Date Archives: October 2022

According to Redfin, a national real estate brokerage, there's a pretty good chance you can find a condo or co-op that'll cost you less to own per month than it would to rent one!

Landlords have every right to get as much for their rental as possible. If there are renters who are ready, willing, and able to pay them what they're getting per month, then the market has spoken, and that is ultimately what defines and creates the market value.

The good news is, you might be able to buy your own home and pay less per month than you do in rent!

People often presume that buying a home will cost them more than renting. It certainly can, but it doesn't always. A lot depends upon:

• Where you live
• What's available to purchase
• How much homes sell for in your area
• How much rents are in area

It's not a no-brainer. You have to look into those things. But most likely you won't be able to buy just any house on the market and have it cost you less per month than something you could rent in the area. That's not how it works. For instance, you're probably not going to be able to buy a 4-bedroom, 3-bath colonial on a cul de sac for less than it costs you to rent a 2-bedroom, 1-bath apartment. But, you might be able to find a 2 bedroom, 1 bath condo or co-op that'll cost you less per month than that apartment!

In fact, according to recent monthly rental market data from Redfin, there's a pretty good chance you can find a condo or co-op that'll cost you less to own per month than it would to rent one! While other types of property cost more per month to own than to rent, condos and co-ops are about $200 cheaper per month to own on average on a national level. And that's not just right now; it has been cheaper to own a condo — by even more than that at times — going back to at least April of 2019.

Again, real estate values and markets function on a local level, so you can't entirely bank on national statistics. But they're at least a good indication that there are possibilities worth looking into if your rent is creeping higher, and you'd like to have some control over how much you're shelling out every month for a place to live! In the least, it's worth asking your local real estate agent to help you figure out if there are condos (or perhaps even another type of home) for you to buy, that'll cost you less per month than your current rent.

The Takeaway:

If you're feeling like rent prices are skyrocketing, you're not imagining things. While they're driven by supply and demand in the market, some landlords are also using software that helps them not only determine how much they can get for rent, but also encourages them to avoid bargaining with renters and to be firm on higher monthly rental rates.

The good news is that you might be able to buy your own condo or co-op, and pay less per month than you would in rent, based upon national rental market data. Reach out to your local real estate agent for a more accurate assessment of the options and possibilities in your area. With offices in Charlottesville, Madison, Amherst, Orange & Culpeper, our Montague Miller & Co real estate professionals can help you with your home search!

Resources: Redfin

Some Highlights

• Even with higher mortgage rates, the mortgage process doesn't need to be something you fear. Here are some steps to help as you set out to buy a home.
• Know your credit score and work to build strong credit. When you're ready, lean on the pros and connect with a lender so you can get pre-approved and begin your home search.
• Any major life change can be scary, and buying a home is no different. Partner with a trusted real estate professional to take fear out of the equation.

Resources: Keeping Current Matters

It took a lot of dedicated effort to get your home on the market. It would be nice if you could just sit back and wait for the offers to roll in. Unfortunately, it's not that easy.

Once your home is on the market, your real estate agent will work hard to complete the sale, but you'll have to do your part to keep things moving forward. Here are five things you can do to help keep your marketing efforts on track.

1. Never say no to a showing
   When you're too tired to handle a last-minute showing, do it anyway. Home showings are a crucial part of the home-selling process. While they don't guarantee a sale, they do bring potential buyers to your door. When a home buyer decides to view your home it means that your listing made it through their initial process of elimination.
   
   Of course, no one can predict the outcome of a showing. The right buyer might walk in the door as soon as you list your property, or your sale could require multiple showings. Opening your house on demand is the best way to find out.
   
   
2. Keep your home white-glove clean
   When you open up your home for a showing, potential buyers inspect and evaluate areas of your home you might not even think about. They will notice dirty tile grout and remember dusty dining room corners, and these things could cost you a sale.
   
   It's a good idea to pay a service to do your initial cleaning as well as regularly scheduled cleanings while your home is on the market. If you enjoy doing your own cleaning, you'll still have plenty to do. You'll need to give your home a once-over before each showing or open house, and you'll want to clean up afterward.
   
   
3. Stay pet-odor vigilant
   If you have a cat, dog, or other indoor pet your realtor probably discussed odor issues early in your marketing process. You likely worked hard to rid your home of telltale odors before you had your first showing. That's great, but if your pets are still in your home, odors will be a recurring problem.
   
   If you've lived with pet odors for years, your nose might be insensitive to smells that are obvious to everyone else. It's important to stay vigilant.
   
   • Clean pet living areas regularly.
   • Use a quality pet deodorizer spray.
   • Clean up pet hair daily.
   • Remove pets, litter boxes, bowls, etc. from the premises during a showing.
   • Burn a scented candle before a showing to disguise odors.
   
