Tysons, VA

This regularly-scheduled sponsored Q&A column is written by Val Sotillo, Northern Virginia-based Realtor and Falls Church resident. Please submit your questions to her via email for response in future columns. Enjoy!

Question: What can you tell me about living in Oakton?

Answer: Oakton is a great place to live. According to a new set of rankings released by Niche, Oakton is the 8th best place to live in the state. The ranking looked at several factors, such as public schools, housing, diversity and family environment. Oakton received an A+ for its public schools, A for diversity, A+ for family environment and B for housing.

So What’s So Great About Oakton?

Location — The Vienna Metro is the last stop on the Orange Line. The station is located in Oakton, in the median of Interstate 66 at Nutley Street, which provides quick access to 495 and can take you to D.C. in 25 minutes. You can get to Dulles Airport in 20 minutes. It’s also less than 3 miles from the Town of Vienna and all its amenities. (Check my past column about Town of Vienna).

Shopping and Dining — The Oakton Farmer’s Market operates year round. Hunter Mill Plaza and Oakton Shopping Center have a great selection of eateries, including Chipotle, Luciano’s Italian, Old Peking, Yoko Japanese, Starbucks and other services include Giant, CVS, Wells Fargo Bank and a wide variety of medical offices.

It’s only a 5 minute drive to the thriving Mosaic District, offering many options for dining, shopping, fitness and entertainment.

Active Community — Oakton has plenty of parks for different activities: Oakton Community Park has a nice playground, Tattersall Park has quiet jogging and hiking trails, and Waples Mill Meadow Park is great for birding (who knew!).

The Oak Marr Golf Complex includes not only the challenging 1,456 yard, 9-hole par three golf course, with holes from 95-200 yards, but also a lighted 78 station driving range with target greens and covered, heated tees. And the Oak Marr Rec Center offers a gym with state-of-the-art equipment, group exercise classes, swimming pools, racquetball, spa, and many activities. Check the full calendar here.

If you have a dog, you can walk to Moorefield Park. The play area is shaded by mature trees and completely fenced in, providing a cool and safe retreat for dogs and their families. Water is available on site as well. All dogs must be licensed by the Town of Vienna or Fairfax County.

Housing

There are many different options for detached homes, townhomes and condos. There are 48 properties for sale, ranging from a one bedroom condo for $249,900, to a brand new 8,000 sq. ft., 7 bedroom single family home for $4,895,950. You can see the active listings here.

Twenty-nine properties are under contract, ranging from a 1 bedroom condo at $260,000, to an 8 bedroom single family house at $1,699,900.

In the past 6 months, 46 condos were sold for a median price of $290,900; 34 townhouses were sold for a median price of $523,450; and 88 single family homes sold for a median price of $900,000.

If you’d like more information, or would like a question answered in my bi-weekly column, please reach out to [email protected]. I hope to hear from you soon.

Val Sotillo is a licensed Realtor in Virginia, Washington D.C., and Maryland with Real Living At Home, 4040 N. Fairfax Drive, Suite #10C Arlington, VA 22203, 703-390-9460.

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This regularly-scheduled sponsored Q&A column is written by Val Sotillo, Northern Virginia-based Realtor and Falls Church resident. Please submit your questions to her via email for response in future columns. Enjoy!

Question: We are planning to buy our first house in 2020 and we’re trying to set up a budget. What advice do you give clients to help them decide how much of a mortgage they can afford?

Answer: Spend too much and you’ll have a half-empty home for a few years. Don’t spend enough and you may be moving sooner than you hoped. This week we’ll break down some of the conversations I have early on with clients as they’re deciding how much mortgage they can afford.

How Much Can You Really Spend?

The first thing you’ll want to do is determine how much you’re allowed to spend by talking with a lender who will provide an honest, detailed review of your finances to let you know what your maximum loan and monthly payment amount is. A good lender will also serve as a valuable advisor as you plan your budget.

Length of Ownership

The amount of time you expect to own your home is extremely important in your home-buying strategy and often glossed over.

If you are buying a 3-5 year home (accurate for many first-time buyers) your focus should be on value and keeping your cost down so that you give yourself room to save for your next purchase, which is likely a longer-term home. Your income and inflation are less likely to increase significantly in that time, so an expensive monthly payment now will still feel expensive in 3-5 years.

