The new administration’s moves to downsize the federal government have resulted in some uncertainty about what lies ahead for the region’s housing market. This story is part of our March 2025 Real Estate Now issue, where top NoVA real estate professionals weigh in on the state of the current market and offer advice to homeowners and homebuyers.
NoVA’s real estate market currently favors sellers. “It remains challenging for buyers due to depleted inventory and the multiple-offer scenario,” says CENTURY 21 New Millennium CEO and Founder Todd Hetherington. “The market is extremely strong for sellers who price their home effectively and present it well. Few properties are listed that are not in market-ready condition.”
Hetherington says well-qualified buyers with reasonable cash reserves have an advantage. “Those able to waive contract protections when using an escalation clause will be successful. Purchasers with modest means must keep their wish lists short.”
Northern Virginia Association of Realtors (NVAR) President Casey Menish says the moderate cooling of buyer demand has resulted in home sales with more contingencies in place and offers closer to the original list price. “While we’re not seeing quite as many multiple offers, many listings are under contract within the first week or two, so buyers need to be ready to jump when the right house comes on the market.”
She adds that the condition of homes has become more important. “Sellers are having to do at least minimum staging to attract the largest pool of buyers. With fewer competing offers, more buyers are able to negotiate a home inspection contingency.”
Holly Worthington, regional vice president and principal broker for Compass DMV, says the market is particularly tough for first-time buyers. “The percentage of first-time buyers is at a national historic low. To succeed, buyers need to save up money for a down payment and consider buying with a family member or a friend to get their foot in the door of the appreciating market.” She advises sellers to show their home in model condition or be prepared to set a lower asking price. “This is a visual, social media era, and how things look matters.”
Sherry Rahnama, broker/owner with RE/MAX Executives advises buyers and sellers to surround themselves with experts. “Choose seasoned professionals who know what they are doing.” She advises buyers to stop waiting. “The longer you wait, the higher the prices are going to be. Just marry the property, but date the rate, because you can always refinance later if rates drop.”
New Rules for Agent Commissions
New rules concerning real estate agent commissions that took effect nationwide on August 17, 2024, may surprise, and possibly confuse, new buyers and sellers. As part of a 2024 lawsuit settlement, the National Association of Realtors (NAR) will follow new practices that help buyers understand exactly how much they are paying for their agent’s services. Before touring homes, buyers must sign an agreement with their agent that specifies the commission fee they are willing to pay.
In the past, the seller generally agreed to pay the commission, which was split between the listing agent and the buyer agent. Depending on the negotiated rate and the home’s sale price, the amount paid could be sizeable. In the case of a 5 percent commission for a $400,000 house, for example, such an arrangement would yield $10,000 to each agent. Most buyers just assumed that the home’s asking price took commission fees into account.
With the new rule, compensation rates are no longer allowed to be listed on MLS, but buyers and sellers can discuss compensation rates with each other verbally or in writing.
The new rules encourage negotiation that may result in lower commissions, thus saving the buyer money. Agents say that so far, most sellers are still willing to pay all or part of the commissions. If sellers begin refusing to pay, it could create a challenge for first-time buyers who are already financially stretched after saving enough for a down payment and all the other costs associated with buying a home. This could lead some buyers to make the risky decision to purchase a home without professional representation.
“In Northern Virginia, we have been practicing buyer-broker representation since the late 1980s, so this really was not much of an adjustment,” says Hetherington. “We are still all working through the myriad details and verbiage changes on our forms when it comes to not disclosing, via the MLS, the amount a seller would be willing to offer a prospective purchaser. And, to add to that, CENTURY 21 New Millennium’s 28 offices and 950 real estate professionals cover Virginia, Maryland, and DC, which all have different forms and policies, so it keeps us on our toes.”
Rahnama points out that agent commissions were always negotiable. “That hasn’t changed, although the media and this lawsuit made it seem that way. Agents do deserve to be compensated for their work. Homes where the sellers choose to not offer compensation may sit on the market longer. Seasoned professional agents have seen many changes in our processes throughout the years. As with any industry, you just learn to adjust and continue to sell.”
5 Things to Know If You’re Buying or Selling
If You’re Buying
- Raise your credit score. Buyers with high credit scores receive the best mortgage interest rates, so do whatever is necessary to raise your score. “It may take six months to a year to prepare and save,” says Rahnama. “Pay off debt, stop buying that daily $7 cup of coffee, skip the $20 cocktails on the weekend. You are going to have to cut corners.”
- Be patient and persistent. “It may take a few offers before one sticks. If you don’t get the first house you write an offer for, learn from that experience and use the knowledge to craft your next offer,” says Menish.
- Work with an experienced agent. “This is the biggest purchase of your life. Good agents will identify ways to save you money,” says Rahnama. “Ask the seller to help with closing costs to minimize your initial cash investment, and ask your agent to identify helpful available financing programs,” says Worthington.
- Stop waiting. “The 3 percent rates of the pandemic probably won’t happen again in our lifetime, but it did spoil some people. Prices will go up, so buy now and build equity while you continue to watch rates. If they do come down, you can refinance,” says Rahnama.
- Be deliberate. “Know what you can afford, set your limits for negotiation, and stick with those limits,” says Hetherington.
If You’re Selling
- List with a Realtor on the MLS. “Marketing matters, and exposure on the MLS opens up your listing to more buyers and a potentially higher sales price,” says Rahnama.
- Prepare your property. “Show your house like a model home. Repair items that need fixing, because buyers will negotiate hard for repairs. Disclose all defects up front or correct them,” says Worthington. “Trust the professionals,” says Menish. “They will guide you in pricing your home and show you what’s necessary to make your home have mass appeal. You may need to paint, replace flooring, or clear out some clutter to make your home shine.”
- Demand a meaningful earnest money deposit. “The strength of the contract is determined by the amount of the deposit the buyer is willing to risk,” says Hetherington.
- Plan what comes next. “If you are planning to immediately purchase your next home after selling, have a plan for making that happen. You may need to negotiate a rent-back or a sale-and-settlement-of-home contingency, live with family or take a short-term lease, or secure a bridge loan,” says Menish.
- Be willing to help the buyer with agent commissions. Under the new rules pertaining to agent commissions, most buyers are including in their offers requests for the seller to pay part or all of the agent’s compensation. “Homes where sellers agree to help the buyer with the compensation are less likely to linger on the market,” says Rahnama.
Feature image, stock.adobe.com
This story originally ran in our March Issue. For more stories like this, subscribe to Northern Virginia Magazine.
