Tuesday, December 11, 2012

Arriving at an Offer Price in 6 Simple Steps

With markets ever evolving from buyers markets, to neutral markets, to sellers markets and everywhere in between, it's important to know what you're shooting for -  an offer that will get you the home you want at the price you want. 

This is where relying heavily on your agent or broker will pay off.  Realtors have insight, tools, expertise and competencies that just can't be beat by a "zestimate" or assessors estimation of home value. 

Arriving at an offer price is a bit of an art, where crafting a strategy can help you win, and a science, where crunching the numbers can back up an offer price.  The best agents can help you sift through the data and really hone in on value.  The following six steps are meant to be a step by step flow chart as you arrive at a strong offer price:

1)  Do You Really Want the Home?
Some folks can get really hung up on convincing themselves they love the home, just because it might have a lower list price.  Although the home doesn't meet any of their criteria, some people will actually find the good within the terrible.  Just because you think you might be able to swing a killer deal, know the facts before jumping into a home you don't love, just because it might be on the cheap.  Your Realtor will be able to help you understand the consequences of jumping into a fixer-upper, a foreclosure, or bank owned home.  If you love the home, and it "checks all your boxes" move on to the next step...

2)  Can You Actually Afford the Home?
I've seen it happen before, a buyer will set a max budget and be disappointed in what they can get for that max budget.  This is where you can really rely on your lender to help explain the different options and where your max budget can be.  Although you may qualify for much more than you're willing to spend, understand the risks of what could happen if you over extend yourself.  A reasonable rule of thumb is that your monthly mortgage debt shouldn't account for over 25% of your gross monthly income.  Consider the HOA dues, utilities, insurance, taxes and all the other things that go along with the home.  On to the next step...

3)  Analyze the Market
The real estate market is always changing.  The pace picks up and slows down based on economic and seasonal factors.  Chances are your Realtor will have their finger on the pulse of the real estate market and will be able to tell you where the market is heading based on experience and empirical data.  Have your Realtor focus in the particular neighborhood in which your hopeful home lies.  From there, your Realtor will be able to determine supply, demand, competition and other valuable data.  Analyzing the market will help formulate your offer strategy.

4)  Compare The Home
This is where a Realtor's expertise will either shine through or fail you.  You should request a Comparative Market Analysis (CMA) for the home you wish to put an offer in.  It should compare recently sold homes, active listings and withdrawn/expired listings to give you a reasonable range to set your initial offer.  Hone in on similar styles, condition, square footage and amenities and base your offer price off the data.  Numbers never lie, and it is much easier to negotiate a stance based on concrete evidence rather than hoping to trick a professional.  Once you've completed the CMA and analyzed the data, move on to the next step.

5)  Consider Alternative Terms and Conditions
Just because you arrive at the highest offer price does not necessarily mean that the seller will accept your bid in a multiple offer situation.  Terms and conditions play a big role in creating a strong offer.  If you're able to come up with a larger down payment percentage, the seller can be further assured that you're financially stable.  If you would rather not be out-of-pocket, you can ask the seller to pay your loan closing costs, typically referred to as "seller concessions".  Make sure that your offer price reflects those concessions as to not insult the seller.  On top of that, timing can play a big factor.  A seller may need to sell their home fast to either move, or avoid foreclosure.  Being able to close in 30 days may sway a seller, as opposed to a 45 day close.  Terms and conditions might not affect your offer price, but they may help your offer get selected over another.  After you've considered all of that, move on to the next step.

6)  Arrive at Your Offer Price
You've done your homework and you're ready to set an offer price.  This is where you need to back up your offer with strong data, evidence and market research.  The better your data, the stronger chance you have at getting the house.  There are 3 possible outcomes when setting your offer price, typically based on seller motivation(s):
  • Steal
    • AKA "Lowball Offers" - A steal is getting a property in a very distressed state or where motivating factors negatively impact the sellers decision making capabilities.  These are estate sales, extreme fixer uppers, foreclosures and the like.
  • Deal
    • AKA "Testing the Waters" - Everyone is looking for a deal.  The best "deal" homes are the least updated in a nice neighborhood, or the cheapest home in any given neighborhood.  You may be able to get a deal if homes have been on the market a long time or if they have updating, or other work that needs to be done.
  • Real
    • AKA "Traditional Sale" - Now that we are in recovery mode, these traditional sales are becoming more and more common.  Gone are the days where you can offer 15% below asking price and get the home of your dreams.  In the current market you can get the following:
      1. A good home at a great price
      2. A great home at a good price
Regardless of your offer strategy, you should never make an offer significantly below where the market data and your realtor's advice suggest.  Your offer price should be within a reasonable range of what the market data supports.  Nobody, including your realtor, will ever be able to tell you the exact value of a home so you need to be able to make a decision and walk away from the home if you're expecting a steal and don't get the answer you want.  Be honest in your dealings, and you will be treated honestly as well. 

Good Luck!

