August 16th, 2010
By Susana Field
What are the chances?
I have tried to help two clients buy condos in Steamboat which were listed as Short Sales. (Short sales can be thought of as pre-foreclosure sales in that the owner’s mortgage lender gets involved because the asking price will not be enough to repay the mortgage; it will be “short” the amount due). Both times our offers were met with offers by other buyers and both times my clients’ bids were rejected.
As an agent of course I hate to go through all that work, for both myself and my client, only to loose the deal. (Yes, deals can be lost after putting in even a lot more work than that; like when my buyer’s financing falls through at the last minute right before closing, but still… ) But what I hate the most is that my clients lost the chance of getting the condos they wanted.
Here’s what I think went wrong, and how I think you can beat my odds:
1. Lowballing an already low asking price.
If your agent has run a CMA (Comparative Market Analysis), looking at all the similar properties which have sold recently, and comes up with X as the market value for the property, consider making an offer at 10-15% below market value and hope they will counter. But when the asking price is already below market value, going an extra 10-15% below that is treading dangerously.
If the asking price is below market value, and the property is in excellent shape and desirable, you are not the only person that is going to have noticed. It’s one thing to be low-balling when you are the only one at the table, it’s another thing to be doing it when a crowd is being attracted. This often can happen right after a price drop. What was a borderline attractive price with a price drop can suddenly become a very attractive and affordable price to more people than just you.
2. Fear of being taken advantage of.
Yes, buying and selling real estate can be scary, especially in our current market where it’s natural to wonder if you are buying something just before the price plummets even more? But what about mistrusting the agents, the seller, and the whole process? Is someone going to trick you out of your money? When I told my clients on both occasions that the listing agent said they were expecting another offer that same day, the response was “Yeah right. They are lying to get me to raise my price.” As an Exclusive Buyer Agent I have a legal duty to my client. I don’t want them to pay more than they have to. But I also don’t want them to lose a home that would be perfect for them, because of a fear of being taken advantage of.
Yes the listing agent could have been lying (although I doubt it and in these two cases felt them not to be). And my clients didn’t want to risk being tricked. But what about risking the possibility that it wasn’t a trick? That there was another offer and that it could be a better one? Why not take the opportunity to decide exactly how much the property is worth to you and make that offer? Is $5000.00 going to make much difference in your mortgage payments (especially at these rates)? Is $10,000.00? Is $20,000.00? If you can afford it, if you were expecting to go up that much anyway during negotiations, if it still gets you the perfect home, and if it still does so for under market value, why not? No one is asking you to offer more than you can afford or want to pay. Sometimes you just have to show your hand if you even want a chance.
3. Asking for too many contingencies.
 Short sales are odd in that you are dealing with both a seller and a bank in order to buy a home. It’s understood that most sellers are willing to negotiate various things (fixing the broken faucet) and that most banks aren’t (typically it is sold “as is” with only ten days to conduct and approve your inspection findings). Because there is a normal seller involved it’s easy to think that you can ask for the normal stuff. But you have to remember that it’s not a normal deal. The seller has to be thinking about what the lender will approve of, because it will be up to the lender to allow the deal to close.
And what does the lender want? Besides the highest price they can get (remember, they are losing money on a short sale as it is, and so they want to lose the very least), they want to be assured the buyer is going to close on the deal in the end. Thus they want as few opportunities for the deal to fall through, meaning as few contingencies to the contract as possible. They’d like it to be a cash deal, or at least with as much cash down as possible to enhance the chances of financing going through for the new buyers. They’d like it to be sold “as is”, so there won’t be negotiations over repairs which could derail the deal.
I don’t like short sales. When a seller lists a price or a bank lists a price, you can be pretty sure that i you give them everything they are asking for that they will sell the home to you. You also can generally get an answer back in a couple of days to whether they will accept a lesser price or terms. But with a short sale, all you know is that the asking price will not pay the mortgage off. The seller is willing to accept the price but hasn’t a clue whether the lender will or not. And it could take months to find out. Oftentimes the asking price is just a lure to capture a mandatory Offer which the seller has to submit to the bank with their short sale request package. All to get the lender to agree to a short sale and to show their hand in what they will and will not accept for a price.
