Its certainly going to be a chilly one, but a trip to Denver this New Year's Eve will not leave you cold! From the zoo, to parties and balls, to spectacular fireworks, Denver covers every member of the family.
http://www.denver.org/things-to-do/denver-holiday-events/denver-new-years-eve/
I wish you a fun and safe New Year's Eve and a very Happy New Year!
Tuesday, December 30, 2014
Saturday, December 27, 2014
The Myth Of The Winter Slump
Here is a piece of conventional wisdom about real estate: It is slow in the winter. The holidays are busy. People are preoccupied with other things. No one is thinking about real estate.
Not so fast.
The stats tell a different story. If we look at the winter months of late December thru late March, it is not uncommon for 20% of the yearly sales to occur during this season versus the spring, summer and fall periods.
The supposed winter lull in real estate activity turns out to be more myth than reality. The truth is that each season of the year offers both opportunities and challenges. There is no perfect time to buy or sell and there is no time that is horrible either.
All of this is good news if you need to sell or buy a home in the next three months. You can be successful at wrapping up a winter real estate deal.
Let’s think about the situation for buyers first. While there are a lot of closings that happen during the winter selling season, it is true that there are fewer properties on the market during this time frame. It makes finding the place you want a little more problematic.
What can be different and favorable for buyers is that winter sellers tend to be serious and motivated. We don’t have a lot of discretionary sellers during the winter. Some sellers who have been overpriced make price adjustments and get very serious about consummating a sale. All things being equal, you can negotiate more aggressively.
The situation for sellers is not all that dissimilar. There are fewer buyers floating around but also fewer sellers with whom you must compete. In addition, the buyers that are active at this time of year are often people with deadlines. Something is driving them to take time during a busy season of the year to get out there and find a home. It is a good time of year for sellers to reevaluate just a bit and make a small price adjustment that will attract the attention of the serious buyers.
Myths die hard. The winter IS as good a time for doing real estate as any other time of year.
(c) Colorado Home Realty
Monday, December 22, 2014
Get The "LED" Out!
No. That’s not a typo. Everyone knows that LEAD is bad for the environment, which is why we got it out of gasoline. Did you know, however, that an LED (lightbulb) is good for both the environment and your pocket book? You want to get LEDs out of the store and into your light fixtures.
LED stands for “light emitting diode”. LED technology has evolved to be a viable alternative to regular incandescent light bulbs. They can save you money and can save the planet, so they are “green” in multiple senses of the term. We’ve been told for a few years now that our light bulbs are killing the planet due to their inefficient energy use. We have been urged to switch to the “compact fluorescent light” bulb. Known as “CFL’s”, these curly shaped tubes of glass use less energy.
However, CFLs are are pretty dull until they have spent a few minutes warming up when first switched on. They also contain mercury, making many wonder how they could be better for the environment. If you break one in your house, your property becomes an EPA superfund clean up site – a slight exaggeration, but certainly a broken CFL requires careful clean up. When CFLs burn out, you can’t just throw them in the trash but should take them to special reclamation facilities – and you know everyone is doing that!
LED’s do not suffer any of these problems. The come on instantly. They contain no toxic materials. They typically don’t break when dropped. In addition, they now produce a soft white light comparable to regular bulbs and the light diffuses in all directions instead of being focused in a beam like original LEDs. They use less energy than a CFL and only 16% of the energy of regular light bulbs. Almost all the energy gets turned into light instead of heat, so your house stays cooler and requires less AC in summer. Heck, they probably make you look younger and skinnier too!
So here is the math on the green (money) front. Assume a bulb is on for three hours a day, which is the national average for lights in frequently used rooms like kitchens, dining rooms, family rooms, living rooms and bedrooms. You install the traditional 60-watt bulb on January 1st and it will cost you $7.63 in electrical use for the year. The bulb will burn out on December 31st. Add the 50 cent cost of the bulb, and it has cost you $8.13 for it’s 12-month life.
The comparable LED bulb will only use $1.08 in electricity over the one-year period. With a purchase cost of $7.00, it has cost you $8.08 for the year (we’ve seen 60-watt LED bulbs for as little as $4 at Home Depot recently, but we’ll not use that lower number in our analysis) No big deal, right? You’ve only saved 5 cents. The important difference is that the LED bulb has a remaining useful life of 21.8 years! For some of us, those bulbs will still be working when our kids are settling our estate! So in year number two, you will NOT have to buy a new LED bulb and it will only cost you about a buck in electricity to run it. You’d incur over $8 in cost in the second year to replace the regular bulb and pay its electrical usage cost.
If you’re keeping score, that’s a savings of about $7 per year per bulb for the LED once you get to the second year. Since the average home has around 40 bulbs, you are saving approximately $280 a year by using the LED bulbs over the regular bulbs.
The equation is a bit different if you are comparing 100-watt bulbs or the 65-watt can lights common in many homes. The payback period of these is about 18 months instead of 12 months. Still, they quickly get to the point of saving you money.
If you are more motivated by being “green” in the environmental sense, here are the numbers. Producing the electricity to power a traditional 60-watt incandescent bulb for a year will cause about 300 pounds of C02 to be emitted. The comparable LED bulb will result in less than 50 pounds of carbon dioxide being released to the environment. So whether you are focused on fiscal responsibility OR you’re concerned about climate change, the LED light bulb can bring you joy and satisfaction.
Courtesy of Mike Cooke, Colorado Home Realty (c)
LED stands for “light emitting diode”. LED technology has evolved to be a viable alternative to regular incandescent light bulbs. They can save you money and can save the planet, so they are “green” in multiple senses of the term. We’ve been told for a few years now that our light bulbs are killing the planet due to their inefficient energy use. We have been urged to switch to the “compact fluorescent light” bulb. Known as “CFL’s”, these curly shaped tubes of glass use less energy.
However, CFLs are are pretty dull until they have spent a few minutes warming up when first switched on. They also contain mercury, making many wonder how they could be better for the environment. If you break one in your house, your property becomes an EPA superfund clean up site – a slight exaggeration, but certainly a broken CFL requires careful clean up. When CFLs burn out, you can’t just throw them in the trash but should take them to special reclamation facilities – and you know everyone is doing that!
LED’s do not suffer any of these problems. The come on instantly. They contain no toxic materials. They typically don’t break when dropped. In addition, they now produce a soft white light comparable to regular bulbs and the light diffuses in all directions instead of being focused in a beam like original LEDs. They use less energy than a CFL and only 16% of the energy of regular light bulbs. Almost all the energy gets turned into light instead of heat, so your house stays cooler and requires less AC in summer. Heck, they probably make you look younger and skinnier too!
