It’s boring, it’s tedious … and there always seems to be something better you could be doing. BUT it is also one of the most important responsibilities you have as a student, and surprisingly it is completely applicable to the home buying process … even in ways that many homebuyers don’t fully understand. This is especially true in the Bay River region because there is such a wealth of information to be learned.
Put Some Muscle Into It
Many second home buyers feel that scouring through the internet on Zillow and Trulia counts as legwork. Trust us — it’s not. Neither is watching HGTV nor reading magazines about the latest kitchen trends.
You cannot get a true sense of anything at the Bay until you see it with your own eyes.
When it comes truly educating yourself about the market, spending a few hours online doesn’t suffice.
Doing your homework as a buyer means getting in the car, driving to the ‘Rivah,’ and taking a long hard look at the inventory available. Figuring out what you don’t like will put you that much closer to finding the perfect second home. Communicate with your agent about what you see, and ask questions about the difference in values that each property commands. The agents at Bay Properties are experts at navigating the roads and waterways of the Chesapeake, and they will be more than happy to steer you through your journey.
Learning is Key
Half of the battle is being prepared to learn.
It is also about understanding what goes on behind the scenes of both sides… buying AND selling. Keeping track of things like inventory levels and days-on-market trends is hugely important. The Bay River river region behaves much differently than many other primary home markets, so it is important to have an agent who is familiar with and pays attention to local trends. Don’t assume that your home market and the Bay will act in the same way. To assume that aggregate conditions apply universally would be hazardous, and while it may be an easier assumption to make, it is seldom correct.
This Homework is Fun
Remember, doing your homework efficiently is essential. And nothing makes doing your homework easier than having an experienced and knowledgeable teacher to help guide you along the way — plus, we can tell you where to get the best local seafood!
The Central Virginia Regional MLS covers regions from west of Richmond to the Chesapeake Bay and is the source Realtors use.
Zillow, Trulia, Realtor.com, MLS.com (which is NOT MLS, by the way), Homefinder, Craigslist, Movoto – all of these sites offer some form of real estate search. And when you layer on all of the brokerage websites that offer search, you end up with a limitless supply of options for the public to find out what is for sale.
The Search Game
No matter where you turn, agents, brokerages and technology startups are all looking to get into the search game. Each platform is in a never ending race to offer the best user interface, the best bells and whistles and the greatest number of houses for sale.
But what are they all offering?
Each site, no matter how slick, fast loading or visually appealing, is offering a mediocre version of the ultimate search database – the Multiple Listing Service (a.k.a – MLS). The MLS is the database that Realtors use and it is, far and away, the most accurate of them all and the one you, as members of the public, should want to use.
MLS is the Gold Standard
So what makes MLS so good? About 40 pages of rules and some pretty stiff fines for violations, that’s what.
“According to recent studies, well over 90% of all transactions are tracked through MLS…
You see, few realize that one of the most valuable services that Realtors provide is the collection and curation of housing data. The data that we collect on housing – from age, style, size and features, to pricing info and marketing times – helps everyone. Appraisers, tax assessors, government agencies, mortgage companies, Fannie Mae and FHA all use the data that we collect to help make informed decisions about housing.
Without MLS, we would all be guessing.
So Zillow Isn’t MLS?
Nope… not even close.
Zillow, and Trulia, and every other website that offers search is not MLS. Some platforms receive limited feeds from MLS that contain a partial list of available properties. Others receive a more complete list of available properties, but the time lag between when a property is available and when it shows up is significant.
“Zillow’s estimates of value are strongest in subdivisions where lot sizes, home sizes and constructions materials are the same. The Chesapeake Bay region gives Zillow’s estimator fits…
The bottom line is that every site that offers free and unfettered home search is giving you a dated and incomplete version of the data – and using your traffic to sell ads.
The Real Scoop
So you want to know the real deal?
Here it is:
Multiple Listing Service (MLS) is maintained by the local Board of Realtors and is the most accurate and up-to-date database available. So you realize, banks require that all appraisers searching for comparable sales use MLS. Although MLS is not a public database, it can be accessed by individual clients through a ‘Client Portal.’ This portal can only be set up by a licensed Realtor and member of the local MLS.
IDX (Internet Data eXchange) is basically like a window into MLS, but it displays FOR SALE properties only. When you look on an agent’s or brokerage’s site for homes, you are probably looking at an IDX feed. Since it pulls directly from the MLS, the data is equally as accurate, but it may lag by 24-48 hours. If urgency is not an issue, then we recommend IDX as a good way to search.
Aggregators (such as Trulia and Zillow) do not have the authority to display MLS properties on their websites, so they rely on a combination of other methods to obtain their data. Because they do not work with MLS, they have fewer rules concerning accuracy, and fewer rules means outdated and incorrect information within the database. Aggregators source their sales information from tax records (updated quarterly), so the latest sales will likely not be displayed. Lastly, the results generated on these sites are largely influenced by advertising revenue – if you pay, they display.
Good Agents have a ton of connections and often times know about opportunities that MLS and Zillow will never know. And even more importantly, you can use these connections to your advantage if they know about off market opportunities that would never hit the internet. It is not uncommon for a seller to feel uncomfortable displaying their home online or publicizing that they want to sell. Sometimes it simply comes down to privacy issues. Whatever the reason, the agents at Bay Properties often know about these unique off market opportunities and can help match you with them.
