My first Ask Eli column was published on November 10 2015 (I introduced myself and explained the Escalation Addendum), exactly five years ago! Since then I’ve accumulated 416 pages in Microsoft Word, nearly 170,000 words, and over 840,000 characters typed!
I want to take a moment to express my appreciation for Scott (Founder), Jordan, Lene, Turquiose and everybody else on the ALRnow/Local New Now team for creating and maintaining such an incredible platform for local news and community discussion. Thank you!
I also want to thank all of the amazing readers and commenters who have made the last five years of writing about Arlington/DMV real estate so rewarding for me. Your feedback, comments, critiques, and questions let me know that I’m not talking into an online abyss Please continue sending me topics or ideas that you’d like me to cover!
For those of you who may have missed my post last week because it was Election Day, I shared a cool interactive chart showing how Arlington real estate has appreciated in value since 2010. You can check out that chart here.
Thank you everybody for following along. Hopefully I’ll get to write a similar ten-year post in November 2025!
Question: I’m in
the process of searching for a real estate agent and having trouble
understanding the different organizational structures. Can you explain how it
Answer: Most real
estate agents operate as independent contractors within their brokerage (office),
thus have autonomy to operate their business/service model as they choose. With
over 12,000 Realtors in the Northern Virginia Association of Realtors alone,
the organizational structures and business models vary widely to suit an
agent’s style of business and/or target clientele.
I think it’s almost as important for home buyers and sellers
to learn about their prospective agent’s operating model as it is to make sure
they know your market. An agent’s operating model will impact your experience
and you need to make sure it aligns with your expectations.
I’ll break down some of the organizational structures that are most common today so you have an idea of what to look for.
At the top of the organizational structure is the brokerage,
which is best described as the office your agent works for. The brokerage is
the legal entity involved in the transaction and when you sign a Buyer
Representation or Listing Agreement, it’s actually with the brokerage, with
your agent as the assigned representative of the brokerage.
Currently in the DC Metro, most brokerages are made up of
multiple agents, often dozens to hundreds, and function like a shared office.
An agent cannot operate independently outside of a brokerage, but an individual
agent can have their own broker’s license and operate an independent brokerage.
Most agents operate as independent contractors within their brokerage, but there are some models, Redfin being the most popular, where agents are employees.
In most cases agents operate individually or within a team,
structured in a some common ways:
Individual Agent, No Support: Many agents work independently without any sort of support staff. The advantage for clients is that you always know who you’ll be working with and who is handling every detail of your transaction. The main disadvantage is that there is a single point of failure if that person is unavailable.
Individual Agent With Administrative Support: Some independent agents hire one or more people to support administrative tasks like scheduling and marketing. Some brokerages also offer this type of administrative support to their agents. This should be an advantage over #1 because the agent has more time for high-value tasks, but it also requires the administrative support to be on top of things and strong communication between agent and admin.
Team Partnership: Two or more experienced agents with strong individual businesses may partner to share some administrative support costs and build a stronger brand together. For the client, it has many of the same qualities as #2, but there’s usually an added benefit of knowing that there’s at least one other experienced agent available as back-up in case your agent in unavailable.
Team Lead With Coordinators: An individual agent or partnership with a large book of business that uses specialized buyer and seller coordinators to support client activities. An advantage to clients is that the transaction is generally led/directed by an experienced agent and that there is no single point of failure, you’re working with a support team. A disadvantage is that some or many high-value pieces of the transaction are handled by coordinators, not the lead (experienced) agent.
Team “CEO” With Junior Agents: An experienced agent who acts more as a CEO, overseeing the operations of a large team of agents, and personally handling very few transactions, if any. Clients should benefit from systems and processes the “CEO” agent used to become successful, imparted on the junior agents. A disadvantage is that these teams often have dozens or more agents and the experience of those agents varies widely and don’t necessarily reflect the talent of the “CEO” agent.
What Should You Ask?
