Whether you just bought your home or you have owned it for years, it’s always fun to keep up with the current value and to see how your investment has appreciated.

As interesting as it is to see the recent sales and speculate your home’s worth, it’s important to note that many homeowners get a false idea of value by looking at online sites and other assessments. While those sources offer estimates of home value, most of them are not accurate and are just very rough approximate values. This is fine if you are not planning to sell anytime soon. However, it is super important to know the correct value range when it’s time to put your home on the market.

Your most important resource for a true value assessment of your home will be an experienced professional Realtor.

First, let’s talk about where homeowners tend to find information on home values. Everyone gets a city or county tax bill, which includes an assessment of value. The tax assessed value can be much lower or much higher than what your home would actually sell for on the open market. In most cases, an assessor has never seen the inside of your property. They use a software program based on sales data and a rough comparison of property features. Their goal is to provide a tax bill for town revenues, and they are not purporting to be an accurate source of value.

Another popular, yet misleading, source of home data is online valuation sites. Zillow is the main one that homeowners cite when discussing value. However, as with most of the online sources, Zillow gets its information from a combination of county websites, user input and recent sales. They publish their margin for error on their website, and in many cases, the error range can be significant. For instance, in Arlington County, Zillow lists the median error rate as 2.5%, so their valuation of a $1 million home is likely to be off by $25,000 or more. In other areas, the error rate is even higher. To view the Zillow margins for error in Virginia, check out Virginia Data Coverage and Zestimate Accuracy.

Another frequently used source of value is the neighborhood grapevine. Your neighbor sold their home, had multiple offers and it sold for well above list price. You think that your home is better than their home, and therefore, you decide that your home value is even higher. Unfortunately, unless you are planning on listing your home within a few weeks of your neighbor’s sale, this data can be unreliable. The real estate market can change drastically in just a short period of time, and it is important to look at not only comparable sales, but also the most recent ones. And, of course, the ages of the roof, HVAC, windows and other features must be accounted for in a value calculation.

So, as you can see, county assessments, online sites and neighbors are frequently used unofficial sources of home value. It’s fine to keep tabs on the market using these sources if you just want a general idea of value, but when the time comes to get serious about selling your home, it’s time to drill down into the details to determine value.

When the time comes to sell your home, what do you do to determine a good list price?

First and foremost, consult an experienced Realtor. A good full-time Realtor sells 20+ homes a year, brings lots of experience to the table and knows the nuances of pricing a home for sale.

Before you ever sell your home, your professional Realtor will prepare a Comparative Market Analysis (CMA). A CMA will take into account a wide range of very specific information, and most importantly, will include data on all sold homes in your area within a 6-12 month period.

The CMA will compare an array of features including: square footage, number of bedrooms, number of baths, style of residence and number of stories. Once the size is closely matched, then the qualities and updates of the home should be studied and factored in. This will include things like size of lot, orientation of the lot, your home’s location in the neighborhood, the age of roof and windows, upgrades to kitchen and baths, type of floors, and more. All of this will be compared to recently sold homes of similar size, to determine a value range for your home.

Lastly, your Realtor will discuss your home’s value range with you and make recommendations on what the best list price would be to drive buyer traffic in to see your home. A great Realtor will be able to suggest a list price that ends up being very close to the final sale price. Ideally, you will have chosen a list price that appeals to buyers and is supported by all the features of your lovely home, resulting in a quick sale at top dollar!

For a no-obligation Comparative Market Analysis for your home, reach out today to Kim and Hope Peele at 703-244-5852.

Kim Peele is a licensed real estate agent with McEnearney Associates, Inc., lives in Old Town and works in VA, DC & MD. She and her daughter Hope Peele are The Peele Group. Kim is a second generation Realtor and fourth generation Washingtonian and is dedicated to helping owners through the challenges of selling their home.

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With an increased need for privacy and cleanliness while vacationing, many people chose to stay at a place that felt like home away from their home this past year by renting a short-term property through websites like VRBO and AirBnB.

I recently stayed in one such vacation home with my family that was clearly a second home for the owners. I couldn’t help but think a number of times while we were there that it would be great to have a second home like this while having a supplementary income to finance it. By providing a wonderful vacation home for others, owning a second home comes into the realm of possibility for more homeowners.

But how feasible is it actually to own a short-term rental? There are three important things to consider before taking the plunge:

1. Know the law.

Ignorance of local laws is not defensible in court. Each jurisdiction has specific laws about short-term rentals and you should be aware of them before you purchase. Your Realtor should be able to recommend a good attorney who would have the answers to any questions that you might have. Also, a good Realtor has a network of trusted agents across the country who can help you find a home outside of their jurisdiction so that the purchase of your second home runs smoothly.

2. Only buy a home you would want to live in.

Many areas of the country are wonderful, vacation hot spots for a reason, but if it doesn’t match your style, don’t buy it. If you don’t enjoy spending time at the beach, don’t buy a beach home just because you think other people will like it. Some people are beach people, others are mountain people. There will be other people who find value in your property.

When purchasing, it is best to make a list of positives and negatives about the property that you are considering. Can you picture yourself in this home for years to come? Can you imagine coming back with friends and relatives? What will Aunt Mabel think about this place? Do you know the area and could find someone to look after it for you if a problem arises while the house is being rented? If a home checks everything off of your list, it might be a great option for you!

3. Ease of getting to and from the home and access to amenities.

You may find out that the local laws are amenable to short-term rentals and you love the area, but how easily accessible is the home? We stayed in a vacation home once that was on the side of a very steep hill. There was not much flat space to run or play, and the nearest town and grocery store was a half an hour drive away on sharp, twisty mountain roads.

