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Add power to purchase offer

by Allison Simson

Add power to purchase offer

Pay attention to 3 market forces

Question:  Allison, we are wanting to make an offer on a condo in Wildernest, but we’re unsure how much to offer.  What do you recommend?

Answer:  Good question!  Figuring out how much to offer on a home you'd like to make your own is never easy. A complicating factor is that although it appears that the housing market may be stabilizing somewhat in other parts of the country, there is no guarantee that prices won't slip further.

With this in mind, don't buy for the short term. Don't buy betting on future appreciation. Buy a home that will work for you long term, at the best price you can negotiate, using financing you can afford.

To avoid paying too much, hook up with a real estate broker who will educate you about how much you'll have to pay for a home that works for you. The Internet is a great resource to help you learn about neighborhoods, current listings and past sale prices.

However, a diligent, knowledgeable real estate broker who has experience helping people buy and sell homes in the area where you want to live can get you up to speed on what's happening in that niche market now.

HOUSE HUNTING TIP: Ask your agent to give you a summary of all listings that you might have been interested in that sold during the last three months to six months, including list price, sale price and how long they took to sell. It's also useful to have information about the change in average sale price over the past year. Have prices declined? Are they flat? Or are they rising?

Also, ask for a list of properties currently available and pending sale. A pending sale is one where the sellers have accepted an offer, but the sale hasn't yet closed. Significantly more active listings than pending sales in an area suggests a high-inventory market where buyers have an advantage. Few active listings relative to pending sales is characteristic of a low-inventory market.

During your house-hunting education, make sure your agent reports back to you about day-to-day changes in the market. If an overpriced listing has a price reduction and is now in your price range, make a point of looking at it as soon as possible. A new price can attract other buyers' interest.

When listings you've seen sell, your agent should let you know the sale price. This will help you develop a sense for when a listing is priced too high, or priced at or under market value. How well a listing is priced for the market affects your offer strategy.

A well-priced listing in a low-inventory market is likely to sell quickly. There could be more than one buyer making an offer. If so, you may need to make an aggressive offer near, at or over the asking price. However, multiple offers don't always result in a sale price higher than the list price.

Becoming savvy about local market pricing enables you to know when to make a strong offer on a new listing, even though the overall market may be lagging.

It's a different story in segments of the market like ours in Summit County where there are plenty of listings that take months to sell. In this case, you have choices, making it possible to offer less than the asking price and negotiate. If this one doesn't work out, you move on to the next. You should be prepared to walk away rather than pay too much.

Buyers making offers that are contingent on the sale of another property usually have to pay more than all-cash buyers who can close quickly. If you've already sold your home and are waiting for the sale to close, you'll be in a better position to negotiate on price. The best bet is to have your home sold and closed. It removes uncertainty in the sellers' minds and may make them more receptive to a lower price.

For answers to your real estate questions, call Allison at 970-468-6800. Email - [email protected].  Would you like a list of properties that meet your criteria automatically emailed to your inbox without having to speak with a broker? Visit www.SummitHomeBuyer.com   

Pricing to sell in today's market

by Allison Simson

With price reduction, timing is everything

Question:  Allison, we currently have our Keystone condo on the market and our Broker is telling us we need to reduce the price.  We priced it where he told us to price it in the beginning.  What’s up with price reductions?  Doesn’t that make our property look bad?

Answer:  That’s a good question…and one that I hear a lot!  Selling property is not always easy, and putting yourself in the right mindset to sell is essential. It's the most difficult aspect of selling for most sellers. Your home is worth what a buyer is willing to pay, which may not be what you think it is worth.

Detaching yourself emotionally from your home- even your second home - is difficult. Clearing out years of clutter, depersonalizing your home by removing personal memorabilia, and staging your home for sale can help you step back and view the home as a commodity that needs to be sold rather than as your personal sanctuary.

Putting your home on the market at a price that reflects what you want and not what the market will bear can cost you time and money as it sits on the market unsold.

The home-sale market is a localized phenomenon. The only way to get a clear picture of what your home is likely to sell for is to find out which listings are selling in your neighborhood and for how much.