It’s important for you to understand how your real estate
agent operates and it shouldn’t be hard to find out by asking some simple
Will I work with anybody else during the
Will anybody else work on my transaction?
What happens if I need something when you’re
unavailable or out-of-town?
I hope this has been helpful for anybody starting out their
search for an agent or just generally confused by how the industry is
structured. As always, if you would like to meet with me about buying, selling,
or renting in Arlington or the surrounding DC Metro communities, feel free to
email me at Eli@EliResidential.com.
Question: How did
the Arlington real estate market perform in the first half of 2019?
Answer: I am
excited to announce the first of many collaborations with Jeannette Chapman,
Deputy Director and Senior Research Associate, at the Stephen S. Fuller Institute at
George Mason University to bring you deeper, more insightful analysis of the
Arlington housing market. The Fuller Institute conducts incredible research and
analysis on the Greater Washington regional economy and I’d encourage you to
subscribe to their monthly
Washington Economy Watch reports. Jeannette is an Arlingtonian and housing
data junkie, which means even better market insights for ARLnow/Ask Eli
Amazon announced they were moving their second headquarters
to Arlington in November 2018 and there has been year-over-year double-digit
decreases in homes listed for sale in each of the seven months from December
through June, topping out with a 29.5% drop in April 2019 compared to April
2018. I think this is due to owners deciding to hold out for more gains once
Amazon employees start showing up.
The shortage in housing inventory forced buyers to compete
for homes, resulting in 46.1% of homes selling for more than the asking price in
the first half of 2019, compared to an average of 26.5% going over ask during
the previous five years.
Less inventory combined with shifts in demand (buyers moving
their timelines up and new investors entering the market) led to price
increases across Arlington in the first half of 2019, compared to the first
half of 2018, by an average of 4.6% and median 8.8%. This does not mean that
all homes in Arlington are worth 5-9% more than they were this time last year –
some sub-markets are up more while others haven’t experienced the
To get a more accurate picture of what’s happening in our
housing market, we separated the data into smaller sub-markets. Townhomes
aren’t included because there’s not enough volume to produce good data and we
left out the 22202 zip code, which makes up the Crystal City/Pentagon City area
(aka most of National Landing), because it’s a very different market than the
rest of the County and requires its own analysis in a future column. We chose
to remove new construction, age-restricted housing, and Cooperatives. Finally,
the time period is based on when a property actually went under contract
instead of when it closed.
Interpreting the Data
For the most part, the charts above reflect what I’ve
experienced in the Arlington housing market this year so double-digit appreciation
from South Arlington single-family detached homes and North Arlington condos
makes sense. However, I was very surprised by the South Arlington condo data.
My experience this year tells me that South Arlington condos
have appreciated more than most Arlington sub-markets, with examples of units
selling for 10-20% more than they would have last year. So why does the data
show that 0/1BR condos in South Arlington are only up 2% compared to the first
half of 2018? The make-up of the individual sales is different in 2019 and 2019
sales are down nearly 50%, meaning our sample size is too small.
During the first half of 2018, there were more expensive
sales and fewer inexpensive sales, as a percentage of total sales, compared to
the first half of 2019. Sales in 2019 have also been 32sqft smaller with 7%
higher condo fees than the sales in 2018. These differences in the make-up of
the data have skewed the median and averages in a way that doesn’t accurately
represent what we’re seeing from individual sales.
The lesson? Real estate data is tricky and doesn’t always
communicate what’s actually happening in the market (e.g. this
June column about 17.3% appreciation in Arlington).
We took a look at the strongest performing sub-markets in
the first half of 2019 to see how these gains look from a historical
perspective, going back to 2000:
North Arlington condos show the biggest
“Amazon-effect” with a sharp deviation from relatively stable prices over the
last 10+ years. Note that existing condo sales dropped off more than the chart
suggests during the recession, but the sales in newer, more expensive buildings
helped maintain the market-wide median price.