Yep, my clients and I have struck out twice in buying a short sale property. The first buyers so far have not come back to the table. The second set left on vacation, with plans to keep looking when they return. Will they look at other short sales? The third time’s the charm, right? I’ll let you know here in this post how well we do! And please, you let me know how well you do too! Maybe together we can get it all figured out!
Tags: buying steamboat springs real estate, real estate short sales
Posted in Buying Tips | No Comments »
August 11th, 2010
By Susana Field
A prospective client of mine was doing his homework and closely studying the detailed property sheets of some ski in/ski out condos for sale in Steamboat Springs, CO, which I had sent him off of the Steamboat Springs Multiple Listing Service (MLS). One detail caught his eye and he shot me off this question:
MLS 126967 mentions a special assessment. Can you provide any details?
And just as quickly, I sent him my answer. Here’s the skinny:
How Special Assessments Work
A Special Assessment is a Home Owner’s Association (HOA)-approved one-time fee charged each property owner, to go towards paying for a special improvement project. Sometimes the fee is spread out over several payments, but nevertheless it is not an ongoing fee. In the case of MLS 126967, it was to cover the cost of the exterior remodel of this particular Storm Meadows building. The MLS sheet stated that the condo owner already paid the assessment, so it won’t be a debt transfered to the future owner. This specific Special Assessment amount was $28,000.
As part of each annual HOA fee a certain amount is put into Capital Reserves for future improvements. But sometimes an HOA will vote to do an improvement even if they don’t have enough in the capital reserves fund. They will also vote to divide the shortfall due on the project amongst the owners as a one-time special assessment. Some HOAs have very healthy Capital Reserves and seldom have to do a Special Assessment. Other HOAs have voted to keep their annual HOA dues (of which the Capital Reserves portion are a part) as low as possible, and thus end up seeing more Special Assessments come their way as major improvements are needed. Some HOAs keep thier developments up nicely, while others vote both for low Capital Reserves and against Special Assessments, and their complex falls into disrepair.
How We Protect Buyers
One of the contingencies we always write into an offer is your right to cancel the contract (without loss of Earnest Money) if upon review of the Homeowner’s Association documents (bylaws, declarations, budgets and financials) and past two-year’s Annual Meeting Minutes, you find something that will not work for you. You should get a good feel for how well the condition of a property matches your personal expectations of how you’d like to see the property maintained just be strolling around the premises.
 Many of the Homeowner’s Associations in Steamboat are run by professional management companies. Two big ones in Steamboat are Steamboat Resorts and Mountain Resorts. They have the staff to keep track of all financials, do repairs, maintenance, snow remeoval and landscaping. Anything they can’t do, the can interview and get bids from contractors and oversee the work. There is a particular management person assigned to each development they run. This person often goes by the title of Owner’s Representative. They typically run the Board of Directors Meetings and the Annual Homeowner’s meetings, if requested by the Board of Directors. And are the go-to person for all the home owners of that condominium development.
We encourage all of our prospective buyers to speak with the Owner’s Rep, and maybe also the President of the Board of Directors (another homeowner elected by the HOA), to get a feel for how compatible your wishes will be with the board, and to answer all your questions. All of this can be done either before or after you get under contract to buy.
But back to your main question about a Special Assessment on a specific unit. Typically the MLS sheet states whether there is a current Special Assessment and whose responsibility it will be to pay it. Then even if it states the new owner will need to pay it, it is something that can be negotiated with the offer.
Tags: consumer protection, homeowner associations, Special assessments, steamboat condominiums, steamboat real estate
Posted in Buying Tips, Exclusive Buyer Agency & Consumer Protection, Steamboat Condominiums, Steamboat Town Homes | No Comments »
August 7th, 2010
Recently I went on a Ranch Tour which featured seven properties for sale around Steamboat Springs, CO.