The most recent sales -- those that closed within the last three months -- will be the most informative. Be sure to take a hard look at the list prices of homes that are new on the market.  The market is constantly changing, and so the price you listed it at 6 months ago, is probably not the price it will sell for today.

If the list prices are lower than they were two or three months ago, this indicates that prices are declining. This needs to be taken into account when you select a list price.

HOUSE SELLING TIP: Pay close attention to your competition. Don't fall into the trap of pricing your home higher than your neighbor's home because yours is better. If your neighbor's price is too high for the market, neither of your homes will sell.

Ask your listing agent to call the listing agents of properties similar to yours to find out what kind of showing activity they are receiving. Have they had offers? If so, why weren't they accepted? Was the price too low? If so, you should set your sights lower.

Your home is most marketable when it is new on the market. Buyers wait anxiously for the new crop of listings. Listings that don't sell relatively quickly often languish on the market.

Price reductions often follow as the sellers try to find market value. A listing that has been on the market for months is likely to receive a low offer -- if a buyer makes any offer.

A listing that receives a lot of showing activity when it first hits the market but gets no offers is probably overpriced for the market. In this case, it's best to lower the price to market value as soon as possible while the listing is still fresh in agents' and buyers' minds, even if this is within two to four weeks of the listing date.

Pricing right for the market is imperative.

Inman News copyright

 

For answers to your real estate questions, call Allison at 970-468-6800. Email - [email protected]. Would you like a personalized list of all properties that meet your criteria, without having to speak to a broker?  Visit www.SummitHomeBuyer.com      

A Reasonable Perspective!

by Allison Simson

As Dorothy says in the Wizard of Oz...."There's no place like home!"  I just returned from vacation this past weekend.  I had a wonderful, relaxing time with my family, but it's good to be home.
 
You know how it is when you get back from being away....it's payback time!  While plowing through my many emails, I came across this "Round of Reasonable Perspective" and wanted to share it with you...

Another Round of Reasonable Perspective
"There is no question that we face formidable, long-term structural problems with our economy – problems that have made US markets less attractive in recent years. But these problems are surmountable. We have no qualms saying that the spirit of innovation and entrepreneurship that has defined America in past crises will prevail today.

Though housing remains tepid and debt and deficit levels are rising, compared to the rest of the world the United States is in good shape. Our economic fundamentals are sound: manufacturing levels are up and interest rates and inflation are low. What's more, the broader economic recovery is translating into meaningful employment improvements and corporate-profit growth that could potentially reach a record high in this year's third quarter.

Risks clearly remain, but markets are always fraught with risks: there are no perfect markets. To the contrary, when markets seem the most perfect, that's when they are the most risky, as the housing and mortgage markets post-2006 have so painfully revealed. Things still aren't so rosy today, but that's okay, because we're sure that better days lie ahead."

And now for your Tuesday Coffee Break...I want to thank the amazing team at Summit Real Estate for "holding down the fort" while I was gone.  They enrich my life everyday!  Our business wouldn't be where it is today without their commitment, help and support.  Now for today's quote:
 
"Even 'Super-You' needs help and support. There is no shame in asking for assistance. Push aside the pride and show respect for the talent others can bring to the table.

And, remember that there is no such thing as a single-handed success: When you include and acknowledge all those in your corner, you propel yourself, your teammates and your supporters to greater heights.
                                - Author Unknown.

Fixing to sell: Don't go overboard

by Allison Simson

Make improvements that pay off

Question:  Allison, my wife and I own three properties in Wildernest that we’d like to fix up and sell.  We understand that the market is difficult right now everywhere (although we’d hoped it wouldn’t hit Summit County like it has!)  What repairs should we make to maximize our investment?

 

Answer: Great question.  Fixer-uppers with upside potential were in high demand when the market was appreciating at a fast pace. Once depreciation took over, speculators disappeared until 2009, when low-end foreclosure properties in some areas of the country became hot properties -- particularly if they were selling at a 50 percent discount from the national peak in summer 2006 (our peak in Summit County was late 2007-08).

Fixers priced over $500,000 aren't as easy to sell today. Most buyers in higher price ranges are buying a home to live in. They want a home in move-in condition that will suit their long-term needs.