So here is the math on the green (money) front. Assume a bulb is on for three hours a day, which is the national average for lights in frequently used rooms like kitchens, dining rooms, family rooms, living rooms and bedrooms. You install the traditional 60-watt bulb on January 1st and it will cost you $7.63 in electrical use for the year. The bulb will burn out on December 31st. Add the 50 cent cost of the bulb, and it has cost you $8.13 for it’s 12-month life.
The comparable LED bulb will only use $1.08 in electricity over the one-year period. With a purchase cost of $7.00, it has cost you $8.08 for the year (we’ve seen 60-watt LED bulbs for as little as $4 at Home Depot recently, but we’ll not use that lower number in our analysis) No big deal, right? You’ve only saved 5 cents. The important difference is that the LED bulb has a remaining useful life of 21.8 years! For some of us, those bulbs will still be working when our kids are settling our estate! So in year number two, you will NOT have to buy a new LED bulb and it will only cost you about a buck in electricity to run it. You’d incur over $8 in cost in the second year to replace the regular bulb and pay its electrical usage cost.
If you’re keeping score, that’s a savings of about $7 per year per bulb for the LED once you get to the second year. Since the average home has around 40 bulbs, you are saving approximately $280 a year by using the LED bulbs over the regular bulbs.
The equation is a bit different if you are comparing 100-watt bulbs or the 65-watt can lights common in many homes. The payback period of these is about 18 months instead of 12 months. Still, they quickly get to the point of saving you money.
If you are more motivated by being “green” in the environmental sense, here are the numbers. Producing the electricity to power a traditional 60-watt incandescent bulb for a year will cause about 300 pounds of C02 to be emitted. The comparable LED bulb will result in less than 50 pounds of carbon dioxide being released to the environment. So whether you are focused on fiscal responsibility OR you’re concerned about climate change, the LED light bulb can bring you joy and satisfaction.
Courtesy of Mike Cooke, Colorado Home Realty (c)
Sunday, December 14, 2014
Enjoy The Sparkle Of The Holidays!
Many of us are donning the outside of our homes and our yards with pretty lights to celebrate this holiday season. The Botanic Gardens is no exception! Enjoy a magical evening at Blossoms of Lights at York Street, and Trail of Lights at Chatfield this year.
http://www.botanicgardens.org/events/special-events/all-is-bright
They are sure to bring a sparkle to your holidays!
Thursday, December 11, 2014
Should You "For Sale By Owner"?
The article, "5 Reasons You Shouldn't For Sale by Owner,"
makes some interesting points about the disadvantages that arise when an owner sells a house without the help of an agent. However, a couple comments are in order.
Like most articles we see on this topic, the author cites studies that show that houses sold directly by an owner typically sell for substantially less money -- exactly 20% less in this case. The study that allegedly shows this is not referenced.
While it is true that For-Sale-by-Owner (FSBO) houses sell for less money than those with an agent involved, the differential is not nearly that large. Our own in-house studies show that For Sales By Owner properties in metro Denver typically sell for prices that are 4% to 6% less than the sale prices of houses sold where an agent is involved.
This differential is substantial and significant. Most agents charge sellers a fee in that range. Bottom-line: It turns out that most owners that sell without an agent end up doing all the work themselves, but don't put any more money in their pocket for their effort. They are out their time and don't have any more money to show for it.
One of the reasons that By Owner properties sell for less money is because of Items #2 and #3 in the article. Through Multiple Listing Services, networking with other agents and internet agreements, real estate agents get much more exposure for a given property. Increased exposure means greater likelihood of finding a better and more motivated buyer than is found with limited exposure as a For-Sale-by-Owner seller.
Be sure to read Item #1 in the article. It makes an excellent point that many By Owner property owners do not consider.
Monday, December 8, 2014
The Holidays Are Here!
Wrap up warm and enjoy some great events in Highlands Ranch this Holiday Season!
December 12th - Showtime at Southridge, Holiday Concert - The Highlands Ranch Swing Shift Band will have you tapping your feet in no time!
December 13th - Bring the little ones and have ‘Breakfast with Santa’ at Eastridge Recreation Center. The morning includes a pancake breakfast and a visit with Santa!
December 13th and 14th - Enjoy the Winter Market at Town Center North. This is a free event for all. Its great for choosing some unique holiday gifts and tasting delicious holiday fayre!
December 14th - The Hanukkah Celebrations at Northridge include singing, dancing, face painting, prizes, etc. A great family afternoon!
December 20th - Don’t miss the Giant Menorah Lighting ceremony at Eastridge! There will be Hanukkah gifts, latkes, children’s entertainment and much more!
….and there are always the Custom Holiday Sleigh Rides, through the Backcountry Wilderness, with roasted marshmallows en-route!
For further details please see HRCA’s 2014 Holiday Happenings, http://hrcaonline.org/ProgramsEvents/CommunityEvents/HRCAHolidayHappenings.aspx
HAPPY HOLIDAYS!
Tuesday, November 25, 2014
A Buyer's Market for Luxury Homes?
“Inman Connect” is a semi-annual national conference for real estate agents. At the most recent gathering in June of this year, held in the beautiful city by the bay (San Francisco), we heard a lot of discussion about the luxury home market.
What is a luxury home? Are different strategies required when you are buying and selling in this market segment? Is it a good time to make a move into or out of this part of the market?
A common definition of “luxury” is that it is the top 10% of any market. It got us wondering about what that looks like in Denver. What is your guess – what is the home price that puts you in the top 10% of the market?
You’ll find the answer below, but make your guess first.
Don’t peek!
Do you have your answer?
The answer for metro Denver is $525,000. Ten percent of the residential properties in metro Denver that sold from October 2013 through September 2014 had an asking price that was above $525,000.
Does that surprise you? It surprised us. We thought the number would be higher.
Here are some additional facts. The cutoff for the top 5% is $600,000. Move up to $1,001,000 and you are in the top 2%. If you lay your head down at night in a place that has a price tag of $1.5 million, then 99% of the properties in the metro area are less expensive than yours.
The supply and demand pattern is different also. While houses with a price at $525,000 or above make up only 10% of the closed transactions over the last 12 months, they represent 37% of the currently available inventory.
In other words, almost 2 out of every 5 houses on the market right now have an asking price over $525,000. This represents 7.8 months of supply, meaning that it would take 7.8 months to sell all these homes if no more came on the market. In contrast, there is only 1.5 months of supply for homes under that price point.
Traditional wisdom says that inventory of less than 3 months indicates a seller’s market while inventory greater than 6 months indicates a buyer’s market.
We see the effect of this large inventory in the time it takes to sell upper end homes, which is 80 days on average. In contrast, half of the homes under $525,000 that come on the market will find a buyer within 11 days.
