Insider’s View

The ultimate appeal of any property is that it is unique. From the design of the house itself, to the size, shape and topography of the lot upon which it rests, no two homes are the same.

And while in urban lots tend to be more similar, we find the opposite to be true in the Bay region.

Know Your Lot

So if you are considering building, spend at least as much time selecting the lot as you do with the layout of the home. Plans can be modified, but the lot you choose will be there forever.

Here are a few things to think about:

• If it is oddly shaped and you are forced to move to one side, then you may want to use fewer windows on that corner.
• If the home backs to a spectacular view, find a plan that will incorporate the view into your daily living experience.
• If no dwelling has ever been built on the lot, you will have to accommodate where the well and septic systems will be located.
• If the lot has a difficult slope or other feature, see if you can incorporate it into the home’s design (walk out basements or storage are usually a good solution for a sloped lot).
• If a neighbor’s home is closer to the side of their lot, you may want to create some distance to maintain privacy.

Take some time scoping out the lot you’re considering and analyze what characteristics make it unique. If there are any features you find to be unfavorable, talk with your Realtor about ways they can be minimized. Likewise, if there is a particularly great feature (like an awesome Bay view) this can be highlighted. And having been in this business for a long time, most of the agents at Bay Properties have seen their fair share of lots and homes that are not in sync with one another.

Being aware of how a lot will relate to a home can really create value.

Know Your Region – Private Roads and Easements

Private lanes and driveways are much more common in the Bay region, meaning you will find fewer paved roads that lead through a neighborhood and directly to a lot. Private roads are typically handled by Road Maintenance Agreements or other documents. Make sure to get a copy before buying to understand how the road is maintained.

Furthermore, if the specific property you are considering is landlocked, it will be important that you obtain the proper easements. Otherwise, you could be committing a civil trespassing offense whenever you enter or leave the property.

Each home can only be built once, so invest some time in really thinking through how the home, lot and other elements all relate.

Led by cousins Ryan and Travis Croxton, Rappahannock Oyster Company set out in 2001 to resurrect the native Bay oyster just after the Chesapeake had recorded its lowest oyster harvest in history. Their family’s century-old oyster leases were about to expire with the state, and they had to make a game-time decision. Ryan and Travis chose to renew the family leases and planted over 3,000 oyster seed the following Spring in 2002.

Sixteen years later, both the company and the Bay oysters are thriving. Because of operations and enthusiasm like the Croxtons’ around Virginia, the state has become the leading oyster producer on the entire East Coast.

What began as Rappahannock Oyster Co.’s ‘tasting room’ in Topping, Virginia in 2011, called Merroir, is now a renowned oyster bar that boasts tons of reviews and fabulous ratings on Facebook. The name ‘Merroir’ comes from a twist of the wine term ‘terroir’ to reference the characteristic taste and flavor imparted to an oyster by their environment.

Oysters can taste radically different depending on a host of factors, most typically related to the salinity of the water where they were harvested. For instance, the mineral-rich freshwater from the Blue Ridge Mountains has a strong effect on the Rappahannock River Oysters, accounting for their trademark ‘sweetness.’ Similarly, the Stingray Oysters grown in Mobjack Bay have a distinctly saltier taste than the Rappahannock Oyster due to the influx of saltwater streaming in from the Atlantic Ocean.

Merroir’s oyster menu consists of three different varieties:

• Rappahannock River Oysters (sweet)
• Stingray Oysters (mild)
• Olde Salt Oysters (briny)

Aside from Oysters, customers can also enjoy craft brews on tap, dozens of world-famous wines and bottled beers, and an always-changing menu of small-plate delicacies, all while basking in a beautiful waterfront view of the Rappahannock River. The Croxtons also have a second oyster bar in Washington, D.C. called Rappahannock Oyster Bar.

The real piece de resistance, however, lies in Richmond, Virginia: The Rappahannock Oyster Company Restaurant on E. Grace Street. The restaurant has partnered with like-minded farmers and fisherman to bring an experience that is both refreshing and unique to customers. It has received national recognition for its cuisine, earning a place among Esquire magazine’s “Best New Restaurants” in 2014.