There are exceptions. In high-demand market niches with few listings, there is occasionally a fixer-upper that draws a lot of attention. Usually, these fixers sell to buyers who will live in the property and fix it up themselves to save money. Often this is the only way they can afford to move into the neighborhood.

Sellers of fixers in such neighborhoods should make their property as presentable as possible by cleaning out clutter, both inside and out. Many homebuyers can't visualize a property's potential. It's often worth a modest investment to show the house at its best advantage.

Cosmetic improvements, such as painting, replacing outdated floor covering, or refinishing worn hardwood floors can pay off. Some fixers are staged, even though the property needs a lot of work, so that buyers can envision themselves living there.

Presale inspections will help buyers make a decision about whether or not to tackle the project. Make reports available to buyers before they make an offer to avoid having to put the home back on the market if the deal falls apart because the buyer's inspectors discover defects not previously disclosed.

HOUSE HUNTING TIP: How much you spend preparing a fixer for sale depends on several factors. How much did you pay for the property? How much do you owe against the property? Is there demand for fixer-uppers in your area? Finally, how much does your real estate Broker think you can sell the home for given current market conditions?

Sellers who have equity in their home and cash to invest in fix-up for-sale work should consider making cost-effective renovations, like a kitchen upgrade, but not an entire renovation. Ask your Broker what the home would sell for with and without these improvements before doing anything to it.

The investment may not yield a profit, but could recover the costs when the home sells. In areas where fixers aren't selling, sellers might need to enhance the property to sell at all. A good real estate Broker should be able to provide references for reliable, reasonably priced professionals who can do the jobs for sellers who haven't the time or expertise to do the work themselves.

Buyers who bought at the peak may not be able sell for even close to what they paid. One possibility would be to rent the property, if it makes sense financially. You may need to fix up the property somewhat to attract a good tenant. Consult with a certified public accountant about the tax consequences of converting a single-family residence to a rental.

Another option, if you don't have to sell now, is to stay put for awhile and fix the property up gradually over time. Avoid investing a large amount of money in the hopes of getting a bigger return.  Inman News.

 

For answers to your real estate questions, call Allison at 970-468-6800. Email - [email protected]. Want to know the value of your Summit County property? Visit www.SummitHomeValue.com   

Tuesday Coffee Break ~ Real Estate Outlook: Experts Weigh In

by Allison Simson

It's beginning to show signs of spring here in the high country...the buds on the trees are coming to life and the melt-off is beginning.  It's been a long winter and the sunshine is quite welcome!
 
I'd like to share an interesting article from "Realty Times" published on May 10th:
 
Real Estate Outlook: Experts Weigh In 
by Kenneth R. Harney
Mega-investor Warren Buffett and a group of top corporate leaders are weighing in on a key issue that's crucial to a sustained real estate recovery: How long will the good economic news we've been getting lately continue?

Are we going to be let down later in the second half of the year, or is the current, slow-moving national economic growth pattern a long term trend?

Buffet told his annual stockholders gathering in Omaha that, the economy is showing "significant" and persistent improvement for the first time since the financial crisis broke in 2008.

Other top business leaders polled by the Conference Board -- and quoted last week by the Wall Street Journal - said they are now "confident that the U.S. will see sustained growth through 2010" - with moderate gains in employment, consumer spending and consumer confidence.

That's hugely important for housing of course - and offers a strong answer to economic doomsayers who predict a sharp drop in home sales and real estate activity following the expiration of the tax credits.

The latest housing and mortgage numbers certainly look encouraging:

Pending home sales jumped by more than five percent in March, according to the National Association of Realtors, and were 21 percent higher than the previous year for the same month.

Home prices are turning at least modestly positive again in the majority of large housing markets. The closely-watched PMI risk index, which looks at price decline potentials for two years out, found that 42 of the 50 largest markets in its latest survey showed diminished risk.

Another index -- from valuation data firm Clear Capital - found home prices gained by five percent nationally year over year. Prices in a handful of what Clear Capital calls "micro" markets are doing better than that. Washington DC, for example, saw an 8.4 percent increase over last year, according to the latest index.