History suggests that the North Arlington condo
market will level off and remain relatively stable at these prices. It’s easier
to add new condo supply to the market compared to other housing types, so
supply usually adjusts to meet demand.
Single-family detached homes in South Arlington
received a noticeable boost from Amazon, but were already trending up over the
last 3-5 years so the 12.3% gains are likely a combined effect
Volatility in the South Arlington single-family
detached market will likely continue for years to come as the area develops and
the market finds a balance. I am bullish on most single-family detached housing
in Arlington because it’s nearly impossible to add more supply to meet
There’s no doubt that Amazon has had a major impact on
Arlington’s housing market already, but at this stage, it’s all speculative.
Homeowners speculating they’re better off waiting to sell. Investors
speculating that property values will appreciate. Home buyers speculating that
they’re better of buying now.
I expect the North Arlington condo market to taper off and
provide owners with modest, long-term growth and believe the best days for
North Arlington townhouse and single-family detached homes are 3-5 years out.
Even though the aggregate data doesn’t currently show
double-digit growth in the South Arlington condo market, that’s what is
actually happening (see earlier explanation). I think this, and the South
Arlington townhouse/duplex market, will stabilize next year and provide modest,
long-term growth. I wouldn’t be surprised if there was a pull-back in the South
Arlington single-family detached market next year, but I think it has the most
growth potential over the next 8-12 years, outside of the 22202 zip code. The
ceiling for South Arlington will depend on the quality and pace of development
along Columbia Pike, parts of South Glebe, and Nauck.
Some of the questions I have about the next 6-24 months in
the Arlington housing market are:
Will homeowners react to recent appreciation and
take advantage of a “seller’s market” by putting more homes on the market in
the next 6-18 months or will they continue to wait?
Did 2019 cannibalize buyers who were planning a
purchase/investment in 2020-2021 and will that demand be replaced with new
buyers or will we see a drop in demand until Amazon hiring picks up?
What decisions will the County make to increase
density and will that provide for more townhouse/duplex development instead of
How will the headwinds from a potential downturn
in the US economy impact local real estate momentum?
How much more will office
vacancy rates drop and will another Fortune 500 company soon follow the
lead of Nestle and Amazon?
If you’d like an analysis on how the value of your home has
changed in 2019 or would like to discuss a strategy for buying or selling a
home in Arlington or nearby communities, feel free to email me at Eli@EliResidential.com to schedule
time to talk or meet. Our team covers Northern Virginia, Washington DC, and the
Question: How did the Opportunity Zone designation in the Nauck neighborhood come to fruition and what is the expected impact on the neighborhood?
Answer: Last year the US Treasury, with the help of each state, began designating underdeveloped or “economically-distressed” communities as Opportunity Zones (OZ) to encourage residential and commercial development by offering investors preferred tax treatment. There are currently over 8,000 designated OZs around the country and 212 in Virginia.
Arlington’s Opportunity Zones
It may come as a surprise that there were two areas in Arlington that received OZ designations by the Governor/Treasury – Nauck-Shirlington Road and Barcroft-Columbia Pike. Both are located in the area bounded by Columbia Pike to the north, 395, and S Four Mile Run (link to map and details). Note: Although the zone is called Barcroft-Columbia Pike, part of it is actually Douglas Park and the rest is an area that I don’t think belongs to either the Barcroft or Douglas Park Civic Associations, but the apartment buildings there do take the Barcroft name.
On a national scale, I don’t think anybody would argue that these neighborhoods are economically-distressed, but within Arlington these designations should help stimulate or expedite development from South to North and West to East instead of the other way around. Both of these areas also have detailed planning documents in place to guide investors.
How Do Opportunity Zones Work?
OZs are a bit outside of my purview because they require commercial development and tax expertise, but the general idea is that investors will put money into Qualified Opportunity Funds and deploy capital to one or more projects in Opportunities Zones around the country in returned for preferred tax treatment on their gains. The theme behind the OZs is encouraging long-term, sustained investment from these funds by incentivizing investments of 10+ years.
