Alarming Observations of Arlington’s Real Estate Market
I got my real estate license in February of 2008, in the middle of our tanking economy but before we hit rock bottom in the winter of 2009. That means, I wasn’t selling real estate during the high days of multiple offers, crazy prices, no inspections, and overextending your finances. I’ve seen the market rebound both in activity, prices, and confidence. I’ve seen buyers get smarter, more educated on the process and prices, as well as investment options and selling features. That said, our local market has been continuously improving since that winter in 2009, however, lately I’ve had some concerns on just how quickly things are changing.
Recently, I had clients who wrote an offer on a house in Arlington. They were 1 of 7 offers. Yes, 7. Escalation clauses were used, short contingencies were added, and yet, they were down to the last 2 offers being considered. They ended up losing the house because someone was willing to pay thousands more than the house was actually worth. I told them I wouldn’t be able to sleep at night if I had let them pay that much for that house. It’s not my money, it’s not my house, but my job is to advise you in buying real estate, and one of those things is educating you on the market and market value for certain properties. Although it’s sad, if someone is willing to literally pay tens of thousands more than it’s worth, you HAVE to let them have it. Hindsight is always 20/20, and with life ever changing, you never know when you’ll need to sell a house and that small “investment” you made to get it, may end up costing you drastically later on.
I’ve also seen some ridiculous pricing for some other properties, like condos, that absolutely blow my mind. Perhaps I’m overly cautious, but I just can’t see how prices have escalated as quickly over the past year as they have. I have a few thoughts I’d like to share….please feel free to chime in:
1. RUN COMPARABLES. Don’t use Zillow, Don’t use Trulia. All of those automated sites are pulling random sales that happen to post to the site (they don’t include everything), and they don’t account for variables: size, parking, storage, condition, location, etc. Have your agent show you what has sold in the neighborhood or the complex. Educate yourself on them before you decide on market value. Evaluate the differences.
2. Keep your plan in mind. Is this a 5-7 year house? Is it a 30 year house? If you’re willing to pay a few extra thousand on a “forever” house, in the long run it won’t be a big deal to get the house you actually want. However, if this is short term and you know you plan to resell, every extra penny will matter.
3. If it seems crazy, it probably is. If you’re being advised to waive a home inspection, or waive appraisal, it sounds shady because it is. Offering to do a home inspection for information only (i.e. retaining your right void) isn’t uncommon, but at least you get to do an inspection. Most cash deals don’t do an appraisal, it’s sort of unnecessary if you’re well educated in the market, but if you’re getting a mortgage, you probably won’t be able to waive an appraisal, especially if you’re putting down less than 20%.
That said – if you’re thinking of selling, this should be SCREAMING SELL to you!! Take advantage of this market!