Jared Reimer is a real estate broker at Prudential Rocky Mountain Realtors in Northern Colorado.  Real estate is his passion and he always wants to connect with like-minded and savvy real estate fans.  For more information or to get in touch with Jared, please visit his website at www.ReimerRE.com or email him at JaredReimer@ReimerRE.com

Wednesday, December 5, 2012

Recovery: How Far We've Come

I'll keep this post short and sweet, because it's filled with numbers.  We've come a long way from the bottom, trust me.  It was around this time 5 years ago that we started getting wind of an impending "economic slowdown".  Fast forward - the past 5 years have been a rollercoaster of ups and downs, good news and bad.  Here's the story of how far we fell and how far we've come since bottom. 

Keep in mind, for these numbers to make sense, I've only used numbers through October because so far in 2012, we've only had figures through October.  Also, this only measures single family, detached homes (condos/townhomes not included - but show very similar trends).

You'll see that both in Fort Collins and Loveland, we're already heading back to PRE-recession levels on both volume and sold listings.  What that means only 2 years after coming off the bottom, we're already back on track, the stock market can't even boast this.  The only thing threatening these recoveries (outside of the fiscal cliff) is the lack of active, available listings to buy in Northern Colorado.  Keep in touch with the market trends by checking updated stats here.

Jared Reimer is a real estate broker with Prudential Rocky Mountain Realtors in Northern Colorado.  Real estate is his passion and he always wants to connect with like-minded and savvy real estate fans.  For more information or to get in touch with Jared, please visit his website at www.ReimerRE.com or email him at JaredReimer@ReimerRE.com

Monday, November 26, 2012

A Big Honor for Yours Truly

I have to say I was truly humbled and honored this month as I was selected as the Fort Collins Board of Realtors' 2012 Young Professional of the Year.  The Young Professional of the Year (YoPro) Award is given out annually to the Realtor under 40 who is most shows leadership and  a spirit of giving in the community and the Board of Realtors.  A YoPro shows well-roundedness and generosity.  Being only 29, I am beyond thrilled to receive this award so early on in my career. 

I am so thankful that my career allows me to be flexible with my time and talents.  Not only can I expertly serve my clients on a daily basis (see testimonials), but I also get to be involved in the communities of Northern Colorado, the place where I live and work.

This award is the culmination of a lot of hard work and the dedication of countless other individuals who have helped and supported me over the past few years.  Specifically, I'd like to thank all of my past clients for whom I'm truly grateful, the executives and the board at FCBR, the folks at my Prudential office, John McCoy (my managing broker), my friends, family and my wife, Kacie.  Without her supporting my ambitions and aspirations, I'd be lucky to still be in the business.  I owe everything to her. 

As much as this award recognizes my past achievements, in no way will I stop striving to better myself or my business.  This award is a beginning - a wonderful validation of what I've done and a glimpse into what I'm able to accomplish.  I'm excited for the what's to come!

See all the winners in the Coloradoan Article

If you're interested in where I'm plugged in throughout Northern Colorado, feel free to check out my resume for ideas on how you can get involved too!

Tuesday, November 6, 2012

Radon and Your Home

If you've bought a home over the past decade or two, chances are you've heard of a pesky carcinogen called Radon.  Radon is a colorless, odorless, radioactive element occurs naturally as a result of Uranium decay.  Because of its radioactivity, it is harmful to your health and environment.  Radon is estimated to cause over 20,000 cases of lung cancer per year.  All of this sounds scary doesn't it?  It doesn't have to be scary; Radon is easy to test for, easy to mitigate and easy to never worry about again.

Radon Potential Zones

How Radon Enters A Home
Any home can have a Radon problem.  Because radon lives in the soil and rocks beneath your home, chances are if Radon levels are high, it's because your floor or foundation walls are compromised in some way, and Radon has built up in your home.  Small cracks in the foundation, gaps around entering utilities, construction/expansion joints, and other gaps will allow the Radon gas to enter your home.

Healthy Levels of Radon
Although the unit for measurement for Radon is weird and uncommon to non-scientist folks, the standard unit is picoCuries of Radon per Liter of Air (pCi/L).  This measurement tells you the level of radioactive elements that are present in one liter of your air.  EPA suggests some form of mitigation when levels are above 4.0 pCi/L.  The scope and cost of mitigation is different for different levels of Radon (see How to Get Rid of Radon).  An average Radon level is about 1.3 pCi/L.

How to Test for Radon
Radon testing isn't required for real estate purchases, however, I strongly encourage it.  Because Radon levels fluctuate from neighborhood to neighborhood, even home to home, when purchasing a home, it's easy to test for Radon.  Most home inspectors will add on a Radon inspection for around $100.  These tests will typically be your short-term tests, that average two simultaneous readings over 2-4 days.  These are as accurate as you need them to be.

How to Get Rid of Radon
The main theory behind Radon mitigation is prevent it from entering and building up in the home by preventing its entrance in the first place.  I call it the seal and suck.  The most common Radon abatement practice is a sub-slab suction system.  It can be done with very little modification to your home and at a reasonable price.  This system works by creating negative pressure to draw radon from under your basement slab to expel it harmlessly to the outdoor air where it will naturally and safely dissipate.  If you own a home with an exposed crawl space, technicians will place a layer of heavy plastic on the ground and attach a vent fan which will draw the radon from beneath your home and pull it out to the open air. 

The Best Radon Information
By far the best source on Radon and Radon mitigation is provided by the EPA.  This pdf has everything you need to learn about all things Radon.  Also, Wikipedia provides an excellent source for Radon Mitigation techniques.  Access it here.

