Blog | Katie Zarpas Group

What Is the Difference Between a Real Estate Listing Agent & a Buying Agent?

December 14, 2020 By Katie Zarpas

A listing agent and a buying agent are often both involved in the real estate selling and buying process. If you are not entirely familiar with the home buying and selling process, then you may not have a complete understanding of the differences between a listing agent and buying agent and which one is right for you.

What is a Real Estate Listing Agent?

A real estate listing agent represents the home seller during a real estate sale. Their job is to find a reliable buyer for the home and sell the home quickly and for good value. The role of the listing agent varies, but several ways they might help during the selling process include:

Optimize the listing information – Determining the most attractive features of your home and advertising them to prospective buyers is essential. The listing agent can help with listing optimization.
Price recommendations based on market research – The listing agent will have access to comparable properties and local market information. This helps you list your home for the right price that offers maximum value and a quick sale.
Recommend home improvements – The listing agent may recommend home upgrades that can yield a return on investment when the home sells.
Help with home staging – They can help you prepare your home to show to prospective buyers.
Market your home and close the deal – Real estate marketing and negotiations are often tricky. A professional listing agent will know how to find the right buyer and close the deal with little to no setbacks.

Represent the Listing and Duty to Seller

looking at a home layout on a tablet The sole responsibility of the real estate listing agent is to look out for the best interest of the seller during a home transaction. Their goal is often to find a reliable buyer quickly, one who is willing to pay the optimal home value.

In representing the seller, the real estate listing agent will optimize the home listing. They will determine the most attractive features of the home and highlight the features in the listing. Additionally, the real estate listing agent will market the home, which may include holding open houses, virtual tours and more. They can also assist the seller in the closing process.

A real estate listing agent is helpful to the seller during the COVID-19 pandemic as they can reduce the need for the seller to participate in negotiations, home showings and more that may require in-person communication.

What is a Buying Agent?

A real estate buying agent represents the buyer during a real estate sale. They work on behalf of the buyer to find the property that fits their needs and negotiate the best terms. Several ways a buying agent can help during a real estate purchase include:

Create a list of potential homes – The buying agent will know the local market. They can use their knowledge to create a list of potential homes that are ideal for the buyer.
Schedule home tours – The real estate buying agent can schedule home tours, based on the homes that the buyer is most interested in seeing.
Handle the negotiation process – Negotiations are perhaps the toughest part of home buying. The buying agent communicates with the listing agent and others throughout the process to find the best deal for the buyer.
Help with the home closing – The buying agent often handles the dirty work. This includes ensuring all paperwork is complete and that all necessary home inspections and appraisals are scheduled, etc.
Deal with setbacks – If and when setbacks occur for the buyer, the buying agent is there to help. They can handle heated negotiations and other concerns in a professional and effective manner.

Legally Bound to Helping the Buyer

signing a contract of a leasing office The sole responsibility of the buying agent is to work on behalf of the buyer to ensure they get the home they desire and are qualified for at the best price and terms possible. As discussed above, there are many ways the buying agent can help. During the home shopping process, they will do everything possible to understand the buyer’s wishes and find homes that match their needs and preferences.

Perhaps more notably, a buying agent can help home buyers close the deal. They can work directly with the real estate listing agent (seller) and the lender to ensure all paperwork and closing tasks are carried out in a timely manner, avoiding as many setbacks as possible in the process.

A buying agent is particularly useful during the COVID-19 pandemic as they can handle many of the tasks that the buyer would otherwise have to handle, such as negotiating with listing agents and lenders, ensuring the home inspection and appraisal go well, etc.

Talk to the Experts at the Katie Zarpas Group

Learn more about the home buying and selling process by talking to our real estate experts at the Katie Zarpas Group. You can reach us by phone, and we are glad to answer your questions and address any concerns you may have.

Creative Ways Real Estate Listings Are Showing Homes During COVID-19

December 7, 2020 By Katie Zarpas

Despite COVID-19, real estate listings agents in the real estate market remain relatively strong. The continued strength of the real estate market is due in large part to the excellent utilization of technology and innovative methods during the selling and buying process.

Of course, safety is still the number one concern, and listing agents have come up with creative ways to keep prospective buyers safe during the home showing process. The following is a review of creative ways that real estate listings agents are showing homes during the COVID-19 pandemic.