If you are buying a 10-15+ year home, the greatest value you’ll generate is choosing a home that suits you and your family long-term. The cost of buying something too small or too far from work that leads to a sale halfway through your intended ownership period is often much higher (taxes, commissions, closing costs, moving costs, etc) than the cost of moving into a slightly uncomfortable range of your budget.

Your mortgage payment hopefully won’t feel expensive forever if you’re in the first half of your professional career because you’ll likely have significant increases in income and, over time, the effects of inflation will minimize the stress of your mortgage (if it’s a fixed rate mortgage).

Monthly vs Down Payment

I find that most people based their budget on their savings and thus, the amount they have to put down towards a max purchase price. Remember a home mortgage isn’t the only recurring expense. Don’t forget to consider how much you’re comfortable spending each month which includes your mortgage, taxes (assume annual increases), applicable condo or HOA fees and homeowner’s insurance. This doesn’t include a budget for maintenance and repairs, which should be estimated at an annual expense of 1-2% of your home’s value.

Savings is clearly an important factor in what you can afford. Your savings determines the amount you can put down; although with solid loan products available with as little as 3% down, many buyers qualify for a lot of house with little savings.

In addition to your down payment, you’ll pay 2-3% of the purchase price in closing costs like taxes, fees, insurance and escrows (closing costs can be paid by the seller). Finally, don’t forget about what you’ll need after you close — moving and furniture add up quickly and you should always have 3-6 months of fixed/living expenses in savings in case of emergency.

Don’t Tempt Yourself

Once you decide on your budget, don’t allow yourself to visit properties that are highly unlikely to drop within your budget. One of the easiest ways to derail your progress is visiting homes 10-20% over budget, leading you to desire features that only exist together in homes you can’t afford. Save the window shopping for another time if you’re serious about buying a home now.

Ultimately, the best way to decide how much mortgage you can afford is to plan ahead by establishing a relationship with a lender and taking enough time to explore your options with an agent who understands the market and your needs.

With enough planning and work, you’ll be able to decide for yourself if the mortgage you can afford gets you the home you want, or if paying rent for another year is better than paying a mortgage.

If you’d like more information, or would like a question answered in my bi-weekly column, please reach out to [email protected]. I hope to hear from you soon.

Val Sotillo is a licensed Realtor in Virginia, Washington D.C., and Maryland with Real Living At Home, 4040 N. Fairfax Drive, Suite #10C Arlington, VA 22203, 703-390-9460.

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This regularly-scheduled sponsored Q&A column is written by Val Sotillo, Northern Virginia-based Realtor and Falls Church resident. Please submit your questions to her via email for response in future columns. Enjoy!

Question:  What neighborhoods are between Tysons and City of Falls Church?

Answer: The neighborhood of Idylwood is located in Falls Church. It originally developed as a suburban community along the route of the W&OD Railroad, and later along Virginia State Route 7. It is bordered to the east by the city of Falls Church, to the north by Pimmit Hills and Tysons, to the west by Dunn Loring, and to the southwest by Merrifield.

Here are the top reasons that make Idylwood an awesome neighborhood:

Great Location

It’s located within 3 miles, of West Falls Church station on the Orange Line, and Greensboro station on the Silver Line. It’s easy access to I-66, 495, Dulles Access Toll Road, and just minutes from Tysons — only 12 miles from D.C.

For joggers and bikers, there’s easy access to the W&OD Trail, going all the way from Shirlington to Purcellville.

Things To Do

It’s located just a couple of miles from all the fun, shopping and entertainment in Tysons and City of Falls Church. Idylwood Park (7715 Virginia Lane) offers baseball fields, tennis courts, a playground and a large soccer field. What I enjoy most about this park is that it is literally walking distance to the W&OD trail.

Jefferson District Park offers a Mini-Golf course, lighted tennis and basketball courts, picnic facilities, a children’s playground and nine-hole executive golf course.

There’s also a range of ethnic restaurants. Taco Bamba is one of my all-time favorites. They have amazing tacos and the best Mexican street corn. Crisp & Juicy for Peruvian Chicken (expert here!); Victor Grill, super casual and delicious Argentinian steakhouse (they have the best deals on wine, especially Malbec); and 2941 Restaurant if you want to celebrate a special occasion or try fancy French-American food.