Jared Reimer is a real estate broker with Prudential Rocky Mountain Realtors in Northern Colorado.  Real estate is his passion and he always wants to connect with like-minded and savvy real estate fans.  For more information or to get in touch with Jared, please visit his website at www.ReimerRE.com or email him at JaredReimer@ReimerRE.com

Tuesday, October 30, 2012

Real Estate Investing In Fort Collins

Real estate investing, when done appropriately, can create long term wealth and financial security.  Too many folks jump into the real estate investing world, spurred on by a new book promising riches, or an info-mercial that touts low risk but in reality there are risks.  Trust me, it's not as easy as those salesmen make it seem, but it doesn't have to be risky...

In Fort Collins, there are several factors that make real estate investing an excellent vehicle towards long term wealth while with low risk.

1)  High, Sustainable Rents

According to the Northern Colorado Business Report, Fort Collins/Loveland has the highest rental rates in the state.  The average rental in Fort Collins goes for $996 per month, which is higher than rates in the Denver metro area.  Taking advantage of high rents will improve cash flow. 

2)  Built in Equity

Fort Collins has a reasonable amount of bank owned foreclosures, short sales and other distressed properties that have the opportunity to provide built in equity upon rehabilitation.  Finding the diamonds in the rough can prove difficult, but the hunt is well worth it.  If you're able to get a distressed property for 15% below market value, and put 5% in repairs, you've already got 10% of the homes value in built in equity.  Rent it out for several years and reap the rewards of your efforts.

3)  Safe, Diversified Economy

Fort Collins is home to one of the safest, most diverse and resilient economies in the nation.  According the the Fort Collins Chamber of Commerce, Fort Collins is strong in high tech, manufacturing, higher education, and government employment.  It's easy to see why we have such a diverse economy, our major employers include Anheuser Busch, Hewlett Packard, Colorado State University, Woodward, and many more.  The mix of both blue collar, white collar and green collar jobs keep the city safe from typical boom and bust cycles.

4)  Renewable Rental Base

Colorado State University is a major driver for the rental base in Fort Collins.  Having thousands of students pour out of the dorms and into rental housing each year keeps turnover consistent and renewable.  Enrollment is either consistent or growing at CSU and demand for rental homes is abundant.  On top of the student rental base, those renting in the senior age bracket have been growing too. 

5)  Low Vacancy Rate

At last report, Fort Collins rental vacancy rates have fallen to the lowest levels in a generation.  Only 3% of rentals are recorded as "vacant".  That means if you buy an investment property, and price rents appropriately, you have a 97% chance of filling your vacancy.  I like those odds.  Low vacancies are advantageous for real estate investors not only to fill your vacancy, but also to have a larger pool of qualified tenants.  With a tight rental market, you get to pick from the cream of the crop, meaning on-time rent payments, less damage to your unit, longer lease rates, and higher rents!  What could be better?

I'd like to help you get into the world of real estate investing.  Give me a call or email me and see what kind of opportunities are available for your particular situation.  Together, we can work to get you down the road towards financial security.

Jared Reimer is a real estate broker with Prudential Rocky Mountain Realtors in Northern Colorado.  Real estate is his passion and he always wants to connect with like-minded and savvy real estate fans.  For more information or to get in touch with Jared, please visit his website at www.ReimerRE.com or email him at JaredReimer@ReimerRE.com

Tuesday, October 23, 2012

Home Projects that Require Permits

A lot of homeowners are in the dark as to what kind of projects actually require permits.  For the weekend warrior, do it yourself kind of homeowner, permits might be neglected all together.  Sure there are plenty of small little fixes and upgrades around that house that you can easily do, but are you sure those fixes are safe?  The entire reason for a permit is to record that your home was safely updated to the current codes.  On top of that, having recorded permits verifies with any future buyer that they are receiving a good, well built product.  There is always the chance in any property transfer that un-permitted work could muck up an entire deal.  It can also be an expensive fix to go back and get the work permitted. 

Permitting your work is the safe way to do things.  Permitting works differently from city to city as different cities have a unique process or building code to use.  Contractors should know what kind of work needs permitting, but just with any other trade, there are good contractors who know what they're doing, and there are some that might not be caught up on current procedures.  Before you start any work, make sure that you understand what projects will need to be permitted by checking with your municipal building department. 

The following are projects that will most likely need permits in your area:

1)  Electrical:  Electrical work is a very particular skill.  Un-permitted work is downright dangerous and can cause serious harm to your home and family.  Most electrical changes require permits and inspection, even if it's just moving an outlet.

2)  Plumbing:  Plumbing is more of a building safety issue than a life safety issue.  Bad plumbing can ruin your home, leave sewage backed up, or cause mold damage.  Typically, removing existing plumbing or installing new plumbing requires a permit.

3)  Structural:  Changing a major load bearing system requires permitting because it changes structural load path and load distribution.  If you're opening up a new room by installing a load bearing beam on columns, have your contractor build per residential building codes and get it permitted and inspected.  This also goes for cutting holes for new windows on exterior walls.  If it's a structural change, get it permitted.

