Moving to the Washington DC Area?
Are you moving to the DC Area from somewhere that’s not the DC Area? Excellent, because this video is for you!
Several years ago, when the real estate markets across the U.S. were bubbling over with demand, buyers moving to DC came here expecting a similar market to the one they left behind. Yes, of course there were nuances in this area compared to other parts of the country. But generally buyers came to the DMV expecting the same multiple offer and escalation situation they left behind.
Over the last year and a half, the real estate market has cooled throughout the country. We’ve all come to expect a slower pace and an easier time. Unfortunately, that didn’t exactly happen here – at least not in all areas.
The way the market here reacted was different based on price point. Under $700,000, which in this market is likely a first- or second-time homebuyer, sales softened. A year ago, there were some darn good deals on homes that would have usually flown off the market in a weekend with multiple offers. The market above $1M though is still competitive. Things may have slowed down, but when I say “slowed down,” I mean from 10 offers per home to 3. That’s still competitive.
Every single person who contacts me from watching my videos says the same thing: “You are no bullshit and that’s what we need.” Well this is going to be the epitome of my Take-No-Prisoners Approach to Real Estate, because it’s time for some tough love. My job is to help you find the best house for you, while managing your expectations and balancing your finances and your dreams.
Do you want to move to the DC Area and successfully buy a great house? Here are five things you need to know to be ready for this market.
1. Have a consultation with me.
Once I hear what you are looking for, I’ll give you my advice, but of course once we start looking at homes in person and I see what really rings the bells for you, my advice on our best course of action may shift. I know areas, I know schools and I know returns on investments. The consultation is critical. We cannot put the cart before the horse.
If you don’t call me (and I don’t know why you wouldn’t but to each his own,) and you call another agent, and they don’t sit you down to explain the whole buying process to you, fill you in on the nuances of the market here and how it differs in different areas based on who the sellers and buyers are, then you may find you’re not in the best hands. It’s okay. I’ve been many buyer’s second phone call. I get it, I’m not everyone’s cup of tea. But I won’t do you dirty. I won’t stick you in any old house. More on that in a minute.
2. Listen to me.
I can’t stress this enough. I don’t tell people things because I’m a Debbie Downer or I want you to do things my way, or because I just want you to get into a house so I can get my commission and move on. That’s not who I am. Believe me. I was showing clients some homes last week and their teenager was with them. They told me that he said, “Mom isn’t this lady supposed to be selling us a house? She keeps telling us what’s wrong with the houses.” Yes. I tour hundreds of houses every year. When it comes to a crooked floor and whether it is a structural issue, I can feel it in a split second. I rarely drink so a crooked or shifting floor is not something I’ll miss or try to convince you to overlook. I strongly encourage people to walk away from structural problems. Do you know what I call a structural problem? The seller’s responsibility. Not yours. Let’s keep it moving.
In all seriousness, I don’t want you to buy a hunk of junk. I love you, but I don’t want you calling me in a year saying you made a mistake. With transaction fees and transfer taxes it is often difficult to get you out and break even much less walk away with some money in your pocket from a sale.
3. Know Your Competition!
This is important in any game but especially this one. Make Sure You Understand this: One in five buyers in the DC Area has cash. Cold. Hard. Cash. Don’t underestimate how many ex-pats work here. They take revolving overseas assignments and their salary dumps at 100% into their bank account while everything else is paid for. They come back to the U.S. prepared to buy, with $500K burning a hole in their bank account.
You also can’t stereotype your competition by age. Just because that couple bidding on the same house you are is in their early 20’s, it doesn’t mean they aren’t flush with cash. There are many buyers out there with a lot of money. I’m Gen X but I’ve watched people make fun of millennials for years now and you know something, they are no joke. They have money and they are stiff competition in the buying market.
4. Don’t Underestimate the Crazy.
A friend once told me that DC is a city full of frustrated ex-Class Presidents. This is critical to understand because the people here like to win and they will stop at nothing to do so. Don’t believe me? Flash back to Covid. As soon as the vaccine came out, people who I thought were relatively normal were inventing excuses to step over the elderly to barrel to the front of the vaccine line. It was disgusting.
I’ve seen time and time again when clients move here from other markets, they want to do things that their friends told them to do, or they want to do something that’s normal in their home market and I explain to them that this how things work here. Melissa, can you give us an example? Yes I can!
In the throes of the crazy, someone here started something called a “pre-inspection.” What is this? It’s a home inspection. Before you submit the offer. For the sole purpose of waiving the home inspection when you submit that offer.
But Melissa, “Does this mean that there will be several people doing home inspections on a house only one of them will buy?” Yes. “That can’t be real, is it?” It is indeed real. I’ve been in a house with clients and their inspector while there were 10 other inspections happening at the same time. I just told a lender from the mid-west this and her mind was blown.
This is currently still happening on the most competitive houses.
Another thing to know, depending on your chosen area, things may be incredibly competitive. I just had clients lose out on a $1.5M home, even when they offered more money than the competing buyer because the other offer was conventional financing and my clients were using a VA loan. Sellers always choose to go with the most “sure thing” over price. (Side note: my buyer clients also opted to do a void-only inspection and the other buyer went with a full-negotiation option and the seller still chose that buyer over my clients. Joke’s on them, they are now making a lot of repairs.)
5. Rate it on a Scale of 1-10 and be prepared to act fast.
When I’m in a house with a client, one of my favorite questions to ask is what the house ranks for them on a scale of 1-10, with a caveat. They are not allowed to consider price in the equation. I just want to know what the house ranks for them in terms of pros and cons overall. Give it a score. If you said eight or higher, we need to have a serious conversation about the home. We all want the 10 out of 10, but with competition, it’s rare to find it in this market.
This means, let’s get you the house you can get, not necessarily the dream. Don’t get me wrong, the dream still happens for buyers, but it’s after setting expectations properly and ultimately making some compromises.
I realize you don’t know me well, and you might be saying, “Lady, take your list and stick it where the sun don’t shine.” And that’s okay. But I am very conservative when it comes to real estate. I have never been the agent to say “the time to buy is right now.” But I’m so sure of a down-market being the right time that I bought another home this year – at almost an 8% interest rate. Outrageous! But, I plan on refinancing when rates come back down. And they will. Will this be painful for a few months or years until I get there? It will. But with risk comes reward and if done right, real estate always pays back with rewards.
Next spring, you could be in line, waiting to get into your 19th open house. Or you could be looking out the living room window of your new home watching the line form for the open house across the street. Let me know which it’s going to be.
