Tarn Jones, 23, will have to forgo spring-cleaning until next year. Last week, Jones bought his first home, a condo in Oakton.
In contrast to many homebuyers a year ago, he never felt rushed, frustrated or stressed out. Actually, the process wasn’t worrisome at all.
“I’d been looking online for a couple of months,” said Jones, who found an agent and patiently shopped around before finding a two-bedroom spread with a sunroom and hardwood floors. “I just loved the place and it was close to the Metro.” Before buying, Jones visited six other comparably priced condos just to be sure.
Had it been last March, or any time the past five years, Jones’s home search would have been markedly different, a fact that wasn’t lost on Jones, a Reston native.
“I think it’s definitely pushing towards a buyers market much more than it has been,” said Jones, who feels like he was able to find a good deal. It didn’t hurt that his Realtor negotiated for the seller to cover some of his closing costs.
JONES, AND OTHERS like him, are just what real estate agents are hoping for this spring — the return of the buyer. But buyers have quickly realized this isn’t last year’s market.
“Buyers have been beat up for the past several years,” said David Howell, managing broker of McEnearney Associates in McLean, describing how competitive buyers had been during the housing boom of the past five years. But in the latter part of 2005, the market began to cool with sagging sales and a steep rise in inventory. “Now, [buyers] have some leverage and they’re using it.”
Howell, who has tracked movements in the Northern Virginia real estate market since 1979, added that would-be buyers this spring won’t be in a big rush. In addition, he said, buyers are asking for — and getting — home inspection, roof inspection and radon contingencies.
“There’s also been an increase in home sale contingencies,” said Howell, referring to move-up buyers who need to sell their homes before buying a new one.
Without the rush to move quickly, house hunting has become much more relaxed. “If a buyer finds a house they like, they have time to think about it,” said Tracy Pless of Long & Foster, immediate past chairman of Northern Virginia Association of Realtors. “We’ve had much happier buyers than we’ve had in past years. They’re pleased with their purchases. They’re pleased with their negotiation skills.”
DURING THE FRENZIED pace of previous years when buying was extremely profitable but not always so enjoyable, escalation clauses and various waivers were common. But with inventory about five times what it was last year, the market has decelerated into what experts agree is a “more normal market.”
Smart, patient buyers, led by knowledgeable agents, are benefiting from a market that is slowly correcting itself after six consecutive years of 20-plus percent increases in home appreciation.
“If you go to the multiple listing site, you see tons and tons of price reductions,” said Ernie Miller, sales manager of Better Homes Realty in Springfield. “Buyers are asking for sales prices less than list price. They’re asking for seller contingencies, and we’re seeing very few houses go when they’re first put on the market.” When Miller, who has 33 years of real estate experience, listed a townhouse in Alexandria, it received three offers. “But none for full price and without some seller concessions,” he said. “Had this been a year ago, you would have had everyone competing for the home above list price.”
Richard Hutchison, senior vice president of mortgage lending with James Monroe Bank, said he’s seen Realtors recently negotiate lower mortgage rates for buyers by asking sellers to buy down the rate. In this case, sellers are asked to pay for one point toward the mortgage rate at the cost of 1 percent of the buyer’s loan, which gives buyer lower monthly payments and savings in the long run. “The key to a transaction like that is a solid real estate agent,” said Hutchison.
REALTORS AGREE, however, that none of these trends spell big trouble for sellers. Agents continue to remind sellers that expectations based on last year’s market no longer apply.
As the market shifted, sellers haven’t been as quick as buyers to adjust expectations. “We still see a number of properties priced as if it was last year,” said Howell. He added that 40 percent of houses that got contracts in the first part of March had price reductions before they got contracts.
Realtors are also asking sellers to be more patient. Last year at this time, the typical home sold in 12 days. Now, the typical home sells in about 50 days.
But when sellers’ expectations match the market, homes don’t last long. “If a property is priced well, looks well and shows well, it still sells quickly,” said Pless.
But sellers who have put off repairs or updates may need to work harder to promote their homes, which sometimes translates into new carpets and appliances or renovated bathrooms and kitchens.
“You really need to get your home in ship shape,” said Miller. “Don’t put it on the market and then say you’re going to fix this or that.”