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The year is half over but Summit County real estate sales aren’t

by The Mountain Living Team

Six months into 2018 and we have had 753 residential sales in Summit County.  That’s 8.1% below the first six months of last year when we had 819 residential sales.  The first six months of the year typically sees fewer real estate sales than the second half of the year so it’s possible we’ll make up that 8% deficit in the coming months.

In 2017, the first six months only made up 41% of the year’s sales.  The highest numbers of closings in any given year generally take place in September or October.  A typical sale takes about 45 days from going under contract to closing which means we are just beginning to get into our busy time for buyers.   

If you are considering selling your Summit County home, you should be putting it on the market soon.  The next two months are our most active of the selling season.  Get some tips on how to make your home show its best.

If you are considering buying in Summit County, you need to be ready to act quickly, 66% of homes are going under contract in the first 30 days they are on the market.  If you are one of the 74.5% of buyers getting a loan, make sure you have spoken to a good local lender and are pre-qualified.  When you are ready to submit an offer, we can have the lender write a pre-qualification letter to present with your offer.  That will reassure the seller that you are a quality buyer that is serious about buying.

It's almost closing day on your new vacation home in Summit County.  You have followed the wiring instructions from your email and head to closing.  At Closing the title company is looking to you for your down payment.  They check their account for the wire and nothing is there.  They check your wiring instructions and discover the funds were wired into someone else's account.  The account of someone you don't even know that was posing as a trusted advisor in your transaction.  We're talking thousands of dollars gone.  How can this happen?  Watch the following video and see how creative the scammers are getting.  Be aware.  Don't let this happen to you.

You have probably heard that inventory levels are down in Summit County.  We only have enough properties for sale to get us through the next 3 months.  Of course, more properties will come on the market and carry us into the summer and fall months, our selling season.  However, choices will be tight and competition may be fierce.  

If you are considering buying, now is a great time.  There are still great properties to choose from and the winter months usually mean fewer buyers and less competition for those great properties.  If you're looking for views over Lake Dillon, there are a couple of condos for sale in The Towers in Frisco.  The Towers offers elevator access, garages, plenty of storage and a community hot tub along with some of the best views over the lake available.  There are townhomes in Water Dance that have equally impressive views. These townhomes come with a little more space and higher price tag.  You know you'd enjoy a condo at your favorite mountain.  Why drive when you can just walk or shuttle to and from the lifts each day?  There are some great homes available on the outskirts of Breckenridge too that offer the peace and quiet of a mountain get-away.  No matter what you are looking for, there are still a few good options worth considering.  Even with the fed increasing interest rates, they have remained around 4%, a fantastic rate!  Don't wait to find your Summit County home.

 

Buying and selling property in Colorado: the purchase contract

by Meredith Adams

The Colorado contract to Buy and Sell real estate is 17 pages long and is written to protect the buyer.  Once under contract, there are eleven opportunities for the buyer to terminate the contract without losing their earnest money.  These contingencies offer a buyer the time to do their due diligence and ensure they are comfortable with all the extras surrounding the home.  Buyers can review the title documents, the HOA documents, the survey and any other requested docs.  If the property doesn't appraise there are provisions for that.  There is even an opportunity to make sure there are no issues getting homeowner's insurance.  Colorado really looks out for the buyer.  It is the agents job to ensure the appropriate actions are taken to protect those outs.  If those opportunities are not protected the buyer can lose their earnest money if they don't perform. 

From the seller side of the sale, once the contract is signed, they are obligated to sell.  They don't have any opportunities to terminate the contract unless the buyer provides those opportunities.  Once a buyer is under contract that property is theirs to buy, or not. If the contract is followed, the buyer can terminate the sale with a valid reason and receive 100% of their earnest money back.  The seller is just stuck with having to put their property back on the market and receives no compensation.  

The buyer is most at risk during a transaction.  If a buyer doesn't buy, the seller still has a property to sell but if a buyer buys a lemon, they are stuck with it.  The state of Colorado has put together a strong real estate contract to try to ensure the buyer knows what they are getting into before they buy.  As a buyer, it is imperative your rights are looked after and protected.  Those rights shouldn't be protected by just anyone.  Do what you can to make sure you are working with the right agent. 