There was a bank-owned property within 15 miles of the ski area and minutes from the airport. The Mountain Plains Farm Credit guy who is holding the note said they are super willing to be flexible with financing a new owner. The 108-acres, 4,700 s.f. home, and huge barn has an asking price of $1,495,000. It seems like a good deal, though the house is a bit funky inside, and I’m guessing they’d take less.
We saw acreage, some with great water rights (which is a commodity in the west – 20th century Gold, it’s called) and great fishing as you can imagine. One had multiple lots, great views and paved access near town. And another overlooked Steamboat Lake in the heart of snowmobiling mecca.
 But my personal favorite felt like something out of a Gunsmoke western dream. I wanted a horse with reins I could lash to the fence post. To hear cowboys throwing hay bales in the hay loft or mucking out the 2,376 square foot barn, and to watch Elk in the pastures alongside the 1/2 mile of the Little Elk River.  My husband would be chopping wood, my son strolling out of the caretaker’s cabin with a future young son of his own on his shoulders. With its conservation easement this place will be unchanged for generations to come. Log home, windows and rock, solid. All that’s missing is Ben and Hoss Cartwright.
Asking price: $2,000,000.00.
Location: 180 acres, ten miles north of Steamboat Springs, Colorado.
Ability to win your heart and imagination: Gigantic.
Tags: bank-owned ranches, ben and hoss cartwright, gunsmoke, Steamboat Springs Colorado ranches for sale
Posted in Best Buys, The Steamboat Lifestyle | No Comments »
July 28th, 2010
By Susana Field
Fannie Mae-owned homes are like their own country. They may twist and turn the playing field, toot their horns and puff their chest. But in the end, they abide by the laws just like we do. I recently helped my vacation ski resort home buyers recently purchase a Fannie Mae-owned condo in Steamboat Springs, Colorado. But wherever you are located or hoping to buy, here are 5 hard-earned tips to keep you sanely in the game.
1. Negotiate first. Submit contract later.
Fannie Mae didn’t want to look at a Contract until after we’d verbally negotiated terms; me on behalf of my buyers and the listing agent on behalf of Fannie. They just wanted to know the names of the buyers, the price being offered and the Closing Date. We went back and forth a couple of times, but once we agreed on the price we put it in writing in the form of a Contract.
2. Ready Set Go. The clock starts ticking.
Along with the standard state contract which we produced, we were given an Addendum by Fannie Mae, which overrides anything in the standard Contract. Read it very carefully. And then read it again with a pencil so you can take notes. Then sleep on it. But even while you are trying to figure out what the thing says so you can explain it to your client, the clock has started ticking and most importantly with regards to your inspection timeline. Forget what dates you put in the standard contract regarding the inspection. The Addendum (yes, bow to Her Majesty) allows you ten days from when Fannie Mae first agreed to your terms, to object to the inspection. Did you read that correctly? Ten days from when Fannie first agreed to your Buyer’s terms, is the deadline by which you can object to the inspection. Which means you need to have gotten the inspection done and have a report in your hands and reviewed it and written your objections, etc., by the tenth day after acceptance of the terms. Which was probably yesterday.
3. You don’t really have to give up your first born.
After reading the first paragraph of the Addendum, which sent you immediately to the phone to schedule the inspection, your eyes might glaze over from mining the legaleze, your blood preasure might start rising and you may be tempted to throw the thing away. But after calming down and reading it for the third time through, you’ll see that most of it is just Fannie saying, “Hay, when this deal is over, it’s over – don’t come running back to us with any issues.” And I don’t blame them – they want those those properties off their books for good.
4. They may huff and may puff, but don’t let them scare ya.
Yes, Her Majesty the Addendum says on the first page that the Buyer can choose the Title Company and the Closing Company. Yes, there is no place in the Addendum that counters Colorado’s standard Contract’s requirement that the Seller pay for the Owner’s Title Policy. And there is no place that says the Seller doesn’t have to pay if the Buyer chooses the Title Company. No matter what they say. No matter what they threaten. The Contract is the Contract. And if they can’t prove something to you by showing you exactly where it says what they say it says, then by all means don’t let them bully you. Her Majesty Fannie, does have to follow the rules. But she will huff and she will puff.
