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Buyer strategies for negotiating home improvements

by Allison Simson

Ask for credit or reduce offer price?

Question:  Allison, we are looking for a home in Summit County and there isn’t a lot in our price range that doesn’t need a lot of “fix up”.  We’re up for some of it, but want the sellers to help, too.  What is the best way to negotiate fix ups?

Answer:  That’s a good question.  According to Dyan Hymer of Inman News,  Buyers often make mistakes when they buy based purely on emotion. They fall in love with the view or charm of the home, but fail to take into account the ongoing maintenance that will be required to keep the French doors operating properly, the garden looking pretty and the skylights free of leaks.

This is not to say that you shouldn't buy a home that catches your heart. Just make sure that maintenance costs are included in your housing budget. If you can't afford the maintenance and you let the home fall into disrepair, its appeal will diminish, as will its value.

Buyers who walk into a listing and know immediately they want to live there are fortunate. Most buyers don’t have this experience. Usually compromises are made when buying a home. You should make a wish list of everything you'd like to have in a home and then prioritize it. You probably won't find everything you want in one home.

There are a couple of issues that complicate home buying decisions in the current market. One is how to deal with deferred maintenance. Another is: How do you evaluate improvements you want to make to the property for your own enjoyment? When home prices are moving up quickly, buyers don't give much thought to these matters.

You have several options when the house you're buying has been neglected by the seller. Let's say there's $10,000 of water damage work recommended in an inspection report. One option is to ask the sellers to have the corrective work completed before closing.

Sometimes there isn't time to have the work done before closing. Or perhaps you want to incorporate improvements into correcting the deferred maintenance, in which case you might not want the sellers to do the work.

For example, if the bathroom floor needs to be replaced because of water damage to the floor joists and the shower pan leaks, you could redo the entire bathroom to your taste, if you could afford to. Even if you just want to replace the floor and redo the shower, you might prefer to use finishes that you select.

In cases where you don't want the sellers to do the work, reduce the offer price by $10,000 and buy the property "as is" regarding the fix-up work.

Buyers who don't have extra cash for repairs could offer a price that doesn't reflect a reduction and ask the sellers to credit them $10,000 in escrow to be applied to their nonrecurring closing costs. Even though the buyers pay a higher price, they bring $10,000 less to closing -- money that can be applied toward deferred maintenance.

Almost any home you buy will need modifications so that it will satisfy your taste and intended use of the property. Perhaps the house lacks a developed backyard or deck. You might not like the color scheme. It may look too plain; you envision spending money to improve the curb appeal.

Most people feel they should recoup investments they make on improvements when they sell. However, studies have shown that most remodel projects don't pay back 100 percent of the amount invested. For this reason, you should select your projects carefully and keep resale value in mind.

Making changes to a home to make it reflect your taste improves the quality of your lifestyle while living there. It's hard to quantify this. The longer you live in the home, the more valuable the enhancements will be to you.

Before improving your new home, make sure you won't be over improving for the neighborhood. Inman News copyright.

 

 

For answers to your real estate questions, call Allison at 970-468-6800. Email - [email protected]. Allison is a long time local in Summit County. Summit Real Estate – The Simson/Nenninger Team is located at the Dillon Ridge Marketplace. Allison’s long-time residency and years of real estate experience can help you make the most of any buying or selling situation. She’s a Certified Residential Specialist (CRS), the highest designation awarded to a Realtor in the residential sales field.  Her philosophy is simple, whether buying or selling, she understands that the most important real estate transaction is yours.  Want to know the value of your Summit County property? Visit www.SummitHomeValue.com   

Summit County sales stats

by Allison Simson

It's offcially mud season in Summit County!  How do I know?  Well, the snow is melting (duh!)....but the main indicator is that many of the local restaurants are having their 2 for 1 specials.  It's a great time to go out to dinner! 

I can never get enough statistical information to keep my up on what our market is doing, and I just received this from one of our title companies, Title company of the Rockies.  I think the information is concise and the graphs are easy to grasp.   

The bottom line is that as you will see in the “2011 First Quarter Analysis”, Q1 2011 Transaction Numbers are up significantly compared to Q1 2010; 34.18%. Additionally, the Dollar Volume for the same time period is up as well; 23.74%. Looking at these percentage increases (34.18% and 23.74%) it is clear Transaction Numbers outperform Dollar Volume indicating Sales Prices continue to drop.  

Our inventory is down from last year....remember your high school economics?  Supply down, demand up?  We should see some stabilization in many segments of the market this summer - particularly the condo and townhome market. 

Summit County Statistics 

And Here's Your Morning Coffee!