It’s important to note that OZs were first written into the tax code in December 2017 and while a lot of money has been raised by funds, there’s still uncertainty on how everything works. The last planned public OZ hearing between industry and Government was June 9 in which industry raised numerous concerns about the governance of the funds/tax exemptions, thus keeping a lot of the money sidelined.
The primary concern for industry seems to be around how the IRS will apply the tax code to different exit strategies common within commercial and residential development. Some investors are happy with any preferential treatment or willing to take the risk of not having an exit strategy, but many are understandably hesitant to deploy huge sums without a full plan in place.
According to Arlington County’s project mapping website, there are not currently any proposals for major development within either of the OZs. However, the redevelopment of Centro Village (anchored by Harris Teeter), directly across from the Barcroft-Columbia Pike OZ, is nearly complete and the Trafalgar Flats condos, also directly across the street from the OZ, has done very well.
It’s quite possible that OZ funds have already been deployed in Arlington and we wouldn’t know. Given the impact Amazon is/will have on South Arlington, the Nauck, Four Mile, and Columbia Pike area plans were going to take shape, but I suspect that the recent OZ designations will lead to a more rapid implementation of the County’s vision.
Investors in Arlington’s OZs likely fall into a category of investors who won’t wait for the Treasury to fully address all of industry’s questions before deploying capital because they’re content with any preferred tax treatment on investments that will be financially viable without the extra help. Is this a fair implementation of tax incentives for a national program? Probably not.
Impact on Residential Real Estate
While the OZs themselves have a relatively limited supply of homes, the homes within and adjacent to these zones make-up the least expensive property in Arlington County. If you’re looking for growth opportunities relative to the rest of Arlington, I recommend adding these neighborhoods to your list, but plan on holding for 7-10+ years to realize the full benefit.
Tax benefits aren’t limited to commercial or multi-family property, but also apply to single-family homes. In some cases, there may be financial benefits to making substantial improvements (a requirement for preferred tax treatment in OZs) to rental properties located in OZs and holding them for 10+ years to qualify for the maximum tax benefit. This may not work in Arlington because the cost of substantial improvements must be at least 100% of the adjusted basis (net cost) of the acquisition price within a 30-month period. Before considering this strategy for your next rental property acquisition, it’s critical that you speak with a tax professional well-versed in OZs.
Question: Do you have any updates to your previous columns about banning smoking in condos?
Answer: Banning smoking in condos is probably the most popular topic I’ve written about and it has given me visibility into how many communities have tried, are trying, or want to ban smoking in units and common areas.
Multiple Buildings Have Banned Smoking
As of 2019, only 12% of Arlingtonians smoke so it’s not surprising so many condo residents are interested in eliminating it from their buildings. Over the last few years, multiple condo buildings in Arlington have successfully amended their by-laws to ban smoking in units and on private balconies (common areas are relatively simple).
Hosting Info Session for Residents/Board Members
This fall, I’m organizing a meeting/info session for all interested condo communities (residents and/or Board members) to discuss strategies and lessons learned on banning smoking, misinformation surrounding smoking bans, and other topics I’ve gotten questions on over the years. We’ll have guests who were heavily involved in the smoking bans in their communities, including an attorney who led the charge in his building, and who has helped other communities get their process started.
Let Me Know If You’re Interested
If you’d like to be included, send me an email at Eli@EliResidential.com with your name, condo building, whether you’re a Board/Committee member or resident, and if your building has already tried or currently trying to ban smoking. I’m targeting a September meeting and hope to set a date and time by early August. Don’t worry, you won’t get signed up for a bunch of junk marketing emails from me if you reach out 🙂
Question: What is customary to leave behind when we sell our house? Is there anything we have to leave or take?
Answer: The answer to this question varies by state/region so it’s important to understand what’s customary or required in your area. Throughout the entire DMV (DC, MD, VA) it’s customary to leave/convey all appliances, anything fixed to the home (e.g. light and plumbing fixtures), and take electronics or anything not attached to the home (e.g. free-standing shelves).
