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Rent vs (or a path to) Sell.

August 29, 2011 by admin in Market and Economic News, Taxes

Whew this is the toughest question I have fielded in quite a
while. At this time real estate is not flying off the shelves in my market. I
sell homes in Evergreen Colorado and when I’m asked I have to do a little Intel.
To give advice some pretty huge variables must be known.

Is the subject property new or a resale? In the equation of
equity vs cash flow a new property will suffer greatly once it has a “human
footprint”. An argument has and can be made for the staging aspect but I believe
loosing that new product identity outweighs the benefits.

What is the price point?
At higher price points buyers have higher expectations. I have gone
through this process enough to know that cigarette or pet smells don’t fly over
the $400,000 price point and less than virgin new carpet does not work well
over $700,000. These can be considered subjective but I can say with some certainty
that homes need to be fresher than they used to be because of the large amount
of inventory in this competitive market.

Who is renting? You have to be careful here above all else
not to discriminate against any protected class of our community. It would be
wise to use a rental agency that could prequalify tenant’s i.e., credit, rental
history, etc. Another option would be to go with a company like www.ShowHomes.Com. They will put in a handpicked
contractor to handle maintenance, security and staging. There contractor will
also give guarantees regarding the home’s showing availability and access for possession
should the home go under contract. Much progress towards immediate cash flow
may not be realized but overall equity or investment will most probably be
superior.

Overall if you want to sell your home and don’t want to
leave it empty you have some options. You will also want to consult your home
owner Insurance regarding their policies. As the owner you have all the
liability, a huge investment and some quality of life issues to consider. And be very careful about lease options Talk
to a professional. The choices are not as easy as they appear.

Sean is a profesional……talk to him

Seller Initiated aka Reverse offer

August 5, 2011 by admin in Conifer, Evergreen, Market and Economic News, Real-estate tech

Making an Offer vs.
“Make Us an Offer” – Seller Initiated aka Reverse offer

In this challenging market real estate professionals, sellers,
buyers and any others vested interests should be thinking out of the box. What I am seeing on the national news and here
on Colorado’s Front Range first hand is that Inventory is high so there for competition
for sellers is fierce. The economy is not at its peak so there for resources
are stretched and lending has been a bit more of a challenge. The gap between buyers and sellers has seemed
to have widened because of constraints and the differing perceptions of the
market. The country’s big picture differs from Evergreens market but I’ll blog
about that and “shadow markets” some
other time. I would have predicted that the “market” would have corrected all
of this but those pesky logistics seem to have gotten in the way. The bell curve has gone towards short sales. I have done these but the pain for both the
buyer and seller tend to be great and I already have too much grey hair to
negotiate transactions that drag on for months with a low success rate with
sellers wringing their hands and buyers running out of steam after jumping through
endless hoops and dealing with poor bank communication. Here at Performance
brokers we have an expert; Yvette Putt yvette@performancebrokersco.com . I
like to deal with more positive solutions like trades and seller intiated
offers. I’ll blog about trades later also.

Some of the things I like about “Reverse offers” are:

1) The seller
can generate attention and stand out in a crowd by submitting an offer.

2) The seller
can test the waters and get an insight to what number the market would support
for their home. Though the sample may be small they don’t have to show their
hand to the market prematurely. They can of course make more than one offer but
I don’t recommend doing so at one time. They may legally obligate their home to
more than one party.

3) “A call to
action”. Issues such as contingencies’, time lines, price, lease
considerations, and due diligence issues can and probably should be addressed before
the offer which would serve as a punctuation mark so that both parties can move
forward with plans allowing more certainty in their lives.

4) Buyers may
engage in a “private negotiation” with seller for variables that are not known
or available to the rest of the market.

5) Buyers can
ask questions about the variables on the contract. Those in the industry know
that the devil is in the details and there are tens of other major variables
besides price.

6) The seller
should offer a PRICE that would motivate the buyer towards the offer. The buyer
would be exposed to an invitation only deal.

One concern
for the seller is projecting desperation. This is a possible perception but
most educated buyers will see this stratagem as proactive and creative by
another party in a competitive market who just may have a bit more savvy than
the average bear. This method has a high probability of getting both the buyer
and seller closest to what they need and when they need it with the least
amount of brain damage.

I’’m all for getting people in the homes they want….Sean

Jefferson County Open Space

August 3, 2011 by admin in Conifer, Evergreen, Jefferson County, Recreation

Jefferson County contains more open space than any other
county in the United States. I see this
as a huge benefit for my real-estate clients for a few reasons.

1)
Recreational
opportunity’s – Colorado is considered one of the healthiest
states in the US with abundant opportunities for cycling, hiking, exploring,
fishing, skiing, spelunking and countless other activities to include
observational and educational nature opportunities’.

2)
Space and privacy multiplier – It’s not uncommon
for property buyers to benefit from Jefferson County’s designated open space rather your property abuts to park
land that makes your one acre feel like 1000 acres or the chance to find wildlife,
recreation and culture close to your front door.

3)
A nod towards our local government’s intentions –
Jefferson County has made efforts to preserve, protect and maintain its assets.
We feel good about that.

Here are some of our
local contacts for more information.