Idylwood Plaza has everything you need! From Whole Foods, to Starbucks, to My Eye Dr. Just give yourself time to find parking as the shopping center is very busy.

You’re also close to all the fun in Mosaic District!

Many Housing Options

There are different options from detached homes, townhomes and condos. In Idlywood, there are currently 26 properties for sale, ranging from a one bedroom condo for $199,999, to a $1.699M 5 bedroom home built in 2015, located by West Falls Church Metro. You can see all active listings here.

Seventeen properties are currently under contract, ranging from a 2 bedroom condo at $240,000 to a custom built 5 bedroom Craftsman house at $1.649 million.

In the past 6 months, 73 condos were sold for a median price of $265,000, 35 townhouses were sold for a median price of $592,5000, and 51 single family homes sold for a median price of $775,000.

Great Quality of Life.

Falls Church Ranked as No. 1 Healthiest Community in U.S. in 2018. Need to say more?

Changes on the Horizon

While the area has a timeless quality to it, things will change a bit in the next few years. Founder’s Row is a mixed use project located at the corner of W. Broad and N. West Streets and it will include a 6-8 screen dine-in movie theater with 850 seats, 5,000 square feet of office and 60,000 square feet of retail-restaurant space and 72 senior and 322 market rate apartments. Also, new developments in Tysons and Mosaic District are in progress. I’ll keep you posted!

If you’d like more information, or would like a question answered in my weekly column, please reach out to [email protected] I hope to hear from you soon.

If you’d like more information, or would like a question answered in my bi-weekly column, please reach out to [email protected]. I hope to hear from you soon.

Val Sotillo is a licensed Realtor in Virginia, Washington D.C., and Maryland with Real Living At Home, 4040 N. Fairfax Drive, Suite #10C Arlington, VA 22203, 703-390-9460.

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Ask Val: House Hunting Apps

This regularly-scheduled sponsored Q&A column is written by Val Sotillo, Northern Virginia-based Realtor and Falls Church resident. Please submit your questions to her via email for response in future columns. Enjoy!

Question: Which free real estate sites are accurate and reliable?

Answer: Whether you’re looking to buy or sell a house, you’re tracking home sales in your neighborhood, or you’re just curious about the value of homes these days, chances are that you’ve visited one of many real estate websites. Technology can help make your search a little easier allowing you to view listings, calculate mortgage costs, and find out which businesses and attractions are nearby.

According to a 2017 report from the National Association of Realtors, nearly all homebuyers start their home search online, up from just 44 percent in 2015.

How Do You Know Which Of The Countless Real Estate Sites Are Worth Your Time?

Most used by my clients: Homesnap

The biggest advantage of Homesnap is that it has a partnership with our Multiple Listing Service (MLS) Bright, which is the system of record agents use to enter and manage properties that are coming soon, for sale, under contract and sold. The result is that the status of every property in Homesnap is 100% accurate and that changes are made in real-time vs the delay you see on many other property search sites.

Everything you see in Homesnap reflects exactly what the listing agent enters into MRIS. You can connect directly with your Realtor through Homesnap (click the link to connect with me!) allowing you to send homes you’re interested in directly to your agent.

The chat function allows you and your agent to communicate through the app and keeps a record of the properties you’ve shared back and forth. You can also add multiple people to the chat (like a spouse).

Snap a photo of any home across the nation to get instant property details, including home values, when it last sold, number of bedrooms and bathrooms, taxes, lot boundaries, local school ratings, similar listings and nearby sales.

Other Search Apps

Sites: Zillow, Trulia, Redfin, Homes, Realtor.com, etc.

I grouped these sites together because they essentially do the same thing: search the local multiple listing service (MLS) for properties for sale. Homebuyers can search by city/state or zip code to see current listings, and filter by price, number of beds and baths, property type, square feet, features, age of home and listing activity (e.g., open houses, new listings, price reduced).

Just keep in mind that Zillow and Trulia are not always reliable in terms of what’s for sale and what’s not on the market. They often show properties as currently listed that are not on the market, and vice versa. They have what they call a “Zestimate” of the value of all homes, but they are not always accurate.