Fortunately, the Northern Virginia sales contract has a section dedicated to what conveys, including a yes/no option for the 30+ items below:
Around here, it’s customary for the items listed above to convey if they’re present, so if you intend to take any of them with you, such a washer/dryer, you should be sure to let your Agent and potential buyers know ahead of time.
In addition to some of the obvious conveyances like landscaping, carpet, and heating/cooling systems there are some not-so-obvious items that convey unless stated otherwise. Those include light fixtures (chandeliers), attached shelving, and wall mounts for electronics. The electronics (and wiring) themselves do not convey, so in practical terms – the TV comes with you but the wall-mount stays.
Other Tips/Grey Areas
You do not have to remove nails and other hardware used for hanging photos and other personal items. In fact, if you do remove them, you’ve technically changed the condition of the home and can be held responsible for patching and painting.
You are responsible for leaving the property “broom clean.” Broom clean is a bit of a grey area, but it surely means you do not have to hire a professional cleaning service or scrub the grout. Regardless of what the contract says, I always recommend sellers use an altered version of a common axiom and convey their home in the condition and cleanliness that they’d like a home to be conveyed to them.
You are also responsible for leaving the home “free and clear of trash and debris” which certainly means not leaving junk in the attic, clothes in the closet, or food in the refrigerator but it’s common (and generally appreciated) to leave behind extra matching paint, extra tiles or floor boards, and other items used to for replacement or repair. It’s generally a good idea to run these items by your buyer first, before leaving them behind, so you don’t get a call 30 minutes before closing to haul away a bunch of stuff they don’t want.
Price and contingencies generally command all of the attention in contract negotiations, but ensuring you’ve accurately documented what conveys also deserves your attention to avoid a major disagreement in the last hour. If you have any other questions about what’s customary when selling a home in Northern Virginia or the great DC Metro area, feel free to email me at Eli@EliResidential.com.
Question: We’re hoping to do some major landscaping work over the next year and would like your thoughts on what we should focus on that will also be good for resale.
Answer: Now is a great time to start planning a landscaping redesign project for next year’s warm weather. If you’re preparing for a sale, small improvements to your yard can be just as valuable as updates to the inside of your home. I sat down with local landscaping expert and long-time Arlington resident, Jeff Minnich (you should see his yard!) of Jeff Minnich Garden Design, to discuss smart ways to boost the outdoor appeal of your home before listing it and talked about some of the landscaping trends he sees in Arlington.
High ROI Landscaping for Resale
DAPPR:Define bed edges, Add fresh mulch, Pull the weeds, Prune the bushes, and Remove dead leaves
Lawn is King: Tall Fescue grass works the best in Arlington. The best time to seed your lawn is March – April and September. Water 1-2x per week. Give it about a month to grow.
Blast of Color: Azaleas are beautiful around here in April and May. Pansies are good options fall thru spring. Geraniums are great in the summer.
Grand Entrance: Your front door is a focal point – hit it with a fresh coat of paint or replace all together. Power wash your driveway and walkways. Flagstone aka Pennsylvania Bluestone offer great value if you need to replace or add a walkway (also perfect for patios).
Create a Scene: Help potential buyers picture themselves relaxing in their future yard by staging an area of your yard with chairs, table, umbrella, hammock, lemonade pitcher, etc.
De-clutter: Just like you removed personal items from inside the home, put things like statues and lawn gnomes away
Condos too: If you have some outdoor space (balcony, patio, etc) pot some plants (see Blast of Color) and stage it (see Create a Scene)
Landscaping for Personal Enjoyment(not everything needs to be done with ROI in mind)
Outdoor living spaces are the biggest trend in Arlington. This includes kitchens, fire pits, entertainment areas, and lighting
Hydrangeas and other “old fashioned” shrubbery are back in style. Dogwoods and azaleas are always trendy in Arlington.
