and gray, call to mind traditional values, homeownership included. Earthy tones like laurel green or artichoke can not only highlight a verdant landscape, but also evoke a sense of tranquility.

Per eBay’s assessment, blue is ideal to move product because it transcends culture. Homes outfitted with a dusty blue or blue-gray exterior may not bridge the gap between your everyday seller and an international homebuyer, but a universally regarded color can help widen the net for buyers on the home front.

If red signs boost retail sales, it seems likely a red home would be ideal for a speedy sale. Not necessarily – red in small doses, such as sale stickers or tags, encourages action. Red on a grander scale can cause adverse reactions. An alizarin crimson door, for instance, might be well-received by buyers, but a house in the same shade could potentially limit offers.

Homes in other colors can sell successfully – our retinas tend to register yellow before any other color, so a buttery yellow exterior could be an attractive option for buyers – but non-traditional colors, like oranges and purples, appeal to very specific personalities and can significantly shrink the pool of interested buyers.

It’s important for sellers to consider the home in relation to the neighborhood before swapping out the exterior color or refreshing an existing paint job. Do nearby homes share a distinct color scheme? Is each home uniquely colored? Evaluating the home’s surroundings can help sellers determine what’s most popular in their market.


Should I Buy a Home Now?

by Judy Reed

I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall further than they have already. They are assuming that the best course of action is to wait for the bottom in the market and then buy. The problem with this approach is that you don't know where the bottom is until you see it in the rear view mirror, meaning until you've missed it!

Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates go up, it could cost you even more to service a mortgage on an identical home!

While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.

Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.

Pros and Cons of Buying a Foreclosed Home

by Judy Reed

Five years ago, a home buyer could spot a bank foreclosed home a mile away. They were abandoned structures, stripped of all appliances and fixtures, with unkempt landscaping and falling down “For Sale” signs.

Today, banks often renovate their REOs (also known as bank real estate owned) before listing in hopes of selling to end users, not contractors or investors who will capitalize off the bank’s loss.

Banks know the market has improved, and they aren’t as desperate as they used to be. They want to minimize their loss on each sale — not simply sell as quickly as possible. This creates some potential risks and rewards for home buyers considering purchasing a foreclosed home.

To help you make a smart decision, here are some pros and cons for buying a foreclosed home in today’s market.

PRO: They are still cheaper

Today, bank foreclosed homes are typically about five percent below a comparable house in the same location that is not a foreclosure. In previous markets, they were often in horrible condition and about 15 to 20 percent below market.

While many new buyers set out in search of the deal that comes with these sales, many REOs should be left to more experienced home buyers.

CON: Foreclosed homes can be very risky

Even though they are priced higher today, REOs still come with baggage. Many banks will invest money to make the listings look nice and get the prices up. In return, they are less flexible on price and less eager to sell in general.

Behind the scenes, these are still risky sales. You don’t know about the history, and there are no disclosures about leaky roofs, mold or crime. And you are forced to buy the home “as is,” without any recourse if things go wrong.

Investors were once fine with this risk, but they are less interested today because the “deals” are gone.

CON: Many are not in prime locations

Many of today’s foreclosed homes are in less desirable parts of towns or school districts. If you see an REO and the price looks good, remember that it may not be the foreclosure that makes it such a great bargain. It could be location, and you don’t want to get stuck unloading a home in a bad location in a few years. Foreclosed homes in good locations will sell quickly.

CON: Banks aren’t people

Consider that you are negotiating with a spreadsheet. Unlike a typical seller who may care about your situation, your personal background or market history, banks don’t. Your offer is likely submitted electronically and placed into a cell on a spreadsheet for an asset manager to consider. If the numbers don’t work, expect a big rejection. Never get your hopes up.

Buyers today can’t assume that a bank-foreclosed home is a good deal. While you can still find a needle in the haystack, they are fewer and farther between.

Banks want top dollar out of their foreclosure inventory. They are sellers just like anyone else. They watch the market and read the headlines. Foreclosed homes will be priced slightly lower than the market, but they are still as-is, take it or leave it with some risk associated.  


4 Ways to Tell How Fast Your Home Will Sell

by Judy Reed

for sale

It’s not just location, location, location — although location is certainly important. Lots of other factors make one house hot and another one not.