MLS Through Your Realtor

The most accurate, up-to-date information available on your real estate market will come through the local Multiple Listing Service (MLS). This is information that licensed realtors and brokers have access to. Your real estate agent can set up email alerts for you based on specific search criteria.

Other Helpful Sites

Greatschools for school ratings.

Walkscore for commute report and options for getting around by car, bus, bike and foot.

Homepath for foreclosure properties owned by Fannie Mae.

What other property search tools do you like or have used in the past? I’d love to hear from you!

Note: Homesnap did not sponsor or review this post.

If you’d like more information, or would like a question answered in my bi-weekly column, please reach out to [email protected]. I hope to hear from you soon.

Val Sotillo is a licensed Realtor in Virginia, Washington D.C., and Maryland with Real Living At Home, 4040 N. Fairfax Drive, Suite #10C Arlington, VA 22203, 703-390-9460.

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Ask Val: Basement Makeover 101

This regularly-scheduled sponsored Q&A column is written by Val Sotillo, Northern Virginia-based Realtor and Falls Church resident. Please submit your questions to her via email for response in future columns. Enjoy!

Question: We’ve owned our home for a couple of years and our partially finished basement is filled with every old and unwanted item in the house from old furniture to memorabilia. Do you have any tips for remodeling our basement and making the most out of that space?

Answer: We are lucky enough to live in an area where basements are a commonly built element of most homes. The basement is a perfect space that can be remodeled and finished so that it not only integrates with the rest of the home, but becomes a valuable asset to the property.

The best way to figure out how to put your finished basement to use is to determine what your home is missing and explore ideas that you often can’t apply to your main living space. A media room, living room, wine cellar, wet bar, gym, office, playroom, man’s cave and guest room are all popular choices for basement spaces.

I spoke with Caroline Goree, a Project Leader with BOWA, a local design build firm that specializes in luxury renovations from kitchens to whole-home remodels. Here are her answers to frequently asked questions about basement projects:

How do you make a basement feel more inviting and connected to the rest of the home?

Nowadays, many clients are trying to integrate their basements with the first floor of the house to create more of a “lower level” rather than dark, cold, “cellar” feeling.

In the past, the entrance and stairwell to the basement were narrow and dark. Today, we are seeing folks create stairways that are open and inviting, frequently featuring a nice railing or banister for an added touch. Generous lighting is also important in making the lower level feel warm and inviting, and most homeowners find they need significantly more lighting in this area than anywhere else in the home to achieve this objective.

If possible, take advantage of natural light by installing large windows or French doors. Don’t forget to also include ample lighting controls as well. By adding recessed lights throughout and highlighting different spaces with decorative wall sconces, it can completely transform the ambiance of this level.

How should you repurpose the basement to create a more functional space for your family?

Homeowners are much more interested in using the basement in other ways besides storage and laundry (many even requesting to move the laundry up to the main level).

Before diving into a construction project, we encourage our clients to start with an assessment of their needs. If you’ve had any life changing events, such as a new baby or caring for aging parents, you may want to consider a nanny or in-law suite. Just keep in mind there are egress requirements that will need to be met with rooms like these.

Or maybe you are looking to create a space for a hobby or passion? If you’re a wine enthusiast, consider adding anything from a wet bar with a wine refrigerator, to having your own temperature controlled, walk-in wine cellar and tasting room.

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This regularly-scheduled sponsored Q&A column is written by Val Sotillo, Northern Virginia-based Realtor and Falls Church resident. Please submit your questions to her via email for response in future columns. Enjoy!

Question: What can you tell me about living in the City of Fairfax?

Answer: The City of Fairfax is an independent city in the Commonwealth of Virginia, gets its name from Thomas Fairfax, 6th Lord Fairfax of Cameron, who had five million acres of land located in Northern Virginia. It is home to George Mason University but it’s more than just a college town. The city is rich in history and its attractive blend of commercial, office, retail and residential properties combines the charm of a small town with the opportunities of a thriving urban area.

What’s Great About The City of Fairfax:

Location — Fairfax is located minutes away from Tysons. It has its own Metro Station (Vienna-Fairfax) and it’s the last stop on the orange line. It is located off of Route 50 and I-66, which provides quick access to Dulles Toll Road, 495 and can take you to D.C. in 25 minutes. You can get to Dulles Airport in 20 minutes. Overall, it’s a great location.