A handy fact sheet – http://co.jefferson.co.us/jeffco/openspace_uploads/os_fact_sheet_01_11.pdf

Administrative Offices

700 Jefferson County Parkway, Suite 100,

Golden, Colorado 80401

Jeffco complex map

Phone: 303-271-5925

Fax: 303-271-5955

Park Services &
Maintenance

700 Jefferson County Parkway, Suite 200

Golden, Colorado 80401

Hiwan Homestead Museum

4208 S. Timbervale Drive

Evergreen, Colorado 80439

720-497-7650

Lookout Mountain Nature
Center 910 Colorow Road

Golden, Colorado 80401

720-497-7600

Let’s
Go outside, Sean

Our Schools

July 16, 2011 by admin in Conifer, Evergreen

Newsweek has reported some of Jefferson County’s High schools as some of
the best in the country. Six percent of schools make the list ; Lakewood,
Evergreen, Conifer and D’Evelyn high schools made the grade for the 2009-2010
school years. Jefferson County alumni include Astronauts, Doctors, Musician’s
and Nobel Prize winners. Jefferson County is the largest school district in
Colorado and has been a consistent performer on a national level.

View accountability reports, policies, boundaries and websites for private
and charter schools as well as Colorado’s Front Range school districts Clear Creek
County and Jefferson County at http://www.heatherseanteam.com/schools.html
Enrollment is often times open but you must move quickly.

My sons’ love their JEFFCO charter school, Sean

Big Words and Evergreen Real-Estate Values

July 3, 2011 by admin in Market and Economic News, Uncategorized

I would like to first disclose that I love listing and marketing homes. And this market has been very frustrating for a lot of people which frustrates me so I am working to understand this log jam. I watch & read the news, go to trainings and meetings and have conversations with experts and my contemporaries on a regular basis. I even watch the talking heads on Sunday morning television trying to gleam wisdom that would benefit my clients but with minimum avail. As buyers, sellers and real-estate professionals seem to circle around each other without fruition I would like take a fresh look at the current state of affairs and address three terms that I believe are relevant to our current state of affairs, fungibility, arbitrage and reticular vision.

Many of us have taken economic classes but we all may need a refresher on the term fungibility. Fungibility refers to the liquidity or lack thereof regarding an asset. Currency is very fungible because most rational people would be willing to exchange a unit of currency for another of same or greater value. Keepsakes or family air looms have low fungible value because the worth to the owner is probably different than the party wishing to acquire. Home owners have historically been faulted with over valuing their homes because of emotional pride or personal investment. Awareness of this is common in the real-estate industry but sometimes the seller is correct. Buyers tend to view all homes as discount properties or center of the bell curve at best while sellers tend to view their homes as unique irreplaceable properties which place on the plus side of the bell curve. The truth is that even the most common tract home has its plus and minuses and the ability to compare properties is an art and should be left to the best of the best professionals whom are not emotionally vested. That is if it is accepted that the market would be a major variable in said transaction.

Arbitrage is again another economic term. This term describes the difference in markets or currencies that’s measurements may harm or benefit vested or responsible parties. The more obvious arbitrage in the market is replacement costs or resale vs. building. For the answer to this question you will need a local expert or experts. There are many variables but I will share with you that in general our market was at it’s peak in 2006 and Evergreen Colorado saw a property value loss approaching 25 percent while construction costs have declined by almost the same amount depending on variables like concrete and metals that take larger amounts of energy to produce. Another arbitrage in our market (and term arbitrage is being used loosely) is selling price vs. purchase price. IE if in a down market you may sell your home at $500.000.00 and take a 10% percent hit to cost you $50,000 and purchase a million dollar home at the same 10% to gain $100,000 in potential equity which would net $50,000 worth of equity on balance. This is an immediate gain but personally I would like to and plan on going the other direction. I want to buy low and sell high and the more I can get on the low the better. The third piece of arbitrage I’ll address is interest rate vs. purchase price as they relate to mortgage payment. I’m going to be careful here and not pretend to be a lending expert but I will say that the conventional wisdom in my industry is that even a one percent change in interest rate can incrementally outpace the purchase price relative to purchase price and it is widely believed that interest rates have hit bottom.

Reticular Vision is something I remember reading about but I can’t find evidence of so I might be making this term up. None the less the concept is applicable. This concept is easier for me to explain by example. If your considering purchasing a Volkswagen, you will all of the sudden notice all of the VW advertisements in magazines and on billboards’. This occurrence tends to direct us towards information that benefits us therefor if you are a seller in Evergreen you will internalize what you hear or read in the local news. If you’re a buyer you will gravitate to the information that suggests that on average prices are lower than the local market. The lesson here is to review the local data with a qualified professional. Research…Research…Research!

At the end of the day sellers and buyers should understand we all have bias but there is some truth in there somewhere. We all want the best deal out there but it’s not as easy as it sounds. If you would like the highest price for your home it should be priced correctly the first time around, have differentiating attributes that differentiates it, scarcity creates value and have a great realtor. If you’re a buyer looking for that once in a lifetime deal you will need to be as liquid as possible, patient and willing to kiss a few frogs before you find your prince and even then he may need some work.

—

Sean likes big words