What does it all mean if you are in that “luxury” market of $525,000 and above? If you are a seller, you are in a buyer’s market. You have to be more accurate with pricing and you’re very unlikely to have the multiple offer feeding frenzy you hear so much about these days.
If you are a buyer … well, it is a buyer’s market. It is an excellent time to make a move up into this range, especially if the house you have to sell is in that heart of the market at $350,000 and below. You get to sell in a seller’s market and buy in a buyer’s market. In other words – it’s pretty much real estate heaven.
Courtesy of Mike Cooke of Colorado Home Realty (c)
Monday, November 24, 2014
Landscaping "Gifts" As Winter Sets In
Everyone knows to winterize sprinkler systems when cold temperatures arrive.
However, did you know that your landscaping could benefit also from some winterization and tender loving care during the winter?
It is worth spending some time and effort on your landscaping. We did a recent blog post about the fact that landscaping can contribute greatly to your property value – you can check it out here: Landscaping Improvements Protect Property Values.
Since landscaping can be an important feature in both the value and enjoyment you get from your home, we interviewed retired Master Gardner Jackie Burghardt to get some tips. She gave us some great tips on how to take special care of your landscaping during the winter season.
Here is the list:
Rake leaves from lawns and out of plant and shrub beds. Leaves left on the grass promote mold growth. Letting leaves remain in planting beds give a place for plant pests to over-winter. When spring comes, they attack your budding and blooming plants with a vengeance.
Do any of your trees need attention by a tree trimming company? Get it done during the winter. Prices are cheaper as winter begins because the arborists are not as busy as they are in the spring, summer and fall.
Think about planting bulbs. The beginning of winter is the time to plant tulip, hyacinth, crocus and daffodil bulbs if you want these plants to be part of your spring and summer landscaping in 2015.
Conversely, think about digging up bulbs. Dig up canna lily and dahlia bulbs after the first freeze, when the leaves turn black. Put them in sphagnum moss in a bag in the garage. The bulbs of these species won’t survive the winter in the ground but they will survive when stored properly in the garage. Replant them when spring arrives.
If we have two to three weeks with no moisture and the daytime high gets up to 42 degrees or more, give plants and trees some water. Use a soaker at a low flow rate so that is can soak into the cold ground.
Water lawns once or twice during the winter using a garden hose when temps are in the 40s. It will help them come back faster in the spring.
Follow these simple recommendations and your landscaping will reward you with health and color when spring arrives. It will increase your enjoyment of your property and will reward you financially if you are thinking about putting your house on the market next year.
Courtesy of Mike Cooke of Colorado Home Realty. (c)
However, did you know that your landscaping could benefit also from some winterization and tender loving care during the winter?
It is worth spending some time and effort on your landscaping. We did a recent blog post about the fact that landscaping can contribute greatly to your property value – you can check it out here: Landscaping Improvements Protect Property Values.
Since landscaping can be an important feature in both the value and enjoyment you get from your home, we interviewed retired Master Gardner Jackie Burghardt to get some tips. She gave us some great tips on how to take special care of your landscaping during the winter season.
Here is the list:
Rake leaves from lawns and out of plant and shrub beds. Leaves left on the grass promote mold growth. Letting leaves remain in planting beds give a place for plant pests to over-winter. When spring comes, they attack your budding and blooming plants with a vengeance.
Do any of your trees need attention by a tree trimming company? Get it done during the winter. Prices are cheaper as winter begins because the arborists are not as busy as they are in the spring, summer and fall.
Think about planting bulbs. The beginning of winter is the time to plant tulip, hyacinth, crocus and daffodil bulbs if you want these plants to be part of your spring and summer landscaping in 2015.
Conversely, think about digging up bulbs. Dig up canna lily and dahlia bulbs after the first freeze, when the leaves turn black. Put them in sphagnum moss in a bag in the garage. The bulbs of these species won’t survive the winter in the ground but they will survive when stored properly in the garage. Replant them when spring arrives.
If we have two to three weeks with no moisture and the daytime high gets up to 42 degrees or more, give plants and trees some water. Use a soaker at a low flow rate so that is can soak into the cold ground.
Water lawns once or twice during the winter using a garden hose when temps are in the 40s. It will help them come back faster in the spring.
Follow these simple recommendations and your landscaping will reward you with health and color when spring arrives. It will increase your enjoyment of your property and will reward you financially if you are thinking about putting your house on the market next year.
Courtesy of Mike Cooke of Colorado Home Realty. (c)
Monday, November 3, 2014
DON'T GET BURNED BY SOLAR
Solar energy is HOT, pun intended. It's getting
lots of attention these days.
Solar is also COOL! A bit of a
status symbol & statement to
the world that you are "going
green".
We're big fans of solar, in theory.
We're sure that 100 years from now the
world will largely run on solar power. It's the wave of the future.
However, it may not be the wave of the immediate future. We
are having some issues when it comes to selling houses with
leased solar power installations. Here's a summary:
Issue No. 1: You are not going to get more money for the
house due to the solar installation when you sell it.
There is a big solar leasing company telling people that solar
increases the value of their home by 15%. We're pretty sure the
researchers that came up with that figure were taking advantage
of Colorado's new liberalized marijuana laws at the time they
were completing their evaluation.
A valid comparison involves looking at homes with solar
compared to nearby homes without solar. Let's look at one
example:
The property at 16437 East Hialeah Drive is a 2,021 square foot
2-story home with unfinished basement. It had solar and it sold
for $316,000 in September 2014. The house next door is also a
2-story home with 2,347 square feet and partly finished
basement. Being a little bigger and with some basement finish,
you'd expect it to sell for $10,000 to $15,000 more - and it did
just that with a sale price of $329,000 in July 2014. The solar on
the first house did not create any increased value for it.
We've done this for a number of paired home sales around metro
Denver and pretty much find the same result -- almost no value
can be attributed to the solar installation.
Issue No. 2: You've got to get the buyer of your house to
assume the lease when you sell it. No big deal, right?
Actually, it can be a big deal. First of all, the buyer has to qualify
to assume the lease. The buyer must also want to assume the
lease. This can be an issue due to the lease buyout provisions.
Every time the house changes hands, the seller risks paying a
huge buyout cost if the buyer will not agree to take over the
lease. The buyouts often run $10,000 to $25,000. We've seen
one where the buyout was over $30k!
Many buyers balk at taking on this liability. Even though the
buyout cost decreases with time, the leases run for 20 years and
buyout costs remain high during the first 10 years or more. Many
buyers are concerned about what will happen when they go to
sell the house. They wonder if their buyer will want the solar or
will they get left holding the bag. This leads right into Issue No.
3.
