Archive for July, 2009

The Little Red Riding Hood of Real Estate

Sunday, July 26th, 2009

By Susana Field

There’s a well-kept secret, and I for one want to reveal it, shout it out, jump up and down, wave a red flag and release a flurry of “Caution” balloons. 

In my fantasies, if I had a lot of money I’d produce a shocking television ad and run it as often as the Cadillac ads have run during this year’s Tour de France.

What is the one thing I want to scream from the roof tops with the same passion of a religious zealot?

This is it: That when it comes to buying property, DON’T CALL THE PERSON ON THE “FOR SALE” SIGN! That person works for the seller. That person does not work for the buyer. Pure and simple. End of story.

Think of it this way: Do you open your heart to your spouse’s lawyer during a divorce? As a professional athlete, do you tell the opposing team’s coach that today you just can’t quite see out of your left eye?

In a divorce case you should only shed tears into your own lawyer’s tissues. In athletics only your own coach needs to know you recently walked into a door. It’s the same thing in Real Estate – for your protection (for the best home at the best price and on your terms) you should only work with someone that is on your side.

This is what happens: The agent on the “For Sale” sign gets a call from you, the buyer, and he becomes the wolf dressed in Grandma’s clothing, slowly licking his lips.

Don’t be the Little Red Riding Hood of Real Estate. There is a clear path away from the woods, and it’s called having your own advocate in an Exclusive Buyer Agent.

What more can I say? You are our billboard. Please spread the news.

Posted in Exclusive Buyer Agency & Consumer Protection | No Comments »

1031 Exchange

Friday, July 24th, 2009

1031 Exchange. No this isn’t the hottest new nightclub in Steamboat Springs nor is it a dating website. A 1031 exchange is a tool that can be used in Real Estate transactions to defer and at times lessen the tax burden from a sale of property. The main rule is that it cannot be used for your primary residence but rather on second homes and investment property. In a resort town like Steamboat this can be a great benefit to property owners. Of course with anything related to the Internal (or infernal?) Revenue Service there are very specific rules and regulations governing this option. Also as predictable, with almost every rule and regulation there are exceptions. How does one sort out what can work and what is not allowed?

Most people lean heavily on their accountant or attorney when it comes to such matters but it is nearly impossible for these professionals to keep up with the ever evolving nuances associated with the 1031 exchange. Therefore there is a 1031 Exchange specific profession called a Qualified Intermediary or QI, or as I like to call it a dyslexic IQ. Interestingly enough there are no license requirements to become a QI. Unlike almost every other aspect of Real Estate like Brokers, Mortgage Lenders, Appraisers etc. that requires examinations, licensing and continuing education a QI can simply hang a shingle and be in business. Since the Qualified Intermediary is required to hold money for what could be an extended period of time between transactions this can be a dangerous cocktail. In the past year there are numerous examples of QI’s absconding with their clients funds. So how do you safeguard your hard earned money and still take advantage of this tax deferred program? As Exclusive Buyer’s Agents working to protect our client’s interests we have found certain QI’s that stand above the rest. I guess you would have to refer to them as qualified qualified intermediaries.

Briefly, a 1031 Exchange is where you sell an investment property and exchange it for another Real property. You have 45 days from the closing of your first property to identify another property that you wish to purchase and 180 days to complete the transaction. There are several details and exceptions and it might take a couple of years of planning and strategizing to be in a position to take advantage of this program. So if you are thinking about selling your investment property, second or vacation home call us and we can give you the basics on the 1031 Exchange program and more importantly we can get you in touch with a qualified QI that can aid you through the transaction.  

Posted in 1031 Tax Deferred Exchanges | No Comments »

Importance of Home Inspections

Friday, July 17th, 2009

By Ulrich,

 

Investing in Real Estate in Steamboat Springs will, most likely, be one of the most important financial decisions one will make in their lives. Hopefully it will also become one of the most rewarding decisions.  It always surprises me that when making these investments how many people try to save money by foregoing items like a home inspection. At Buyer’s Resource we strongly urge our clients to spend the extra money for this inspection. The cost can range from $250.00 for a condo to $500.00 for a normal size single family home. Even on new construction it is surprising what items a good inspection can identify.

