Keystone Real Estate Update

The Keystone Real Estate Market has made a lot of progress throughout 2012 as well as recently.  The first three quarters of 2012 saw 126 transactions which is a 35.5% increase compared to 93 in the first three quarters of last year.  The average sales price of Keystone Real Estate has also risen 4.5% from $451,478 in the first three quarters of 2011 to $471,833 in the same time period this year.

More recently in Keystone Real Estate, September 2012 has demonstrated considerable growth compared to September 2011.  This September, transactions rose 35.3% from 17 last year to 23 this year.  Furthermore, the average sales price came up 9% from $511,465 last year to $557,283 this year.

As always, please feel free to contact me anytime with questions about Keystone Real Estate or Summit County Real Estate in general.  I look forward to hearing from you!

All the best,

Tyler MacGuire  e-PRO®, SFR, CNE

Broker Associate

Omni Real Estate Company

Office: 970-468-2740

Mobile: 970-409-7779    

Web: www.tylermacguire.com

       

“Your Guide to Summit County Real Estate”

Number of Transactions Up Compared to Past Years

            Although the average sales price has fluctuated a bit, over the last few years the number of transactions appears to be on the rise.  This is good news for a market with a large inventory (over a years worth) that needs to be chipped away at before we can expect to see sustained appreciation.

            In the first four months of 2010, Summit County saw 224 residential transactions with an average sales price of $526,571.  During the same time period in 2011, the number of transactions grew (25%) to 280 and the average sales price came up slightly (3.4%) to $544,489.  In the first four months of this year we have seen 294 residential transactions (up 5% compared to last year and 31% compared to 2010) with an average sales price of $532,366 (down 2% from last year and up 1% compared to 2010).

            Like any market, when there is too much supply the value goes down.  However, if the demand for properties in Summit County (AKA number of transactions) continues to grow, it is likely to lead to a decrease in supply and an increase in value.  As always, it will be interesting to see how this plays out in the coming months but, feel free to contact me anytime at the information below with questions.

                                                                                                 

All the best,

Tyler MacGuire  e-PRO®, SFR

Broker Associate

Omni Real Estate Company

Office: 970-468-2740

Mobile: 970-409-7779    

Web: www.tylermacguire.com

          

“Your Guide to Summit County Real Estate”

Q1, 2012 Compared to Q1, 2011

In the first quarter of 2011 Summit County saw 200 residential transactions with an average sales price of $516, 266.  In 2012 however, the first quarter saw 196 residential transactions (down 2%) and an average sales price of $548,078 (up 6%)!     

Looking forward, there are currently 188 transactions pending with an average list price of $543,944.  We also have 1,209 active listings which represents over a years worth of inventory.  An inventory of over six months is generally considered to be a buyer's market and with the average sales price on the rise now may be the time to take advantage of low pricing, low interest rates and a large inventory.

As always, if you have questions about this or anything else pertaining to Summit County Real Estate please feel free to contact me anytime.

All the best,

Tyler MacGuire  e-PRO®, SFR

Broker Associate

Omni Real Estate Company

Office: 970-468-2740

Mobile: 970-409-7779    

Web: www.tylermacguire.com

      

“Your Guide to Summit County Real Estate”

The information contained herein is based solely on MLS data.

First Right of Refusal: What is it and What You Need to Know.

A First Right of Refusal is a HOA regulation that allows members of the association to assume a Purchase Contract from a third party buyer without their or the Seller's consent.  More simply put, if you make an offer on a condo with a First Right of Refusal a letter will go out to all owners in the HOA stating the terms and conditions in the contract.  The owners in the HOA will then have a set period of time (usually 10-20 days) to decide if they want to purchase the condo instead of you.  For an individual to exercise their First Right of Refusal, they will have to be willing to assume the current purchase offer including all of the terms and conditions set forth in the contract.

