Virginia’s second quarter home sales surpass $10 billion

The Virginia residential real estate market experienced its strongest second quarter since the 2008 recession, with sales volume reaching nearly $10.6 billion during the April through June time frame. This sales volume represents an 11 percent increase relative to the second quarter of 2014. The second quarter boost is due largely to a June sales surge, which reflects an atypical month-over-month jump of 21 percent from May sales. April and May 2015 outpaced the same months of 2014, but not as drastically as the June to June comparison. Annualized residential sales, a rolling sum of the home sales closed in the preceding twelve months, indicate steady improvement in Virginia’s housing market with three consecutive quarters of increase in this measure. Length of time on the market decreased substantially from the first quarter, as is industry-cyclic. Relative to the same quarter last year, the number of days on the market decreased by 6.8 percent, showing a slight quickening to the seasonal pace. Virginia’s pace is on trend with national listing data for days on the market.

VAR President Deborah Baisden says: “This data showcases the hard work and entrepreneurial spirit of our 30,000 REALTORS® who are helping to drive the economic engine of the Commonwealth one transaction at a time. The strength of these second quarter results point to sustained improvement in Virginia’s residential real estate market.”

Click here to download the Virginia Association of REALTORS® Second Quarter 2015 Home Sales Report.

Q2 HSR Volume GRAPHIC

5 New Smart Home Technology

5 Ways Smart Home Technology Is Changing the Way We Live In Our Homes

A smart home is so much more than cool gadgets and shiny gizmos.

It seems as if a new piece of smart home technology is invented daily. Whether it makes our lives safer, more comfortable or more convenient, there is no doubt that we enjoy these products and systems. But how much are they really impacting our lives?

If you take a step back, you will realize that smart home technology is not just about fun gadgets and gizmos. In fact, in many ways, it actually changes the way we live in our homes. Here are five ways smart home technology does this:

  1. Security: It used to require a lot of effort – not to mention money – to install a state-of-the-art security system in your home. And even after it was done, many systems would fall short from providing you things like high-quality video. But nowadays, there are easy-to-install, DIY security systems that can keep you safe. Most importantly, many of them allow you to control and watch over your home from mobile devices.
  2. Temperature Control: You used to have to walk over to the thermostat if you wanted to change the temperature in your home. But with today’s smart home technology, not only do you not have to get up – you don’t even have to be in your home. Some companies now offer technology that allows homeowners to control and change the temperature of their homes remotely, which can make lives more comfortable and also help save money.
  3. Lighting: If you left for a long vacation and realized you left some lights on in your home, you would likely be out of luck. But for those who have invested in new smart lighting, it would be no hassle to turn the lights off from a smartphone. Controlling your home’s lighting remotely can also help keep it safe by creating the illusion that you are at home and deterring potential intruders.
  4. Entertainment: Most of us have been there: struggling to connect specialty devices to our TVs so that we can watch certain programs that are only available on particular platforms. Doing this can be confusing and frustrating, but with many new entertainment products and systems it is no longer an issue. Certain smart TVs allow users to stream popular apps and shows in high definition – and without complex and expensive auxiliary devices.
  5. Appliances: Wouldn’t it be nice if your clean clothes were warmly waiting for you in the dryer when you got home – regardless of the time? Or if you could tell how much milk you had in your refrigerator while you were in the dairy aisle at the grocery store? Thanks to new smart appliances, these are possible.

Smart home technology is really changing how we live in and interact with our homes. Later this week we will be exploring smart home products and systems in all of the above categories. Stay tuned!

Cover image via http://www.digitaltrends.com/home/wink-relay-smart-home-control-panel/

Lindsay is the Senior Manager of Media Engagement for Coldwell Banker Real Estate and is a licensed real estate agent. She was born and raised in New Jersey and just bought her first home in Livingston, where she grew up. When Lindsay isn’t busy facebooking, tweeting or instagramming she is enjoying life with her husband Joe and cat Rory. She enjoys binging on Netflix, cooking and Zumba.

Would you bypass a bank for your next mortgage?

In the last decade, peer-to-peer lenders – online platforms that connect credit-seeking consumers directly to potential lenders – have helped customers borrow to refinance student loans, pay off credit card debt, and build their small businesses.

Now one lender wants to disrupt the market for mortgage originations, long dominated by big banks.

San Francisco-based lender SoFi (short for “Social Finance”) has been quietly testing the waters to underwrite new mortgages for existing customers living in states like California, New Jersey, North Carolina and Texas. After beta-testing more than 100 mortgages, SoFi is opening the platform more broadly.

“It’s a multi-billion-dollar opportunity,” SoFi CEO Mike Cagney told CNBC.

The program boasts loans up to $3 million, with as little as 10 percent down, and a 21-day application turnaround — but is limited to just six states.