Issue No. 3: We're pretty sure that solar technology is going to
change and evolve rapidly. We worry that the solar cells being
used in today's products will be out of date in a few years.
After all, how much can you get for your five year old computer
compared to what you paid for? Probably nothing and you may
even have to pay to dispose of it since you can't just dump
electronics in your trash can.
We can imagine that the same may be true of today's solar
panels. They may be close to worthless in five years and yet
you'll still have a huge lease buyout cost. This should make you
and any subsequent buyer think twice about the advisability of
solar.
Conclusion: We are sure there is much more to solar than just
the three items listed here. We have not done extensive
research. However, we wanted you to be aware of some issues
that have come up.
Courtesy of Mike Cooke, Colorado Home Realty (c)
lots of attention these days.
Solar is also COOL! A bit of a
status symbol & statement to
the world that you are "going
green".
We're big fans of solar, in theory.
We're sure that 100 years from now the
world will largely run on solar power. It's the wave of the future.
However, it may not be the wave of the immediate future. We
are having some issues when it comes to selling houses with
leased solar power installations. Here's a summary:
Issue No. 1: You are not going to get more money for the
house due to the solar installation when you sell it.
There is a big solar leasing company telling people that solar
increases the value of their home by 15%. We're pretty sure the
researchers that came up with that figure were taking advantage
of Colorado's new liberalized marijuana laws at the time they
were completing their evaluation.
A valid comparison involves looking at homes with solar
compared to nearby homes without solar. Let's look at one
example:
The property at 16437 East Hialeah Drive is a 2,021 square foot
2-story home with unfinished basement. It had solar and it sold
for $316,000 in September 2014. The house next door is also a
2-story home with 2,347 square feet and partly finished
basement. Being a little bigger and with some basement finish,
you'd expect it to sell for $10,000 to $15,000 more - and it did
just that with a sale price of $329,000 in July 2014. The solar on
the first house did not create any increased value for it.
We've done this for a number of paired home sales around metro
Denver and pretty much find the same result -- almost no value
can be attributed to the solar installation.
Issue No. 2: You've got to get the buyer of your house to
assume the lease when you sell it. No big deal, right?
Actually, it can be a big deal. First of all, the buyer has to qualify
to assume the lease. The buyer must also want to assume the
lease. This can be an issue due to the lease buyout provisions.
Every time the house changes hands, the seller risks paying a
huge buyout cost if the buyer will not agree to take over the
lease. The buyouts often run $10,000 to $25,000. We've seen
one where the buyout was over $30k!
Many buyers balk at taking on this liability. Even though the
buyout cost decreases with time, the leases run for 20 years and
buyout costs remain high during the first 10 years or more. Many
buyers are concerned about what will happen when they go to
sell the house. They wonder if their buyer will want the solar or
will they get left holding the bag. This leads right into Issue No.
3.
Issue No. 3: We're pretty sure that solar technology is going to
change and evolve rapidly. We worry that the solar cells being
used in today's products will be out of date in a few years.
After all, how much can you get for your five year old computer
compared to what you paid for? Probably nothing and you may
even have to pay to dispose of it since you can't just dump
electronics in your trash can.
We can imagine that the same may be true of today's solar
panels. They may be close to worthless in five years and yet
you'll still have a huge lease buyout cost. This should make you
and any subsequent buyer think twice about the advisability of
solar.
Conclusion: We are sure there is much more to solar than just
the three items listed here. We have not done extensive
research. However, we wanted you to be aware of some issues
that have come up.
Courtesy of Mike Cooke, Colorado Home Realty (c)
Thursday, October 30, 2014
Home Buyers And Sellers Deserve More Than A Salesperson
Why does the public think of real estate agents as salespeople? Why does the industry think of itself that way?
I suppose it is because we imagine that real estate agents sell houses in the same way that car dealers sell cars. In contrast, we don’t think of lawyers or doctors or accountants as salespeople. Why?
When it comes right down to it, isn’t every business a “sales” business? Trial lawyers need plaintiffs. Oncologists need cancer victims. Accountants need confused taxpayers (no trouble finding those).
Nothing happens in any business until someone is convinced to buy whatever that business is selling, be it a product or a service.
The real distinction comes when the sale is made. In a product business, the sale is the culmination of a process. You buy. You leave. You’re done.
In contrast, the sale is the beginning of a relationship in a service business. The trial lawyer files the case. The oncologist wheels you into surgery. The account starts finding deductions.
Now when I really stopped to think about it, years ago I realized that good real estate agents know that they are more than salespeople. They don’t sell houses, per se. Homebuilders sell houses! Homebuilders sell houses just like car dealers sell cars.
In contrast, real estate agents provide a service — more like the accountant and the lawyer. The process of buying and selling a house is complicated and most consumers need help. Agents are the people that have the specialized expertise. They can guide buyers and sellers through the maze of pricing, staging, marketing, financing, negotiating, inspecting and all the other aspects of a real estate transaction.
A real estate agent “sells” people on using her services and that is when the relationship begins. And if she is any good, she then becomes a consultant, helping people make good decisions about acquiring and disposing of their real estate. That is what the client really needs.
Of course, she does end up “selling” houses because some clients need to dispose of properties they own. However, she ends up helping other clients acquire property. In either case, her goal is helping people make great decisions about their real estate holdings and not to just make a “sale”. This builds a long term relationship of repeat and referral business rather than just creating a single transaction.
This is our focus at Colorado Home Realty. We are constantly rethinking the real estate business. Part of that rethinking is to shift from a sales mentality to a consulting mentality – from being in a product/sales business to being in a service/consulting business.
One of my strategies for success is to be more than a salesperson — to truly be your trusted real estate adviser for all your real estate needs.
Courtesy of Mike Cooke of Colorado Home Realty (c)
I suppose it is because we imagine that real estate agents sell houses in the same way that car dealers sell cars. In contrast, we don’t think of lawyers or doctors or accountants as salespeople. Why?
When it comes right down to it, isn’t every business a “sales” business? Trial lawyers need plaintiffs. Oncologists need cancer victims. Accountants need confused taxpayers (no trouble finding those).
Nothing happens in any business until someone is convinced to buy whatever that business is selling, be it a product or a service.
The real distinction comes when the sale is made. In a product business, the sale is the culmination of a process. You buy. You leave. You’re done.
In contrast, the sale is the beginning of a relationship in a service business. The trial lawyer files the case. The oncologist wheels you into surgery. The account starts finding deductions.
Now when I really stopped to think about it, years ago I realized that good real estate agents know that they are more than salespeople. They don’t sell houses, per se. Homebuilders sell houses! Homebuilders sell houses just like car dealers sell cars.
