Colorado Springs Vintage Homes Blog » For Sellers

Cash continues to drive the REO Market

Kathy Torline — Wed, 25 Jan 2012 13:10:08 +0000

Cash is still King

There was an interesting article in DS News about how cash investors are pushing down prices. According to a quote in this article “In December 2011, data collected for the HousingPulse Survey shows that the overall proportion of cash buyers in the housing market surged to a record 33.2 percent, up from 29.6 percent a year earlier.” There is also a Press Release put out by Campbell, that essentially was repeated by DS News.

I did a quick calculation of Colorado Springs home transactions for 2011 and came up with the following information on what type of financing was used for home purchases in the area;

Cash 19%

Conventional Financing 31%

FHA Financing 19%

VA Financing 31%

One of the reasons that the numbers are different from the national average in the Colorado Springs Housing market, could be because of the strong military presence in the area which is shown by the 30% of home buyers that use VA financing.

This article has several key points on why they think cash buyers were bringing down prices

More cash buyers are the winning bidders on REO properties, and REO banks prefer transactions that can close within 30 days
Even though investors may not be the first offer accepted, they often end of getting the property because other buyers can be eliminated because of lengthy mortgage approval timelines. Since cash sales can typically close in 20 to 30 days and financed offers, especially VA and FHA can take closer to 45 – 60 days, REO banks have a strong preference for cash.

In my opinion, investors are important in this market. They often buy homes that are distressed and can’t be financed because of the condition of the property. If the house is in disrepair, most lenders don’t want to lend on them. As an example, the roof may be in bad shape, plumbing may not work, the house may have been stripped of all of the appliances and cabinets by the foreclosed home owner. Seems to me it’s much better to get the house sold, and fixed up, vs. letting it sit empty. (Although I have to admit that I’m biased, as I’m also a real estate investor).

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Kathy (719-287-1049) KTorline@msn.com

Don’t Assume anything in Real Estate Series, #1

Kathy Torline — Thu, 19 Jan 2012 14:01:23 +0000

I’ve decided to start a new Series, Don’t Assume Anything in Real Estate.

This series is really just a bunch of random articles about the many assumptions buyers and sellers make when selling, leasing, or purchasing a home.

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You aren’t under contract yet!

Some buyers are under the mistaken impressions that once they write an offer on their dream home, or their first investment property, they are under contract to purchase the home. This is definitely not correct.

After they put together their offer, their Buyer’s Agent submits the offer to a Listing Agent, and the offer is then presented to the seller. The seller has many options on how they respond.

They can reject the offer and not respond.
They can counter the offer
Or they can accept the offer.

THE MOST IMPORTANT THING TO UNDERSTAND ……….. Until the offer is completely accepted and all of the appropriate documents are signed and acknowledged, a buyer and seller are not under contract. Another offer can always be presented to the seller from a completely different buyer and the seller can accept it.

The terms “under contract” may seem like a technicality, but it’s not. After a seller presents a counter-offer to the buyer, it’s important to remember that another offer can come in on the property and the seller can certainly accept it.

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Kathy (719-287-1049) KTorline@msn.com

3 reasons to get building permits

Kathy Torline — Wed, 14 Sep 2011 15:00:03 +0000

3 reasons to get a Building Permit in Colorado Springs

Some people complain about getting a building permit from the local code enforcement office for changing something in their house, erecting a deck, adding a garage or making any other improvement to their property. I think it’s very important to get permits.

Before you start your next home improvement project, here’s 3 reasons to get a building permit:

It might be a law that if you make enhancements of a certain nature to your property you must get a building permit to begin the work.
The permit keeps everyone honest. There won’t be any shortcuts by the contractor that might affect your investment or safety. If there have been shortcuts that affect safety, the code enforcement officer would typically find it.
You get free inspections of the work the contractor does. The code enforcement officer typically comes out to check the work and to ensure the work is up to code. Wouldn’t you prefer to know about problems on your your remodeling project? Especially before you make the final payment to your contractor.

As an example, we’re currently getting the electric panel upgraded on a Colorado Springs rental house that my husband and I own. Even though we’ve done our homework on the contractor we’ve hired, we won’t know if the work is “up to code”, as we’re not trained electricians. Pikes Peak Regional Building will come out and inspect the work to make sure it meets code requirements. It certainly gives me peace of mind.

According to information on the Pikes Peak Regional Building web site, “The main goal of the Department is to safeguard life and limb, health, property and public welfare by regulating and controlling the design, construction, quality of materials, use and occupancy, location and maintenance of all buildings and structures within all zoned areas of El Paso County through the enforcement of minimum building code standards.”