Meanwhile, new applications for loans to purchase houses took another big jump -- up 13 percent over the previous week, according to the Mortgage Bankers Association.

MBA vice president for research, Michael Fratantoni, said that last week's FHA and VA share of home purchase applications soared above 50 percent -- the highest it's been in more than two decades.

Finally, there was some outstanding news for home buyers and sellers in high cost markets: The jumbo loan market is roaring back -- with more banks now offering big loans and cutting rates. One major lender even announced that for credit-worthy applicants, it's dropping rates on jumbos to 5.7 percent for 30 years -- the best ever.

Published: May 10, 2010 in “Realty Times”


In Summit County, we historically lag behind the national economy by 18-24 months.  When the majority of the economy has their big spike in prices in 2005-2006, we were still very steady and flat here, and then when the rest of the country took a nosedive is right when we saw our biggest appreciation in years!   Now, our values in Summit County are depreciating, but it's great to hear some good news on the national front.  Time will tell if history repeats itself or not.

 
And now for your Tuesday Coffee Break....."We tend to forget that happiness doesn't come as a result of getting something we don't have, but rather of recognizing and appreciating what we do have."     ~  Frederick Keonig

Have a great week! 

 

Warmly,

Allison Simson, Owner/Broker
Lynn Sustad, Buyer Specialist
Kelie Gray, Buyer Specialist
Anna Willis, Buyer Specialist
Kristi Warner, Client Care Manager
Margaret Bowes, Transaction Coordinator

I received so much response from my last article on staging your home to sell, I decided to incorporate a few more ideas.  I found these tips in a blog from Emily Hsieh.

It’s probably stating the obvious to say that it's a tricky, challenging real estate market out there, and, if you’re currently selling your house, you can use any kind of competitive edge. Professional home stagers can help you get it. Part interior decorator, part closet organizer, and part magician, they offer advice on upping the value of your home by sprucing up your interiors—all without any major renovations or shelling out of major cash. Basically, a home stager's job is to maximize your space, making rooms appear larger and feel more inviting (and desirable) with just a few clever design tweaks.

Intrigued by the idea of this home-makeover magic, we tracked down Donna M. Dazzo, president of Designed To Appeal, a New York-based home staging company, to share her tried-and-true tips for capitalizing on the worth of your house. “With things the way they are, the name of the game is to get your house sold, and sold quickly,” Dazzo says, before outlining her essential tricks to do just that:

Depersonalize. Hide anything—family photos, awards, trophies, your collection of antique teacups—that might interfere with a buyer feeling like your home could be theirs. People get really distracted when they’re surrounded by someone else’s personal stuff. Make your bathroom look like a hotel’s: no one wants to see your soggy loofah and half used bar of soap. Put all your beauty products in a shower caddy, so they can easily be stowed under the sink when you have a showing.

De-clutter. Most people have too much stuff, whether it’s tchochkes or paperwork or furniture. The goal is to create a sense of space in a room—and in all your closets. Fight the urge to shove all your stuff in your closets, since you have to be prepared for prospective buyers to open every last cabinet. An organized closet can send the message that as an owner, you’re the kind of person who doesn’t slack on any aspect (a leaky roof, a busted water heater) of maintaining your home.

Clean. Clean. Clean. No one wants to walk into a dirty house. Bathrooms and kitchens in particular should be sparkling. Don’t just do a surface clean—pay attention to hidden corners like the nook behind a toilet or the inside of your refrigerator. You never know where people are going to look. Use Febreze or reed diffusers to remove any odors, and invite a neighbor over to make sure there are no leftover scents, since living there may make you immune to the smell. Only about a third of Americans live with pets, so to be sure you’re not alienating the other two thirds of the population, remove all traces (leashes, litter boxes, dog beds) of animals.

Lighten and Brighten. You want to have as much light as possible filtering through your space. Start by cleaning the windows. Ditch the screens, which just add one more darkening layer. During an open house, make sure your shades are up. Check to see if all your bulbs are working, and replace low-watt bulbs with high-watt ones to ensure the place feels bright.