Essentially, the purpose of a First Right of Refusal is to offer some level of protection to owners in an HOA in the event that someone decides to sell below market value.  For example, let’s assume you and your neighbor own similar condos that are worth $200,000.  If your neighbor falls on hard times and needs to sell their condo fast, they may list it for sale under market value and accept a purchase offer for $170,000.  If this happens it will adversely affect your property value so, you may want to exercise your First Right of Refusal and purchase the under valued unit yourself.  By purchasing the neighboring unit, you become the beneficiary of the under priced sale despite the adverse affect on the value of your condo.

It is very important when purchasing a property in a HOA to know if there is a First Right of Refusal and when it expires.  As a buyer, you don’t want to be spending money on inspections and appraisals just to have someone else exercise a First Right of Refusal and buy the property out from under you.  As always, if you have questions about this or anything else pertaining to Summit County Real Estate, please feel free to contact me anytime at the information below.

All the best,

Tyler MacGuire  e-PRO®, SFR

Broker Associate

Omni Real Estate Company

Office: 970-468-2740

Mobile: 970-409-7779    

Web: www.tylermacguire.com

         

“Your Guide to Summit County Real Estate”

In Defense of HOA’s

More than once I have been told by a buyer that they don’t want to look at any properties that are part of a Home Owners Association.  When asked for more information the most common answer I hear is “it’s too much money every month that is not going toward the principal on my mortgage.”

           

At first glance a $350 a month HOA payment in addition to your principal, interest, real estate taxes and insurance costs may seem like a lot.  However, it is important to understand what you are getting in return for that money.  Here in Summit County, CO the most common HOA inclusions are Cable TV, water, sewer, trash pick up, snow removal and common area maintenance (this may include a common hot tub or club house).  Admittedly, you can probably get cable, water, sewer, snow removal and trash pick up for less than $350 a month but, you will have many separate bills to pay so there is a convenience factor.  More importantly though, a portion of your monthly HOA payment is going to be put into the HOA’s reserve account.  Down the road when the building needs repair it will be paid for from this reserve account.  If you do not have an HOA you will be solely responsible for any expenses and if you haven’t been saving for it, you could be in real trouble.  Lastly, imagine the worst case scenario of a catastrophic roof problem that causes more expenses than what is in your HOA’s reserve account.  Without an HOA you would be solely responsible for the difference but with an HOA, that amount gets divided by all the members of the association which could save you thousands.

All of this being said, it is very important that you take a look at the HOA’s financial statements before purchasing a property in any association.  If the HOA is weak financially, it could lead to all sorts of unforeseen costs typically in the form of the dreaded special assessments.  Nevertheless, a strong, well run HOA can take away many of the worries associated with home ownership and provide financial security.

As always, if you have any questions about this or anything else pertaining to Summit County Real Estate, please feel free to contact me anytime at the information below.

All the best,

Tyler MacGuire  e-PRO®

Broker Associate

Omni Real Estate Company

Office: 970-468-2740

Mobile: 970-409-7779    

Web: www.tylermacguire.com

       

“Your Guide to Summit County Real Estate” 

Is a Short Sale a Foreclosure?

The question was recently asked of me what the difference between a short sale and a foreclosure is.  Since I assume most people have a general understanding of what a foreclosure is, I will focus on explaining what exactly a short sale is.

The short sale addendum defines a short sale as “a transaction in which any Lien Holder releases it’s lien against the property and (a) accepts an amount less than the full amount Lien Holder claims is owed or (b) treats the debt secured by the Lien differently than as originally provided for in the evidence of debt (such as a promissory note).  Ok now in simple English, a short sale is an alternative to a foreclosure that may be less detrimental to the homeowner.

Let’s say John Smith bought a home at the height of the real estate market and today he is upside down on it (owes more than it’s worth).  Now if John like many Americans falls on tough financial times, he may no longer be able to afford his monthly mortgage payment.  Furthermore, John may not be able to afford to sell his home for less than the loan amount and bring the difference to closing to pay back the lender.  However, if John can document his inability to repay the loan, with the help of his Realtor® he may be able to negotiate a short sale with the Lien Holder.  In the short sale, the Lien Holder would agree to accept an amount less than what is actually owed, there by making it possible for John to sell the home without it being foreclosed upon.