Approaching a landscaping project:
Step 1 Hardscaping: Install patios, walkways, living spaces, water features, etc. This can cost anywhere from $10,000-$25,000+
Step 2 Sheds and Storage: Establish space for these items next
Step 3 Plantings: Work from biggest (trees) to smallest (flowers)
A full project usually takes 1-3 months to complete
There’s no such thing as maintenance-free
Thank you Jeff for all of your great advice. To learn more about Jeff or see examples of his work, please visit his website (link) or send an email to email@example.com. Jeff received his horticulture degree, with an emphasis on landscape design and nursery management, from Virginia Tech. His garden design/build firm, Jeff Minnich Garden Design, Inc. takes the client from initial design concept through the completed garden design. Enjoy the wonderful colors of his personal Arlington garden at 2268 N Upton St.
During home sale preparations, one of the most overlooked spaces in a home is the garage. I’ve shown many homes where owners have packed their garage full of furniture, toys, and boxes in an attempt to clear out the rest of their home, not realizing that a clean, organized garage can have a huge impact on their resale value.
If you’re looking to add a finishing touch to your home that attracts buyers and adds appeal, the garage is the best place to start. According to this study, 85% of homebuyers are looking for garage storage space. If homebuyers walk into an unorganized and cluttered garage, “extra storage space” won’t be checked off their wish list.
We’ve compiled three ways having an organized garage can help sell your home, and how to achieve garage envy that goes beyond just the garage door.
1.) Extra Storage Appears Achievable
Homebuyers that are looking for extra storage space won’t feel confined to storage closets and pantries when garage storage options are clearly visible. Organizing and adopting a storage system allows the potential buyer to see the storage possibilities your garage has to offer. Decluttered space makes an area appear larger, a great way to add appeal.
Garage conversions are on the rise in popularity and many homeowners are looking to convert their garages into additional rooms. In-home gyms, in-home offices, and many other conversions are common among homeowners. If a potential buyer is looking for more space your home has to offer, but can clearly see the garage potential, that might be your saving grace.
2.) Parking Space
According to the US Department of Energy, 1 in 4 Americans say their garage is too cluttered to fit their car. Chances are, your potential homebuyer may not have been able to fit their car inside their current garage. Showing a spacious garage helps the homebuyer see the parking potential. Your home can be their ray of hope for in-garage parking.
If you’re located in an area that has frequent snowfall during the winter, this is especially important. In addition to indoor parking, adding a garage heating system adds an extra perk to the garage. If you’re located in an area of extreme heat, adding an AC system to your garage can also be a great feature to add buyer appeal.
3.) Functionality & Customizability
Unlike other rooms in a home, the garage is typically low (if not completely missing) on the home tour list. A custom garage storage system and gives you the chance to show off the design potential of the garage. Through color and added functionality, your garage can easily become a home tour destination. A Thompsons Company study showed that over half of Americans want to have a garage their neighbors’ envy- allowing your garage the potential to shine could be the tipping edge for potential homebuyers. If any part of your garage is unfinished (paint is missing etc.) consider giving your garage some TLC and tie up the loose ends. Homebuyers, when they walk into the garage, should feel they are entering another room in the house. You wouldn’t allow a room to go unfinished inside your home, would you?
If your garage appeal is lacking, your selling chances are too! A clean, organized garage completes your home tour and adds value to potential buyers. Anytime a space is more organized, it appears larger and more usable. Don’t allow yourself to become discouraged by a messy garage.
Question: Are you seeing a sharp increase in the asking prices of homes in Arlington, as reported by Realtor.com, since Amazon announced HQ2?
Answer: You guessed it, the national media is wrong about Arlington’s housing market (sort of). I don’t mean to jump on the Fake News bandwagon, but a few weeks ago Realtor.com ran a misleading article, that got a ton of coverage here, stating that the median asking price of homes in Arlington were up $110,000 or 17.3% from November 2018 to April 2019.
