Key Local Market Info!

Most Important First Step is Selecting a Realtor® 
Whether you're a first-time home buyer, a move-up purchaser, acquiring an investment property, or relocating across the country to find a home, buying a home is one of the most thrilling events experienced in your lifetime. The process can be a confusing one for some, or simply a re-fresher for others who have bought and sold multiple homes.

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The Pre-Offer Work
First, let's review a little background about some of the many things that should have occurred prior to an offer being received. Hopefully, the seller began the process by hiring an Exceptional, Highly Effective Agent who specializes in Northern Virginia real estate. This type of agent is best positioned to reach the seller's desired outcome in the most efficient and professional manner possible. Prior to receiving an offer, the agent and seller have collaborated on all the vital steps to make sure the home is show-ready to achieve maximum buyer interest.

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Understanding Seller Agency - Seller is Protected
When a seller in Northern Virginia desires to sell their home at the maximum price and in the shortest amount of time, their first step is usually to contact an exceptional real estate agent who specializes in this market.  The sale of a home begins with the seller hiring a real estate broker-agent through a written Listing Agreement.  The Listing Agreement establishes Seller Agency and outlines all of the contractual duties required by the Broker like what price to sell the property, how the property will be marketed, and how the Broker will act as a fiduciary for the seller and protect their best interests at all times.  The Broker then lists the property for sale and cooperates with other Broker-buyer agents to solicit offers from ready, willing and able buyers. 

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What is Gross Rent Multiplier (GRM)?
In a recent blog post, I explained the use of Cap Rate by investors as a financial technique to estimate value when considering the buying or selling of a multi-family apartment building.  Another metric used in real estate is Gross Rent Multiplier (GRM).  Like Cap Rate, GRM is simply a gauge of value, but it can be used to quickly compare investment opportunities.  GRM accounts for the gross rents as measured against the selling price. It's calculated by taking the price and dividing it by the total annual gross rent.  For example, a price of $1 million divided by $100,000 in gross rent produces a GRM of 10.  Generally, GRM's in the Northern Virginia region vary widely between 6 and 16 based upon building location, rent level, age, and class.  Generally, the higher the GRM the better the building and lower the perceived risk.  Likewise, the higher the GRM the longer it will take an investor to recover their investment, meaning a lower ROI.

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Not All Realtors® Are Created Equal
There are over 16,000 member Realtors® in Northern Virginia between the three associations; the Northern Virginia Association of Realtors (NVAR), the Realtor Association of Prince William (PWAR), and the Dulles Area Association of Realtors (DAAR).  The largest association being NVAR with over 12,500 members and each is part of the overarching National Association of Realtors®.  Buyers and sellers should know the only common denominators shared among practicing agents in Northern Virginia is they have passed an exam to become licensed in the state, they have activated their license with a supervising broker, and they have joined one of the three Realtor® associations in Northern Virginia to be recognized as a member.  That's where the similarities and standards generally end.

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