 

A good home inspector is certified in a variety of fields and disciplines. Look for certification from ASHI: American Society of Home Inspectors, NACHI: National Association of Certified Home Inspectors. Additional certifications include NEHA: National Environmental Health Association, AARST: American Association of Radon Scientists and Technologists. There are even home inspectors who are qualified in Thermo graphic imaging. Using a special camera to locate areas in the home where exterior cold air can enter or warm interior air can escape.

 

Once the home is inspected the potential Buyer will receive a comprehensive report outlining all of the items inspected and areas of concern. There may be indications that would alert one to conduct additional inspection from people who’s area of expertise would qualify them for such and inspection, an engineer or well and septic inspector for example.

 

Once the inspection is complete it is important to conference with your Exclusive Buyer’s agent and identify what items are of concern and whether it is best to terminate the contract at this point or ask that certain repairs be performed. On the “Dates & Deadlines” section of the Colorado Real Estate Commission approved form the deadline is identified as to when one must submit an Inspection Objection. This is followed by the Inspection Resolution Deadline which typically is within a week of the Objection.  This is the date that the inspection items issues should be fully resolved so that one can continue with the contract.

 

Once the Seller receives the Inspection Objection asking them to resolve the items identified they have a few options. They can simple refuse to correct any items, they can choose to correct some or all of the items or they can offer a dollar amount in compensation that will be deducted from the contracted price. Ultimately the Buyer will have the choice to accept or reject what the Seller has proposed.

 A good home inspection may save the Buyer thousands of dollars down the road which makes ones Steamboat Springs property purchase an even better investment.

Posted in Exclusive Buyer Agency & Consumer Protection | No Comments »

Where Has All the Money Gone?

Thursday, July 9th, 2009

Where has all the money gone??? 

Back in December of 2008 congress acted swiftly to assure that moneys were available for Banks and lending institutions to allow the American people to secure mortgages. Sooo why is it so difficult to obtain these funds? Steamboat Springs Colorado is facing the same issues and problems that all other resort towns across the nation are facing. It seems like the lenders are making it as difficult as possible to pry the dollars out of their hands.

 

As is generally the rule of the pendulum the availability and rules to obtain funds has swung from one extreme to the other. Even one short year ago it was very easy and straightforward to obtain a loan and with historically low interest rates. Ever since the housing crisis (how can there be a crisis with less than 4% of the homes in the United States facing foreclosure?) many of the rules have changed.

 

One market segment in Steamboat Springs that is bearing the adverse affects is the Condominium market. Condominiums are America’s second homes. They are used for vacations and retreats and holidays as a specific place that the entire family loves to gather and enjoy. What a wonderful concept to purchase a secondary home and have someone manage all of the details like transportation to the ski area, cleaning and heating the swimming pool, cutting the grass, booking a nice dinner out for the family. All you had to do was show up check in at the front desk conveniently located on site. As an extra bonus, if you were not using the unit the Management Company could rent it out to guests and you would end up with about half of that rental fee. Suddenly this wonderful concept has become a burden. For some inexplicable reason lenders are no longer making money available for this market segment. So the question is why? Were there more condos that faced foreclosure than single family homes?  Absolutely not! In fact HUD reports that less than 1% of condominiums are in foreclosure. So what gives?

 

The best explanation that I have heard is that the lenders are anticipating that if an owner is facing a financial crisis they will naturally allow the condominium to go into foreclosure prior to their primary home. Although the concept has some logic to it, the foundation is not based in fact. This has, currently, not proven to be the case and if there is someone who is facing a possible foreclosure the banks are making it impossible for the person to sell because whoever wishes to purchase the property CAN’T GET FINANCING!

 

Loan underwriters are now using the “Google” rule which means if they can find a nightly rental in a complex by “Googleing” that complex it will be considered a Condo-Tel and lenders are not making loans to Condo-Tels. We have several complexes in the Steamboat Springs Mountain area where the vast majority of owners are full time residents and work in the community and raise families. Unfortunately if an underwriter can find even one unit that offers nightly rental they often will reject the loan request.

 

The silver lining is that this will have to be corrected at some point as the pendulum moves back to center. This also means that sellers are motivated to look at all offers including the possibility of owner financing. 