Buying and selling property in Colorado: the agent relationship

by Meredith Adams

Every state is a little different in the way a home purchase works.  Some states are more hands off than others.  Some state involve attorneys and others use title companies.  Even the relationship you have with your broker may not be what you are used to.  Many areas use different terms for the same process.  Even if you have bought and sold multiple properties you can feel like a fish out of water if you aren't familiar with a Colorado transaction.

Let's start with the relationship with your broker.  In Colorado your broker can be your Agent, either a Buyer's Agent or a Seller's Agent, they can be a Transaction Broker or you can just be a Customer, with no relationship.  Unless the agent is already in a relationship with the other party, you and your agent are in a Transaction Broker relationship by default.  That means they will facilitate what you want but may not take on your plight and do all they could.  Their main objective is to put the sale together.  You can choose to work with your broker in a Buyer or Seller Agent capacity instead of a Transaction Broker.  That requires a signed contract and more of a commitment from both parties.  The best way to explain the difference is with a sports analogy.  A Transaction Broker is like the referee of a football game.  Their job is to make sure both sides play fair and the game is completed.  They have no interest in who wins the game, just that it happens.  An Agent is like the coach of a team.  That coach is doing what they can to help their team win the game.  Their job is to do what is best for their team.  The third way you can interact with your broker is as a Customer.  That means the broker is working for the other party and has no obligation to you.  Anything you tell the broker can be passed along to the party they are working for .  A consumer should always know the type of relationship they have before disclosing much information about themselves and their motivations.  A broker is required to disclose their relationships in relation to each consumer.  Because this subject is somewhat hard to grasp, the conversation may not happen as early as it should.  

It is our preference to work as your agent, doing everything we morally and ethically can to get you what you want.

 

Changes coming October 1 for real estate purchases

by The Mountain Living Team
Consumer Financial Protection BureauIn an attempt to better protect consumers from predatory lending practices, the Consumer Financial Protection Bureau (CFPB) has integrated the mortgage loan disclosures as required under the Dodd-Frank Act.  What this means to consumers is two new forms.  The Good Faith Estimate we are used to that discloses the costs of the loan at the beginning of the loan process becomes the Loan Estimate.  The HUD-1 that shows the actual charges due at Closing becomes the Closing Disclosure.

In addition to the new forms are a few new rules.  During the loan process, there are several things that may happen that will require the lender to update the Loan Estimate and notify the consumer.  Those triggers are changes in the charges.  Perhaps a credit from the seller to the buyer was negotiated during the inspection period or maybe one of the estimated charges was inaccurate initially and needs to be adjusted, that means a new Loan Estimate must be sent to the consumer.  Lenders are only allowed a 10% increase between the charges disclosed on the most recent Loan Estimate and the actual charges on the Closing Disclosure.  If closing costs are initially estimated as $3000, the 10% rule only allows a $300 increase.

This all sounds great.  Keep the consumer informed on the costs they will be paying at closing.  No surprises at the closing table!  Where these new rules may cause problems in our real estate transaction is the required delay between issuing a Loan Estimate and Closing.  A three day wait is required.  Probably not a big deal, however, if something goes wrong and a last minute credit needs to be offered or one of the charges is discovered to be incorrect at the last minute Closing could be delayed.  Both Buyer and Seller need to be on board in order to delay Closing.  If the Seller doesn't agree, it could be disastrous for the Buyer.

The new rules were supposed to start August 1st but was recently pushed back to October 1st.  That means the real estate industry has a few more months to figure out how best to adjust to the new changes.

The Mountain Living Team knows it is important to stay on top of changes in our industry.  Educating ourselves and the consumers as well as adjusting our practices to better serve our clients is a high priority for us.  In response to the upcoming changes, we will be implementing new measures to ensure our Buyers are protected against any unexpected situations that could create a snag in the closing process and potentially put their earnest money at risk.  

Is your real estate agent marginal?

by Meredith Adams

NAR, the National Association of Realtors, recently released a "Danger Report" that states the largest threat to today's real estate agent is other real estate agents.  When an organization that is out there to protect and propel the image of Realtors is publicly skeptical about real estate agents, there must be a big problem. The competence of agents is a big concern mentioned in the report.  Because real estate is a commission only job, it's not uncommon for agents to have a full time job that pays the bills and be a real estate agent part time for supplemental income.  Many agents are unskilled, lacking the ability to coach buyers and sellers in one of the largest purchases or sales they will ever be a part of.  As a consumer, how do you make sure your agent is competent and ethical?  How do you protect yourself from agents that are marginal?

