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This regularly scheduled sponsored column is written by Eli Tucker, Arlington-based Realtor and Arlington resident. If you would like to work with Eli and his team in Northern Virginia and the greater D.C. Metro area, you can reach him directly at Eli@EliResidential.com.

Eli and his team believe that your real estate needs should be managed by advisors, not salespeople. Their mission is to guide, educate, and advocate for their clients through real advice, hands-on support, and personalized service.

Question: Should Virginia pass a law that gives buyers a non-negotiable due diligence period?

Answer: The last few years have ushered in complex and difficult debates locally and nationally about housing and what the role of federal, state, and local government should be in private housing. Nationally, we are dealing with an affordability crisis and locally we’ve debated Missing Middle/EHO.

To me, the most critical and interesting questions center around what government’s role should be in private housing and what, if any, responsibility does government have to homebuyers and sellers. That applies to a wide range of housing-related issues including but certainly not limited to taxation, zoning, insurance, Realtor commissions, and affordability.

Don’t worry, I don’t have a death wish and am not about to open a conversation about government, free markets, and housing affordability a week before the election. This is (hopefully) a more subdued topic.

Buyers Are Foregoing All/Most Due Diligence

One of the unfortunate results of our highly competitive housing market over the last 5+ years is the amount of protection and due diligence buyers have given up purchasing a home. In many home purchases, especially single-family detached, buyers are foregoing inspections and financing/appraisal contingencies to compete. It often shocks me on my listings how many buyers choose not to do a home inspection, even in scenarios where a pre-inspection (inspection conducted prior to making an offer) is possible.

Buyers accepting the risk (sometimes significant risk) of no contingencies (contractual protections) is somewhat of a catch 22 — they do it because other buyers they’re competing against are doing it and they in turn become the buyers that cause other buyers to make similar decisions. When the market is at its most competitive (generally the first half of the year), I would estimate that at least 2/3 of homes (probably more) in Northern Virginia that go under contract within the first week on market (most homes) do not have any contingencies and many of those buyers never do a home inspection.

Should Due Diligence Laws Be Passed?

Until we move into a less competitive market, which seems a long way off due to systemic supply issues and robust demand in Northern Virginia/D.C. Metro, I don’t see this pattern of homebuyer risk changing in a meaningful way.

So, I wonder out loud (and via the poll below) — should Virginia pass a law that gives every homebuyer a non-negotiable due diligence period after they’re under contract? They can use this time, at their option/cost, to conduct a home inspection, confirm a property is insurable, and more.

To provide comfort to sellers and maintain an element of the free market negotiations to this, a required due diligence period can be coupled with a non-refundable due diligence deposit if a buyer voids within this period. In a competitive market, buyers can increase this deposit to increase the value/safety of their offer. For example, a highly motivated buyer can offer a $10,000 non-refundable deposit if they void.

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This regularly scheduled sponsored column is written by Eli Tucker, Arlington-based Realtor and Arlington resident. If you would like to work with Eli and his team in Northern Virginia and the greater D.C. Metro area, you can reach him directly at Eli@EliResidential.com.

Eli and his team believe that your real estate needs should be managed by advisors, not salespeople. Their mission is to guide, educate, and advocate for their clients through real advice, hands-on support, and personalized service.

Question: Are buyers now required to pay the buyer’s agent commission?

Answer: Most people have heard at least a little about the sweeping, nationwide changes to how compensation is offered/paid to buyer agents in residential real estate transactions that took effect in mid-August. If you’d like a catch-up, you can read my article on it from July.

Are Buyers Required to Pay Agent Commission?

I have heard a lot of confusion over the last few months on what these changes actually mean for buyers and sellers. Many came away from reading/hearing whatever news they follow, understanding that buyers are now required to pay buyer agent compensation, but that is not accurate.

Here’s what you need to understand: Buyers are responsible for their agent’s compensation, but they are not required to pay it out of pocket.

What Does it Mean for Buyers to Be Responsible?

Prior to the new rules/laws, buyers didn’t hold much responsibility when it came to their agent’s compensation because in most cases (like 99% +) buyer agent commission was set when the seller signed a listing agreement with their agent and became enforceable when the home was entered into the MLS for mass marketing. So most buyers thought little about their agent’s compensation and rarely had to come out of pocket for it (the DOJ hated this).

The new rules require that the Representation Agreement between a buyer and their agent include a clear and specific amount of compensation the agent will earn. In other words, it must be a specific percentage or dollar amount, it cannot be vague (e.g. “as negotiated with the seller”) or broad (X%-Y%). This means that, through the Representation Agreement, buyers are responsible for ensuring their agent is paid the agreed-upon amount.

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This regularly scheduled sponsored column is written by Eli Tucker, Arlington-based Realtor and Arlington resident. If you would like to work with Eli and his team in Northern Virginia and the greater D.C. Metro area, you can reach him directly at Eli@EliResidential.com.

Eli and his team believe that your real estate needs should be managed by advisors, not salespeople. Their mission is to guide, educate, and advocate for their clients through real advice, hands-on support, and personalized service.

Question: How much should I wait for rates to drop until I refinance my loan?

Answer: Mortgage rates have fallen (and risen) over the past six months. A few weeks ago rates were down by over 1% from earlier this year and at 18-month lows, which meant anybody who took on a mortgage recently should be thinking about refinancing. Rates have come back up over the past couple of weeks, but I wouldn’t be surprised to see them sink again in the coming months.

I reached out to the loan officer, Jake Ryon at First Home Mortgage to ask about the process he uses to help clients decide whether it’s the right time to refinance.

What Are Your Goals?

The first step is understanding what you want to achieve. Ask yourself:

• Do you want to lower your monthly payments?
• Do you want to shorten or extend your loan term (e.g. 30-year to 15-year)?
• Do you want to take cash out for home improvements or other financial goals?

Since most people refinance to lower their monthly payments, I will focus mostly on that decision.

How Much Does a Refi Cost?

The transactional cost of refinancing varies, but Jake advises estimating 0.5%-0.75% of the loan amount to refi in Northern Virginia (usually on the higher end of the range), but these costs can vary based on several factors and vary by state/city. The transactional costs include things like:

• Lender fees
• Title fees
• State taxes/fees (e.g. recording fee, transfer tax)
• Third-party fees (e.g. HOA questionnaire, appraisal)

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