 

 

 

 

 

 

 

 

Americans Say Buy Now

by Allison Simson

Spring is beginning to spring in Summit County...although we're expecting more snow tonight, which I guess is par for the course.  The other thing that is springing upward is our inventory...it is making a gradual incline - which is normal for this time of year.  The inventory has not jumped as much as it usually does, which is good for our real estate economy.  The supply/demand ratio, also called absorption rate, is fairly stable at about 15 months county-wide.  We consider 1-5 months a seller's market, 6-7 a balanced market and 8+ months of inventory is a buyer's market.

Here's some good news! Smile

Gallup Poll: Americans Say Buy Now
With dropping home values in many markets mixed with interest rates at historical lows, homes are more affordable now than they’ve been in the last 35 years, reports Zillow.com.

The average buyer nowadays can expect to spend about 17 percent of her monthly gross income on a mortgage, which compares to a 25 percent average since 1975, Zillow reports.

With affordability high, Americans seem to be getting the message about the value of home ownership. Nearly 70 percent of Americans say now is a good time to buy a home, according to a recent Gallup poll.

Men are about 16 percent more likely to say now is a good time to buy a home than women. And Americans living in the West are most favorable toward buying (75 percent), which compares to 64 percent of Americans who live in the South who say now is a good time to buy.

Americans with higher incomes also expressed more of an interest in home ownership, according to the Gallup poll. Americans who make $75,000 or more a year are 18 percent more likely to say that 2011 is a good time to buy a home than those making $30,000-$75,000.

 

And Here's Your Morning Coffee!

 

 

 

Tax Assessor Fun

by Allison Simson

What's that they say?  April snowstorms bring more May snowstorms?  Something like that...yes, it's still snowing in Summit County- A-Basin has over a 100 inch base! Crazy good skiing there...if you can still stand to put the ski boots on!   

 

It's property assessment time in Summit County again and here's an article you'll find interesting: Article on this year's assessments  Values overall are down 16% from 2009.  The good news is that the number of sales in Summit County year to date are up 23% over same time 2010 (224 sales in 2010, 276 sales this year).  So, yes, prices are still declining, but more buyers are feeling confident that Summit County is a great place to own property!  Is the bottom in sight?  Perhaps, but we won't know for sure that we've hit bottom until the market begins to go up again.  Note to buyers:  The best time to buy is when prices are falling, not when they are appreciating!   

 

For more specific reports about the  market in Summit County click below: 

1) Dillon


2) Wildernest/Silverthorne


3) Frisco


4) Breckenridge


5) Keystone


6) Summit County Overall

And Here's Your Morning Coffee!

 

 

 

 

 

 

Prioritize trade-offs in house vs.condo decision

by Allison Simson

Q: Allison:  We are looking to buy property in Summit County, which  is better to buy - a house or condo/townhouse?

A: Good question!  According to Tara Nicholle Nelson of Inman News, in the house vs. condo or townhouse battle, the analysis of which type to buy is not as simple as "better" or "worse," per se.  However, there are trade-offs to each, and in the final analysis of which property type to buy, own and live in, your decision boils down to a matter of fit between your lifestyle, personality and finances, and the key characteristics of the property type you select.

The most common concern homebuyers bring up when making the "condo or no" decision are around homeowners associations: the monthly dues they charge, and the restrictions they impose.

While many people think paying any sort of monthly dues on top of your mortgage and property taxes is nuts, these dues often cover expenses that a single-family homeowner would have to pay out as individual line items to various vendors, like garbage collection, hazard insurance and maintenance of the building(s) over time.

Another common "pros and cons" comparison when it comes to the house-vs.-condo debate involves the commonly cited advantage of attached, HOA-style housing, in that it eliminates the biggest portion of the home maintenance single-family homeowners have to do. This is especially true when it comes to the buildings' exterior, landscaping, and maintaining big ticket items like foundations, boilers, roofs and windows.

Unit owners don't have to do that sort of work, but the trade-off is a different set of responsibilities that owners of non-HOA properties don't have: the work of participating in an HOA. That means attending board meetings, reading meeting minutes, staying informed about HOA issues, and voting. If you don't participate, you can't be surprised when the HOA levies surprise fees and assessments because expenses weren't appropriately anticipated or budgeted.

And here's another set of trade-offs: privacy vs. communal living. In a detached home, you have as much privacy from your neighbors as possible in light of the architecture and lot situation of the property you choose. In an HOA situation, you might share walls, ceilings, floors, parking areas and yards -- and, depending on the construction standards of the property, possibly also smells and sounds -- with your neighbors; as well, you definitely share some financial interests with your neighbors in a condo scenario.