During your home purchase or sale, you rely on your agent for not only market information but opinions on how to handle different situations that crop up, resale value and negotiation tactics.  An agent that has years in the business may sound like someone you can rely on but if they are a part time agent, that may not be the case. A better measure of the experience of real estate agents is the number of sales they have handled.  According to NAR, agents on average close just 12 transactions a year​.  In 2014 Jason & I closed 39 transactions.  We are both full time real estate agents and our standard of living relies on our ability to provide an excellent service to both buyers and sellers.  We pride ourselves on the care we take of our clients; looking out for their best interests while maintaining a high ethical standard.  We ensure our clients' earnest money is never at risk, that deadlines are not overlooked, and that their motivations and bottom lines are closely guarded and never exploited.  We provide factual information to help our buyers and sellers decide their best course of action.  We will never push a client into a decision!  Road blocks that may hinder a transaction are anticipated and preempted.  We work hard for every client whether they are buying a small condo or a multi-million dollar home.   We believe there is no better compliment from a client than coming back to us for another purchase or sale or referring a friend or family member to us for their real estate needs.  It is our goal to provide service worthy of exactly that.

The easy answer to hiring a great real estate agent is to work with The Mountain Living Team for your Summit County real estate needs.  If you're buying or selling outside of Summit County, we may have a great agent to refer you to, check with us first.  One additional tip, make sure your real estate agent is really representing you.  Every state has its own rules but no matter where you are your real estate agent should be able to tell you about their obligations to you.

Additional questions?  Just ask, we're happy to help.

 

Make the time to do some reading

by Meredith Adams

Everyone has heard horror stories about people that have signed a contract, didn’t know what they were agreeing to, and somehow got taken.  But still, when presented a document that needs to be signed while someone waits very few people actually read it.  Some will ask what it says, others will skim it quickly, but not many actually make someone wait while they read the document.  As the length of the document grows, the number of readers goes down.  We see this all the time in real estate transactions.  Has anybody really read their mortgage documents before signing them? 

Being a real estate agent in Colorado, we are required to have some forms signed by consumers.  It’s supposed to be in an effort to look out for the consumer.  Unfortunately, sometimes it does exactly the opposite.  The documents I am mainly referring to are listing agreements.  There is one for sellers and one for buyers.  Colorado listing contracts lock both parties into a business relationship for a designated time frame.  It clarifies what the responsibilities of both parties are and what these services will cost you.  This is important information you should know before you agree to it. 

Real estate agents are a sampling of our population.  Just as there are good people and bad people in the population, there are good agents and bad agents.  There are measures in place to try and weed out the bad and keep the good but knowing which is which isn’t always obvious.  It’s important you look out for yourself by reading the contracts and asking questions. 

Luckily, the consequences of signing a document with your real estate agent without reading it are typically minimal, if any.  Most agents will ultimately do what is right.  However, you could find yourself stuck with an agent you don’t like or one that is incompetent.  That could cost you time, hassle, money, or all three. 

Take a minute to read what you are being asked to sign.  It's worth the time it takes.

Which survey is right for my Summit County real estate purchase?

by Meredith Adams

You finally found the Summit County property that is just right for you! Now an offer needs to be submitted to the seller telling them what we want from them. One of the items sometimes requested is a survey. Do you even need a survey? And if so, what kind of survey should you specify?

Your real estate agent should be able to help you determine what is necessary for your specific situation but here's an overview to give you a basic understanding. Typically, if you aren't buying any land, a survey isn't necessary. Real estate that doesn't come with land could be a condominium or townhome. For those type of properties, the title documents should include a condo map that shows the placement of the condo or townhome within the building or development. If you are buying some land, you should consider asking the seller to provide a current survey. It would be awful if you bought a piece of property only to find out sometime later that the house you have been living in is partially on the neighbors land. It would be even more terrible if the neighbor asked you to remove your house from their land. Afterall, it is their land. What right would you have to have your house on it? The easiest way to avoid any chance of that type of scenario happening to you is to get a survey and make sure the house you are buying sits on the land you are buying. The survey would also show you if anyone else is using your property. Things like fences and parking areas next to a driveway are common encroachments onto neighboring property.