How COVID-19 Has Affected Real Estate Listings

Although the real estate market remains strong, there is no doubt the COVID-19 outbreak has altered the way homes are listed, marketed and sold. The pandemic has forced real estate listings agents to offer fewer open houses and in-person home tours. Instead, many are temporarily transitioning to more of a digital approach, showing homes through telecommunication applications, videos and other methods that do not require the prospective buyer to be physically present.

The fact is safety is of the utmost importance during this time. An experienced real estate listing agent will understand how to put the client’s needs first and keep them safe during the home selling process, while also ensuring their home is still properly marketed and sold in a timely manner.

Ways Listing Agents Have Become Creative

COVID-19 has forced real estate listing agents across the country to evaluate their home-showing process and find ways to make it safer. At the same time, listing agents also have the challenge of ensuring the prospective buyer gets a detailed look at the home and has all their questions answered.

As it relates to showing the home, real estate listing agents are utilizing virtual tours, professional videos and remote closings to make the sales process safer and convenient. Of course, each listing agent will have their own process and methods may vary. However, the following is a complete overview of the more common methods listing agents are implementing to remain effective (and safe) with real estate sales during the COVID-19 pandemic.

Virtual Tours

Virtual tours offer a way for prospective buyers to get a 360-degree view of the entire property. They can go through each room the same way they would during an in-person showing. During the COVID-19 pandemic, this offers the most practical way for buyers to see the home.

Of course, many buyers may still be hesitant to purchase a home sight unseen. Some real estate listing agents are accepting offers contingent on the buyer’s approval once they have a chance to see it in person. Nevertheless, the majority of the work can be done remotely, and the prospective buyer can make their decision remotely, remaining safe from the threat COVID-19 presents.

Hiring Professional Videographers

Part of being a good real estate listings agent is understanding your limitations. While some listing agents may try to create videos of the home themselves, the best way to ensure the home is shown in the best way possible is by hiring a professional videographer. The Katie Zarpas Group pays for professional photography and videography at no additional cost to the homeseller. This can help the home sell faster during the COVID-19 pandemic.

Professional videographers, particularly those with experience in real estate listings, know how to highlight the most notable features of the home. They can show every part of the home in a high-quality manner, including the exterior of the home as well as the interior.

Selling Homes Without Buyers Physically Stepping Inside

Some homeowners are purchasing their new home without ever stepping inside. Additionally, some are closing on the home without meeting in-person with the lender or selling agent. This is often possible due in large part to the hard work of real estate listing agents, who handle all of the closing tasks remotely.

If you are interested in a remote closing, it is important to choose a listing agent that has experience in the area and is willing to do what is necessary to ensure the buyer does not have to be physically present. A remote closing works by having the buyer sign electronically, although the agent may need to be present during certain parts of the closing process (inspection, signing, etc.).

Work with Experienced Real Estate Listings Agents

Our team at the Katie Zarpas Group can help you find the home of your dreams during COVID-19. We understand the importance of safety during this time, and we always put the needs of the client above all else. Give us a call today to learn more about how our listing agents can list, show and sell your home without you ever having to feel vulnerable to the coronavirus. You can reach us by phone or email, and we respond promptly to all who are interested.

What Is a Listing Agent?

November 30, 2020 By Katie Zarpas

The process of selling a home can be an arduous one, from accurately estimating the value of your property to finding creative ways to market your abode. Fortunately, there is one type of person who can assist you with a home sale: a listing agent. This individual’s primary responsibility is to adequately market your property until it is sold.

According to the 2018 National Association of REALTORS ® (NAR) Profile of Home Buyers and Sellers, 91% of sellers in the United States in 2017 received help from an agent when putting their property up for sale. Evidently, real estate professionals remain a highly reliable resource for many people across the nation. Given statistics such as these, let’s take a look at a listing agent’s duties and the benefits of teaming up with one.