It is important to understand however, that short sales are by no means the perfect solution.  Sometimes the Lien Holder does not agree to release the Seller from the unpaid portion of the debt and the Seller may remain liable for the debt after closing.  There for, as I said in the beginning, a short sale is an “alternative” to foreclosure not a solution or fix all.

If you have any questions about this or think you may need to try to negotiate a short sale with your Lien Holder, please feel free to contact me anytime.  You can also find lots more information on Summit County Real Estate on my web site

                                            

All the best,

Tyler MacGuire  e-PRO® SFR

Broker Associate

Omni Real Estate Company

Office: 970-468-2740

Mobile: 970-409-7779    

Web: www.tylermacguire.com

       

“Your Guide to Summit County Real Estate” 

Should I Be Talking With a Lender?

Often, buyers will ask me at what point in the buying process they need to sit down with a lender.  Furthermore, many times buyers are apprehensive about speaking with a lender as the will have to disclose all of their financial history including income, debts and their credit scores.  However, it is to the buyer's benefit to get a lender involved in the home buying process as early as possible…and by early, I mean as soon as you start considering purchasing a home.

By sitting down with a lender you can get pre qualified for a loan.  The prequalification process consists of answering the lenders questions about your income, debts and credit scores.  Once the lender has this information they can estimate not only how much house you can afford but, how much your monthly payments will be at different price points.  As a buyer this information is very important as it will dictate what properties you look at and ensure that you are not wasting time looking at properties that you either cannot afford or, are far below your purchasing power.

                

Once you have been prequalified for a loan the lender will ask you to provide documentation of your income and debts.  This will typically include bank statements, tax returns and a full credit report.  Once this is done the lender can issue a Pre Approval Letter that assures your ability to secure a loan.  When you make an offer on a home, you can attach a copy of the pre approval letter to demonstrate to the seller that you are a well qualified buyer who will be able to secure a loan to purchase their property.  Without a Pre Approval Letter, the seller will likely be apprehensive to accept your offer as they will have to take their home off the market while you start the loan process.  If you fail to secure a loan, the seller will have lost valuable time trying to sell their home and will have to start the process over.  Furthermore, if you end up in a situation where multiple buyers are making an offer on the property you want, a Pre Approval Letter will make your offer more attractive to the seller.

As always, if you have any questions, or would like a list of top notch Summit County Lenders please feel free to contact me anytime at the information below.  I am always happy to discuss your Summit County Real Estate goals.

All the best,

Tyler MacGuire

Broker Associate
Omni Real Estate Company

Cell: 970-409-7779

Email: tylermacguire@hotmail.com

Web:   www.tylermacguire.com  
         

      

"Your Guide to Summit County Real Estate"

Assessed Value vs Appraised Value

              I have often been asked why there can be such a large discrepancy between the assessed value of a property and the appraised value.  To clearly understand this question it is first important to understand what exactly the two terms mean.  An assessed value is the valuation placed on a property by a public tax assessor, exclusively for tax purposes. 

            On the other hand, the appraised value is determined by licensed appraiser who uses a number of criteria including recent comparable sales, replacement cost and their professional knowledge of market conditions.  Furthermore, the appraised value is what lenders will typically use to determine the value of a home.

            All too often home owners and home buyers put too much weight on the assessed value of a home especially when it is favorable to them(high for owners, low for buyers).  However, the assessed value will have little if any influence on a lenders willingness to lend on the property.  Nevertheless, to get an appraisal done on a home can cost several hundred dollars. 

            So how can you figure out what your home is worth?  Contact your Realtor and have them put together a Comparable Market Analysis (CMA) for you.  A CMA will look at similar properties that have sold recently to give an estimate of value.  Furthermore, unlike an expensive appraisal that can only be done by a licensed appraiser, many Realtors will put together a CMA for you for free.

            If you have any questions about assessed vs appraised values, or would like a free CMA to estimate the actual value of your home, please feel free to contact me anytime at the information below.

All the best,

Tyler MacGuire  e-PRO®, SFR

Broker Associate

Omni Real Estate Company

Office: 970-468-2740

Mobile: 970-409-7779    

Web: www.tylermacguire.com

       

“Your Guide to Summit County Real Estate”