   
4. Keep working on your curb appeal
   If you worked hard to give your home a look that brings buyers to your door, don't forget to keep it fresh. Getting the right curb appeal is worth the time and effort. If your home is on the market for more than a few months, you'll need to refresh the look.
   
   • Hire a landscaper to maintain your yard.
   • Keep your gutters clean.
   • Wash dirt and mud from walkway, driveways, and porches.
   • Check for new problems or issues you might not have noticed before.
   
   
5. Create a pleasant atmosphere
   When potential buyers visit your home, give them an atmosphere that says, "welcome home." Remove throw rugs and other trip hazards. Open bedroom and bathroom doors. Brighten rooms with natural and artificial light by turning on lamps and opening up curtains, drapes, and blinds.
   
   Adjust your climate control system to a pleasant temperature. Burn a lightly scented candle just before a scheduled showing, but don't forget to blow it out before you leave.

Your work isn't done until the sale is finalized. With these tips, you can ensure everything goes right with your home sale.

When you're selling your home, first impressions are everything. Typically, each home buyer is looking for something different in the house they buy. However, there are common problems that will make them walk — and, maybe, even run — out of your home if they see them. The good news is there are several things you can do to make buyers fall in love with your home.

1. Boost Your Curb Appeal
   Start with your yard. You won't believe the difference mowing your lawn, trimming hedges, picking up toys, adding fresh mulch, and raking leaves make. Best of all, improving the visual appearance of your yard doesn't cost you much. Just remember, once you're committed to selling your home, you'll need to stay on top of lawn work until the property has sold and is no longer your responsibility.
   
   If you have a plain yard, you should consider adding one or two flower beds or planting an ornamental tree to spruce things up.
   
   
2. Tweak the Interior
   Take a look at the interior of your home. Is the paint chipped, streaked, or just tired looking? Do the fixtures and door handles match? Are the outlet covers and light switches working properly?
   
   The odds are good that when you look at the interior of your home through the eyes of a prospective buyer, you'll realize that things are a bit dated. Now that you're selling your home, it's time to change that. A quick run to the hardware store for updated door fixtures, outlet covers, and paint won't cost too much. With a weekend's worth of work, you'll have given the inside of your home a facelift and made it more appealing to buyers.
   
   When choosing fixtures and, more importantly, paint, stick to neutral options.
   
   
3. Upgrade the Kitchen
   Buyers have said that the kitchen was what made them decide to place an offer on a home.
   
   If you're on a shoestring budget, you'll want to devote your funds to:
   
   - Ensuring the plumbing works perfectly,
   - Repairing and/or replacing damaged cabinet doors,
   - Making sure the kitchen is well lit,
   - Repainting,
   - Relining the shelves/drawers,
   - Refinishing hardwood floors,
   - Cleaning grout and re-grouting any damaged/crumbling grout.
   
   If you have more money to devote to upgrading the kitchen, consider:
   
   - Replacing older countertops with new granite countertops,
   - Upgrading to energy-efficient appliances.
   
   
4. Ceilings
   If your home was built prior to the 1980s and has a popcorn-finished ceiling will want to have it tested for asbestos. If the test is positive, you'll want to replace the ceiling before speaking to a real estate agent. Now that buyers understand the potential health risks connected to asbestos, they won't consider a home with the material.
   
   Even if the test comes back negative, you should still consider having the ceilings replaced. Not only does the popcorn finish give the house a dated feel, but it's also extremely difficult to keep clean or paint, which serves as a turn-off for any prospective buyers.
   
   
5. Remove the Clutter
   It's difficult for prospective buyers to fully appreciate the full potential of your home if it's full of clutter, so after deciding to sell your home, put any items you can temporarily live without into storage.

With these tactics and fixes, there's no doubt buyers will fall in love with your home. Ask your trusted Montague Miller real estate agent for more tips on how to get the most out of your sale.

If you're planning to sell your home, consider staging it. From decluttering and cleaning to rearranging and styling, successful home staging can make you money. In fact, according to the National Association of REALTORS®, most sellers' agents agree a well-staged home increases the dollar amount home buyers offer.

If you are an HGTV fan, you know home staging is when the "pros" go through a home clearing out the clutter, highlighting its strengths, and presenting each room in the best light that will attract the largest group of potential home buyers.  

But, do you need to hire a professional stager? Maybe not. Use these six tips to manage the styling and upgrading of your home to fetch a higher sales price.

1. Ban the Clutter
   Nothing turns away prospective buyers quite as quickly as clutter. For some buyers, clutter makes it impossible for them to see the home because all they can see is the mess. For others, clutter makes them feel as if the home does not have enough space for their own needs because it does not have enough room for yours. Clear away the clutter, so the home's spacious design shows through.
   