While you may love the privacy, and it would look attractive to a first-time renter unfamiliar with the area who found the house online, a location like this may deter repeat business.

The best short-term rentals are those that you can rent again and again to the same people. It allows you to develop a relationship with them and know the people who are staying in your home and what state of cleanliness they will leave the home in afterward. Not only that, but repeat business ensures your potential rental income for the future. There was probably a reason that attracted you to the area in the first place — highlighting the features of the home to your renters will make them want to keep coming back.

Of course, there are many other things to consider before purchasing a second home, but with the rise in short-term rentals, low interest rates and ease and convenience of finding renters through online websites, there has never been a better time than now to jump into the secondary home market.

Jean Beatty is a licensed real estate agent in VA, MD, and DC with McEnearney Associates Realtors® in McLean, VA. If you would like more information on selling or buying in today’s complex market, contact Jean at 301-641-4149 or visit her website JeanBeatty.com.

Take a look at our website for all of our listings available throughout Washington, D.C., Maryland, and Virginia.

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When considering a move, sometimes there’s a dilemma. Is this the right time to buy, or should I rent again? In some areas of the country, it’s a clear choice. If mortgage payments will be consistently lower than rent, or at least close, there is an obvious opportunity to see appreciation in your investment and come out ahead in a few years. In our area, it can be a little tricker.

The first step in your decision-making process is to find a good Realtor who will be patient, answer all of your questions and see you through the process — whether you decide to rent or buy this year. Your Realtor will guide you through the process of shopping for homes that fit your situation and budget and will negotiate diligently on your behalf when the time comes. They also have great resources and can refer you to trusted lenders, which is your second most important step in making your decision about a home!

Whether you want to buy now, or even in a year or two, an experienced local lender will provide all the important financial information that you need to make your decision. They will look at your credit score, job history, income, as well as your assets and debt. All this information will help them to map out the best plan for your future, regardless of where you already are in the process. A good lender will give you options for loan programs, helping you create the most competitive offer when you are ready to buy, and they will show what your interest rate would be depending on how much you put down on your loan. They will also have guidance for you on how your tax savings may allow you to make a mortgage payment higher than what you would be comfortable paying for a rental. Your Realtor and lender should be identified early, as they will become your close advisors in this journey to decide whether to rent or buy.

Let’s talk about the upside of buying. Clearly, there are many reasons to buy. First, you can truly make your home your own. Remodeling, updating and even just painting are all your decisions and to your tastes. Second, your investment will grow and make money for you as home values increase. Third, depending on the mortgage program chosen, your payments will remain almost the same for many years, except for minor changes in taxes and insurance. Lastly, the cost of waiting will be higher interest rates — now at all-time lows — and more expensive homes. Your buying power will lessen the longer you wait.

A few years back, we met Margaret and Devon (names have been changed) at a rental in Alexandria where the monthly rent was $2,700. It was a 2-bedroom, 2-bath condo about a mile from the center of Old Town. They were newlyweds and expecting their first child. They mentioned to us that they didn’t think that it would be possible for them to own a home in this area. We suggested they talk with one of our favorite lenders, and they discovered that a mortgage payment for a home up to $550K would be about the same monthly payment. Also — they could get away with just 5% down. Like many newlyweds, they didn’t have quite that much to put down, so their parents gave them a tax-deductible gift of $25K. In this instance, it made much more sense to buy than rent, and this family was thankful for the information. Several years later, their $549K purchase is now worth $635K and growing.

Now, let’s talk about the cons of buying and why some are deciding to rent.

First, when you buy a home, the maintenance becomes your responsibility, so knowing exactly what you are getting into is important. How old are the systems in the home and the roof? What’s new, and what will need to be replaced in the next few years? Your realtor will help you evaluate the home and get the necessary inspections.

Secondly, it’s often competitive to get a home. This past year has been a seller’s market in much of the U.S., and Northern Virginia and D.C. have been particularly difficult areas for buyers. Many listings have had anywhere from 5 to 20 offers on them. Low interest rates and pandemic-induced cabin fever has caused people to reevaluate their space, and in many cases, look for a newer, larger home. The Amazon headquarters and new Virginia Tech campus on the Route 1 corridor created a lot of buzz about increasing values. All of this resulted in high demand and low inventory.

Photo Courtesy Of: Attom Data Solutions

According to ATTOM Data Solutions, a property database company, “owning a median-priced three-bedroom home is more affordable than renting a three-bedroom property in 63% of the 915 U.S. counties analyzed for the report.”

The bottom line is, your decision on whether to buy or rent will be unique to your situation. You should talk to a Realtor and a lender, sooner rather than later. They will help you with a full evaluation of the market and of your buying power so you can make an educated decision on whether to buy a home this year or to wait.

And, of course, if we can be of assistance, we are always happy to help! We would never try to convince someone to get into a situation that they cannot afford. However, we would also never want someone to miss opportunities that they can afford because they didn’t know their options. Homeownership is often more attainable than people realize. Simple education, guided by the experts, is the key to not missing out on your chance to invest in your future! For a confidential meeting, reach out to Hope and Kim Peele at 703-244-5852.

Kim Peele is a licensed real estate agent with McEnearney Associates, Inc., lives in Old Town and works in Virginia, D.C. and Maryland. She and her daughter Hope Peele are The Peele Group. Kim is a second-generation Realtor and fourth-generation Washingtonian and is dedicated to helping owners through the challenges of selling their home.

Take a look at our website for all of our listings available throughout Washington, D.C., Maryland, and Virginia.

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