Summit Colorado Resort Blog

For sale by owner or use a REALTOR

For Sale by Owner (FSBO) is, a homeowner trying to sell their home without the assistance of a REALTOR. Can you do this, of course it's possible, Sometimes people actually get their home sold! However it is not typical. Statistics show about 80% of FSBO's end up listing their homes with a Professional REALTOR.

Deanna and I are REALTORS in Beautiful Summit County Colorado a resort community. Home prices here are much higher than the national average. You would think with some homes in our area selling in the millions of dollars people would use a REALTOR to facilitate the transaction. Most do. However due to our market moving well we are seeing a small but steady trend of FSBO.

We recently had a transaction where our buyer went under contract on a FSBO home. In Colorado it is law that we provide all parties with a brokerage disclosure. This is simply a definition of who is who and what they mean to the parties. We struggled to get the FSBO to read and sign it. The FSBO thought we were trying to trick them into signing a contract. It clearly states at the top "This is not a contract". During the inspection the inspector found a significant leak in one of the bathroom showers. After working with both the Buyer and the FSBO seller it became apparent the seller really did not understand the law or the process. The FSBO asked on several occasions, "speak to me before you talk to the buyer" If he would have had took a moment to read and understand our responsibility is to our client. We recommended on several occasions they find a REALTOR to help them.

While we were waiting for an estimate on the cost to repair the damage of the shower from a licensed contractor the FSBO called and said they had good news. The FSBO had decided to tear apart the shower stall the night before on their own, and proceeded to explain the problem was not as bad as we thought. They said they could fix the problem and re-tile the shower stall themselves. Now had they had a REALTOR or asked they would have known it is going to be hard to get the home to meet appraisal with a torn apart bathroom. The appraisal was in a couple of days. It also would have placed great liability on the FSBO buy doing the repair themselves.

Deanna and I had to rush to save the transaction. It was a full price offer to the FSBO and nearly cost them the deal. It ended up costing them more money and time than it would have had they let us help them.

Now I know not every transaction is like this. But it is very common for older existing homes to have some problems found during inspection that you might not even be aware of. In my experience most REALTORS are good people here to help. A great REALTOR can be an incredible resource to guide you through what might seem to be an easy transaction. With today's laws and the amounts you are dealing with a REALTOR just might save you money if you let them.

Here are a few tips why:

1. I do not have the time to make appointments during the day or during normal business hours.

2. How do I know if these potential buyers can qualify for my home?

3. I am not aware of the legal documentation that should accompany a contract.

4. How do you pick a Title Company, and who is suppose to pay their fees?

5. What if the Buyer backs out of the contract?

6. Can I sell my home for market price without using a REALTOR?

7. What coverage do I have if the Buyer sues me a year after closing?

8. Is it worth having a home inspection before putting the house on the market?

9. Who does the home warranty really protect?

10. Will I really be saving the real estate commission if I try to sell myself?

These are just some of what a homeowner needs to ask themselves before embarking on this endeavor without a professional. What some homeowners don't realize is that most REALTORS do care. This is our livelihood. We want to sell your home for the highest possible price. Our goal is to have a smooth transaction, and you are happy with the outcome so the next time you buy or sell, you think of us.

Still, anyone can put a sign in the yard and try to sell their home, and some may actually get it sold in a reasonable amount of time. But as with any profession, if you decide to take on the role yourself, you are opening yourself up to potential risks. Licensed REALTORS are just as such, a licensed professional who is capable of guiding you through the process and assessing the transaction with the least amount of risk and in the least amount of time possible and at the highest possible price. We ensure that the buyers are qualified to purchase the home and walk you through the closing process step by step.

There is always a Realtor out there that can help in any situation. Don't hesitate to pick up the phone and call one for help in getting your home sold that's what we do!

Jason & Deanna Long are local Summit County Real Estate brokers, and focus on second and vacation home properties in and around the Breckenridge area.

http://www.ski-homes-breckenridge.com/index.php

Vacation-home sale rise, investment property sales plummet?

Here in Summit County Colorado home to four of the United States top ski resorts we are seeing an interesting trend. I call it the vacation home investment.

What is a vacation-home? It is a place where you and your family go a few times a year to relax or to "Just get away from it all". However in the back of your mind your goal is that it will appreciate in value even if you won't admit it publicly or to your loved ones who love to go there.