4)  Additions:  If you're changing the configuration by extending out from the current footprint, you'll need a permit.  Along with the permit, you'll most likely need architect and engineered drawings for the addition.  Additions are expensive because of all the permitting required.  Make sure you use a skilled and knowlegable contractor who can help you navigate the bureaucratic systems to get permitted for such a big project.

5)  Exterior Changes:  Most landscaping, sheds or fences don't require a permit if they are within size limitations per city codes.  Sheds typically have a square footage or height threshold before they need to be permitted and the same goes for fences.  If you have plans to create a large outbuilding or a shop, it'll most likely need permits.

Although permits are time consuming, sometimes expensive and laborious, they are the only way to go to protect your well being and your investment in your home.

Jared Reimer is a real estate broker with Prudential Rocky Mountain Realtors in Northern Colorado.  Real estate is his passion and he always wants to connect with like-minded and savvy real estate fans.  For more information or to get in touch with Jared, please visit his website at www.ReimerRE.com or email him at JaredReimer@ReimerRE.com

Thursday, October 18, 2012

Prepping Your Home for a Winter Sale

Where I come from, selling in the winter time is tough work.  Inventory levels shrink which can help your home stand out, but also, the amount of buyers searching for homes shrink.  You're likely to have fewer showings.  Not a lot of people want to be hauled around in parkas and snow pants to see a few homes in sub zero temperatures, let alone have to move in the snow.

The odds are stacked against you in the winter time unless you have a plan.  Make your home stand out.  Here are a few tricks to getting that listing sold over the winter time.

Exterior Photos Set the Stage

If you're thinking about listing your home in the winter but you're not quite ready, I suggest getting some photos taken immediately.  Soon, trees will be bare, grass will be brown, flowers will be dead and snow will cover all of your beautiful landscaped areas.  Winter is the worst time for photos.  There's something about the angle of the sun that makes the sky much more pale.  Greys and browns abound.  It's always a good idea to get good pictures of your house in spring, summer and fall.  I feel autumn and spring are the best times for exterior photos, there is just so much color.  You be the judge:

Winter Photo:

or the Autum Photos:

Granted, these aren't the same homes, but you get the point...

Keep it Warm and Cozy

The last thing you want to do after getting out of a cold car, walking through a cold December afternoon and opening a cold door handle is to walk into a cold and un-inviting home.  As a seller, winter is not the time to skimp on heating.  Don't sweat our your buyers, but make sure your home is warm and draft-free.  If you have a fireplace, light it up before a showing.  It's a nice touch that provides a cozy ambiance and let's the buyers know it is fully functioning.  Winter also means windows are constantly closed, allowing the house to get musty and stuffy.  Bad smells can kill a deal.  My advice on the cheap:  get a tea kettle and pour in a few pints of apple juice, throw a dash of cinamon, nutmeg and/or cloves and set to a light simmer.  The cold weather spices will conjure cozy memories of Thanksgiving and Christmas and will help your buyers really feel at home. 

Keep it Safe and Clean

I always tell my sellers:  make it easy for someone to see and fall in love with your home.  If that means putting a little extra effort into the sale, then so be it.  You wouldn't believe how much a shoveled walk way can impact a buyer. Not only do they appreciate the effort to keep them safe from slipping on ice, it is a further indication of the care you most likely put into your home and yard.  They may not be able to see the lawn through the snow, but if you neatly shovel the drive way and walk, they'll assume you handle the yard in the same careful manner (they should already know because you provided springtime pictures of your yard, didn't you?).  One other nice touch that benefits the buyer and the seller is providing some sort of shoe station.  You don't want folks bringing in dirty, slushy muck into your home, so provide them a station to remove their shoes.  If that isn't an option, provide disposable "booties" to slip over their shoes so they don't damage your carpets.  Better yet, a nice touch would be to provide an array of comfortable slippers or sandals, so your buyer's feet stay warm and cozy throughout the tour!

Although the odds are stacked against you, I've always got inventive ideas to put the odds in your favor when selling over winter time.  Give me a call today if you're interested in making a move.

Jared Reimer is a real estate broker with Prudential Rocky Mountain Realtors in Northern Colorado.  Real estate is his passion and he always wants to connect with like-minded and savvy real estate fans.  For more information or to get in touch with Jared, please visit his website at www.ReimerRE.com or email him at JaredReimer@ReimerRE.com

Tuesday, October 9, 2012

Approaching Your Neighbor About Building a Fence

It's inevitable that at some point in your life, you are going to need a little privacy and you'll need to put up a fence.  Where do you begin?  Approaching your neighbor about building a fence can be a very tense situation if you aren't on good terms with your neighbor, or if you've never met with them before.  You're literally asking them to help pay for and build a physical mechanism so you don't have to see each other, it's an ironic paradox.  Having open communication and planning ahead can really help reduce the stress of approaching your neighbor.  Here are some great tips on how to get the fence building process started:

1)  Never Assume Anything
Your best bet is to go into the whole fence building operation understanding you'll end up paying the entire bill.  Don't assume your neighbor will pay for anything or even allow you to build a fence.  Don't assume that you're even allowed to build a fence. 

2)  Do Your Homework First
Check with your city building, planning or zoning commission before you think about building a fence.  They may have city guidelines that you need to follow in order to stay within the law.  On top of that your HOA may have restrictions and covenants regarding fences.  They'll probably spell out what type of fence, materials and heights are required in your particular neighborhood.  Doing your homework will show your neighbor that you're concerned with doing things correctly, and that'll go a long way.