 This is just one small factor that is holding up the Real Estate market in Steamboat Springs from appreciating once again. Of course there are several more reasons that will take another blog, or two, or three. As always we would be happy to discuss these issues with you in person.   

Posted in Financing | No Comments »

Residential Sales during 1st half of 2009

Monday, July 6th, 2009

By Susana Field

So what’s been selling in Steamboat Springs over the first half of 2009?
 
According to our Multiple Listing Service stats: 53 residential units sold, of which 15 were single family homes, 15 were townhomes and 23 were condos.

Let’s take a look at the single family homes first:
 
The least expensive home which sold in the first half of the year was in the neighborhood called Steamboat II, located west of town. A lot of the houses there were built in the 1970s and are of modest size, so it’s no surprise that is where the least expensive purchase occurred. It was a 1771 square foot, three-bedroom home with two bathrooms and a two-car garage. The asking price was $489,000 and it sold for $450,000.

The most expensive single-family home sale was for an 8536 square foot, 5 bedroom, and five bathroom home with a two car garage, located in the gorgeous valley of Strawberry Park right outside of town.

And town homes?

The least expensive town home which sold was an older town home above town in a small development called Suncrest. It was a 1267 square foot, three bedroom, two bathroom and one-car garage home, and sold for $295,000 after an asking price of $329,000.
 
The most expensive town home sold for full price at $1,995,000, had four bedrooms, three bathrooms and a two-car garage, and was located in the beautiful, new Stonewood development near the ski area.

Now condos:

Of the 23 which sold, the one with the smallest price tag sold for $180,000 ($205,000 asking price).  It was in Walton Village, in what’s considered The Mountain area, to the east of the ski area. At 565 square feet it has one bedroom and one bathroom.

The most expensive condo sold for $1,118,250 (asking price of $1,245,000) and at 1836 square feet, it has three bedrooms, three bathrooms and a one-car garage. This one is located at the new Trappeur’s at Bear Lodge very close to the ski area base.

And contrary to what you might be thinking, these were not all cash sales! Most of these were bought with financing so yes, people are getting loans out there – those lucky devils!

Let us know how we can help you be one of them!

Posted in Market Trends, Steamboat Condominiums, Steamboat Single Family Homes, Steamboat Springs Real Estate - General Information, Steamboat Town Homes | No Comments »

Happy Independence Day!!

Friday, July 3rd, 2009

Happy Independence Day weekend! I often think back to that small band of men who wanted independence for this new land. Do you think they had any concept as to what would evolve over the next 233 years? Could any of them ever have imagined the trials and tribulations this country would have to endure in the name of freedom? Yet there must have been tremendous foresight to craft such a document as our Declaration of Independence. The challenges that this young Country faced must have, at times, seemed insurmountable. These challenges, however, could not deter the passion and drive to craft governance dedicated to freedom for all of its people.

 

Challenges are again at the forefront as we tackle tough global economic times. It seems like every time we hear some positive economic news it is closely followed by some negative impact. Yet in every challenge there is opportunity. We wonder how some of our wealthiest entrepreneurs achieved their level of success. Primarily it was by analyzing available information and acting on this data. Was it risky? You bet! There were many failures along the way but the successes far outweighed those setbacks. I think of the Walt Disney’s or Ray Kroc’s (McDonalds) of the world and see high school graduates who had a dream or concept and acted to achieve. This truly is the American spirit.

 

In a local sense we also have our economic challenges. Both the City of Steamboat Springs as well as Routt County are furloughing employees after losses in revenues.  Our Real Estate Market shows a lot of inventory without a lot of successful sales.  The question is when to take these challenges and turn them into opportunities.  My sense is that we are slowly but steadily climbing out of our economic woes. Factory orders are on the upswing and housing starts have seen two months of gains. The Stock Market seems to have stabilized and the automotive industry is seeing signs of improvement. We have faced tough economic times before and have always rebounded stronger and with more resolve. I see opportunity in the current market. Interest rates are low, inventory is great, prices are coming down and sellers are motivated. This brew is ripe for someone to turn a challenge into an opportunity.

 I hope all have a safe and wonderful weekend enjoying friends and family. As you watch the fireworks displays on the fourth think about the spirit it took to build this great nation and about all the challenges that were turned into opportunities. You could be next.

Posted in Uncategorized | No Comments »