We are seeing a new mindset here in Summit County. I like to call it ‘the vacation-home Investment". It's no secret with areas like Breckenridge, Keystone, Frisco, Lake Dillon, and Eagles Nest at the Raven Golf course here in Summit County our Real Estate market is hot. Buyer's motives are changing. Many now not only see buying here a lifestyle choice but a sound investment for their future.

It's no wonder we are seeing this shift in the market, take a look at what the National Association of Realtors reported in April 2007:

NARs annual Investment and Vacation Home Buyers Survey shows vacation-home sales rose 4.7 percent to a record 1.07 million in 2006 from 1.02 million in 2005, while investment-home sales fell sharply, down 28.9 percent to 1.65 million in 2006 from a record 2.32 million in 2005.  By contrast, primary residence sales fell 4.1 percent to 4.82 million in 2006 from 5.02 million in 2005.

The Baby Boomer effect:

The median age of vacation-home buyer was 52 in 2005. That is right in the heart of the largest living generation in America. Vacation home buyers of today not only want lifestyle, but also require a sound investment. We are seeing this generation begin to re-allocate their monies to what they want. With an estimate wealth in the 10's of trillions baby boomers are a force to be reckoned with.

Vacation -home verses investment property:

With the recent boom and now bust in the nationwide housing market buyers and investors have become very discerning on their purchases and have begun liquidating non-performing assets. According to NAR "We expected the drop in investment sales because speculators left the market in 2006, which caused investment sales to fall much faster than the primary market, but the rise in vacation-home sales is based on strong demographic and lifestyle factors, with only modest interest in renting their properties to others". Appreciations of homes in the Summit County-Breckenridge area continue to outperform the national average. We are seeing solid appreciation at many of the top resort areas in the country with limited available land to develop and build. Speculators will always speculate in given markets. However there are a limited number of prime vacation spots that are true destination points which contributes to steady price increases in these areas.

Why buy now:

According to NAR Eight in 10 second home buyers considered it a good time to invest in real estate, compared with 57 percent of primary residence buyers. Summit County is experiencing double digit year over year price gains in single family homes according to the Summit Association of Realtors. (http://statspak.firstamericanmls.com/SUMStat/statrpt%20Comparison.pdf) Breckenridge weighed in an astounding 33% since last year. Most of us in this market only see this trend continuing. Summit County Is still one of the more affordable top destination resort areas in the country. If you look at the trend in Aspen and Vail we see Summit County doing something similar over the next 10 years.

It truly is time to look at vacation-home investment.

Jason Long

http://www.ski-homes-breckenridge.com/

Jason & Deanna Long are local Summit County Real Estate brokers, and focus on second and vacation home properties in and around the Breckenridge area.

Summit County Colorado has been experiencing double digit year over year appreciation. Lately the question of gains on our owners properties have been a popular question. Many of our owners are second or vacation home owners. So I will try to answer the question "how do I calculate a gain."

In real estate, capital gains are based not on what you paid for the home, but on its adjusted cost basis. To calculate this:

1. Take the purchase price of the home: This is the actual sale price, not the amount of money you actually brought at closing.

2. Add Adjustments:

- Cost of the purchase-including transfer fees, attorney fees, inspections, but not points you paid on your mortgage.

- Cost of sale-including inspections, attorney's fee, real estate commission, and money you spent to fix up your home just prior to sale.

- Cost of improvements-including room additions, deck, etc. Note here that improvements do not include repairing or replacing something that currently exists, such as putting on a new roof or buying a new furnace.

3. The total of this is the adjusted cost basis of your home.

4. Subtract this adjusted cost basis from the amount you sell your home for. This is your capital gain.

A special real estate exemption for capital gains

Since 1997, up to $250,000 in capital gains ($500,000 for a married couple) on the sale of a home is exempt from taxation if you meet the following criteria:

- You have lived in the home as your principal residence for two out of the last five years.

- You have not sold or exchanged another home during the two years preceding the sale.

Also note that as of 2003, you may also qualify for this exemption if you meet what the IRS calls "unforeseen circumstances" such as job loss, divorce, or family medical emergency.

Keep in mind that the capital gains treatment for a primary residence is different from the tax treatment on a second home or investment property. Capital gains on investment properties can be deferred through the purchase of a replacement property with the use of a 1031 Tax Deferred Exchange. The above criteria does not apply when selling a second home or investment property. However any second home can become a primary residence and all the above rules apply if you live in that home more than six months a year. Remember to always consult a tax professional. Now go have some fun and buy some property.

Jason Long

The Long Group

www.skihomesbreckenridge.com