In contrast, real estate agents provide a service — more like the accountant and the lawyer. The process of buying and selling a house is complicated and most consumers need help. Agents are the people that have the specialized expertise. They can guide buyers and sellers through the maze of pricing, staging, marketing, financing, negotiating, inspecting and all the other aspects of a real estate transaction.
A real estate agent “sells” people on using her services and that is when the relationship begins. And if she is any good, she then becomes a consultant, helping people make good decisions about acquiring and disposing of their real estate. That is what the client really needs.
Of course, she does end up “selling” houses because some clients need to dispose of properties they own. However, she ends up helping other clients acquire property. In either case, her goal is helping people make great decisions about their real estate holdings and not to just make a “sale”. This builds a long term relationship of repeat and referral business rather than just creating a single transaction.
This is our focus at Colorado Home Realty. We are constantly rethinking the real estate business. Part of that rethinking is to shift from a sales mentality to a consulting mentality – from being in a product/sales business to being in a service/consulting business.
One of my strategies for success is to be more than a salesperson — to truly be your trusted real estate adviser for all your real estate needs.
Courtesy of Mike Cooke of Colorado Home Realty (c)
Wednesday, October 22, 2014
DISINTERMEDIATION & Your Friendly Real Estate Agent
What Does a Good Agent Do For You?
You've probably never heard of "disintermediation" unless (1) You're an economist, (2) A complete nerd or (3) You attended the big Inman real estate agent convention in San Francisco earlier this year. We learned about it through option 3 with maybe a dash of option 2 thrown in.
Disintermediation is when intermediaries are cut out of a supply chain. More simply, it's when you "cut out the middleman".
The Internet has created a lot of disintermediation. The travel agent business is a good example. People can go to any number of websites to get much of the info they use to get from a travel agent. So there aren't as many travel agents these days.
The discussion at the Inman conference was whether this same thing would happen to the real estate brokerage business. Do websites like Zillow and Trulia create a situation where buyers and sellers just get together directly, eliminating the need for an agent? Is the agent a middleman, providing little value?
The most definitive answer is "NO" and it comes from a surprising source - from Spencer Rascoff, the CEO of Zillow - the 800-pound gorilla of real estate websites. He also created Hotwire, the popular travel-booking site. He was asked earlier this year why Zillow partners with real estate agents instead of trying to replace them like he did to travel agents.
Rascoff, insightfully and accurately explained the differences between booking an airline flight and buying or selling real estate when he said:
"There will always be a real estate agent in the transaction because, for most consumers, it's just too important and too expensive and too infrequent and complex to screw up, so they need an agent."
We agree. Rascoff's conclusion is supported by the most recent survey of homebuyers and sellers nationwide. Over the 12-month period studied, 89% of buyers reported using the Internet to search for homes, but this did not eliminate their need for an agent - 89% of those buyers also used a real estate agent. For sellers, 90% used a real estate agent.
Rascoff went on to say he believes the Internet is changing the role of the agent from information gatekeeper to skilled transactional guide with expertise in marketing, negotiating and local market knowledge. We disagree.
In our opinion, the role of a good agent has always been to be much more than an information gatekeeper. Rascoff forgot to mention skilled pricing analyst, exceptional stager, financing guru and savvy legal-beagle when it comes to contract preparation.
An agent we heard recently tell a compelling story of his first home buying experience before he was an agent and long before the Internet existed. This agent was buying his first home and wanted a ranch style, single-family property with 2 bedrooms and a basement in a certain area. He explained all this to the lady he selected to be his agent.
His agent showed him what he wanted to see but also showed him a duplex in an area he had never considered. It had everything he wanted plus hardwood floors that complimented his furniture and a renter next door that paid the lion's share of the mortgage. She negotiated a great deal on it and skillfully guided him through the whole process. He says it is the best real estate he ever owned and the best real estate experience he had as a consumer.
As an agent with CHR, we share this vision for the role of a real estate agent. At CHR, we are skilled advocates that bring our expertise in pricing, staging, marketing, financing, negotiation and contract preparation to bear in helping home buyers and sellers.
And for agents in this industry that aren't passionate about this expansive role, we are happy for them to be disintermediated.
Courtesy of Mike Cooke at Colorado Home Realty (c)
You've probably never heard of "disintermediation" unless (1) You're an economist, (2) A complete nerd or (3) You attended the big Inman real estate agent convention in San Francisco earlier this year. We learned about it through option 3 with maybe a dash of option 2 thrown in.
Disintermediation is when intermediaries are cut out of a supply chain. More simply, it's when you "cut out the middleman".
The Internet has created a lot of disintermediation. The travel agent business is a good example. People can go to any number of websites to get much of the info they use to get from a travel agent. So there aren't as many travel agents these days.
The discussion at the Inman conference was whether this same thing would happen to the real estate brokerage business. Do websites like Zillow and Trulia create a situation where buyers and sellers just get together directly, eliminating the need for an agent? Is the agent a middleman, providing little value?
The most definitive answer is "NO" and it comes from a surprising source - from Spencer Rascoff, the CEO of Zillow - the 800-pound gorilla of real estate websites. He also created Hotwire, the popular travel-booking site. He was asked earlier this year why Zillow partners with real estate agents instead of trying to replace them like he did to travel agents.
Rascoff, insightfully and accurately explained the differences between booking an airline flight and buying or selling real estate when he said:
"There will always be a real estate agent in the transaction because, for most consumers, it's just too important and too expensive and too infrequent and complex to screw up, so they need an agent."
We agree. Rascoff's conclusion is supported by the most recent survey of homebuyers and sellers nationwide. Over the 12-month period studied, 89% of buyers reported using the Internet to search for homes, but this did not eliminate their need for an agent - 89% of those buyers also used a real estate agent. For sellers, 90% used a real estate agent.
Rascoff went on to say he believes the Internet is changing the role of the agent from information gatekeeper to skilled transactional guide with expertise in marketing, negotiating and local market knowledge. We disagree.
In our opinion, the role of a good agent has always been to be much more than an information gatekeeper. Rascoff forgot to mention skilled pricing analyst, exceptional stager, financing guru and savvy legal-beagle when it comes to contract preparation.
An agent we heard recently tell a compelling story of his first home buying experience before he was an agent and long before the Internet existed. This agent was buying his first home and wanted a ranch style, single-family property with 2 bedrooms and a basement in a certain area. He explained all this to the lady he selected to be his agent.
His agent showed him what he wanted to see but also showed him a duplex in an area he had never considered. It had everything he wanted plus hardwood floors that complimented his furniture and a renter next door that paid the lion's share of the mortgage. She negotiated a great deal on it and skillfully guided him through the whole process. He says it is the best real estate he ever owned and the best real estate experience he had as a consumer.
