Real Estate Questions Answered (7/7/2025)
Interview with Shakima:
The Real Estate Edition is here! After a few years of the hottest real estate market any of us have ever lived through, and with all the wild market uncertainty that we saw in the first half of this year, I wanted to dedicate time to the largest financial decision many of us will ever make; our homes!
I spent some time with the amazing Shakima Thimba, Licensed Realtor with Patterson Schwartz, earlier this week to discuss your home buying questions. You can learn more about Shakima here, and our conversation was as follows:
L.A.: “We’re talking in the middle of summer, a little more than halfway through the year, is it fair to say that 2025 feels a bit different in the real estate market than in years past?”
S.K.: “2025 has been a challenging year compared to prior years. I'm calling 2025 “the wake-up year” because people in this market have now realized - uh-oh - they may have over spent on their house, offered too much or paid too much for their home. Asking themselves “what did I do?” These were buyers from 2021 to 2024 who are now starting to question if they made the right decision at the height of the market and looking to move into homes that make more sense for their family. They got a bit caught up in the frenzy.
These are the buyers and sellers right now, folks who are in homes and looking to move, many of them are turning into minimalists - they're downsizing and they're starting to realize what is most important to them as homeowners.”
L.A.: “Many L.A. Dimes readers are current owners who are trying to figure out the ideal process to move. They want to purchase new homes but have ones to sell and want to know the best order of operations - whether it’s to upgrade from their starter home, downsize for retirement, or general relocation, what do you recommend?”
S.K.: “Ideally, yes, you should sell your first home or at least have it under contract before purchasing your next home.
If you are not in a financial position to afford two mortgage payments, you can find yourself becoming stressed or feeling pressure because you have bitten off more than you can chew. You don't know how long it will take for your home to sell. Using other homes in the area is a great way to gauge how quickly homes in your area could sell but it's not a guarantee. Also, if you try to put an offer in on a new home, some sellers are not willing to accept offers that have a home sale contingency attached. It can be too risky for the seller.
Prices have stabilized from a few years ago, and there’s less risk that you’ll see prices climb meaningfully between obtaining a contract for your sale and going under contract for a purchase. Selling first is my recommendation.”
L.A.: “What about advice for those in the market for something other than a primary residence? What guidance do you have for those interested in a vacation home or investment property?”
“The process and financials of buying a second home, whether it’s for your own use or as an investment, will be different. Your down payment requirements are going to be higher, and you can also expect some of your ongoing costs, such as your insurance premiums, to be higher, too.
Some people underestimate the amount of research they need to do when purchasing a second home. Think about how often you plan to stay in or visit the property? How will you get help with maintenance (lawn care, housekeeper, security system, etc.)? Do you plan to make this your retirement home or will you sell it later? How much money and time are you willing/able to put into a second property?
When it comes to investment/rental properties specifically, too many times I find that people purchase in areas that are oversaturated with rentals and then they wonder why they're not able to rent it out as often as they want. You really need to understand the market and be ready for the commitment.”
L.A.: “Do you think real estate/rental properties are a good investment or are they too risky for someone more conservative?”
S.T.: “It depends. Are you looking for the long term or short term? Real estate is risky, anyone who says otherwise isn't being honest. The first step to being successful in this industry is understanding the market that you are planning to invest in; resale values, property taxes, school ratings, proximity to major highways, airports, amenities, etc. If you are not familiar with these things, hire a trusted professional.
A rental property is one way to make additional monthly income and grow your wealth. You’ll want to consider how you’ll make sure your tenants can afford the rent, that you have a good handyman on call, and if you are not comfortable with having the tough conversations as a landlord, hiring a property management company (for a fee) to be the face.”
L.A.”I would also add here asking yourself how you’ll feel when the property goes unoccupied. I’ve worked with many people in the past who panic when a tenant doesn’t renew and they need to find new renters. Ask yourself how comfortable you’d be financially when there are stretches of time without the rental income, as well as the illiquid nature of real estate property – If you need the money and want to sell, are you prepared for it to take 6 months or longer before you can cash out?”
S.T.: “I agree. For conservative folks, this may not be the best option, there are too many unknowns.”
L.A.: “Let’s take a step back and consider all buyers regardless of experience or type of purchase. What are the most common home buying mistakes you see clients make?”
S.K.:”There are three big mistakes that I see often. The first is rushing the process. So many people buy a home based on how it looks rather than if it’s built to serve their needs. I know it’s fundamental, but I always tell my clients to make a list of needs and wants. It seems so elementary but we always reference the list when we shop for homes. Of course we don’t always get everything on the list, but having it helps keep us focused.
Purchasing new construction without representation is another huge mistake. The salesperson that sits in the model home is not your friend or your advocate! They were hired by the builder/developer to make the company money, to close deals and to make sales. Buyer beware when it comes to buying new construction, bring your own realtor and get your own real estate attorney.
Finally, overpaying for a home has been common. Some homes will end up in a bidding war and you may have to go over the asking price to get the home – be careful with this. It may take years before you see the return on your investment. You may not be able to sell the house for another 7-10 years because there isn't enough equity in the home.”
L.A.:”This is all so helpful. Any final thoughts you’d like to share with readers as we look to wrap up this ‘wake-up year’ with prices sort of leveling out and anticipation of some interest rate changes?”
S.K.:”For anyone on the fence, I would say find yourself a trusted professional and do your research. When you have all your questions answered, determine if you are truly ready to make the move. If you know you are ready do not let higher interest rates or the prospect of prices coming down at some point deter you. If you are waiting to time it perfectly based on numbers you will never wind up buying the house. Interest rates are going to come down eventually – if you're the person who's waiting for interest rates to fall you're going to pay a higher price for the house. I appreciate nobody is excited to have a 6.5% interest rate, but if you can afford the house you want now, buy the home and you can always look to refinance when rates come down. Otherwise you’ll be waiting for a lower rate and lamenting that the price has gone up.” Date the rate, marry the home.
Thank you again, Shakima, for answering our questions!! If we didn’t get to a question you submitted this time I will likely cover it in an upcoming edition.