In real estate, almost every conversation centers around price.

And although the price of a property does carry significant weight, remember that it is only one piece of the pie when making a good deal. There are numerous other factors that can turn a good deal into a really great one.

Deciding Between Price or Terms

There are two things that make up a real estate contract: the price of the property and terms to which both sides must adhere. Even though price tends to create all of the buzz, the terms can have a substantial impact on the value of the contract.

Think about it – how much space in the contract is dedicated to each component?

In the Central Virginia Association of Realtors Residential Purchase Agreement, you will find the following language discussing price:

“The purchase price of the property is __________, which shall be paid to the seller at settlement, subject to the prorations described herein…

The standard contract then goes on for eight more pages to cover the additional items that go along with the purchasing a property!

Just to be clear – the purchase price is covered in one sentence while the rest of the contract is eight pages long. And just so you understand, the contract is eight pages before adding the required disclosures or any addenda.

What does that tell you?
The ‘Standard Provisions’ alone run from A through K. Did you know that Section #21 is labelled ‘Other Terms’ and is completely blank? And did you know we can include as many addenda in the contract as necessary?

Terms

Contracts cover a number of bases:

• Financing
• Inspections
• Title
• Numerous Disclosures
• Closing
• Fees
• Representation
• Default

While people typically do not negotiate each of these individual points in a standard residential contract, there is some flexibility to either create leeway or close some ‘outs’ (depending on which side you are on). When you begin to look at other types of real estate contracts (land, new homes) then you introduce components that fall outside of the generally accepted norms.

At Bay Properties, we pride ourselves on having a great deal of exposure to contract structures and practices due to our extensive experience in not just real estate sales, but in contract negotiations relating to commercial properties, development transactions, and commercial lending.

Here are a few things to think about.

Have an Exit Plan

Getting into a contract is easy but getting out can be hard, expensive, or worse – both!

Knowing how you can get out before you get in is important. And although you should never enter into a contract with someone if you’re planning to get out later, we know circumstances can change. If this happens and a seller is not in a giving mood, you may have to exercise on of the legal ‘outs’ provided in most contracts.

In any contract, there are some points that are more likely to “blow up” the contract than other points. In addition, the closer you get to the settlement date the harder (and more expensive) negotiating becomes. It is important to recognize the potential points in a contract where you can extricate yourself without penalty (or even lawsuit) before signing on the dotted line.

Recognize What Both Parties Want

Everyone values things differently and this is no different when it comes to buying and selling homes.

For someone who is trying to both sell a home and purchase another, time and flexibility are of the utmost importance. Allowing a seller not only the time, but the ability to go out and find their next home is absolutely vital to them. The use of a ‘Rent Back’ agreement is appropriate.

If the house you are looking to buy was already a second home, much of the personal property including furniture may be included with the deal. If it can save the seller time and money when moving, it will often all be very negotiable and for a very reasonable price. The ‘Bill of Sale’ is the correct tool in these instances.

Being able to offer a currency that is more valuable to them than you is always a good idea.

Get a Grasp on Contract Structures

A contract is a flexible and adaptable document that can do a lot of different things. Having been exposed to the common practices in the residential market, ranging from the Middle Peninsula through the Northern Neck, has given us insight into a wide range of techniques.

In some spring markets, multiple offers can be common. Securing the winning offer in a bidding war is difficult. When 3 or more people are bidding at once, offers will often include escalation clauses. Writing an escalation clause that secures the property while also paying as little as possible is no easy task.

Thinking about the number of times a bid was lost or a price was unnecessarily escalated makes me shudder. This can happen due to a number of reasons, from faulty structure to simply not understanding contract options.
When it comes down to it, swap price for terms and you will gain far more than you lose.

Conclusion

This post only scratches the surface.

Because each set of circumstances is unique, it’s difficult to give a complete roadmap to contract writing in blog form. The structure of a contract should vary by the parties involved, marketplace conditions and each individual’s goals.

At Bay Properties, we know how to use a contract to our client’s advantage.