LISTING IN REAL ESTATE

In the real estate world, a “listing” refers to an advertisement of a home on the Internet, in a newspaper or magazine, or in some other outlet. Per the NAR’s 2018 report, 50% of homebuyers found the home they purchased online, and 28% discovered their property thanks to a real estate agent. In many cases, a listing contract or agreement is drawn up between a broker and a property owner that grants the former the authority to act as the latter’s agent during the selling process. Three common types of such agreements are an exclusive right-to-sell listing, an exclusive agency listing, and an open listing. Each type of contract dictates different rules regarding commission payments to the broker, among other things.

WHAT DOES A LISTING AGENT DO?

A listing agent aims to market and sell a property through any legal means. They can sometimes function as a clerk and place a property for sale into a Multiple Listing Service (MLS). There is an array of services that brokers utilize to set up contractual offers of compensation and handle information related to home appraisals (assessing the value of a property).

ADVANTAGES OF PARTNERING WITH A LISTING AGENT

Here are six benefits of enlisting the help of this type of agent:

List Your Home at the Right Price – A real estate agent can typically give you a much more accurate estimate of a property’s price than websites like Zillow can.
Smoother Home Presentations – First impressions always matter.
Higher Offers from Buyers – An experienced agent can help you get higher offers.
Greater Buyer Exposure – Get significantly more showings for your home!
A Listing Agent Can Help You Negotiate Inspection Results – An inspection is a major aspect of the home sale process.
Expedite Time to Close Home Sale – Why not get assistance with all of the exhausting paperwork involved in a home sale?

HOW TO FIND THE RIGHT LISTING AGENT FOR YOU

There are several ways to find a listing agent, although facts show personal connections remain important. The NAR’s 2018 report revealed that 39% of home sellers who enlisted an agent met this type of professional via a referral from friends or family. If you are satisfied with an agent’s services, you can then enlist this person’s help again in the future or potentially recommend him/her to a relative or friend. You can also try searching online or attend local information sessions on real estate trends in your area.

SPEAK WITH A REAL ESTATE EXPERT

Contact the professionals at the Katie Zarpas Group in Virginia Beach to learn more about the importance of using a listing agent to sell your home. Katie Zarpas worked as an assistant director in the entertainment industry for years, but since 2005 she has gradually become a major player in the luxury real estate business.

Katie has earned the Hampton Roads Realtors Association’s Gold, Platinum, and Diamond awards and has repeatedly ranked as one of the top realtors in the country. The Katie Zarpas Group has handled listings in Virginia Beach, Chesapeake, Suffolk, Norfolk, and Portsmouth. It is also affiliated with several organizations that operate abroad, including Christie’s International Real Estate and Luxury Portfolio International®.

As a Long and Foster agent, Katie has access to a network of luxury agents and luxury real estate resources through the exclusive Long and Foster arrangement with Christie’s International Real Estate. Katie has established a vast referral-service network in the real estate market through connections such as the Mike Ferry Organization, which coaches elite real estate agents to provide top results for clients, as well as LeadingRE, which encompasses over 1.1 million global transactions in an exclusive, invitation-only network.

We always strive to remain up to date on the latest market trends in Virginia real estate and are dedicated to serving our clients’ unique needs and concerns. Call the Katie Zarpas Group today at (757) 685-4400 or contact us online for more information about our work or to schedule an appointment if you are interested in selling your home.

What Is A Good Cap Rate for An Investment Property?

November 23, 2020 By Katie Zarpas

CAPITALIZATION RATE EXPLAINED

The capitalization rate (or cap rate) is a formula used in real estate to calculate the presumed rate of return on an investment. The cap rate represents the return over a one-year time span and only applies when the property is bought with cash instead of financed. Because it measures value over time, the cap rate is more suitable for long term investments whose aim is to generate rental income rather than a quick fix-and-flip investment.

This is useful for investors to determine how much return on investment they can expect from a particular building and can be a very useful tool for determining which building to invest in when considering multiple buildings. Essentially, it is a useful indicator (although not the sole indicator) of whether a property is becoming more or less profitable.

CALCULATE THE CAP RATE

The cap rate formula is calculated as:

Cap rate = Net operating income (NOI) / current market value

The “net operating income” is the expected income you will get from the property over the course of a year. So, if you are renting a property for $1,000 a month, then your net operating income would be calculated as $1,000 x 12 months = $12,000 per year. This gives you your gross operating income, or your income before expenses. To calculate the net operating income, you then need to factor in any costs associated with the property, including insurance, taxes, property management fees, and estimated maintenance costs. Once you calculate net operating income, divide it by the property’s current market value to arrive at the cap rate.