As an agent with CHR, we share this vision for the role of a real estate agent. At CHR, we are skilled advocates that bring our expertise in pricing, staging, marketing, financing, negotiation and contract preparation to bear in helping home buyers and sellers.
And for agents in this industry that aren't passionate about this expansive role, we are happy for them to be disintermediated.
Courtesy of Mike Cooke at Colorado Home Realty (c)
Friday, October 17, 2014
A Buyer's market in the Denver Luxury Home Market
"Inman Connect" is a semi-annual, national conference for real estate agents. At the most recent gathering in June of this year, held in the beautiful city by the bay (San Francisco), we heard a lot of discussion of the luxury home market.
What is a luxury home? Are different strategies required when you are buying and selling in this market segment?
A common definition of "luxury" is that it is the top 10% of any market. It got us wondering about what that looks like in Denver. What is your guess - what is the home price that puts you in the top 10% of the market?
You'll find the answer below, but make your guess first.
Really.
Guess.
Stop.
Don't peak!
Do you have your answer?
The answer for metro Denver is $525,000. Ten percent of the residential properties in metro Denver that sold over the last 12 months had an asking price that was above $525,000.
Does that surprise you? It surprised us. We thought the number would be higher.
Here are some additional facts. The cutoff for the top 5% is only $600,000. Move up to $1,001,000 and you are in the top 2%. If the digs you come home to every night has a price tag of $1.5 million, then 99% of the properties in the metro area are less expensive than yours.
The supply and demand pattern is different also. While houses with a price at $525,000 or above make up only 10% of the sales over the last 12 months, they currently represent 37% of the available inventory.
In other words, almost four out of every ten houses on the market right now has an asking price over $525k. This represents 7.8 months of supply - it would take 7.8 months to sell all these homes if no more came on the market. In contrast, there is only 1.5 months of supply for homes under that price point.
Traditional wisdom says that inventory of less than three months is a seller's market while inventory greater than 6 months is a buyer's market.
We see the effect of this large inventory in the time it takes to sell upper end homes. Half of the homes under $525,000 that come on the market will find a buyer within 11 days. Above $525,000, it is taking 80 days on average to find a buyer.
What does it all mean if you are in that "luxury" market of $525,000 and above? If you are a seller, you are in a bit of a buyer's market. You have to be more accurate with pricing and your are very unlikely to have that multiple offer feeding frenzy that you hear so much about these days.
If you are a buyer, ditto. It is a bit of a buyer's market. It is an excellent time to make a move up into this range, especially if the house you have to sell is in that heart of the market at $350,000 and below. You get to sell in a seller's market and buy in a buyer's market. In other words - it is pretty much real estate heaven.
Courtesy of Mike Cooke at Colorado Home Realty (c)
- See more at: http://juliereddingtonrealestate.com/a-buyers-market-for-luxury-homes/#sthash.tziA2fJQ.dpuf
Saturday, October 11, 2014
Home in The Backcountry, Highlands Ranch
A fantastic upgraded and immaculately finished home in the prestigious community of the BackCountry, in Highlands Ranch
Hardwood floors.
Gorgeous kitchen with beautiful granite countertops, pantry, large gas cook top and stainless steel appliances.
4 upstairs bedrooms with upper laundry and views, views, views!
Low maintenance yard fire pit, with sand pit, practice sport court, area for trampoline.
Surround sound system, mud room.
Check out the community of Backcountry featuring the Sundial House, miles of open space and trails, parks, resort style outdoor swimming pool, Peaks Pub, fitness and movement rooms and an outdoor amphitheater. Check out website for more information http://backcountryco3.reachlocal.net/community-of-the-year/
Tuesday, July 22, 2014
The Current Supply/Demand for Denver Home Inventory
You are hearing everywhere that the available home inventory is low. It has also been reported that there have been fewer homes sales so far this year. This makes it look like both supply and demand are down for the year.
In reality, neither is true. It can all be confusing so here is a blog post to unravel the mystery.
In short, the decrease in home sales is a bit of a mirage. Due to lags in reporting, the true number of sales for January through June of 2014 will not be known for a few more weeks. When all is said and done, we'll be with a percent or two o
f last year's numbers.
f last year's numbers.
Thus, while inventory is historically low, this is not because there are fewer sellers. For all practical purposes, we've had the same number of sellers this year as last year. Supply is steady even though inventory is low.
At the same time, buyer demand is through the roof and much higher than the sale numbers show. This is because of the "multiple offer" situation. A high percentage of homes that come on the market have multiple offers. For every one that sells, two or three other buyers are left to continue their search. If there was more inventory, we'd have 20% or 30 % or more sales so far this year.
Bottom Line: Supply is steady, not down. Demand is up, big time. Read more about the whole market situation HERE.
Remember:I have detailed statistics on what the market is doing in each zip code in metro Denver for both single-family and multi-family homes. Call me if you'd like a report for your type of house in your specific zip code.
Source : Colorado Home Realty
Monday, July 14, 2014
Seller Strategies for Finding A Replacement Home
Right now, sellers can sell quickly and for more than their home has ever been worth in many cases and still have options to implement strategies to protect themselves in case they cannot find an appropriate, exciting or acceptable replacement home. Here are some of those strategies:
- Have home totally prepared, ready to go to market, then find replacement home. Working with a great agent means the sellers home is staged, pictures taken, brochures done, price determined and an effective CMA ready to present to the listing agent on the purchase of another home (this requires trust and partnership between home owner and agent as agent will have already invested a significant amount in preparation for marketing of the home and seller must be committed to the process). The moment a seller finds the right replacement home, they get it under contract and immediately place their home on the market. PROS: lower risk of not finding replacement home. CONS: must be more aggressive in asking price on current home, reduced negotiating power on the purchase of new home, requires lots of explanation and education of agent and seller on other and of transaction.
- Purchase new home prior to selling current home. If sellers lender will qualify them to own two homes, use equity in current home to purchase the replacement home. The seller takes out an Equity line of credit against the current home to use as down payment against the purchase of a new home. PROS: take time to find replacement home, not rushed to get out of current home, tremendous negotiating power in purchase of new home, assuming appreciation continues at similar pace, the seller actually achieves appreciation on the ownership of both properties. CONS: must qualify for owning two homes, must carry note on two homes, risk of owning two homes longer than anticipated. (given the appreciating market we are in, if a seller can afford to do so, this is the most financially beneficial strategy). Alternative forms of this strategy might include borrowing against retirement and replacing those funds upon sale of current home, or other forms of accessing capital if a seller can afford to purchase prior to selling.