Great sense of community — Fairfax has a great sense of community and they do an excellent job at keeping residents informed with all their news, events and activities with their monthly newsletter.

Things to do — Parades, festivals, fireworks, concerts, farmer’s market, bingo at the Fire Station… you name it! A few of my favorite events are Celebrate Fairfax, and the upcoming City of Fairfax Fall Festival, a festival with over 400 arts, crafts, food vendors, children’s activities and three stages of music and entertainment for all ages.

You can visit Civil War sites such as Ox Hill Battelfield Park, enjoy one of the many parks and recreational areas including basketball, tennis and volleyball courts. Or take Fido to the brand new Fairfax City Dog Park.

Scooters and bikes are now available for rent to stroll around the city, just keep in mind that the City of Fairfax does not allow e-scooters or e-bikes on sidewalks or walking trails, but they are permitted on the road and in bike lanes.

There are endless dining and entertainment options, but a few favorites are The Auld Shebeen for drinks, live music, or trivia, Sisters Thai and Artie’s for great food.

Here’s a map with the best Fairfax attractions.

Housing

There are many different options for detached homes, townhomes and condos. Within the City of Fairfax limits there are 62 properties for sale, ranging from a 1 bedroom condo in Mosby Woods for $175,000, to a new custom built 5 bedroom single family home for $1,295,000. You can see the active listings here.

Seventy properties are under contract, ranging from a 1 bedroom condo at $179,900, to a new custom built, 5 bedroom single family house at $1,295,000.

In the past 6 months, 41 condos were sold for a median price of $220,000; 36 townhouses were sold for a median price of $646,500; and 149 single family homes sold for a median price of $575,000.

What’s Next For Fairfax City?

Amongst current developments, Point 50 is under construction (10412 Fairfax Blvd) with 48,199 square feet of retail space, including a grocery store under 30,000 square feet and 18,000 square feet of additional retail/restaurant space. Scout on the Circle is another development close to completion.

The city is definitely keeping up with the ongoing growth and development and continues to evolve to accommodate changing needs of residents and businesses. The City of Fairfax 2035 Comprehensive Plan was adopted by the City Council and it was developed around 14 content areas, categorized into the Land Use, Multimodal Transportation, Environment and Sustainability, Economic Development, and Community Services chapters.

Their goal for 2035, is to be a city with a close-knit community and a population that is diverse in its culture, demographics and lifestyles, that capitalizes on its location in the center of the growing region and with easy access to the nation’s capital.

I will keep you posted!

If you’d like more information, or would like a question answered in my bi-weekly column, please reach out to [email protected]. I hope to hear from you soon.

Val Sotillo is a licensed Realtor in Virginia, Washington D.C., and Maryland with Real Living At Home, 4040 N. Fairfax Drive, Suite #10C Arlington, VA 22203, 703-390-9460.

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Ask Val: Who Pays Closing Costs?

This regularly-scheduled sponsored Q&A column is written by Val Sotillo, Northern Virginia-based Realtor and Falls Church resident. Please submit your questions to her via email for response in future columns. Enjoy!

Question: What are closing costs in a real estate transaction? Who pays closing costs in a home sale and which terms are negotiable?

Answer: When it comes to budgeting for a home purchase or sale, you’ll also need to plan for closing costs, which are due at settlement day.

Closing costs vary by state and locality, but it is customary in Virginia, D.C. and Maryland for each side to cover the taxes and fees associated with their portion of the transaction and the seller to pay the commission to both the broker/agent representing them and the broker/agent representing the buyer.

Sellers pay about .25% of purchase price, plus the commission they’ve agreed to, in closing costs. Buyers pay about 2.5-3% of purchase price in closing costs.

Here are the standard closing costs on each side of a home sale for transactions in Fairfax. Virginia:

Sellers

All of the fees listed below are automatically deducted from the buyer’s payment so you do not pay any of these out-of-pocket, except for the resale package if your home is part of an HOA or Condo Association.

Commission: Sellers traditionally cover the commission for their representing broker/agent and offer a commission to the buyer’s representing broker/agent.

Title Fees: This covers the legal review and preparation of the sale documents and usually runs about $500-$1,000.

Transaction Taxes: The seller pays a transfer tax to the state, also known as the VA Grantor tax.