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Kathy (719-287-1049) KTorline@msn.com

Don’t forget about the outside

Kathy Torline — Wed, 03 Aug 2011 14:00:51 +0000

The outside is just as important as the inside

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In today’s age of Internet savvy buyers, the pictures of a property that are posted online are everything. And lately it seems like more and more buyers focus just as much on the outside of the property, including the landscaping, the backyard, the deck, the hot tub, the views, the front porch; just as much as they focus on the inside of the property. They are buying more than a home, they are buying a lifestyle.

Many buyers moving to Colorado Springs are doing so because they want to enjoy the beautiful views and the outside space; yet over and over I see listings that don’t include any outdoor pictures. Too bad for the sellers, as the outside can be just as important as the inside.

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Kathy (719-287-1049) KTorline@msn.com

It’s taking longer

Kathy Torline — Wed, 27 Jul 2011 13:16:08 +0000

Why should you care about Days on Market?

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Colorado Springs on list of most affordable Homes in Colorado

Why should you care about Days on Market? Why is this number important? Sellers know that the longer their house is up for sale, the less likely they have of being offered their asking price and are often willing to discuss a lower price. Buyer’s often look at properties and want to know the Days 0n Market; and essentially the longer the property has been on the market, the more buyers think they are in a better negotiating position.

But just as important as the current days on market, is the trend for the days on market. If the days on market continues to drop in a neighborhood, the market is starting to become more of a seller’s market in this particular area; and the more the days on market continue to increase, the more the housing market in this particular area becomes a buyer’s market.

Here’s some of the facts about days on market in Colorado Springs:

Single Family homes in the Colorado Springs area lingered on the market this year 136 days as of June 30th versus 105 as of June 30th, 2010.
It took an average of 31 days longer to sell single-family homes in the Colorado Springs area in June 2011 than it did in June 2010.
The average days on the market for June was 90 days for the 2nd quarter in 2011 vs. 70 days for the same quarter in 2010.
Denver is currently at 86 days for a house to sale. Phoenix is 106 days on market. Las Vegas is 159 days.
Breckenridge is 90 days. Pueblo is 125 days. Fort Collins is 59. Aspen is 300 days.

I know I always write articles about real estate is local, but this chart really shows the differences in the Colorado Springs area. The shortest days on market in the area is 78 days in the Southeast, which also happens to be one of the lowest priced areas in the city. The highest days on market are in Black Forest and Manitou; which are areas where the house prices are above the average in Colorado Springs.

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Kathy (719-287-1049) KTorline@msn.com

More Research required

Kathy Torline — Tue, 19 Jul 2011 12:12:23 +0000

The El Paso County Assessor’s office provides a wealth of information

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One of the many things I do when I’m getting ready to write an offer for a buyer, is to look at the property at the Assessor’s Office. In El Paso County, the Assessor’s web site site, provides a wealth of information for perspective buyers.

In El Paso County, you can search by address, by a range or addresses, by Schedule Number, of by Last name.

Once you go to a specific Colorado Springs address, or schedule number, the web site will tell you the owner’s name, the owner’s mailing address; as well as it will give you the legal description of the property. It also includes information on the assessed value.

Part II of this article, will show you how to find information on previous sale information, assessor maps, year built, and square footage.

Remember Knowledge is Power

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Kathy (719-287-1049) KTorline@msn.com

Don’t plan on closing yet

Kathy Torline — Tue, 12 Jul 2011 12:34:56 +0000

Closings don’t always happen

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Just because you’ve signed the Colorado Real Estate contract and came to terms on the price, it doesn’t mean you own the house yet. I don’t know the exact percentage, but I’m guessing 10% to 15% of real estate contracts don’t make it to the final closing. There are many reasons for cancelled contracts, but here’s the 4 most common.

(1) Financing

Even though you got a prequal letter from your bank, things can still happen when your loan gets to underwriting. Maybe the requirements changed for the loan, your credit score may have changed, the underwriters may require additional documentation on expenses. These are just a few of the things that can cause a loan not to get approved. Loan guidelines change daily.

(2) Buyer’s Remorse

As a buyer, you may feel remorse after you submit the contract. You may start to feel you made a big mistake. You may think there are so many great homes on the market, is this one really the right one? Is there something better you haven’t seen yet? Is your dream house still around the corner? Do you think you can get a better price on a different house?

(3) Low Appraisals

Appraisers continue to come under a lot of pressure during the current market conditions. If the property doesn’t appraise correctly, you may not be able to get the loan.