When SoFi launched in 2006, it focused squarely on the burgeoning student loan market – a market that, unlike housing, had no viable option to refinance both federal and private student loans from higher interest-rate eras. Since then, SoFi has provided more than $1 billion in funding for students from select universities (read: schools with promising income capacity) to consolidate or refi college or grad school debt.

 

© Provided by CNBC

That high-income market (“doctors, lawyers, finance folks, technology folks”) is, according to Cagney, a “beachhead” into housing: “The next life cycle for someone after you’ve paid off a student loan or paying down a student loan is home acquisition.”

Cagney experienced the difficulty of getting a mortgage firsthand when he made the leap from Wells Fargo’s proprietary trading desk to SoFi, then a fledgling startup that came with a large pay cut. Mortgage bankers “were modeling that my income would be negative in a few years,” Cagney said. “I feel for Ben Bernanke.”

Carving a niche

SoFi is clearly trying to benefit from the fact that the burden of student debt has made home ownership a distant reality for many millennials. The company, more important, is also trying to carve out a niche in an increasingly crowded landscape of companies seeking to disintermediate Wall Street banks from consumer finance.

Lending Club, the industry’s largest, targets a range of credit profiles for smaller loans (on average, about $14,000 per borrower) that are used to refinance credit card debt and will be a test for the market when it goes public later this year.

Prosper, the oldest and second-largest peer-to-peer lender, does much the same, but has tended to target even riskier borrowers, says industry investor and blogger Peter Fenton of Lend Academy.

Fenton says SoFi’s venture into mortgages shouldn’t cause alarm, because the company is targeting borrowers with little credit history that would otherwise be considered “super-prime.”

“We’re talking, 780 FICO scores, $180,000 in income,” Fenton said of SoFi’s customer base. “You couldn’t find a better group of borrowers on the planet.”

Peer-to-peer lenders originally sought to attract retail investors to its loan marketplace, but the lack of high-returning assets elsewhere in the market has made these platforms increasingly attractive to major asset managers and hedge funds.

So attractive that the company has completed two rounds of securitizing its student loans into bundles that investment banks can sell to institutional investors. A $251 million round was completed in July and earned an “A” rating from Standard & Poor’s.

“The last securitization that we did it was 15 times oversubscribed on the institutional side,” Cagney told CNBC. “I anticipate that we can generate strong demand as we bring mortgage to market.”

While securitizing loans helps SoFi find other parties to shoulder some of the loan risk and share the cost of interest, it does call to mind the role that such bundles — albeit less creditworthy, and on a much larger scale — were one of the biggest culprits of the financial crisis.

SoFi executives are quick to point out that in its eight years, with nearly 14,000 borrowers, not a single loan that has been underwritten has gone into default.

“There’s always systemic risk with any kind of credit,” Cagney says. “But what we’ve seen historically is that these folks tend to respond very well to crisis.”

By CNBC’s Kayla Tausche. Follow her on Twitter: @KaylaTausche

Don’t Forget These Costs When Buying a Home

You’ve crunched the mortgage rates, estimated your tax payments, and taken a realistic look at how much house you can afford. You’ve stuck within your range when scouring therealtor.com® listings, being careful not to bust your budget.

But there are more expenses involved in home buying than just the property costs. And those additional payments, if you don’t factor them in, can be high enough to derail your conscientious planning.

Home-Buying Expenses: Add Them Up

Here are the line items you should keep in mind.

Buying Costs

You’ve got your mortgage pre-approved, but that’s not all you will need to fork over to get the keys to your new place. Services that need paying:

  • Your buyer’s agent fee
  • An appraisal to confirm a reasonable market price for the property
  • Inspections of structural, mechanical, pest or other potential issues
  • A real estate attorney to review all contracts (depending on the state)

Property taxes vary widely, up to 4.2% of a home’s value in some states, according to a CNN map published in 2013. Depending on when you buy, you may owe the previous owners for property taxes they have already paid. You may also need to pay fees to a local association, such as a homeowners association.

Moving Costs

Moving into a home can involve major expenses for packing, storing and transporting your possessions and yourself. If you are moving across the country, the costs could be significant. Even moving across town can cost more than you planned for truck rental, movers and equipment.

Utilities

Setting up your telephone, electricity, gas and water—did you budget for these expenses? They could cost more at your new place, especially if you’re moving to a larger home or from a rental.

New Stuff

You may need to purchase appliances or furniture for your new home. Some items, like your old particle board bookshelves, may not be worth the cost of moving. Again, if you are sizing up, you face the potentially fun, but possibly financially draining, challenge of filling the new place.

Maintenance and Renovations

Trees fall on roofs. Gutters need cleaning. Driveways need repair…. A standard rule of thumb is to budget at least 1% of your home’s purchase price each year for home maintenance costs.