3)  Open the Lines of Communication
Don't just walk over your neighbor and ask them to pay for half the fence.  Be friendly and understanding of their needs.  Hopefully your neighbor is like minded and understands that the current fence needs replacing, or at least that it would be beneficial to have a more sturdy fence with better privacy.  Go into the whole situation with a goal of collaboration - collaboration in design, effort and hopefully payment.  By involving the other party in the whole process, you make them feel respected and appreciated.

4)  Use a Professional
Building a fence might seem like a piece of cake, but if you've never done it before, chances are you shouldn't experiment while your neighbor's money is on the line.  Use a professional and you'll get a professional fence.  This is really where you'll get what you pay for.  Check the better business bureau and ask for references. 

5)  Design to Accommodate All Parties
There will be several disagreements on design of the fence.  There are two sides to every argument which parallels nicely with there being two sides to the fence: an attractive side and an ugly side.  You'll need to gently approach the subject with your neighbor.  Maybe you pay a little more for the attractive side, or maybe it doesn't matter to the other party.  If you're splitting the cost, make sure both sides are happy with the design and materials before you begin.  Maybe your neighbors are assuming you're using wood, where you'd like to use vinyl or steel.  Make sure it's been agreed upon before you get building.  There's even a design called the "Good Neighbor Fence" which makes each side the attractive side, a wonderful compromise.

6)  Maintain Your Side
After the construction, keep up your end of the bargain by maintaining your fence.  Stain, protect or refinish your side when necessary to safeguard its looks as well as extend its life.  The worst possible thing that could happen is not maintaining a fence that took you so much effort to build and pay for.  Worse yet, you'll need to approach your neighbor in a few years to build a new one if you don't maintain it!

Jared Reimer is a real estate broker with Prudential Rocky Mountain Realtors in Northern Colorado.  Real estate is his passion and he always wants to connect with like-minded and savvy real estate fans.  For more information or to get in touch with Jared, please visit his website at www.ReimerRE.com or email him at JaredReimer@ReimerRE.com

Tuesday, October 2, 2012

How to Be a Good Neighbor

Neighbors aren't who they used to be.  Back in the day, neighbors knew each other, they helped each other, and they looked out for each other.  Nowadays, being a neighbor has boiled down to living within proximity to another human.  The human element is gone.  Neighbors rarely talk to each other, living in their own little bubble, and usually when they do interact, it's more likely that they'll be complaining about too much noise, those rowdy kids, or that annoying dog.  I'm here to bring back what a neighborhood should be and tell you how to be a great neighbor.

1.  Introduce Yourself
This may be a tough one at first but being familiar with your neighbors will go a long way.  Get to know them and their situation.  Let them know that they can count on you and they will most likely return the favor.  If you're just moving into a neighborhood, go meet a few neighbors early on...The longer you wait to introduce yourself, the more awkward and uncomfortable it'll be once you do finally meet them.  If you've got new neighbors moving in, do introduce yourself.  Bringing baked goods can't hurt.

2.  Be Respectful
One part of getting to know your neighbors is understanding their unique situation.  Do they have young children?  Do they work late hours and sleep during the day?  Put yourself in their shoes and imagine which ways you could be disrespecting them.  You don't always have to agree, but respect goes a long way.

3.  Mind Your Yard
You have that one neighbor in mind right?  That one who lets the grass go to seed, the one who hasn't trimmed the bushes in years, the one who never shovels snow or rakes leaves...Your goal is to not be THAT neighbor.  If enough people manage their own yard, it creates a strong sense of pride in the neighborhood which will not only boost property values, but it'll also attract those who value that pride.  Keep in mind your yard doesn't have to be perfect, just pay attention to it.

4. Control Your Pets
If you have pets, you know their demeanor.  If you put your dog out because you're tired of him barking inside, chances are your neighbors already hate you and your pets.  Take the time to either train your animals or control them in a way that doesn't upset your neighbors.  Who knows, maybe instead of that expensive pet boarding, you could have a neighbor watch your animals while you're on vacation if you've made it known you've got well behaved pets. 

5.  Communicate Often

It's probably a good idea to have your neighbors phone number or email address.  Whether it's an emergency or maybe just a quick question being able to get a hold of your neighbor is important.  Don't abuse the privilege!  If your neighbor is working on their home, drop by and lend a hand.  Invite them over for back yard parties and get togethers.  Do what it takes to communicate on a regular basis.

Having a good neighbor-to-neighbor relationship can pay off in ways you never thought possible.  More than anything, the security of knowing your surroundings can give you confidence that you've found a great place for your family.  Don't just live in your bubble, get out and be a great neighbor today!