As an example, let’s say you’re buying a million-dollar property, and predict that it will generate $70,000 per year in income after all of your expenses have been accounted for.

$70,000 / $1 million = 7% cap rate

So, say you have also been eyeing an alternative property in the same neighborhood that would bring you in a net operating income of $90,000 per year, but costs a bit more at $1.5 million. Dividing 90,000/1,500,000, you find that this property has a cap rate of 6%. In this example, it may be more profitable for you to invest in the million-dollar property, even though it is bringing in less income at face value.

It’s also important to note that market values tend to increase over time. This means that if your net operating income isn’t keeping pace, your cap rate percentage is going to fall. To maintain profitability over time you need to ensure that you are growing your income at a rate that is greater than or equal to the rate at which your current market value is growing.

ASSESSING YOUR RISKS

While the cap rate can be useful for quickly comparing the relative value of similar real estate investments in the market, it should not be used as the sole indicator of an investment’s strength because it does not take into account leverage, changes to the value of money over time, future cash flows from property improvements, and a range of other considerations. There are no clear ranges for a good or bad cap rate, and they largely depend on the context of the property and the market.

Just remember, a cap rate isn’t the only indicator of a good or bad investment. Let’s say you buy a piece of property for $1 million, expecting to make $100,000 per year from renting it. This would give you a cap rate of 10%. That sounds great, but if the local housing market changes and the value of the property increases to $1.5 million, you would be left with a cap rate of 6.6%, which is significantly lower.

In a situation like this, selling the property and collecting the immediate profits might be a better idea than renting it out in hopes of an ongoing profit.

DEMAND, INVENTORY, AND TYPE OF PROPERTY

It is important to note that supply and demand also affect the cap rate. While the property you are looking at might have an attractive cap rate, you could be overestimating the amount of net income you will be able to draw from it if it is in a high demand area. If there is an abundance of similar properties in the area, those are going to impact both your current value and the amount of income you generate. If other landlords in the area try to stay competitive with each other by continually dropping their rents, you could end up with either an empty property or be forced to rent out your property at a lower rate than you initially calculated.

Similarly, the type of property you invest in is also going to affect the cap rate. For example, commercial properties likely require a much larger cap rate, because they carry a higher level of risk with them. As we have seen with the COVID-19 pandemic, economic downturns and other catastrophes can drastically reduce the demand for office or retail space and could leave you sitting with an empty building that nobody is looking to rent. Residential properties are considered safer because people are always going to need a place to live. So even though residential property has a slightly lower cap rate than commercial property, residential property is usually a sounder investment.

FACTORS OF INFLUENCE

In addition to supply and demand, there are some other factors that could also impact your cap rate.

The first of these is the location. It is no secret that location is the biggest single driving factor in real estate. Before you decide to buy a property because the cap rate tells you it’s a great deal, you should evaluate where it is located.

You also need to consider what kind of rental you are purchasing. If you’re purchasing the property as a high dollar vacation rental, then your average rent will be much higher. But, it might also come with higher maintenance costs and could introduce higher levels of uncertainty to your annual net operating income estimate as rentals increase or decrease with the on- or off-seasons.

WORK WITH THE KATIE ZARPAS GROUP

Reach out to the real estate professionals at the Katie Zarpas Group in Virginia Beach for more information on investment properties.

Before entering the luxury real estate industry in 2005, Katie Zarpas worked as an assistant film director and thus acquired many valuable connections in the entertainment business.
Katie has since earned several accolades, including the Hampton Roads Realtors Association’s prestigious Gold, Platinum, and Diamond awards. She has also been ranked as one of the top realtors in the country.

At the Katie Zarpas Group, we help clients obtain key information about listings in Virginia Beach and the surrounding areas, including Norfolk, Chesapeake, Portsmouth, and Suffolk. We strive to constantly track local real estate market trends, which means we can help you estimate your desired home’s value and investment potential.

We will always put your priorities first, regardless of what you are seeking. Call the Katie Zarpas Group today at (757) 685-4400 or contact us online to learn more about our work and how we can assist you.