5. Hurry up and wait…all the way to the end.
You hurry up. And you wait. And you do it again. You hurry up. And you wait…We waited six weeks for Fannie to sign the Contract. So yes, we passed several deadline dates including of course the inspection, before we even had a signed contract we could submit to the lender. Over at Fannie it seemed like the left foot had no idea it was even meant to wear a shoe, little alone what the right hand was doing. Humor came in handy around that time, as well as several stiff drinks. But that’s another blog post. And why should Fannie change their pace at the very end? Disbursement of commission checks takes place a few days after Closing.
What a sense of accomplishment though, I must say! To have closed the deal on time! To have only broken down crying once! To have stood up to Her Majesty’s bluff and won! And to have helped my Buyers get a really good deal! I wish you luck. I wish you fortitude. Let me know how I can help.
Tags: buying a ski resort condo, Fannie Mae, Steamboat Springs CO real estate
Posted in Buying Tips, Real Estate Opportunities | No Comments »
July 23rd, 2010
By Ulrich,
Isn’t it interesting how some towns seem to take on the personality of their founding fathers? Steamboat Springs is just such a place. Within 5 years of the Crawford family settling here they were joined by other hardy families who settled the Yampa Valley and set the tone of its character for decades to come.
The Ranching way of life brings certain traits that are unique to its lifestyle. Resilience, Independence, Toughness, Simplicity, Innovation; Ranchers must adapt to a variety of challenges such as weather, equipment, crop conditions, diseases, and market conditions. It is easy to place a parallel on farming and the ski industry; after all aren’t ski areas simply snow ranchers?
Just as the Ranchers had to face a myriad of challenges so did Steamboat as a community. Many of these challenges were championed by innovation and our independent spirit. Being so isolated we had to figure out how to facilitate an easier way to attract our tourists, hence the Yampa Valley Regional Airport. We were the community that invented the airline subsidy program as well as kids ski free.
The Steamboat Economy has reinvented itself on several occasions from agriculture to coal mining to health (the hot springs were a huge draw from the handicapped to the rich and famous from 1909, when passenger trains arrive, to 1939 when the famous cabin hotel burned down), various incantations of tourism and even construction.
Even during our most successful economic days we have remained grounded and enjoy living this simple uncomplicated life. Talk to some locals and see how many leave their homes unlocked and the keys in their cars. As you stroll up and down Lincoln Avenue notice the lack of suits and ties. There used to be a saying that only out of town salesmen and out of town attorneys wore suits and ties and we had no use for either. How many other places in the world can a CEO of a major corporation and a cab driver enjoy each other’s company as without pretences?
Of course the most important traits that are so attractive and inviting are those of collaboration and welcoming. The early settlers knew all too well that the only way to survive was to help your neighbor, because sure as shootin you would someday need their help. The new families were welcomed and celebrated and assisted to insure their success. These traits are still present and what separates Routt County from so many other places.
It is incumbent upon us who have wondered into this special place and embraced its heritage to foster and maintain this personality for future generations to benefit from.
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July 19th, 2010
With the recent conclusion of the second quarter of 2010 (April, May & June), I thought I would take a look at how this quarter and first half of the year compared to 2009. I’m pleased to report that the market has substantially picked up compared to last year, and it most likely has occurred because sellers have been willing to come down in their asking price.
The number of Q2 transactions posted this year was 143 – a 30% increase over the 110 purchases in Q2 2009! The average price for a Steamboat Springs-area property dropped in the same quarter from $681,333 to $609,656. However, not too good news for buyers is that that $609,656 average inched slightly up from Q1 of 2010, which was $588,759. Q4 of 2009 was 550,497 and Q3 was at a 14 quarter low at $523,271.
Does this mean the Steamboat Springs real estate market hit bottom last fall? Well, there are still plenty of listings on the market. The conclusion of Q2 showed we’re at an all-time high for MLS listings at 2,385, but only slightly higher than where we were going into Q3 last year at 2,310. Sellers still want to sell, and the competition to attract buyers is high, but we are now seeing competitive bids happening on well priced and foreclosed properties, where last year it was an abnormality for that to occur. Pending any substantive change in the economic climate, I’m thinking of a slow and steady increase in activity and price appreciation over the immediate future.