Jared Reimer is a real estate broker with Prudential Rocky Mountain Realtors in Northern Colorado.  Real estate is his passion and he always wants to connect with like-minded and savvy real estate fans.  For more information or to get in touch with Jared, please visit his website at www.ReimerRE.com or email him at JaredReimer@ReimerRE.com

Wednesday, September 26, 2012

4 Renovation and Remodeling Myths

If you're getting the itch to do a remodel or renovation, understand that it might not bring the return you're looking for down the road.  Now, if you've just bought your home and plan to stay there long term, make it exactly what you want, and revisit the remodel situation just before you sell.  Understanding the traps early on will help you avoid a big mess when you go to sell:

Myth 1:  Focus on Improving Interior Spaces
If you've ever heard the term "curb appeal" you know that the exterior of a home makes the first impression.  Focusing too much on interior projects might leave little time, effort and attention to the yard, which could backfire.  On real estate listings, a photo of the exterior of the home is usually first, which could mean if the exterior is bad, it'll get passed right over.  On top of that, lack of attention to the front yard could lead buyers to believe you're trying to impress them with smoke and mirrors on the inside...

Myth 2:  All Remodeling Projects Add Value
You can never assume that your project will add value to your home, especially if your project doesn't fit within your neighborhood or doesn't appeal to a wide variety of buyers.  Maybe you've decided to turn garage space into living space - most buyers love the benefits of having a warm garage with some extra storage, so you might have over-improved yourself out of a possible buyer.  If you're thinking of doing a "unique addition" such as a steam room, pool, wine cellar, etc. it might be best to check with a real estate professional to see if buyers are looking for those features.  If not, there is money better spent elsewhere. 

Myth 3:  High End Finished and Materials Appeal to the Majority of Buyers
What myth #2 didn't cover is what this myth does - higher-end finishes doesn't mean that it will prove valuable to all buyers.  Make sure your improved finishes are in line with the rest of the neighborhood.  On top of that, understand that some buyers will be much more cost conscious, and less prone to see the value in higher-end finishes.  They could look over your home and choose a more reasonable home, with a more realistic price tag.

Myth 4:  Doing it Yourself Gets the Biggest Return
I feel this is the biggest myth of all, and I have seen some of the worst examples of this myth backfire on sellers.  Do you know how to expertly finish a basement?  Do you know how to expertly finish drywall?  Do you know when your mechanical upgrades and electrical upgrades need to be permitted?  I have walked into more "do it yourself" basement finishes, and I have to tell you, they were rough.  If you can't expertly do the job, DON'T.  Rather than adding value, buyers see dollar signs of what they'll have to spend to make it look right, bring it up to code, or finish correctly.  There are plenty of things you can do yourself, but don't trick yourself into believing you can do it all.

I've said it before and I'll say it again, match the style, era, and upgrades seen in the rest of your neighborhood.  Don't overdo it, because you'll either price out certain buyers, leave them scratching their heads, or be the most expensive home in the neighborhood - sticking out like a sore thumb.  My biggest suggestion is to have your realtor show you a few homes around the neighborhood before you begin your remodel project.  Who knows, you might even get some good ideas when you see what they've done.  On top of that, you might see some issues to avoid or how you could do the projects better.  Good luck!

Jared Reimer is a real estate broker with Prudential Rocky Mountain Realtors in Northern Colorado.  Real estate is his passion and he always wants to connect with like-minded and savvy real estate fans.  For more information or to get in touch with Jared, please visit his website at www.ReimerRE.com or email him at JaredReimer@ReimerRE.com

Wednesday, September 19, 2012

The 6 "S's" of Home Site Selection

If your realtor hasn't mentioned the incoming boom of new construction yet, be prepared.  Over the past several years, builders have been on the sidelines, waiting to get back in the lucrative game of building quality new construction.  In Northern Colorado, we have been very under-built, meaning that the majority of the home sales have come from existing homes, not new builds.  We have a pent up demand for homes, and new construction is going to have to fill it. 

So, if a brand new home is on the horizon for you, how do you pick a site?  Keep in mind there are a couple different situations in which you'd be selecting a new home site.  Either your new home site will be in a planned neighborhood, with permitted lots, or, you'll find a nice plot of land on your own to build a custom home.  These tips can apply for both situation, however, if you're in a planned neighborhood, chances are the majority of your options are out of your control.  With a planned neighborhood, you get to select the best lot that is available, but there is little else you can select - keep this in mind.  As with all home selection ideas, begin with the end in mind.  Know exactly how you want to enjoy the home.

When selecting your home site, the elevation change and terrain play a big part in your decision.  Do you want a walk out basement or maybe a pool?  The slope will play a huge role in either.  On top of that, if there is a big elevation change on your site, it could affect the style home you select and the amount of stories.

Within a planned neighborhood, location is one of the most valuable considerations.  Great locations within a neighborhood are typically being near a park, on a corner lot, or being off a main street.  Corner lots are usually touted as being valuable, due to lack of neighbors, where as end of cul-de-sacs have the advantages of being quiet and more secluded.

Setting, Situation, and Sun
The orientation of your home within your lot can save you a lot of money and make your home feel more open and bright.  Nobody wants to live in a cold, dark home.  In Colorado, it makes sense to have some nice southern exposure for extra heat in the winter time.  Situating your home on the site can also save money on heating and utility bills.  Get the best view of the mountains as possible, but skew it correctly to avoid the blazing heat of direct western exposure.  The correct setting will give you sun and shade right where you need it, for either gardening or summer backyard entertaining. 

Your lot's shape plays a big role in your site selection as well.  In certain neighborhoods, shape will affect the size of your home's footprint.  On top of that, an irregular shape could leave you with a big chunk of un-usable space in your yard.  Understand what is most important to you, whether you need some significant depth, or maybe just some space between your neighbors.