Here are data-driven pointers from Zillow Research that help identify which homes are likely to fly off the market (in 60 days or less):

  • Keep calm and price it right. The housing market is improving, but take care not to overheat your listing price. Homes priced more than 12 percent above their Zestimate® home values are almost half as likely to sell in 60 days as those priced closer to their estimated values. The sweet spot is between the Zestimate and six percent above it — a range where homes sell about as quickly as those priced below their Zestimates.
  • Take a picture, but not too many. The optimal number of listing photos is 16 to 21, but it’s better to have too many than too few. Having fewer than nine photos lowers your chances of selling in 60 days by two percentage points.
  • Size matters. As a rule, smaller homes (under 1,100 square feet nationally) sell the fastest — about nine percentage points faster than the largest homes in a 60-day window — but that doesn’t hold true for all markets. In San Francisco and Indianapolis, for example, small homes take the longest to sell.
  • Get the word out. Page views on Zillow are a strong indicator of how quickly a home will sell. Listings with 280 or more page views in the first week were three times as likely to sell in 60 days as those with fewer than 100 views. That’s powerful incentive to make sure your agent spreads the word early by posting your listing online.

Before you start going to open houses, pay down high interest debt now.

The higher the interest, the higher your priority should be in getting it squared up quickly. Many people pay close to the minimum on their credit card debt in favor of growing their savings, despite the fact that their payment often doesn’t even cover interest. Monthly interest for credit cards for people with near perfect credit can still hover around ten percent or more, often double or triple your student loan payments.

buy-house-student-debtPay down your cards as quickly as you can, and only use them in an emergency situation. With this extra interest-payment savings, you can pay additionally on your student loans, lessening their overall burden, or tuck away money for a down payment. This will improve your credit score too, helping you get better terms on your loan.

Be mindful of your Debt-to-Income ratio.

One of the biggest factors for people who can’t get a loan despite having a good job and some savings is their DTI, or Debt-to-Income ratio. Lenders study your monthly income compared to how much you spend paying down debts such as your loan payments, credit cards, auto loans and any other installment or revolving debt.

This is among the biggest hurdles for people with student loan debt in getting loans. Look into where your DTI is early in the process so you know how far away you are from securing good terms on a loan, then make actionable steps toward that goal before you sit down with a lender.

Investigate down payment assistance programs.

Chances are if you are making payments towards your student debt, you aren’t putting a large amount of money aside for your down payment. Many young people who have smaller savings look immediately to FHA loans, but especially in high dollar metros in places like California or New York, your FHA standard 3.5 percent can still cost tens of thousands of dollars (plus, many have higher interest rates and require mortgage insurance).

Every state and many cities have programs in place to assist qualifying homebuyers in paying their down payment. Whether they’re helping first time buyers or stabilizing neighborhoods, down payment assistance programs can be a great help to buyers whose savings have been affected by their debt load.

Consider crowdsourcing.

Sometimes the needs of the market lead people to innovate in ways wholly unfamiliar to generations before them. For our parents’ generation, signaling a stranger to drive you around was called hitchhiking; for our generation, we call it Uber.

The same type of dynamic exists in financing your investment. If you’re starting out with debt, getting more people on board or looking for a different way to kick off your investment can lessen the initial weight you carry. Alternative approaches to financing, from crowdsourcing collectives and co-ops to pitching in with trustworthy friends to get off the ground, are becoming more popular as the cost of buying a home increases in major metros.

Other alternative financing strategies such as buying owner-financed homes, rent-to-own and developing vacant land are also growing in popularity among creative youngsters looking to get started sooner rather than later.

Distressed properties.

Swing a hammer like your grandpa did. Chances are, if you are a young and indebted person with limited assets to work from, a distressed property that needs some renovation will be more in your range than a new or updated turnkey home. Do what you can yourself to save money on contractors. Remember to consider the cost of your renovation and the degree of repair that is needed; the cost of contractors can vary widely from region to region based on demand and availability.

first-propertyBuy wisely.

Above all, buy a home that is going to make you money, not just the one you can afford. Thanks to advances in real estate data, we are learning more and more new things about the types of trends that appeal to different buyer demographics. Buying a home with a higher walk score, for example, can boost your rate of appreciation more than homes in car-reliant neighborhoods according to several studies.

Know about buyer trends and get a home that will earn you money in the long term, rather than trigger migraines. People whose lending options are limited may feel pressured to aim lower on the quality and location of the home they invest in for obvious reasons, but often it’s better to wait than buy an unmarketable property.