I was suspicious of their report because I’m not seeing that type of increase in the asking prices of homes across Arlington, so I dug into the numbers a bit more to understand why the data looks that way. Technically, they weren’t wrong/lying but like most reports about local markets, they chose the version of the data with the biggest numbers to generate the most clicks and reposts without regard to whether it’s an accurate representation of our market.
The Truth Is In The Details
The reason the median price is up so much isn’t because owners are actually asking that much more for homes, it’s because the number of homes listed from Jan-May 2019 vs Jan-May 2018 for under $700k is down nearly 27% compared to a decrease of just over 9% for homes over $700k. This has shifted the middle/median up substantially, but doesn’t actually indicate owners are asking more for their homes rather that there’s just less availability of homes under $700k.
For reference, the average listing price is up just 5.6%, to $782,156, in the first five months of 2019, a more accurate representation of the actual increase to asking prices.
The main reason for the drop-off in housing supply below $700k is the decrease in 1-2BR condos, as detailed in the chart below:
To highlight how easy it is to manipulate housing data to show the opposite of what Realtor.com claims to be happening in our market, I looked at three sub-markets to compare how median price is changing within similar housing stock. Looking at cross-sections of a local market with similar housing stock allows us to draw a more accurate picture of what’s actually happening, but even the chart below is misleading because it suggests asking prices are dropping this year, which isn’t true.
So What’s Actually Happening?
Over the last few months I have started to see asking prices increase. Occasionally I’ll see an asking price 15-20%+ higher than where it would’ve been last year, but mostly it seems asking prices for similar types of homes are up by 3-5% which is why you’re still seeing so many homes sell for above ask because most market values have increased by more than that (I’ve teed this one up perfectly for famed ARLnow commenter $4 Million to Heirs Annually).
Next month I’ll be working closely with Jeannette Chapman of George Mason University’s Fuller Institute to provide a detailed look at the Arlington housing market through the first half of 2019. I’m looking forward to collaborating with Jeannette on multiple columns to bring you more advanced market studies and opinions.
If you’d like a question answered in my weekly column or to set-up an in-person meeting to discuss local Real Estate, please send an email to Eli@EliResidential.com.
Question: I’ve made a few offers on homes and am frustrated by the lack of negotiating I’m able to do. Are there things I can look for that are a sign that there’s room to negotiate price and terms?
Answer: Most Buyers think that negotiating the terms of a home purchase is between them and the home owners, but in reality, most of the time you’re actually negotiating against other buyers. This is especially true when a home has been on the market for 30 days or less. You can make a perfect case for why a home is worth less than the owner is asking, but if there are other buyers willing to pay more and offer better supporting terms, you don’t even get a participation trophy. If you’re dead-set on negotiating the price and maintaining favorable contingencies, the best thing to look at is the number of days a home has been on the market.
Historical data supports the following:
If you want to purchase a home that has been on market for 10 days or less, you should be prepared to pay at or above the asking price
There is very little room to negotiate price in the first 30 days
Buyers gain negotiation leverage after a home has been listed for 30 days and it gets better each month after that
The last three months of closed sales in Arlington shows the following:
Buyers who purchased a home within 10 days of it being listed for sale negotiated 1% or more off the asking price on just 7.9% of transactions
Buyers who purchased a home within 10 days of it being listed for sale paid 5% or more over the asking price on 18.7% of transactions
Use this data to make buying more strategic and less guesswork/frustration, but remember there is no hard rule that you can’t negotiate a price and terms from Day 1 or that a Seller is going to agree to discount their price after three months. Remember that each transaction is unique in that both parties have their own set of priorities/circumstances, each house comes with its own unique strengths and flaws, and all it takes is one or two Buyers being on vacation/busy for a deal to go from multiple escalating offers to one negotiable contract. Take some time to understand underlying market trends and probabilities and apply those to each individual transaction based on the information that is unique to it.
If you’d like to meet to discuss how data can be used to develop your purchase strategy, you can email me at Eli@EliResidential.com to schedule a time to meet.