What does this mean for our buying clients? If you find a property that is attractively priced, we suggest you act on it. There may be another buyer on the sidelines just waiting for the same property, and even if the market slips a little more, the market has also proven once that it can command 2006 and 2007 prices, and it will again. We’re currently at 70% to 80% of those values, and it’s going to be more important to you that you get the right property now than hoping for another percent or two correction, if it will ever occur.
Tags: steamboat springs real estate market, steamboat springs real estate statistics
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July 16th, 2010
Friday, July 16, 2010
By Ulrich,
As Exclusive Buyer’s Agents we take pride in understanding the Steamboat Springs Real Estate market and analyzing what a particular property is worth. But in tough economic times there is more to analyze and understand to help our Clients make the best purchasing decision. Let’s examine a few of these variables.
Why and how has a Selling Agent priced the property? Obviously they have conducted a market analysis complete with comparables (if they exist). They take into consideration what the motivating factors are of the Seller, Divorce, Loss of employment, health issues, etc. A current factor is also what they are competing against. A short sale or foreclosure might skew the comparables but still need to be addressed in arriving at the initial selling price.
Now it is up to your Exclusive Buyer’s Agent to glean as much information on the property and the Sellers as possible without being too invasive. We will also conduct a market analysis on the property to see if we come up with close to the same figures as the Listing Agent.
Another important, and sometimes forgotten, element is to know the Listing Agent. Like most things in life Listing Agents have trends. Some will price a property fairly while others will place an inflated price on a property for a couple of different reasons. The first is to get the listing. We need to start off with the premise that all Sellers’ believe that their property is the best in the neighborhood. So if a Seller interviews three Agents guess which one they will most likely go with? You got it, the one with the highest asking price. The second reason is a strategy. If the average property has been selling for 17% below asking price a Listing Agent may well price a property anticipating a lower offer and then using the 17% figure to justify their counter offer.
Due to our history with, and respect that we have earned in, the Yampa Valley Real Estate Community we understand these dynamics and can adjust our strategies to compensate for these variables.
There is a reason that our Clients are so loyal to us and our business model. Come find out why we proclaim and stand behind our declaration “The Best way to buy Real Estate in Steamboat”.
Posted in Buying Tips, Exclusive Buyer Agency & Consumer Protection | No Comments »
July 14th, 2010
Q. Hi Susana- we are looking for a condo in Steamboat. Do you have information on the average nightly/weekly/monthly rental rate for a unit as described above? If not, can you direct me to a good source for this information? This will help us evaluate the opportunity. Thanks.
A. Great question. Unfortunately, there is no single place to go to, to get that information, except on a condo by condo basis. Here’s why:
- Every development has its own rates, and this largely depends on the condo’s location (how close it is to the base of the ski area, for example, or downtown) and amenities (whether it has a pool, shuttle service to the ski mountain or downtown, hot tubs, tennis courts, etc.).
- Then even within a development there will be different rates depending on the season and even the night. The highest rates are typically the week between Christmas and New Years, during the ski season in general with peaks during President’s holiday and school spring breaks, etc. The shoulder seasons of spring, after the ski area closes, and the fall, before the ski area opens, command lower rates.
- It is fairly easy to get a general idea of what the annual rental figures will be, by asking for rental history figures from the past, for any of the condos on the market. I can help you get these figures. They often are in the form of an Income and Expense sheet given to the owners by the management company.
- Another thing that affects the bottom line is how much the owners have used the condo (and thus had it unavailable for rental), as well as when the owners used it (personally using it during the highest-income holiday week, for example, will have a greater impact on your annual income than using it during the off season). Which is not to say that you shouldn’t use it during that week – after all, one of the pleasures of having your own vacation condo is being able to use it when you want to – but just that sometimes the owner’s use is, and other times isn’t, included in the income and expense reports which we have access to.
Nevertheless, I can certainly help you analyze the figures and the properties.