With time and patience, young people who are still paying off their education can get started on buying a home. Growing an investment with a moderate student debt burden requires preparation, but it can be done — and done successfully!

If done right, buying an investment property can provide you with the type of financial security that even makes it possible to pay off your debts more quickly than expected.

How to Refinance a Jumbo Mortgage for Less

by Judy Reed

If you’re completing a refinance on a home that you owned for less than 12 months, some jumbo financing investors may also require you to refinance using a different loan, such as a loan issued by Fannie Mae or Freddie Mac. Furthermore, some jumbo investors have a requirement that specifically states if you’re refinancing a home that you’ve owned for less than 12 months, the original purchase price needs to be used as consideration for the value no matter what the current market supports.

Still if you plan to refinance this year, you would be well served to ask your mortgage company to qualify you on their jumbo programs, if they offer any, as well as the traditional Fannie Mae/Freddie Mac loan so you can determine which mortgage loan program will align with your payment, cash flow, and equity objectives.

If rising mortgage rates have spooked you into refinancing but your loan size is more than $417,000, pay particularly close attention. Traditionally, these loans cost homeowners more, but there are new investors in the marketplace offering better rates and deals on larger mortgages.

The big question to ask

It doesn’t matter where you apply to refinance a mortgage—whether it’s a bank, credit union, mortgage broker, or even a direct lender—the investor determines whether your loan will cost more or not.

Fannie Mae and Freddie Mac purchase loans up to the maximum conforming loan limit, designated by county—it’s often $417,000 but can be as high as $625,000 in high-cost markets. For example, in Sonoma County, Calif., it’s $520,950.

In terms of pricing, Fannie Mae and Freddie Mac loans are ideal if your loan is $417,000 or lower. However, any loan of $417,001 or more that goes to Fannie Mae or Freddie Mac will likely cost more than if it were going through a different investor. So make sure to ask your lender: “Where’s my loan going?”

Up until recently, Fannie and Freddie have been the main players for loans above the maximum loan limit. Just this year additional jumbo investors have entered the market—including Wells Fargo, Chase, and many others, and they’re buying loans made by banks, credit unions, brokers, and direct lenders.

Jumbo investors offering an alternative

Ask your mortgage company about its “jumbo” mortgage offering. This would be especially beneficial if you’re trying to refinance a loan size bigger than $417,000, because jumbo investors specifically cater to this market.

This means that jumbos may even be lower-priced than loans $417,000 or under—which are the ones that are normally considered the best-priced mortgages in the marketplace. Working with a jumbo investor may help you avoid being subject to the pricing adjustments (a big driver of cost on mortgages) that Fannie and Freddie impose, which could help you refinance for a lower interest rate and payment.

Let’s compare Fannie/Freddie to a jumbo investor:

Other times the jumbo option may make sense

There are some other potential advantages to working with a jumbo investor. Let’s say you have a first mortgage on your home at $400,000 and an $80,000 home equity line of credit that you would like to consolidate into one. Fannie Mae and Freddie Mac would consider this scenario to be a “cash out refinance” because the added HELOC debt wasn’t used to acquire the home, and your mortgage company will charge you more for the loan being over $417,000 and for “cash out.” You could expect as high as .5% of the loan amount being absorbed either in the interest rate or paid for by you (based on whatever interest rate you choose) at close of escrow or paying in cold hard cash at closing.

A jumbo investor, however, will likely consider the loan in this scenario to be “rate and term,” which offers better pricing.

It’s important to remember that some jumbo investors recognize a jumbo mortgage loanto be anything bigger than $417,000. Other jumbo investors characterize a jumbo mortgage to be anything bigger than the maximum county conforming loan limit. So be sure to talk to your mortgage company when discussing jumbo loans.

Jumbo credit still tight

While pursuing a jumbo mortgage refinance, credit requirements for these loan types are still relatively tight. These programs want strong borrowers with good credit, a low debt-to-income ratio and equity in the home. For example, if you’re trying to roll HELOC debt into the refinance, there can be no draws on the home equity line of credit in the past 12 months. (Before you begin your refinancing process, it helps to have an idea of your credit standing—you can get a free credit report summary on to see where you stand.)


Open House This Weekend!

by Judy Reed

Come see us this Sunday, 6/21/15 from 1pm-4pm!!


Displaying blog entries 1-10 of 16