Responsibilities Of A Real Estate Listing Agent

November 16, 2020 By Katie Zarpas

A real estate listing agent can make the home selling process much easier. If you are interested in selling your home, then there are two ways to do it: you can either list your home for sale yourself (by owner) or trust in a real estate listing agent to sell the home for you. The fact is, selling your home is not an easy process, and it requires a lot of market research and the implementation of marketing strategies to ensure good prospective buyers are attracted to the home.

Although the idea of saving money by selling your home yourself may seem attractive, it often becomes more time consuming and costly to do so as the home is likely to sit on the market longer or possibly sell for less than your home is truly worth. It is helpful to understand the responsibilities of a real estate listing agent to decide if hiring a listing agent is the right strategy for you.

What A Real Estate Listing Agent Does

There are certain responsibilities that a real estate listing agent has. The ultimate goal, of course, is to sell the home for the most amount of money possible and as quickly as possible, while taking away the hard work from the homeowner in the process. The following is a more in-depth look at the way a listing agent will go about ensuring the home is sold for optimal value and all necessary steps are completed during the home sale.

In-Depth Research Of Market

One of the main benefits of hiring a real estate listing agent is that they understand the local real estate market. This is particularly important when it comes to listing your home for the most appropriate price. A well-priced and well-marketed property can ensure it sells as fast as possible, limiting the number of days it stays on the market.

There are several different aspects of the market that the real estate listing agent will analyze. They will look at comparable properties in the neighborhood to get an idea of how much the home is worth. They may also do a comparative market analysis (CMA) to determine the most accurate value of the property to ensure it is listed in the proper way.

Market Property

After conducting thorough market research and determining the best price to initially list the home, the listing agent will officially list the property for sale and begin marketing the property. This is when a listing agent can really become useful as finding prospective buyers who have the right financing takes time and expertise.

A real estate listing agent has an extensive list of contacts and understands how to find prospective buyers. They are able to receive multiple offers, potentially creating competition for purchasing the home. Without an experienced real estate listings agent, there is a much greater risk of the home sitting on the market for an extended amount of time, driving down the value and appeal of the home in the process.

Efficiently Attend Home Inspections

An experienced real estate listing agent will do everything they can to ensure the home selling process goes smoothly. A necessary part of the home sale is the home inspection. A good real estate listing agent will attend the home inspection to ensure they are able to answer any questions the home inspector has, which can help clear up problems before they develop.

A good real estate listing agent may also choose to attend the home real estate appraisal so that they can answer questions the real estate appraiser has. This can avoid the appraiser knocking the appraised home value due to misunderstandings about the home features. This can ensure a smooth selling process and allow the closing to happen faster as there is less of a risk of disputes and tough negotiations during the sale.

Finalize Any Loose Ends

If you have never gone through a home sale yourself, then you may quickly become overwhelmed by all of the loose ends that have to be finalized. An experienced real estate listing agent can take care of all of the minor details that could otherwise delay the home sale. Their job is to make the process convenient for the seller and to avoid as many roadblocks as possible throughout the selling process, which ultimately allows the deal to close sooner and for optimal value.

Work With The Katie Zarpas Group

Our team helps homeowners who are interested in selling their home fast and for the best possible value through the home listing and sale process. Feel free to give us a call at 757-685-4400 or schedule an appointment if you have questions. Our experienced real estate listing agents at The Katie Zarpas Group are more than happy to answer your questions and help you make the first step toward selling your home.

What To Look For In An Investment Property

October 26, 2020 By Katie Zarpas

Real estate is an exciting venture. Investment properties have the opportunity to bring along great growth for you in a financial sense. When searching for your perfect property, make sure to keep a few thoughts in mind. So, what is there to look for in an investment property?

Things To Keep In Mind For Investment Properties

Certain factors have the opportunity to be successful in an investment property. It’s important to take these into account when making your decision. Here is what to look for in an investment property:

Investing In The Location

When it comes to real estate, you might already be familiar with the mantra “location, location, location.” Location is everything for real estate investments and should be the primary starting point in your search for an investment property. Many considerations need to be made, and many of them boil down to if you want to be close to the property or not. Will your mind be more at ease if you can make a short drive to visit the property, or are you looking to invest in properties that you won’t be visiting on a regular basis? Are you going to be responsible for property management and maintenance, or do you intend to outsource those aspects?

