Our Buyers' Most Frequently Asked Questions... Answered!

Secrets for Buying a Home in the DMV Series

Buying a home for the first time can be confusing. That’s why the tips and strategies in our 8-week series will set you on the right path. It’s our unique approach and a “behind-the-scenes” glimpse of what you should look out for and consider when starting your own search for a home.

Buying a home, especially if it’s your first time, can be complex and confusing at times. But you are not alone!

Just like most first-time homebuyers, you want to make sure you don’t do something wrong. Or, you might worry that you don’t know what you don’t know!

I hear from my clients all the time about their concerns and questions when buying a home in today’s market. That’s why I am here to answer some of the most common questions I get so you can become better informed and more reassured.

The questions swirling around in your mind are likely the same ones that other buyers, like you, want to ask. And, more than likely, they were the same questions that buyers who went before you also asked!

i have heard your question before, and even if I haven’t, no question is ever a “dumb question,” so ask away! And if you have any questions that aren’t listed below here, reach out and ask! 

Even though each buyer’s situation is unique, the question/answer sections below will help you gain some insight into what steps might be best for you. 

Plus, maybe you’ll also learn something “you didn’t know you didn’t know”!

Q: How do I know the property value will increase?

Although there are no guarantees, there are clues and historical data that are indicative of future performance. One thing that drives home values in the DC metro area more than anything else is the addition of “walkability” and commercial/retail space.

If you know the area is changing and will increase in density or desirability, you will likely see an increase in value over time, perhaps more than other areas. I always tell my clients not to go on hearsay but to look at projects that have actually gone through the planning, development, and funding stages.

Being near transit is also a good indicator that your value will increase over time. The good news about the DC market, in general, is that our population is increasing, our unemployment is low, and our economy is booming, Which is a recipe for an increase in value over time.

However, you still need to buy smart. Each neighborhood, block, or building can be different, and it’s important to understand that you don’t overpay.  

There is an old saying that says you make money in real estate when you buy, so focus on that, and you’ll be fine when you sell.

Q: Should I put a deadline on an offer?

This is a tricky question to answer and really depends on the specific situation of the home you are bidding on.  

In more competitive neighborhoods, most sellers want to give their home full market exposure to get the highest price possible. That means sellers tend to have their own deadline for any and all offers.

If a seller is not anticipating multiple offers, perhaps wants less inconvenience, or needs a quick sale, moving quickly with an offer and having a deadline for a response can be a useful strategy.   

If you are going to set a deadline, make sure to give one that allows enough time for the seller to respond but not long enough for another offer to swoop in.

Again, it depends on the particular situation. I have found that 8-12 working hours (not sleeping hours) is often a reasonable timeframe for a deadline. Often times, this could mean avoiding a bidding war. 

But you’ll have to make it worth the seller’s while to want to take their home off the market quickly—perhaps a higher price than asking and favorable terms such as no or short contingency periods.

In some situations, a deadline will not make the seller respond, so be prepared for that outcome as well!

Q: How do I get a good deal?

Good question and one I focus on for each and every one of my clients! I always say you make money when you buy in real estate, so making sure you buy right is HUGE.  

The only way to ensure you get a good deal is to look at the specific neighborhood, building, or block you are buying in and compare your home to what has sold over the last six months to a year. 

There will be a range in price depending on specific location (for example, a basement unit will sell for less) and condition (just renovated will sell for more). Compare the home you want to buy with what has sold recently to make sure you are not overpaying.  

I will also give you information about whether it’s a sellers’ market or a buyers’ market so you can make your offer accordingly. The longer a home sits on the market, the more likely you are to get a lower price.  

And please remember that just because something is “cheap” doesn’t mean it’s a good deal. Be sure not to make this crucial mistake!

Q: If the house I want is $20k over my price range, does that mean I can’t afford it?

Maybe, maybe not…

I tell my clients to focus on their monthly payments, not just the purchase price. This will help them determine what they may or may not be comfortable paying for a home every month.

In other words, focus on the fact that you want to pay $2,500 per month for your new home, not on a somewhat arbitrary price point. 

Why? 

Because for every $10,000 change in price, your monthly payment only goes up about $50 per month. Looking at it that way, you can afford the home of your dreams or that home you just fell in love with. 

So, that extra $20,000 price tag equates to an extra $100 per month. Is that something you can handle? If so, and it’s a home that has everything you’d ever want, go for it…as long as it doesn’t break the bank or make you uncomfortable by forcing you to change your lifestyle.

On the other hand, if you buy something not as nice for less money, you might have to spend money on repairs, etc. You’ll need to weigh the pros and cons of each situation when determining what is affordable to you.

Next week is one of my favorite articles — Is the “Paradox of Choice” Derailing Your Home Search? I’ll tell you the secrets from this book that can help you focus on making a decision and not being overwhelmed by too many choices.

You don’t want to miss it!