Land SurveyIf you have determined a survey is a good idea, the next question is what type of survey do you need? An ILC, Improvement Location Certificate, is typically the least expensive option. This gives a rough idea where the improvements are and if there may be encroachments onto or from this piece of property. An encroachment is when someone has been or is using someone else's property for themselves. Encroachments could be a trail leading into the National Forest, a fence, a driveway or a multitude of other things. An ILC is the surveyors opinion of encroachments. If you're more concerned about where exactly your property lines are an Improvement Survey Plat, ISP, may be a better type of survey for you. On top of the items in the ILC, the surveyor will verify and often flag the corners of the property. This is the way to go if you are considering adding on to the property or if you have concerns about encroachments and need more exact boundary information. The Improvement Survey Plat is the surveyors opinion of property boundaries. If you are buying a vacant piece of property this same type of survey is called a Land Survey Plat. In the Summit County market the seller typically pays for a survey so the buyer doesn't have to be too concerned with the cost of a survey. Prices vary with each property and with each surveyor. An ILC will typically cost around $300 and an ISP $600+. Is a survey necessary?Keep in mind the time of year will also have an affect on how thorough the surveyor can be. They can only document what they see so if something is buried under the snow, it won't show up on the survey. If you buy a house in the winter and when the snow melts you discover a fence under the snow, the surveyor may come out and update the survey for you at a reduced price. That reduced price, if they offer one, may not be as low as you would anticipate. Regulations dictate surveyors confirm all previous information before signing a new survey so while we just see them adding a fence to the previous drawing, they are actually measuring and reconfirming all the original information which can be a time consuming process. Every piece of property is different and it is impossible to give a blanket statement about the type of survey that is best for you without knowing the specific situation. A real estate professional should be able to offer advice and you can always talk to the surveyor directly. If they have done a lot of surveys in the area the surveyor may be aware of some frequent problems with properties in the neighborhood

The truth about average sales price

by Meredith Adams

I looked at a new property for sale in Frisco a couple of weeks ago. It's a cute place and was very familiar to me. I looked up the property history and realized it was familiar because it was on the market last year. It sold for $385,000 and due to the owner's situation changing it is back on the market for $429,000. Nothing had changed with the property. It wasn't as if it was a fixer upper last year and was now a gorgeous home. I asked the listing agent why it was priced so high. His response was that the average sales price in Frisco was up 10% this year over last year so his price was just keeping up with appreciation. I checked his numbers and sure enough the average sales price was up 10% over 2013's average. But does that statistic really mean that every property in Frisco is valued 10% higher now than it was last year? To answer this question we have to look at the data that makes up Frisco’s average sales price. Every sale of every residential property in Frisco is included in the average sales price calculation; from studio condos to million dollar homes and everything in between. The mix of sales has a big impact when calculating the average. If there have been a lot of lower priced properties selling and no high end sales, it will drag the average down. If there have been a lot of high end sales but nothing in the lower price ranges, the average sales price will be higher. The mix of sales has nothing to do with price appreciation in an area. More higher end sales may indicate that the market is getting stronger because more people are spending more money. It could also mean there were fewer lower priced properties for sale. More information is needed to draw any accurate conclusions.

  • In 2013, Frisco's average residential sales price was at $472,654. 68% of the sales were under $500,000 and 2.5% were over $1 million.
  • Through the end of May this year the average has jumped up 13% to $536,197. 2.5% were still over $1 million but only 53% of the sales were under $500,000.

Just from looking at the mix of sales, I would expect the average sales price to be lower in 2013 when a larger percentage of sales were in lower price ranges. If the mix of sales were relatively equal, I could see a possible conclusion that there must be appreciation happening. But again, more information would be needed. Realize, just about any position can be justified by a statistic of some sort and one statistic never tells the entire story. When you hear random statistics, the question you need to answer is why that statistic is being put out there. In this case, the agent was telling me about the average sales price because he wanted to sell me & my client on this property. Unless a real estate agent is your Buyer’s Agent or Seller’s Agent, they are just a salesperson looking to make a sale. Don’t get sold. Get the facts. Hire an Agent that represents you.

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Photo of Jason & Meredith Adams Real Estate
Jason & Meredith Adams
Mountain Living Real Estate
101 E. Main Street, #109 / PO Box 4115
Frisco CO 80443
888-666-0844