   
2. Spruce up the Front Door
   When selling your home, the front door of your home is the first thing most people notice, so make sure it really shines. Give it a fresh coat of paint, add some outside, potted plants, and a new rug. If the front door is inviting and welcoming, the home will sell faster and for a better price.
   
   
3. Place Furniture Strategically
   The placement of your furniture can add to or detract from your home. In the main living areas, put the furniture into conversation groupings rather than pushing it up against the wall. Then, in other rooms, make sure the furniture accentuates the home's positive features while drawing the eye away from negative ones. Remove some furniture, if needed, to help the room look as large as possible.
   
   
4. Spruce up a Neglected Bedroom
   Do you have a guestroom or a master bedroom that you've neglected over the years? Take some time to spruce it up. Transform the guest room into a kid's bedroom (even if you don't have kids) to make the home appealing to families who do. Make sure the bed is the focal point of your master bedroom space. Aim for symmetry where clutter rules. With these tips, your home will be much more appealing.
   
   
5. Add Lighting
   Most homes do not have the right amount of lighting for proper home staging techniques. Even if your home has plenty of natural light, you want to ensure that you have 100 watts of lighting for every 50 square feet of living space. Adding lighting on multiple levels of the room, including overhead lights and table lamps, will make the space feel warmer and inviting.
   
   
6. Clean and Organize the Kitchen, Inside and Out
   The kitchen will make or break your home's ability to shine, so spend a significant amount of time here as you stage the property. Make sure you clean it well and pack away all clutter so the countertops can be clear. Then, clean out each cupboard and pantry to make it look like it has plenty of storage space. Remember, potential buyers will be looking inside these spaces. Finally, update any outdated appliances and cover any ugly cabinets with a fresh coat of paint. Don't forget to invest in a new sink faucet if an upgrade is needed.

In a competitive market or in a situation where you need to sell your home quickly, staging is the key. Keep these tips in mind, and don't be afraid to talk to a professional stager. Often, the cost of professional staging is made back with a higher sales price and less time on the market!

Deciding whether to jump into the housing market or rent instead is rarely an easy decision – especially if you're a first-time homebuyer. But in today's whirlwind market, you may find it particularly challenging to pinpoint the best time to start exploring homeownership. 

 A real estate boom during the pandemic pushed home prices to an all-time high.¹ Add higher mortgage rates to the mix, and some would-be buyers are wondering if they should wait to see if prices or rates come down.

 But is renting a better alternative? Rents have also soared along with inflation – and are likely to continue climbing due to a persistent housing shortage.² And while homebuyers can lock in a set mortgage payment, renters are at the mercy of these rising costs for the foreseeable future.

 So, what's the better choice for you? There's a lot to consider when it comes to buying versus renting. Luckily, you don't have to do it alone. Reach out to schedule a free consultation and we'll help walk you through your options. You may also find it helpful to ask yourself the following questions: 

1. How long do I plan to stay in the home?

 You'll get the most financial benefit from a home purchase if you own the property for at least five years.³ If you plan to sell in a shorter period of time, a home purchase may not be the best choice for you.

 There are costs associated with buying and selling a home, and it may take time for the property's value to rise enough to offset those expenditures.

 Even though housing markets can shift from one year to the next, you'll typically find that a home's value will ride out a market's ups and downs and appreciate with time.⁴ The longer you own a property, the more you are likely to benefit from its appreciation.

 Once you've found a community that you'd like to stay in for several years, then buying over renting can really pay off. You'll not only benefit from appreciation, but you'll also build equity as you pay down your mortgage – and you'll have more security and stability overall.

 Also important: If you plan to stay in the home for the life of the mortgage, there will come a time when you no longer have to make those payments. As a result, your housing costs will drop dramatically, while your equity (and net worth) continue to grow. 

2. Is it a better value to buy or rent in my area?

 If you know you plan to stay put for at least five years, you should consider whether buying or renting is the better bargain in your area.

 One helpful tool for evaluating your options is a neighborhood's price-to-rent ratio: just divide the median home price by the median yearly rent price. The higher the price-to-rent ratio is, the more expensive it is to buy compared to rent.⁵ Keep in mind, though, that this equation provides only a snapshot of where the market stands today. As such, it may not accurately account for the full impact of rising home values and rent increases over the long term.

 According to the National Association of Realtors, a typical U.S. homeowner who purchased a single-family existing home 10 years ago would have gained roughly $225,000 in equity — all while maintaining a steady mortgage payment.⁶

 In contrast, someone who chose to rent for the past 10 years would have not only missed out on those equity gains, but they would have also seen U.S. rental prices increase by around 66%.⁷

 So even if renting seems like a better bargain today, buying could be the better long-term financial play.