Maintenance can include things such as painting, replacing roof shingles, fixing or upgrading plumbing and wiring. The amount you will need to pay for maintenance can depend on the age of the home, the previous owners’ upkeep and the climate.

Homeowner’s Insurance

You won’t be able to obtain a mortgage without homeowner’s insurance covering both the property and its contents. However, the standard insurance may not cover natural disasters such as floods, tornadoes and earthquakes. Depending on where you live, you may want to consider taking out additional insurance to cover such risks.

Private Mortgage Insurance and Title Insurance

If the down payment on your home was less than 20% of the purchase price, you will have to pay for Private Mortgage Insurance. PMI protects your lender in case you default. It’s standard, and fees vary. The rules are complicated, but usually once you have paid down the mortgage so you owe less than 78% of the purchase price, you can drop the PMI payments.

Title insurance offers protection for you (and your lender) if you later discover that someone else could lay claim to the title, and therefore ownership, of the house.

Even if you are lucky enough to avoid paying for PMI, you find a low-cost attorney you can trust, and you have a modern, energy-efficient house, these expenses can still add up to thousands of dollars. That prospect should not scare you away from homeownership, but it always helps to be prepared.

Updated from an earlier version by Ben Apple.

How to Win the Bidding War

If you are buying a home at the height of a citywide seller’s market or simply want a sought-after house in a neighborhood with limited turnover, you may find yourself in the midst of a real estate bidding war.

Competing against faceless prospective buyers may bring out the warrior in you, but before you decide to go all out in your battle, you need to step back and decide how much you really want that particular home.

Should You Compete in a Bidding War?

In the thick of competition you may forget your end goal is a home you love and can afford to own. If your offers have been turned down by several sellers because of competing buyers, then you may feel pushed to make an aggressive offer for the next home you like.

You should stop yourself from competing just because you think the time is right to become a homeowner or to move up into a new place. Instead, think about whether you really want the particular house enough to fight for it.

To guard against making an emotion-fueled offer for a house, take a hard look at your finances. While it may feel good at first to beat out other buyers and to purchase a property, it won’t feel so great in a year or two when you are struggling to make the payments on a house beyond your means. Know your limits before you begin to bid.

Prep for Battle

Your first step before entering a bidding war should be to consult with a lender to understand the maximum amount you can borrow, to evaluate how much cash you have to spend while keeping enough money in a reserve fund.

Next, make sure you hire an experienced REALTOR® who can share information about local market conditions and communicate with the seller’s agent. You should rely on your REALTOR® for advice about how to handle a bidding war, but be sure to do your own research: visit a lot of homes in the area where you want to buy so you understand the value of various properties before you make an offer.

Bidding War Strategies

Your REALTOR® should work with you to craft an attractive offer based on the list price for the home, a comparative market analysis of similar homes, and knowledge gained from the sellers’ agent about the sellers’ motivations and preferences.

In a bidding war, it’s important to work with a REALTOR® who will move quickly to present your offer and any counteroffer, one who is easy to communicate with during the transaction.

While you may assume money is the motivator that steers sellers to one buyer over another, there are other ways to make your offer attractive, such as these ideas:

  • Solid financing: You may be competing against cash buyers, so make sure your loan pre-approval is in place and you have completed all required documentation other than identifying a specific property.
  • Eliminate contingencies—carefully: If you own a home now, you may want to offer to buy another home without making your contract contingent on the sale of your current home. You take the risk of carrying two mortgages for a while, so make sure you can safely handle the payments. You can also decide to have an “information only” home inspection rather than making your offer contingent on the outcome of the inspection.
  • Make the settlement date convenient for the sellers: Rather than negotiating on a closing date convenient to all sides, you can tell the sellers you will work with their schedule or rent back the property to them after the closing.
  • Offer to pay all closing costs: You can reduce the sellers’ out-of-pocket expenses by offering to pay their share of the settlement fees, but before you do this get an accurate estimate of what those costs will be and make sure you have the funds available to pay them.
  • Personalize the transaction: Sometimes the tipping point for sellers who receive multiple offers is something emotional rather than financial. A personal letter describing your love of their home may tilt the scale in your favor.
  • Try an escalation clause: Money talks, too, so you can add an escalation clause to your offer that increases your bid by a certain amount above other offers. Just make sure you set a limit on how high your offer will go.
  • Control yourself: Remember that any offer is subject to an appraisal (unless you waive that contingency, but that’s not recommended unless you have plenty of cash), so be careful not to bid above the market value of any property.
  • information provided by Michele Lerner, realtor.com

8 questions to ask before hiring a home inspector

As the weather warms up and open houses attract prospective buyers, hiring a home inspector can provide negotiating leverage for the buyer or warn of potential problems.