The second thing to consider is what advantages the location offers you as a property owner. Is it in a good school district? Does it have easy access to interstate highways? What are the market trends for the area?

Navigating Your Finances

After you’ve decided on a location that suits your strategy, next is the big hurdle – financing. You typically will need excellent qualifications, as investment property mortgages are considered to be high risk. An alternative may be to consider an owner-occupied home, where you occupy one unit or room and rent out the others. This comes with advantages such as reduced down payments and interest rates but it isn’t the approach for everyone.

For non-owner-occupied properties, you should expect your mortgage to require a 20% down payment at minimum, with 25% being far more common. Unless you are in a position where you can pay in cash upfront, this needs to be accounted for in your financing plan. Remember that you’ll also be responsible for closing costs, and typically need 6 months of payments in reserve.

There are two approaches to financing – conventional financing and asset-based loans. Conventional financing refers to mortgages from a bank that is backed by your personal qualifications. The considerations for conventional financing of an investment property include the type of property, your credit score, employment status, assets, and other debts. While you may be able to use some of the property’s projected rental income to qualify, your current income is going to be the main factor. That means if your existing mortgage or debt uses a large portion of your gross income, it might be difficult to get conventional financing.

If a conventional loan isn’t a good fit, asset-based loans might be an option. Asset-based loans use the investment property itself as the main qualifying factor instead of the borrower’s personal qualifications. While your credit score will still help to determine your eligibility and interest rate, you do not have to worry about personal debts, income, and employment. The primary condition for approval is that the property generates sufficient cash flow to cover the mortgage payments with a reasonable cushion.

Calculate The Cost of Maintenance

Whichever approach you pick, projecting your cash flow is going to be your next significant consideration. If it costs more to own and maintain the property than the property is bringing in, then the property isn’t going to make a good investment property.

Cash flow can often be variable and you’re never going to be operating from a position of 100% certainty when projecting it, but a good rule of thumb is to set aside 15% of rental income to cover vacancy and maintenance.

Example of Good Cash Flow

Start with the expected monthly rental income
Subtract your mortgage payment, taxes, and insurance cost
Subtract your property manager’s fee (if you use one)
Subtract any recurring expenses
Subtract your vacancy and maintenance set aside

If you have a nice cushion after your subtractions, the investment property could be a valuable asset to you.

Plan For Gap Periods

One thing that might have caught your eye is vacancy. Vacancy and other gap periods can negatively affect cash flow but are an unfortunate reality. If your cash flow is right down to the margin and you need the full monthly rental income to break into the positive you will only be able to cover
expenses when things are going perfectly. One thing investment property owners learn quickly is that things don’t always go perfectly.

There will be times that your property is vacant. Repairs or maintenance in between tenants, for one. If you are buying an investment property that already has residents with signed leases – find out the terms of those leases immediately (e.g., are they annual or month to month?) so you are not hit by any sudden unexpected gaps when you take over ownership.

Do You Need A Property Manager?

Another crucial decision you need to make is, do you want to self-manage the investment property or outsource to a property management company? Property managers typically charge between 8% and 10% of the collected rent but come with benefits such as:

A wealth of experience that can help you to maximize rental income
The ability to advertise and attract tenants
Conduct background and credit checks on prospective tenants
Collecting rent for you
Serving as the primary contact for maintenance issues and tenant complaints
Paying bills or utilities on your behalf

A property manager can help free up your time but at a cost. Make sure that you calculate in this cost when you are determining your cash flow projections.

Team Up With The Experts At The Katie Zarpas Group

Reach out to the real estate professionals at the Katie Zarpas Group in Virginia Beach for more information about buying your first investment property. At the Katie Zarpas Group, we help clients obtain key information about listings in Virginia Beach and the surrounding areas, including Norfolk, Chesapeake, Portsmouth, and Suffolk. We strive to constantly track local real estate market trends, which means we can help you estimate your desired investment property value. Our team can help you to identify what to look for in an investment property.

We will always put your priorities first, regardless of what you are seeking. Call the Katie Zarpas Group today at (757) 685-4400 or schedule an appointment online to learn more about our work. We look forward to discussing what to look for in an investment property, and helping you in your process!