Prorations: You may owe or be credited for property taxes or HOA/Condo fees, based on the status of your tax payment.

Resale Package: If your home is in an HOA or condo building you are required to provide the buyer with a resale package including by-laws, reserve balance, Association inspection, etc. This fee varies by community but is usually $100-$300.

Buyers

All of the fees/taxes listed below are included in your costs due at closing, except the appraisal, inspection costs and in some cases a condo questionnaire, which are all paid out-of-pocket while you’re under contract.

Lender Fees: This includes the cost of processing your loan, any points paid to reduce your interest rate, appraisal cost and any other lender-related costs. These costs often total at least $1,000-$2,000+, plus any points purchased to bring down your rate.

Title Fees: These charges include lender-required title insurance, optional buyer’s title insurance, deed preparation, title abstract search, land survey and other general processing fees to prepare the legal and administrative side of your purchase. These costs usually cost $500-$1,500, plus the cost of title insurance (if required and/or opted for), which is usually about .25-.75% of purchase price.

Transaction Taxes: You’re responsible for a handful of state and local taxes, some fee-based like the deed recordation fee and others are a percentage of the purchase price like the state and county transfer tax. Expect to pay roughly .5-.75% of purchase price in Government fees and taxes.

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This regularly-scheduled sponsored Q&A column is written by Val Sotillo, Northern Virginia-based Realtor and Falls Church resident. Please submit your questions to her via email for response in future columns. Enjoy!

Question: I’m looking to purchase a home that’s walking distance from the metro station. What are my housing options and what neighborhoods do you recommend around the Vienna Metro Station?

Answer: Vienna Metro Station is the last stop on the Orange Line. The station is in Oakton, in the median of Interstate 66 at Nutley Street (Virginia State Route 243) which provides quick access to 495 and can take you to D.C. in 25 minutes. You can get to Dulles Airport in 20 minutes. Overall, a great location!

The communities around the metro are beautiful and offer many housing options. It’s a mix of original homes and new construction; condos and large homes. The area is very walkable with lots of green spaces, and it tends to be quiet during the weekends.

What’s Great About The Neighborhood

Location — The Vienna Metro is located minutes away from Tysons. Depending on which side of the metro you are, you could walk to Pan Am Shopping Center. It’s less than 2 miles from the upcoming mixed use development Scout on the Circle, which will have small shop retail, and a 54,000 sq. ft. Giant Food.

It’s also less than 3 miles from the Town of Vienna and all its amenities. (Check my past column about Town of Vienna)

It’s only a 5 minute drive to the thriving Mosaic District, offering many options for dining (True Food and B Side are some my favorites!), shopping, fitness and entertainment.

Active Community — The Providence Community Center is just steps from the metro and it provides the residents of all ages various fun activities such as Yoga, crafts,and chess club. Here’s the full schedule.

There are parks within walking distance such as Nottoway Park, offering tennis, basketball and volleyball courts, gardens, picnic areas and wooded nature paths.

If you have a dog, you can walk to Moorefield Park. The play area is shaded by mature trees and completely fenced in, providing a cool and safe retreat for dogs and their families. Water is available on site as well. All dogs must be licensed by the Town of Vienna or Fairfax County.

Housing

There are many different options for detached homes, townhomes and condos. If you’re interested in new construction, check out my column about Metro West.

Within 1.2 miles from the metro, there are 66 properties for sale, ranging from a one bedroom condo for $179,900, to a brand new 6,000 sq. ft., 5 bedroom single family home for $2,295,000. You can see the active listings here.

Twelve properties are under contract, ranging from a 1 bedroom condo at $195,000, to a new custom built, 6 bedroom single family house at $1,449,900.

In the past 6 months, 86 condos were sold for a median price of $327,500; 110 townhouses were sold for a median price of $549,000; and 71 single family homes sold for a median price of $815,000.

I visited some active listings in the area, and the nearest to the metro is a 2 bedroom condo, located at 2971 Centerboro Drive #379 (Courtesy of RLAH Real Estate).

Here’s a little video tour for you:

If you’d like more information, or would like a question answered in my weekly column, please reach out to [email protected]. I hope to hear from you soon.

Val Sotillo is a licensed Realtor in Virginia, Washington D.C., and Maryland with Real Living At Home, 2420 Wilson Blvd #101 Arlington, VA 22201, 703-390-9460.