Every Platform Has a Purpose
Ultimately, each site has its own purpose, so asking Zillow to do the same thing as MLS will not yield the proper result. But if you think about it, using the wrong tool for a job usually doesn’t end well, regardless of what you are trying to accomplish.
Choose wisely and don’t forget to use your agent as a resource as well.
Taking the first steps towards buying a Bay property can be intimidating for many people.
Maybe you aren’t familiar with the area, or maybe you’re having trouble choosing between Mobjack Bay and the Rappahannock River. Maybe you just don’t even know what you’re looking for yet. For whatever reason, you have no idea where to start, and we are here to help.
As you begin your journey, here are a few things we recommend taking into consideration…
Choosing a Realtor
You should interview several Realtors in order to find one that you like best.
Don’t feel obligated to work with the first realtor you meet. Look into their background and determine if they are buyer-based or seller-based.
Do they have area(s) of expertise?
Do they have a weekend home someplace or have they spent their lives in a particular location?
Do they specialize in a specific type of property?
Do they work full time or do they treat real estate like a hobby?
What you’re really looking for is whether or not they have a bias towards a certain asset type or geographic location that could sway their advice. Many agents do specialize to some extent; however, you still want to see if they can offer unbiased guidance.
If they can’t, find a new realtor. You want opinion, but you don’t want persuasion.
MLS vs. Trulia/Zillow/Realtor.com
You should get set up IMMEDIATELY on the local MLS’s version of a Client Gateway or Portal.
The Bay River region has its own MLS service that offers a direct link to MLS which can only be set up by a Realtor. It will give you immediate notification if a property falls within the set parameters.
Additionally, you want to set broad parameters (features, price, location) AND set the MLS Portal up to include both PENDING and SOLD properties. I can feel my realtor comrades shudder as I write this…but it is true…at least to start with.
Why use broadly defined searches? Because every property is related, and knowing what’s happening in other areas and price points is crucial. Similarly, sometimes the best deals are ‘value add’ in some way; when you define your search narrowly you miss those opportunities.
Why include Pending and Sold Inventory? Tracking how quickly properties sell when they enter the market tells you a great deal about the market strength. Follow this closely.
Don’t Be Afraid to Ask Questions
Talk to everyone you can about the area.
What makes it unique? Is it history? Proximity to a shopping center? Architecture? Near a marina? Near the Tides Inn?
Let’s say you are having trouble deciding between a waterfront, water view, or water access property (all of which are prevalent Bay options) — asking for local opinions would be especially helpful. Each person will have a different experience, and they will all try to convince you why they live in the best place.
Let them do it…there is a plethora of useful information in these little anecdotes. Use the opportunity to build your Bay knowledge.
Crunch the Numbers
Quickly find inventory graphs to better understand what’s going on in the market.
The MLS system has a great statistical package that can help make sense of market conditions.
Although sold and pending properties can be helpful, seeing how inventory and pending sales are tracking will tell you a lot more about market strength. This way you will be able to better gauge current sales rates and how long the current for-sale inventory might last. Ask your agent about this information — they should have access to it.
When it comes to calculating what you can afford, flood insurance will be an important expense to include in your budget. For some properties located within the Chesapeake Bay watershed, flood insurance can cost upwards of $1,000 per year. We do not mention this to scare you; however, we do want you to have a realistic set of expectations. Getting in contact with a seasoned local lender who is familiar with the region and can assist you will be immensely important — ask your agent for a referral. Leveraging your realtor’s relationships will make the entire process that much easier (more on this in a moment).
Keep Your Eyes and Ears Open
Follow the local newsfeeds to get a sense of the local happenings (such as BayJournal.com). Neighborhood pages (like Rappahannock News or Gloucester-Mathews Gazette-Journal) can also give you a quick taste of local flavor. I
t is all a part of understanding the ins and outs of a new region.
Take Advantage of Your Realtor’s Connections
Get a recommendation from your Realtor for a LENDER (and attorney) and make sure they are acquainted with one another. For an agent, it’s much easier to mitigate a last minute closing problem by knowing who to call rather than knowing what to say. We (realtors) are dedicated to providing fabulous service for our clients, so we’re more than happy to point you in the right direction.
And for a place like the Chesapeake Bay, the way housing is bought and financed is different. Second homes and investment properties make up a large part of the purchases here and the loan products required are different. The local lenders know this and can offer the best financing advice to clients. The rates that you see advertised online or through your local credit union are generally for primary residences — not vacation homes. Make sure to use lenders familiar with the Bay market.
Ask your agent for a list of local lenders. Not only will they have access to the best loan products, but they will also know what they are doing. During your search, you’ll find plenty of mortgage outfits promising ridiculous rates and low closing costs in order to hook you (they are stretching the truth). Keep in mind, when something goes awry right before closing (they always do), your agent should know who to call to get things running smoothly again. We also sincerely believe that when a lender is deciding which file to work on, it’s almost guaranteed they will choose the file that came from a valued referral source first and all of the others second. You want to be the ‘priority’ file.
Bring Your “A” Game
One of the most important things you can do is pay attention. Keep up with new notifications and try to figure out if a new listing will sell quickly or slowly to test your understanding of the market. If you get to the point where you can identify which properties are more likely to sell quickly, you are getting the hang of it.
Most importantly, take advantage of the information available to you and build a quality team who has experience working together. If you surround yourself with outstanding people and do your homework, it should be smooth sailing.