- Sell current home and take time. While this is definitely a hassle, when sellers look at this strategy it actually makes a lot of sense. Sellers sell their home, focus on getting top dollar for that home and put the vast majority of their belongings in a short term storage facility. Sellers then move into a short term rental (which has its own challenges right now, but there are options) and take their time to find the right replacement home. If someone is looking at a 10-20 year move, is it worth 15 days to 3 months of short term rental and hassle to find the right home? only the seller can decide the answer to that question. PROS: most money for current home and appropriate time to find great replacement home. CONS: hassle.
- (Most Applicable for Most Sellers) Sellers put their current home on the market and select the offer to purchase that allows the seller the greatest flexibility in finding a replacement home. Sellers can write into a counter proposal to any prospective buyer for a longer closing time frame AND that seller has 2 or 3 weeks (or whatever seller chooses to ask for) to find a suitable replacement home. In the event that seller does not notify the buyer that a suitable replacement home has been found and placed under contract by “X” date, the current contract terminates. PROS: great confidence for the seller to place the home on the market and know they have opportunity to find a great replacement home. CONS: lose some negotiating ability with buyers.
Get excited about more inventory, low interest rates and the opportunity to save a tremendous amount of money over the ownership period of the next home.
This might be the seller’s perfect storm.
Saturday, June 21, 2014
Another Real Estate Bubble?
Is it deja-vu? Have we seen this movie before?
The metro Denver real estate market has made a dramatic turnaround — going from a buyer’s market to a seller’s market in short order. With prices rising dramatically, is this just another bubble that is going to come crashing down?
Not necessarily. Historical perspective shows this. The accompanying chart shows the average sale price of single family resale homes in metro Denver for the last 18 plus years. Notice two things:
(1) Prices rose $61k from January 2012 through April 2014. That is an increase of 21.8%. There was a similar price rise in a similar time period that added $60k to the average sale price of homes from January 1999 to April 2001 — a 32.2% price increase. Yet that dramatic rise was not followed by a crash. The market continued to appreciate at a healthy rate for another five years.
(2) Notice the straight line on the accompanying chart. It is the “best fit” line through the data. If you can remember back to high school algebra, the best fit line is the line that shows the real trend in a set of data. Prices were above the trend line from mid-2000 to mid-2008 and then below the trend line through mid-2013. Prices have just recently returned to the long-term trend line. It appears that the recent recovery has put us back where we would have been if the long term trend has persisted over the whole period from mid-2000 to today. That seems healthy.
As they say in the investment world, “past performance is no guarantee of future performance”. However, this historical look shows that big increases are not always followed by immediate setbacks.
By the way, we’ve seen info on home price trends in metro Denver going back into the 60s. As we recall, there is never a period of price decline lasting more than 5 years.
The bottom line: It is a great time to sell. If you’ve been wanting to move, it’s a great time to jump in and do so. It is always a great time to buy and especially when your next move will be a place you want to stay for a time frame of five years or greater.
Stay tuned for more insights on the Denver area real estate market. In the next installment, we’ll report on some economic fundamentals that bode well for real estate in the mile-high city.
Friday, March 28, 2014
Denver Real Estate stats
The metro Denver real estate market continues to show rising homes prices due to increased demand coupled with a low inventory of homes on the market.
The latest stats show that 12% more single family homes sold over the last twelve months compared to the same 12-month period a year ago. At the end of February, there were only 5500 single family resale homes on the market -- barely a two month supply of homes since more than 2700 single family homes went under contract in February. As a result of these factors, price appreciation has been over 9% over the last 12 months. The 12-month moving average sale price for single family homes stood at $333,983.
The stats in the condo and townhouse marketare a virtual carbon copy. Demand is up by more than 22% while the number of properties on the market is up just slightly from a year ago. Price appreciation in this category has been close to 11% over the last 12 months. The average price for a condo/townhouse stood at $201,869 at the end of February based on the 12-month moving average.
We like to use the 12-month moving average figure for looking at price trends. It is not a number you see reported much in other places. Without getting all Bill Nye, the Science Guy nerdy about this, just know that the 12-month moving average takes 12 months of sales data and averages them together to produce a number that takes out seasonal fluctuations. As a result, a chart of 12-month moving average sale prices gives you a true price trend. Check out the linked charts CHART 1 or CHART 2 to see metro Denver real estate price trends.
Every real estate market is local. There are literally hundreds of sub-markets within the Denver "metroplex" based on exact location, type of property and price range.
The latest stats show that 12% more single family homes sold over the last twelve months compared to the same 12-month period a year ago. At the end of February, there were only 5500 single family resale homes on the market -- barely a two month supply of homes since more than 2700 single family homes went under contract in February. As a result of these factors, price appreciation has been over 9% over the last 12 months. The 12-month moving average sale price for single family homes stood at $333,983.
The stats in the condo and townhouse marketare a virtual carbon copy. Demand is up by more than 22% while the number of properties on the market is up just slightly from a year ago. Price appreciation in this category has been close to 11% over the last 12 months. The average price for a condo/townhouse stood at $201,869 at the end of February based on the 12-month moving average.
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Attached Single Family Homes
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Detached Single Family Homes.
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Every real estate market is local. There are literally hundreds of sub-markets within the Denver "metroplex" based on exact location, type of property and price range.
The market in your particular area may be doing better or worse. I've got stats like the linked tables and charts above for every single zip code in metro Denver. I'd love to send you the data for your part of town. Just give me a call.
- See more at: http://juliereddingtonrealestate.com/real-estate-stats-in-denver/#sthash.zI56C03D.dpuf
Improving your Homes curb appeal
by QuickQuid.
Explore more infographics like this one on the web’s largest information design community – Visually.
Explore more infographics like this one on the web’s largest information design community – Visually.
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Thursday, March 27, 2014
Cute Ranch in Englewood
Great Starter Home!!
Situated in Englewood close to trails. shops, restaurants, transportation to Light Rail
3 car garage!!
Partially finished basement
For more info, CLICK HERE
Tuesday, March 18, 2014
Your Top 10 Guide to Buying a Home
- Do Expect to Kiss a few Frogs
This whole process is a bit like dating. You will kiss a few frogs, have your heart broken on a deal that goes south, and then just when you think there are no more fish in the sea, Mr/Mrs Right House will be just around the corner
- Pick your favorite SHORT list
It is recommended when you go out and look at houses, stick to around 6. After this number, they will all start blending into one! It can also be quite exhausting. If you have a lot of house you want to look at, schedule for another day when you will be refreshed. The average buyer will look at around 12 houses before deciding.
- Do Take lots of notes, pictures, video tours on your phone
This will help you remember the properties trust me, you might not forget the neon paint, but you might forget the payout, where the washing machine was etc.