Jared Reimer is a real estate broker with Prudential Rocky Mountain Realtors in Northern Colorado.  Real estate is his passion and he always wants to connect with like-minded and savvy real estate fans.  For more information or to get in touch with Jared, please visit his website at www.ReimerRE.com or email him at JaredReimer@ReimerRE.com

Tuesday, September 11, 2012

Are Open Houses Still Relevant?

In the not so distant past, open houses were a coveted piece of the real estate puzzle.  Back before the internet or even color pictures in the newspaper, open houses served a very valuable purpose.  Back then, it might have been the only opportunity for people to actually see your home.  One grainy black and white picture in the newspaper was never enough to make a sale -  folks needed to engage all five senses while in your home to really understand if it would be a place they could see themselves living in.  Outside of broker/agent showings, open houses were one of the most valuable tools to get your home sold.  Have things changed?

My opinion is yes, things have changed, but open houses still do serve a valuable purpose in today's real estate world.  With the advent of the internet, searching through homes has never been easier.  Most multiple listing services allow for up to 25 photos, so it's quite easy to get a grip on the condition and style of a particular home.  Virtual tours and YouTube videos literally place you within the home, so the question is, are open houses useful anymore?  Of course they are, but not in the way you might expect.

You may want to sit down for this, because it might come as a shock...ready?  CHANCES ARE YOU WILL NOT SELL YOUR HOME DURING AN OPEN HOUSE.  Shocking as that may be, it's true.  Statistics from the National Association of Realtors show that only about 3% of homes are sold because of an open house.  Although this might sound like a waste of time and money, let me describe how you can benefit from an open house and why it's still a great tool to use.

A home not might not sell because of an open house, but it's my opinion that open houses will lead to a sale in several tangible ways.
  • Increased Awareness - Just because your home might not sell at an open house doesn't mean people aren't noticing your home.  Your Realtor will likely have directional signs and some may even have streamers, flags and balloons drawing attention to your home.  Although someone might not come in for the open house, they're aware of your home, and might stop in for a showing within the next week.
  • Increased Feedback - While holding your home open, your Realtor will typically try to draw as much feedback as possible from those who come through.  Although these folks might not buy your house, their feedback is incredibly valuable.  Maybe they perceive the price to be a little high.  Maybe the home is lacking curb appeal or perhaps the color of the carpet is off-putting.  If there is repeated and resounding feedback, make a change.  This will lead to a sale.
  • Neighborhood Interest - It's my experience that a hefty portion of folks coming through your open house might just be interested neighbors or folks from the neighborhood who happened to be walking by.  They want to compare your home to theirs.  They want to know the price.  Neighbors are a gold mine for feedback, some may have the same floor plan and may make comments.  On top of that, these folks might have someone in mind, a friend or family member, who might be looking for a home.  If it impresses a neighbor, chances are you might have some follow up showings from people they know too.
Open houses aren't a thing of the past - they just need to be utilized differently.  You can't expect someone to come in with a contract in hand, unless you have an under-priced home in a super-hot market.  Think of open houses as just another tool to expose your home and create awareness, manage your expectations and a sale will come!

Jared Reimer is a real estate broker with Prudential Rocky Mountain Realtors in Northern Colorado.  Real estate is his passion and he always wants to connect with like-minded and savvy real estate fans.  For more information or to get in touch with Jared, please visit his website at www.ReimerRE.com or email him at JaredReimer@ReimerRE.com

Wednesday, September 5, 2012

Buying With Your College Student

College is back in full swing, and if you've done the whole college thing, you know just how great it is to get out of the dorms and into "your own place".  Chances are however, your own place is a beatdown rental with a few friends and a crabby landlord.  Is there a better way?  Of course there is, if you have a little foresight and the right strategy.  It's called a kiddie condo, or more specifically, a home parents buy along with their student.

It can really be any piece of property; a condo, townhome, detached home or apartment.  Where you can gain the most benefit from is purchasing with your student on the lease and the title, here's why.

1)  Better Interest Rates
If you were just buying a home for your son or daughter and their friends to live in during the college years, and have them pay you rent, technically you would not be occupying the residence.  That being said, your property is classified as an investment, rather than owner occupied.  Investment homes typically carry a higher interest rate than owner occupied, typically .375% to .5% higher.  That can really add up over a 30 year term.  Getting your student on the title and loan will keep it in "owner occupied" status, which will lock in that better interest rate, even if you charge rent for a few roommates.

2)  Building Credit
Let's face it, good credit can be tough to come by with college students.  Some get buried in debt, either consumer debt or student loans, and have to spend the majority of their twenties digging themselves out.  Credit is not easy to build with bad debt, so keeping your student on the loan and title of their college condo could be the best thing to help establish good, reliable credit.  Once they're done with school they'll be off to a great start with great credit.

3) Tax Advantages
Just like getting better interest rates, having an owner occupied home has tax advantages at the eventual sale.  Primary residences are exempt from taxes (up to $250k single/$500k married).  What that means for you is if the home appreciates, you and your student will be free from paying taxes on the gains, which wouldn't be the case if you had purhcased as an investment.  Maybe as a graduation gift, the student could use that gain on a downpayment of their very own home, or at lease backpack around Europe for a few months...