Paint. Walls are the bones of your home, and it’s super important to make sure they look fresh. Painting is relatively inexpensive if you do it yourself, and can have a huge impact on the way a place looks. Avoid non-neutral colors like red, purple, or loud yellow, since they won’t appeal to the majority of people. White can feel stark and cold, which doesn’t do anything to add to the appeal of a room. Try warm beige tones instead like Benjamin Moore’s Rich Cream or Natural Wicker.

Would you like a complimentary brochure on staging your home to sell?  Email - [email protected] and we’ll get one to you straight away!    

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   

5 Mistakes to Avoid When Selling Your Summit County Home

by Allison Simson

5 Mistakes to Avoid When Selling Your Summit County Home

Selling your Summit County, Colorado home should be a smooth and -with any luck at all- a profitable transaction. But it could end up being an unsuccessful, draining experience, especially if the appropriate precautions and preparations are not observed. A majority of the time, the chance for success lies within the hands of the hired real estate expert. In order to guarantee optimal results, the sellers must be willing to cooperate and consider the professional advice of their real estate agent. Agonizing over a listing price, making the property presentable, rushing for last minute showings, answering inconvenient calls, and frazzling thoughts of not being able to sell are all stressful components of selling your Summit County home. If you and your home are not properly prepared there is a great risk of losing thousands of dollars in an unsuccessful transaction.  Here are five of the most common, costly mistakes homeowners can easily avoid when selling their property here in the mountains:

1. Do not believe all real estate professionals are the same, choose wisely

The process of selling your home involves many tedious details and critical decisions. Real estate professionals are experts in handling these situations and offering knowledgeable guidance to sellers. It is crucial to research several professionals in order to find a suitable match with experience selling homes similar to yours. Real estate agents use different methods to sell their listings. Innovative professionals who promote listings with newer techniques to attract buyers are always more successful than professionals relying on traditional strategies. 24-7 advertising, excessive exposure and lead generation are important services agents offer to aid in selling your home. Hiring and utilizing the right real estate professional can significantly maximize the chances for a smooth, profitable transaction.

2. Effects of ignoring cosmetic upkeep

The potential buyer’s first impression of your property is crucial. Dirty dishes piled in the sink, unkempt lawns and front entry areas, cluttered rooms, stained carpets, scattered soiled laundry, and any offensive odors may seem like little things, but they are big turn-offs to prospective buyers. Ignoring cosmetic upkeep leads to loosing home sales. It also never hurts to hire a staging company to assist in making the home more appealing to buyers.

3. Refusing to make repairs

Another major cause in loosing home sales is the seller’s refusal to make necessary repairs. In the long run, it is not beneficial to sell “as is”. Instead, making needed repairs or improvements will increase the home’s value. A real estate agent can decide what repairs will boost the home’s value.

4. Picking a price that is too high or too low

When properties get priced too high they tend to sit on the market and eventually develop a label of a problem property. When priced too low a home could fly off the market, allowing the buyer to get a great deal and the seller with lost potential profits. Listing the home at the appropriate price could make or break a successful sale. Real estate professionals use their market knowledge and special tactics to appropriately price the property and ensure a timely and profitable sale.

5. Making things convenient for prospective buyers

Providing easy access to the property for showings is the key to finding the right buyer. Appointment-only showings take away from the buyer’s convenience because a specific time has to be set to fit the schedules of multiple people. Using a lock box is the best way to provide easy access for showings. You are less likely to miss out on a sale when buyers are never denied a chance to view the property.

 For answers to your real estate questions, call Allison at 970-468-6800. Email - [email protected]. Want to know the value of your Summit County property? Visit www.SummitHomeValue.com   

5 tips for tapping energy credits

by Allison Simson

Get tax savings for home improvements

Question:  I’ve heard a lot about the tax credit for first time homebuyers and move-up buyers, but I’m interested in more details about tax credits that are available for energy saving improvements we’d like to make to our home in Silverthorne.  What can you tell me?

 

Answer:  Good question!  According to Mary Umberger of Inman News there are some great improvements you can make in 2010 that not only have the potential to reduce your monthly utility bills -- they also could put a dent in your taxes.