Along with owning and living in a communal setting comes the obligation to abide by its rules. It is precisely the extensive covenants, conditions and restrictions (CC&Rs) and community rules and regulations that make a community of relative strangers run smoothly, which makes some prospective buyers bristle at the potential loss of autonomy and ability to freely choose your own home improvements, among other things.

It's not bizarre for condo rules to limit things like your flooring choice (because hard floors can create noise pollution for lower units); what you can put out on your patio; and the size, number and type of pets you can own.

The flip side? The community, together, possesses economies of scale and can collectively afford property amenities you could never afford to have in your own private property, from doormen to parking garages, pools to community centers, and even including business centers and parks.

So, my answer is: You decide. Do you value privacy over amenities? Ease of maintenance over independence? Ask yourself what your priorities are, and go see both detached homes and condo/townhouse properties in your area. The right personal choice becomes clear to most buyers very early in their house hunts.

With that said, I do have one caveat about condos and townhomes: There are a number of HOAs that are experiencing deep financial crises, post-recession, from the dues they charge being viewed as a low-priority obligation by homeowners struggling to pay their bills. As a result, some HOAs are increasing dues on all homeowners to cover their expenses, and levying special assessments to cover high-priced upgrades and repairs that urgently need doing.

Increasingly, in a large number of HOAs across the country, the units are unable to be resold due to the HOA's financial issues, rendering it impossible for prospective buyers to obtain mortgage financing -- when buyers can't buy, home values plummet.

If you decide you like condo living, talk with your real estate broker or agent about finding a unit in a healthy HOA -- buying into one that is struggling can dramatically impact the value of your home and the ability to resell it over the long term.  Inman News 2011.

For answers to your real estate questions, call Allison at 970-468-6800. Email - [email protected]. Allison is a long time local in Summit County. Summit Real Estate – The Simson/Nenninger Team is located at the Dillon Ridge Marketplace. Allison’s long-time residency and years of real estate experience can help you make the most of any buying or selling situation. She’s a Certified Residential Specialist (CRS), the highest designation awarded to a Realtor in the residential sales field.  Her philosophy is simple, whether buying or selling, she understands that the most important real estate transaction is yours.  Want to know the value of your Summit County property? Visit www.SummitHomeValue.com   

What Your Money Can Buy ~ Beautiful Single Family Home

by Kelie Gray

Beautiful Single Family Home with Great Views & Location!

1151 Rainbow Drive in Silverthorne could be your next primary residence in Summit County, or your family getaway in the mountains! This beautifully maintained single family home boasts 4 bedrooms and 2 ½ bathrooms and over 2000 square feet. Built in 2004, this home is light and bright with a ton of windows to let all the sunlight in. An open floor plan with a large kitchen and family room has nice finishes and hardwood floors throughout the home.  Vaulted ceilings, deep closets and a crawlspace with additional storage are just a few of the other wonderful things you will find here.

Mountain living at it’s finest continues outdoors with an almost ¼ acre lot with very nice landscaping.  Most of the trees and flower beds are on an irrigation system, making the maintenance here very easy.  Relax on the large deck and soak in the jaw dropping Gore Range views to the west!  This home is in a great neighborhood that is walking distance to the Rec Center, Rainbow Park and the new Rec Path along the Blue River.  Homeowners also have access to the nearby pond for boating and fishing.  Store all of your toys for the walks to the pond, park and bike path in the attached 2 car garage.

This home is listed for sale at $560,000.00 and $269/square foot. Compared to other single family homes in Silverthorne sold in the past year that were built after 2000, between 3-5 bedrooms and less than 3000 square feet, 1151 Rainbow Drive is listed below the median sale price of those comparable homes at $281/square foot. Don’t wait until interest rates creep up and up and inventory levels go down, give your broker or Summit Real Estate a call to see this roomy and bright home today! 

    

 

Looking to Buy?  Not ready to speak to a broker?  Visit www.SummitHomeBuyer.com

Meet Lynn Sustad, Kelie Gray and Anna Willis, the Buyer Specialist Team at Summit Real Estate-The Simson / Nenninger Team.  Devoted to working only with Buyers, these Specialists tour hundreds of homes and commit to having the most comprehensive knowledge in the market.  A member of the Buyer Specialist Team can be reached at (800) 262.8442 or (970) 468.6800, www.SummitRealEstate.com or email us at [email protected]

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Photo of Summit Real Estate Real Estate
Summit Real Estate
The Bright Choice
330 Dillon Ridge Way, Suite 10
Dillon CO 80435
970-468-6800
800-262-8442
Fax: 970-468-2195

Allison Simson, Owner/Broker, is a licensed Colorado Real Estate Broker