 Ready to compare your options? Then reach out to schedule a free consultation. As local market experts, we can help you interpret the numbers to determine if buying or renting is the better value in your particular neighborhood.

3.Can I afford to be a homeowner?

 If you determine that buying a home is the better value, you'll want to evaluate your financial readiness.

 Start by examining how much you have in savings. After committing a down payment and closing costs, will you still have enough money left over for ancillary expenses and emergencies? If not, that's a sign you may be better off waiting until you've built a larger rainy-day fund.

 Then consider how your monthly budget will be impacted. Remember, your monthly mortgage payment won't be your only expense going forward. You may also need to factor in property taxes, insurance, association fees, maintenance, and repairs.

 Still, you could find that the monthly cost of homeownership is comparable to renting, especially if you make a sizable down payment. Landlords often pass the extra costs of homeowning onto tenants, so it's not always the cheaper option.

 Plus, even though you'll be in charge of financing your home's upkeep if you buy, you'll also be the one who stands to benefit from the fruits of your investment. Every major upgrade, for example, not only makes your home a nicer place to live; it also helps boost your home's market value.

 If you want to buy a home but aren't sure you can afford it, give us a call to discuss your goals and budget. We can give you a realistic assessment of your options and help you determine if your homeownership dreams are within reach.

4. Can I qualify for a mortgage?

 If you're prepared to handle the costs of homeownership, you'll next want to look into how likely you are to get approved for a mortgage.

 Every lender will have its own criteria. But, in general, you can expect a creditor to scrutinize your job stability, credit history, and savings to make sure you can handle a monthly mortgage payment.

 For example, lenders like to see evidence that your income is stable and predictable. So if you're self-employed, you may need to provide additional documentation proving that your earnings are dependable. A lender will also compare your monthly debt payments to your income to make sure you aren't at risk of becoming financially overextended.

 In addition, a lender will check your credit report to verify that you have a history of on-time payments and can be trusted to pay your bills. Generally, the higher your credit score, the better your odds of securing a competitive rate.

 Whatever your circumstances, it's always a good idea to get preapproved for a mortgage before you start house hunting. Let us know if you're interested, and we'll give you a referral to a loan officer or mortgage broker who can help.

5. How would owning a home change my life?

 Before you begin the preapproval process, however, it's important to consider how homeownership would affect your life, aside from the long-term financial gains.

 In general, you should be prepared to invest more time and energy in owning a home than you do renting one. There can be a fair amount of upkeep involved, especially if you buy a fixer-upper or overcommit yourself to a lot of DIY projects. If you've only lived in an apartment, for example, you could be surprised by the amount of time you spend maintaining a lawn.

 On the other hand, you might relish the chance to tinker in your very own garden, make HGTV-inspired improvements, or play with your dog in a big backyard. Or, if you're more social, you might enjoy hosting family gatherings or attending block parties with other committed homeowners.

 The great thing about owning a home is that you can generally do what you want with it – even if that means painting your walls fiesta red one month and eggplant purple the next!

 The choice – like the home – is all yours.  

HAVE MORE QUESTIONS? WE'VE GOT ANSWERS 

The decision to buy or rent a home is among the most consequential you will make in your lifetime. We can make the process easier by helping you compare your options using real-time local market data. So don't hesitate to reach out for a personalized consultation from our Montague Miller & Co trusted real estate professionals, regardless of where you are in your deliberations. We'd be happy to answer your questions and identify actionable steps you can take now to reach your long-term goals.

The above references an opinion and is for informational purposes only.  It is not intended to be financial, legal, or tax advice. Consult the appropriate professionals for advice regarding your individual needs. 

Sources:

1. CNN -
   https://www.cnn.com/2022/08/11/homes/home-prices-second-quarter/index.html
2. NPR - https://www.npr.org/2022/07/14/1109345201/theres-a-massive-housing-shortage-across-the-u-s-heres-how-bad-it-is-where-you-l
3. Bankrate -
   https://www.bankrate.com/mortgages/5-year-real-estate-rule/
4. Federal Reserve Bank of St. Louis -
   https://fred.stlouisfed.org/series/MSPUS
5. National Association of REALTORS - https://www.nar.realtor/blogs/economists-outlook/price-to-rent-ratios-by-state-from-2014-2019
6. National Association of REALTORS -
   https://www.nar.realtor/blogs/economists-outlook/single-family-homeowners-typically-accumulated-225K-in-housing-wealth-over-10-years
7. Statista -
   https://www.statista.com/statistics/200223/median-apartment-rent-in-the-us-since-1980/