“No home is perfect, not even new construction,” says Brenda Avilla-Kintz, a Real estate agent with Legacy Real Estate & Associates in San Jose, California. “If you end up spending money on an inspection and find these red flags, then you’re out a few hundred dollars for the inspection, but it saves you potentially tens of thousands of dollars” when you negotiate the price or walk away from the property.

Not all states have licensing requirements for home-inspection companies, so they can vary in terms of cost and quality. Your real estate agent may have suggestions for inspectors, but it’s a good idea to also vet them yourself.

Check out the American Society of Home Inspectors website to find a member inspector in your area. Meanwhile, here’s a look at the important questions to ask before hiring one.

 

1. Do you perform repairs or just home inspections? Some homebuyers seek the advice of a general contractor rather than a home inspector. Avilla-Kintz says that’s a mistake, as they provide expertise from a different point of view. “A home inspector is typically checking the roof or the appliances if they’re included in the home,” she says. “A general contractor is coming in from a repair standpoint and can quote for whatever repairs need to be done.” In fact, providing both services could create a conflict of interest, because buyers can’t always distinguish between necessary repairs and optional upgrades.

After the home inspection, you may want to hire a specialist or general contractor to find out how much a kitchen renovation or plumbing upgrade might cost. “Get the unbiased opinion first,” Avilla-Kintz says. “Then you bring in the contractor to quote for what those repairs are.”

 

2. Are you bonded and insured? Stephen Gladstone, a Connecticut home inspector and author of “The Field Guide to Home Inspections,” says a surprising number of home inspectors don’t have insurance. “Somebody with employees should really have workers’ [compensation], and they should have errors-and-omissions​insurance in case there is something significant that they miss,” he says.

 

Say the inspector falls through the attic or slips while inspecting your roof. If the company doesn’t have the appropriate insurance, it may sue you or the current homeowners or try to put a lien on the property. So make sure the company is insured before the inspector sets foot on the property. “Whenever one party is sued in the transaction, it tends to pinball all over the place where everybody ends up in the lawsuit,” Avilla-Kintz says. “You’re avoiding personal liability by making sure that they have their own insurance.”

3. Can you provide references? It’s a good idea to check the inspection company’s references, according to Scott Pruitt, vice president of operations for Commercial Building Consultants in Orlando, Florida, which has a home inspection division.

 

Pruitt suggests asking previous clients about whether the inspector arrived on time and inspected all aspects of the house, including the roof and attic. “Did they provide a comprehensive report that spelled out all areas of the home and the findings?” he adds.

Consider references with a grain of salt, however, because the references given are likely to be the inspector’s most enthusiastic supporters, not a complete sampling of customers, as Gladstone points out.

 

4. Can I tag along on the inspection? Some homeowners leave the inspectors alone to examine the home, while others want to be more hands-on and follow along as the inspector works. If you fall into the latter camp, which several experts recommended, make sure your inspector is willing to walk you through the process. Gladstone says it’s important to find an inspector who can communicate clearly and takes the time to explain things.

“I offer my clients the opportunity to walk around with me and ask questions,” he says. “More and more, an awful lot of my customers don’t know much about the house. They want to know about the heating system and how to turn off the electric if there’s a problem with the electricity.”

 

5. What does the inspection include? To compare inspectors, you need to know what the inspection includes (or doesn’t include). Ideally, the inspection should be as thorough as possible. “We open every window we can open and test every outlet we can test,” Gladstone says. “A lot of inspection companies don’t test the appliances, but we turn on dishwashers and laundry machines to see if there’s damages on the gaskets and stuff.” The extent of the inspection may also vary by region. In Florida, for instance, it’s common for inspectors to test the irrigation systems.

 

6. Will you send me a sample inspection report? The inspector should send you a detailed report after completing the inspection. Avilla-Kintz suggests asking to see a sample to make sure the information is presented in a clear and thorough format that’s easy to understand. She especially appreciates reports that have a lot of color photographs because those images can clearly demonstrate problem areas and help during negotiations with the seller and the seller’s agent.

7. Do you have any special expertise? If you’re buying a special type of property, such as a historic home or new construction, make sure the inspector understands the special considerations for those types of properties. Gladstone says older homes may have issues that newer homes don’t have, while recently constructed properties may have new materials and different types of framing that require a more critical eye. Homes with swimming pools also have potential issues. Inspecting a condo tends to be simpler than a freestanding home, Gladstone adds, so it’s not necessary to look for someone with specific condo expertise.

 

8. How much do you charge? Notice that price is the last question mentioned. That’s because shopping on price alone may lead to cutting corners. “You might be saving a couple of hundred dollars to hire the cheapest inspector,” Avilla-Kintz says, “but you could be paying in a big way because the inspector wasn’t thorough or the report was hard to understand.”

By Susan Johnston, U.S. News & World Report