(4) Inspections

You have a period of time to conduct an inspection when purchasing a house. This contingency in Colorado Real Estate contracts gives you the opportunity to walk away from the purchase of a home. In Colorado, buyers can terminate the contract because of inspection reasons.

Inspections can also become another period of negotiation. The seller wants to sell the house as is, and you may want everything fixed and repaired. If you see too many items that need repaired, you may get nervous decide you don’t want the house any more.

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Kathy (719-287-1049) KTorline@msn.com

Colorado Springs on list of most affordable Homes in Colorado

Kathy Torline — Mon, 20 Jun 2011 11:09:44 +0000

Colorado Springs is affordable

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Since I’m a statistic fanatic, I read every article I can that talks about pricing and comparing home prices in Colorado Springs with other parts of the U.S. Caldwell Banker does a home listing report that compares pricing in 2300 cities across the U.S. The report includes a list of the top 10 most expensive markets and the top 10 least expensive market. 6 of the most expensive cities were in California, and some of the least expensive homes were Georgia and Ohio

According to the report, In Colorado, the average four-bedroom, two-bathroom home is $357,556. The national average price is $293,251.

The top five most affordable Colorado markets were

Pueblo at $141,160
Alamosa at $186,890
Montrose at $208,875
Colorado Springs at $222,936
Thornton at $234,856

The top 5 least affordable Colorado markets were:

Evergreen at $922,183
Boulder at $860,671
Durango at 472,147
Broomfield at 470,345
Golden at 470,244

The prices come from the average home listing price between September 2010 and March 2011 in more than 2,300 North American markets.

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Kathy (719-287-1049) KTorline@msn.com

How accurate are real estate listings on the Internet?

Kathy Torline — Thu, 16 Jun 2011 17:37:09 +0000

It’s on the Internet, it must be correct

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As a Buyer’s Agent in Colorado Springs, I work with many buyers from all parts of the world looking to relocate to Colorado Springs. The Internet is a wonderful tool for buyers, as they can find out so much information about the Colorado Springs area as well as check for potential homes. BUT, not every home listing they find on the Internet is correct.

Each Realtor is typically responsible for inputting their home listings in the local MLS system, which is called PPAR in the Colorado Springs area. Many Realtors have office administrators or assistants that input the data for them; but the Realtor is ultimately responsible for the the information. Even though most Realtors strive to have the information correct, it’s extremely easy to get something wrong. I’m guessing that the average listing has 100 to 150 fields of data that need to be filled in; which leaves alot of room for error.

But even more important than the initial input of all of the data about a home, is all of the places the information gets distributed to line. Every web site has a different way they get their information and different ways their information gets updated. As an example, as a member of PPAR, my listings get distributed to Zillow and Trulia and Realtor.com. But there are many, many other web sites out there; and some of them get updated more often than others. According to a recent quote in the Wall Street Journal, “21% of the data agents individually submit for posting on real estate websites isn’t updated when changes are made to the price or when the property is sold, according to a report released last month by listing web sites, Trulia.com”

Remember, just because it is online doesn’t make it accurate

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Kathy (719-287-1049) KTorline@msn.com

Townhome and condos continue to see pressure on pricing

Kathy Torline — Mon, 23 May 2011 17:00:45 +0000

Why are Colorado Springs condos and townhomes harder to sell than houses or townhomes?

The Colorado Springs housing market for Condos and Townhomes continues to see a decline in pricing and numbers of units sold in 2011. 2010 pricing decreased by 3% from 2009 and 2011 pricing has currently declined by 5% from 2010. There were more units sold in 2010 vs. 2009.

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There are 5 main reasons that condos and townhomes are currently harder to sale than a Single Family Home in Colorado Springs

As foreclosures continue to hit the Colorado Springs home market, buyers are now choosing houses over townhomes since they can get them for about the same price.
There continues to be an over-supply of townhomes and condos, as there is currently over 8 months of townhome/condo inventory on the market. It’s a buyer’s market.
Financing guidelines continue to impact the market.
1. An entire complex must be approved for a buyer to use FHA financing.
2. The addition of HOA fees impact how much a buyer can qualify for. A lender must include them in qualifying a buyer for the monthly payments, which can exclude some buyers. HOA fees can run from $100.00 to over $400.00 a month.
Some potential buyers may back out of the purchase when they review the HOA documents. Many buyers are concerned about the possibility of special assessmentss, inadequate financial reserves, rules about pets, and parking and guest rules.
Fannie Mae may decide not to loan on a unit in any complex that is involved in any type of litigation.

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Kathy (719-287-1049) KTorline@msn.com