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This regularly-scheduled sponsored Q&A column is written by Val Sotillo, Northern Virginia-based Realtor and Falls Church resident. Please submit your questions to her via email for response in future columns. Enjoy!

Question: I am interested in remodeling my home to better suit my family’s current lifestyle and taste. How much should I consider resale value over our personal preferences?

Answer: I often say that the best way to ensure your home is a good investment is to find one that will suit you for a long time. Market appreciation and local development are never guaranteed, but eliminating one or two real estate transactions from your lifetime is a guaranteed way to generate value. This is why many homeowners take on major remodeling projects instead of moving to a new home.

Major remodeling projects often cost well into the six-figures so homeowners rightly question resale value. To provide an insider’s opinion, I reached out to Caroline Goree ([email protected]), a Project Leader with BOWA, a local Design Build firm that specializes in luxury renovations from kitchens to whole-home remodels.

In Caroline’s role, she works almost daily with her clients from the design consultation through construction so she is intimately familiar with the challenges homeowners face when choosing between resale value and personal preference. The following is courtesy of Caroline:

Renovation Expert Advice

As a Project Leader, I am part of the remodeling process from beginning to end and there almost always comes a point during the design phase when clients ask “Will I ever get a return on my investment?”

How often do you buy a new pair of shoes or new tech and consider its return on investment? Taking on a major renovation allows you to stay in your neighborhood, extend the time you live in your home, and customize to your lifestyle. Some of these bonuses won’t show up in a financial model, so it’s important to remember that return on investment can be about more than money (like the one year old iPhone you just replaced with a newer iPhone).

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This regularly-scheduled sponsored Q&A column is written by Val Sotillo, Northern Virginia-based Realtor and Falls Church resident. Please submit your questions to her via email for response in future columns. Enjoy!

Question: We are under contract for a property in Falls Church and the home didn’t appraise for the purchase price. What are our options?

Answer: Don’t panic! Low appraisals are a common side effect of a seller’s market. Appraisals are largely based on comparable home sales that closed prior to the home you’re buying. When there is a limited number of units that have sold and the market is hot, appraisers might have a harder time coming up with a home value that keeps pace with a hot market.

But First, What’s An Appraisal Contingency?

A home appraisal is an impartial professional opinion of how much a home is worth. In a property sale transaction, an appraisal is used to let the lender know that the contracted sales price is supported.

An appraisal contingency protects buyers if the appraised value is less than the price they’ve agreed to pay for the property and gives them the right to renegotiate the sales price with the seller, or withdraw from the contract without a penalty if buyer and seller don’t come to an agreement.

Your mortgage lender cares about the appraisal only to the extent it affects the loan-to-value ratio. A low appraisal does not mean the lender won’t lend. It means the lender will make a loan based on the ratio agreed to in the contract at the appraised value.

When Is It Okay To Waive The Appraisal Contingency?

I don’t often recommend waiving the appraisal contingency, but in some unique situations it could be considered an option:

  • Buyers competing with multiple offers might choose not to include an appraisal contingency in their contract to make their offer more attractive to the seller. Buyers must be financially prepared to cover any difference between the sales price and appraised value.
  • For an all-cash buyer, an appraisal is not required but it’s entirely up to the buyer to have one.

Most Common Reasons For Low Appraisals

  • The market is moving too quickly — In areas where homes are selling rapidly, with multiple offers and increasing prices, it may be difficult for the appraiser to keep up with them as the appraisal process compares recent past sales.
  • Bad comps — Bank owned, foreclosures and distressed properties bring down the value of the subject property unless an appraiser adjusts for marketing conditions.
  • Improvements are not always as valuable as you would expect — No matter how nice, the appraiser won’t value the improvements significantly higher than the same improvements in the other homes in the area.
  • Lack of local market knowledge — The comps the appraiser uses may be in an area that is not as pleasant or desirable as where the subject home is, which can negatively impact the appraisal value.
  • The property is priced incorrectly — A common saying in real estate is that a property is worth whatever someone is willing to pay for it. While some would argue that you should never pay more for a home than what it’s worth, it’s important to remember that appraisals are merely opinions of value. This is where your agent is especially helpful and he understands what the market is doing and can clarify your options so you can make the best decision for that moment.

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