A couple of other things to keep in mind are:
- Regardless of the rate or the condominium development, one thing you can count on is that in Steamboat, to be conservative, it is typical to figure that 50% of the rate will stay with the management company and the other 50% will go to you.
- Your Home Owner’s Association (HOA) fees are independant of your management fees, and these can vary greatly between condominium projects.
- If you are interested in getting financing to help with your purchase, it’s important to know that financing for condominiums in developments that allow nightly rentals (even if you’re renting your individual unit or not), is quite limited. In addition to meeting the usual requirements demanded by lenders these days (good credit score and income), you should anticipate needing to bring 25-35% of the purchase price with you to the closing table, and borrowing the rest.
Hope this helps!
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July 2nd, 2010
What could be better than the celebration of the signing of the Declaration of Independence on July 4th 1776? Is there anything that would be more appropriate than to celebrate our founding fathers incredible foresight and the dedication and courage it must have taken to stand up to the super power of England.
As we enjoy the parades and various festivities, parties with hot dogs and ice cream, practicing our vowels, Ohhhh, Ahhhh, while watching the evening’s fireworks, let’s not forget to reflect what it took to build this Country into what it is today. America has always been a land of pioneers and entrepreneurs. We have never been afraid to try or to fail. We continuously push the envelope and, to paraphrase John F. Kennedy, ask what we can do for our Country.
This Pioneer spirit is no more evident than here in Steamboat Springs. Imagine transplanting your family to an unknown location somewhere high in the Rocky Mountains. What must it have been like in 1875 for the Crawford family when they first decided to homestead in the Yampa Valley? Would the Indians be friendly? What dangers would the Bears, Mountain Lions, wolves pose? What happens if disease or injury sets in? What it must have felt like to know that the nearest outpost with provisions was a week away and totally inaccessible for the better part of the year. Could the Crawford’s ever had imagined that their single room cabin would have morphed into the beautiful resort community that we all enjoy today?
This is just one small example of the fortitude it took to grow the United States into the world leader it is today. During our 234 years of Independence we have faced a multitude of challenges and tragedies, economic downturns, wars, famines, whatever Mothers Nature and Earth can throw at us and, yes, even oil spills. Yet we show a remarkable resiliency and the ability to rebound from these challenges. As a Country and a people we are truly the best when the times are the worst.
So on with the celebration! Happy 4th of July everyone!
Posted in The Steamboat Lifestyle | No Comments »
June 28th, 2010
Last week one of Steamboat’s largest and most exclusive slopeside condominium projects, Edgemont, announced a whopping 30% price reduction for their next three sales. Although they have not had a sale since April, it only took five days for three buyers to seize the opportunity. Edgemont is now offering a 25% discount for the next three buyers.
First of all, this recent activity shows me there are sellers willing to discount their price to lighten their financial obligations, as well as buyers in the marketplace who are willing to take advantage of a good opportunity when it presents itself. And it appears there are going to be three more buyers who are also going to get a great deal on a luxury condominium at the base of the Steamboat Ski Area, as well! But the one thing that I can’t seem to understand is why it had to take the seller to discount the prices and advertise them to the public to make these buyers act?
As a real estate brokerage dedicated to seeking the best deal for our clients, it does not take an advertised offering to the masses for us to find a great deal for our clients. We typically suggest making an offer below list price anyway. In today’s market, if you are considering a property to purchase, if we aren’t competing with other offers, what’s to say that we create our own “special discount” and make an offer well below list price and see just how motivated a seller is. Furthermore, if a client of mine were interested in one of the Edgemont condos, I would have recommended making an offer less than the 30% advertised discount to make sure nothing was left on the table.
If you have been thinking about a Steamboat property, rather than waiting until the seller announces a discount to the general public, wouldn’t it make more sense to offer 30% below list now on a property you know is the one you want and not have to worry about competing with other buyers for the same property?
Give us a call to start your Steamboat Springs real estate search today!
Tags: consumer protection, exclusive buyer agency, steamboat real estate
Posted in Uncategorized | 1 Comment »
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