- Do Listen to your Gut
I truly believe that a house can pick you as much as you pick a house. Your instinct can be powerful
- Do Allow Enough Time
Don't buy in haste, repent at leisure. Make sure you allow lots of time on your house hunt, and arrange a second viewing on any potentials. Follow the rule of thumb your first visit with your heart, the second is with your head.
- Don't have a Extra Large Coffee before you start your tour
It is not always the polite thing to us everyones facilities. Plus, some vacant homes may have the water turned off. You don't want to be caught short.
- Do wear practical shoes
Some homeowners may request that you remove your shoes, and especially in when the weather is inclement. Wear shoes that are easy to take on and off, not lots of laces, and wear your best socks.
- Do Find a babysitter for the children
Especially until you narrow down the possible house. Children find the whole process VERY exciting. So rather than worry about if they have knocked over the Sellers best china, find care for them, and bring them in when you have a short list.
- Don't be a Wall Flower
Do be very vocal. As your Realtor, I have many gifts, the power of reading exactly what the mind is thinking is not one of them. This is not my house I am showing, so you will not offend me. And it will truly help me understand what you are wanting in your Dream Home.
10. Do be Prepared to Compromise
Just like dating, you might be looking for your Dream Partner, but not everyone or everything is perfect. Create a Wish List and if you are buying as a couple, compare your lists so that you are on the same page. Also discuss your big no-no's. And be prepared, you probably won't find everything on your list so be prepared to compromise on this.
(c) Julie Reddington Real Estate
Benefits of Using me When Buying a New “Build”
What can I do for you when buying a new home purchase?
- I get Paid by the Builder: The builder will pay the fee due to an agent with no increase to the purchase price of the property.
- Negotiation Expertise: Builders, like every seller, may be negotiable on the sales price. I can help you determine when a reduced sales price might be achieved with a builder in given situations.
- Contract Review: Unlike Colorado Real Estate Commission approved contract forms that heavily favor the buyers of resale homes, new home contracts are drafted by a builder’s attorney and are extremely biased towards protection of the builder. I can help you understand these differences and suggest legal review as needed. I provide a 17-point checklist to every new home buyer that identifies key differences where builder contracts may put you at a disadvantage. You’ll be more informed about the risks/rewards of a new home purchase and, in some cases, proactive steps can then be taken to minimize contractual disadvantages.
- Inspection Guidance: Many new home buyers do not consider having an inspection on a new home. However, almost every new home probably has some construction details that are not to code or that were not done properly. This is true even though city/county building inspectors have conducted numerous on-site inspections. I can help you decide on the need for your own inspector to accompany you on your pre-closing walk-through to make sure you end up with a complete punch list of items for the builder to correct.
- Selection of Options and Upgrades: You may not need a particular option but it might be best to include it to avoid resale disadvantages. For example, you may not need a 3-car garage but you’d probably want to include one if 70% of the homes in the area have this feature. Otherwise, you may run into problems when you sell the property years later. The same applies to upgrades to flooring, countertops, plumbing, lighting and so forth. Some of these items can have broad appeal to a wide range of buyers if selected thoughtfully.
- At The Closing Table: You’d think that closings are pretty standardized. However, papers that are missed or filled out incorrectly at closings constantly amaze us. A colleague attended a new home closing recently and discovered that the wrong kind of deed was being used to convey the property to the buyer. The builder had been using the same deed form for over 12 years and key required language was missing! A good agent can review the closing documents and make sure that you get what is required by contract
RELOCATE TO DENVER, INTERNATIONAL RELOCATION TO DENVER
Tuesday, February 18, 2014
Is selling to 'your friend' a good thing?
Many homes are getting sold prior to officially going on the market these days.
It can happen for a variety of reasons. Some are outright sinister and unethical. Most are innocent.
As a general rule, you are always likely to get the very highest net price by fully exposing your home to the broadest possible market rather than having it viewed by only a selected buyer that you happen to know.
As a general rule, you are always likely to get the very highest net price by fully exposing your home to the broadest possible market rather than having it viewed by only a selected buyer that you happen to know.
However, there can be very legitimate reasons why you'd want me to pre-promote your property and show it to some limited number of buyers prior to it officially hitting the market.
For more info on this and to read a sample scenario of this, CLICK HERE
For more info on this and to read a sample scenario of this, CLICK HERE
Kindest Regards
Julie Reddington | ABR®, REALTOR ®, Broker Associate | Colorado Home Realty |
Julie Reddington | ABR®, REALTOR ®, Broker Associate | Colorado Home Realty |
(Mobile) 720-226-4168 |
Friday, February 14, 2014
For Sale By Owner ??
The article, "5 Reasons You Shouldn't For Sale by Owner,"
makes some interesting points about the disadvantages that arise when an owner sells a house without the help of an agent. However, a couple comments are in order.
Like most articles we see on this topic, the author cites studies that show that houses sold directly by an owner typically sell for substantially less money -- exactly 20% less in this case. The study that allegedly shows this is not referenced.
While it is true that For-Sale-by-Owner (FSBO) houses sell for less money than those with an agent involved, the differential is not nearly that large. Our own in-house studies show that For Sales By Owner properties in metro Denver typically sell for prices that are 4% to 6% less than the sale prices of houses sold where an agent is involved.
This differential is substantial and significant. Most agents charge sellers a fee in that range. Bottom-line: It turns out that most owners that sell without an agent end up doing all the work themselves, but don't put any more money in their pocket for their effort. They are out their time and don't have any more money to show for it.
One of the reasons that By Owner properties sell for less money is because of Items #2 and #3 in the article. Through Multiple Listing Services, networking with other agents and internet agreements, real estate agents get much more exposure for a given property. Increased exposure means greater likelihood of finding a better and more motivated buyer than is found with limited exposure as a For-Sale-by-Owner seller.
Be sure to read Item #1 in the article. It makes an excellent point that many By Owner property owners do not consider.
Thursday, January 23, 2014
Buy a home today for maximum purchasing power
Those thinking of buying a home may want to get that done as soon as possible. Rising home prices along with rising interest rates are the two factors that are creating this urgency.According to most recently published statistics for the Metro Denver real estate market, residential mortgage rates have risen by approximately 1% on a 30 year fixed loan in the last 12 months and homes have appreciated in value by approximately 12%.
This means that a buyer purchasing a $300,000 home 12 months ago, would be paying $336,000 for the same home today and the interest rate at closing would be 1% higher. The corresponding monthly payment will have increased by $146 per month, the buyer would have needed $7,200 extra in down payment and the additional amount of interest paid over the life of the loan is $73,535.
If the same trend continues, 12 months from now the same home will cost $376,320, the monthly payment will have increased $493 per month and the additional interest paid over the life of the loan will have increased to $166,342.
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| * Based on 12% appreciation rate** Total interest paid over 30 years |
Colorado Home Realty (c)
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