They are tax credits that homeowners can get through a federal stimulus package passed last year.

In particular, the Existing Home Retrofit Tax Credit covers an array of energy-saving fix-ups -- from installing certain kinds of windows to powering your house with a windmill -- that qualify for a credit, according to Calli Schmidt, environmental communications director for the National Association of Home Builders.

The tax credit for many of the energy-saving changes could be good for as much as $1,500, she said. If you want to upgrade your heating or cooling or switch to alternative forms of energy, the potential tax credits can go much higher.

Five things to know about the home-improvement tax credits:

1. The simplest changes that qualify for the credits involve buying and installing approved products that improve the energy performance of the home itself, such as insulation, insulated siding, doors and windows, some types of roofing and skylights, and others.

The credit for these products is 30 percent of the cost (but doesn't include the cost of installation), up to $1,500. NAHB materials explaining the tax credits offer a typical example: Upgrading inefficient insulation (from R-19 to R-38) in the attic of a two-story, 2,000-square-foot-house in Chicago might cost about $1,000, but the tax credit would reduce the cost to $700.

2. If you go the second route and install a new furnace, air conditioning, tankless hot-water heater, heat pump, geothermal system, biomass heater, or solar or wind installation, the credits could go much higher.

Again, the credit amounts to 30 percent of the purchase cost, but there's no dollar cap on these, she said. A big-ticket example: Spending $25,000 for a rooftop solar-heat panels would net a $7,500 tax credit.

3. "In addition to the federal incentives, many utilities and municipal, county and state governments are also offering incentives for buying and installing certain products," Schmidt said.

For example, New Mexico offers tax credits to help cover of the cost of installing geothermal heat pumps; Indiana offers credits for qualified water heaters, furnaces, central air conditioning and programmable thermostats.

A state-by-state guide to these tax credits and other incentives is at the Database of State Incentives for Renewables & Efficiency-- www.dsirusa.com.

4. The federal offering isn't a tax deduction (which whittles down your taxable income), but a credit -- which reduces the actual taxes you owe Uncle Sam. It applies only to your principal residence, not to vacation homes.

Being a tax law, of course, it has myriad details and exclusions. To file for the credit you'll need Internal Revenue Service form 5695; you'll also need to hang on to both the itemized product-purchase receipts and the labels from those products.

The credit also could apply to home improvements you may have made in 2009, so if you did some fix-ups last year that improve your home's efficiency you might be able squeeze them into your last-minute IRS filing or consider an amended return if you've already filed. Again, however, documentation is critical.

5. For further information on the tax credits, you can visit EnergyStar.gov. The homebuilders also have details at NAHB.org/efficiencytaxcredit.

 

 

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   

10 Questions You Must Ask Before Purchasing a Condominium

by Allison Simson

I get a lot of questions about buying condos vs. single family residences and came across this blog post from Richard Vetstein that answers many of the questions quite well.  Buying a condominium unit can be more involved than buying a single family home. This is because you have to worry about both the unit itself and the condominium project as a whole.

10 Questions You Must Ask Before Purchasing a Condominium

To borrow from a famous phrase, not all condominiums are created equally. Some condominiums are very well run; some are quite poorly run and underfunded. Buyers interested in purchasing a condominium unit must do their homework:  not only about the condition of the individual unit they are interested in purchasing, but on the financial health and governance of the condominium as a whole. Remember, you are buying into the entire project as much as you are the unit, and your decision will impact your daily living and your ability to re-sell.

Here are the 10 questions buyers should ask when deciding to purchase a condominium unit:

  1. What is the monthly condominium fee and what does it pay for? The monthly condominium fee can range quite dramatically from condominium to condominium. The fee is a by-product of the number of units, the annual expenses to maintain the common area, whether the condo is professionally managed or self-managed, the age and condition of the project, and other variables such as litigation. For budgeting and financing you need to know the monthly fee and exactly what you are getting for it.
  2. What are the condominium rules & regulations? Condominium rules can prohibit pets, your ability to rent out the unit, and perform renovations. Make sure you carefully review the rules and regulations before buying.  Needless to say, the buyer and possibly the buyer's attorney should review and approval all condominium documents, including the master deed, declaration of trust/by-laws, covenants, unit deed and floor plans to ensure compliance with state condominium laws as well as Fannie Mae and FHA guidelines, as necessary.
  3. How much money is in the capital reserve account and how much is funded annually? The capital reserve fund is like an insurance policy for the inevitable capital repairs every building requires. As a general rule, the fund should contain at least 10% of the annual revenue budget, and in the case of older projects, even more. If the capital reserve account is poorly funded, there is a higher risk of a special assessment.  Get a copy of the last 2 years budget, the current reserve account funding level and any capital reserve study.
  4. Are there any contemplated or pending special assessments? Special assessments are one time fees for capital improvements payable by every unit owner. Some special assessments can run in the thousands. You need to be aware if you are buying a special assessment along with your unit.  It's a good idea to ask for the last 2 years of condominium meeting minutes to check what's been going on with the condominium.
  5. Is there a professional management company or is the association self-managed? A professional management company, while an added cost, can add great value to a condominium with well run governance and management of common areas.
  6. Is the condominium involved in any pending legal actions? Legal disputes between owners, with developers or with the association can signal trouble and a poorly run organization. Legal action equals attorneys’ fees which are payable out of the condominium budget and could result in a special assessment.  In most states, you can run a search of the condominium association in the court database to check if they've been involved in recent lawsuits.
  7. How many units are owner occupied? A large percentage of renters can create unwanted noise and neighbor issues. It can also raise re-sale and financing issues with the new Fannie Mae and FHA condominium regulations which limit owner-occupancy rates. If your buyer is using conventional financing, check if it is a Fannie Mae approved condo. If FHA financing, check if it's an FHA approved condo.
  8. What is the condominium fee delinquency rate? Again, a signal of financial trouble, and Fannie Mae and FHA want to see the rate at 15% or less.
  9. Do unit owners have exclusive easements or right to use certain common areas such as porches, decks, storage spaces and parking spaces? Condominiums differ as to how they structure the “ownership” of certain amenities such as roof decks, porches, storage spaces and parking spaces. Sometimes, they are truly “deeded” with the unit, so the unit owner has sole responsibility for maintenance and repairs. Sometimes, they are common areas in which the unit owner has the exclusive right to use, but the maintenance and repair is left with the association.  Review the Master Deed and Unit Deed on this one.
  10. What Does The Master Insurance Policy Cover? The condominium should have up to $1M or more in coverage under their master condominium policy. For buyer's own protection, they should always buy an individual HO-6 policy covering the interior and contents of the unit, because the master policy and condo by-laws may not cover all damage to their personal possessions and interior damage in case of a roof leak, water pipe burst or other problem arising from a common area element.

Often a standard condominium questionnaire will answer all or most of these questions. If not, you may want to be prepared to generate this list and incorporate it into your Offer.

Buying a condo in Summit County does require additional due diligence that is different from buying a single family home, but the benefits of having a condo- your home – or home away from home are certainly worth it!  Good luck! 

 

For answers to your real estate questions, call Allison at 970-468-6800. Email - [email protected].  Interested in a list of properties that meet your specific criteria?  www.SummitHomeBuyer.com   

Question: I am going to remodel an older home in Silverthorne. What types of remodeling projects give the greatest increase in property values?

 Answer: Many homeowners upgrade their residences with property value increases in mind. The key for these consumers is to determine which improvements will produce the most value for the money.

According to Remodeling magazine's annual Cost vs. Value report, kitchen remodels are the most profitable upgrade, offering homeowners an 88 percent return on project costs. Some homeowners actually stand to lose money on a sale if they fail to modernize their kitchens and bathrooms, says Vince Butler of the Northern Virginia Building Industry Association Remodelers' Council.

On the hand, homeowners only recoup an average of 55 percent on the costs of a home office, making it the least profitable improvement. Remodeling investment returns are tied to the properties' values, as well as local market conditions.

 

For answers to your real estate questions, call Allison at 970-468-6800 or 1-800-262-8442. Email - [email protected] or visit their web site at www.SummitRealEstate.com. 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.  

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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