These are just a few advantages of getting your sophomore on the title when it comes times to get out of the dorms.  If you have any questions please feel free to contact me!

Jared Reimer is a real estate broker with Prudential Rocky Mountain Realtors in Northern Colorado.  Real estate is his passion and he always wants to connect with like-minded and savvy real estate fans.  For more information or to get in touch with Jared, please visit his website at www.ReimerRE.com or email him at JaredReimer@ReimerRE.com

Tuesday, August 21, 2012

Back to School in Fort Collins

Well, it's that time of year...Time to get the kids prepared and off to school.  It's a bittersweet time for most parents, understandably, but living in Fort Collins has its perks when it comes to schools.  Poudre School District is the best school district in Northern Colorado so when it comes time for parents to send their kids back to school, they know their little ones will be in good hands.

Poudre School District (PSD)

High Schools:  6
Middle Schools:  9
Elementary Schools:  33
Total Students:  26,520

According to School Digger (www.SchoolDigger.com) PSD ranks 24th out of 122 Colorado districts.  Although that might seem to be "better than average but not great", keep in mind that School Digger ranks all districts regardless of size.  So that small town with one great school and 1200 students has a good opportunity to rank higher due to one or two great schools in the district.  What is very impressive is out of all districts with 25,000 students and above, PSD ranks 4th.

Great Schools (www.GreatSchools.com) is a comprehensive school and district ranking website used by parents and faculty to find information on any school in the state.  It is a great resource to understand all things of importance when sending your kiddo off to school.  They have past test score averages, spending per pupil, and student/teacher ratios.

It's interesting to note that greatschools.com gave PSD an 8 out of 10 in overall ranking.  Spending per pupil was $7982 per student, where the statewide average is $8094, so Poudre is doing much more with much less.  Student to teacher ratios are on par with the state average at 17 pupils per full time teacher, which is a very reasonable learning environment.  When it comes to test scores, you really can't beat Poudre.  The district was above state CSAP test score averages for every grade level, in every category (reading, writing, math, and science) for each of the past 6 years.

Not only does the district lead in academic pursuits, the faculty and staff at PSD schools have also been recognized for the leadership in environmental pursuits.  The district is voluntarily involved in Climate Wise, a City of Fort Collins program committed to climate protection.  According to the district website, program partners have saved over 480 million kilowatt hours of electricity, the equivalent of the annual energy use of 43,000 homes.  On top of that, the school has earned over 120 Energy Star Awards since 2000.

It's easy to see why sending your kids off to school in Fort Collins isn't a tough decision after all.  The entire city is committed to providing the best education and educational support to students and the wonderful school district is a reflection of that dedication.

Wednesday, August 15, 2012

Rich Dad - Poor Dad Real Estate Investing

While going through my bookshelf and de-cluttering, organizing and purging a few things here and there, I noticed just how many "Rich Dad" books I've read.  It made me think.  I went through all the miscellaneous real estate books I've read over the past few years and tried coming up with the most influential books - the ones that have really made an impact on me and my own personal philosophies on real estate investing.  The top four books were all Rich Dad books.  Not that they are the best books ever written, but the authors (Robert has a fantastic approach to co-author all of his best-sellers) have a specific style and format to writing that is easily understood, with maximum impact.  If you're just starting to think about getting into the real estate market as an investor, I highly recommend you read these cover to cover, in this particular order.

1.  Rich Dad Poor Dad - Robert Kiyosaki with Sharon Lechter CPA
This book is the foundation of all the principals outlined in every book in the Rich Dad series.  It is a very straightforward read and describes differing views on money from Robert's two different father figures growing up.  Within this book, you'll begin to understand how you can buy assets that create consistent and steady cash flow, setting yourself up for future wealth.  This book will help you understand good debt versus bad debt, and assets versus liabilities in a very different perspective. Buy it here

2.  Rich Dad's ABC's of Real Estate Investing - By Ken McElroy
Ken McElroy is a Rich Dad advisor and very prominent real estate investor, property manager, developer and entreprenuer.  In the ABC's of Real Estate Investing, Ken walks you through all the basics from understanding expenses and cash flow, choosing properties carefully, property management dilemmas, and much, much more.  There are several excellent examples of different scenarios and plenty of useful resources within.  Buy it here

3.  Rich Dad's Advanced Guide to Real Estate Investing - By Ken McElroy
Ken takes it to the next level in the Advanced Guide to Real Estate Investing.  Here, Ken moves from investing in small single family homes, to multi-family investing concepts.  Ken digs deep into advanced valuation principles, strategies for increasing cash flows and how to structure the deal for maximum profitability with limited financial risk.  This book is not for beginners, but it is an excellent resource when understanding where your real estate investing journey is heading.  The concepts within will work whether you're buying a $89,000 condo or a multi-million dollar apartment building. Buy it here

4.  Rich Dad's Real Estate Advantages - By Sharon Lechter and Garrett Sutton
A real estate investing business is only as successful as its behind the scenes business practices.  If you aren't tracking and understanding your finances, you're basically dead in the water.  This book helps to explain how real estate investors can acheive maximum return on investment by understanding tax advantages allowed only to them.  Also, this book dives deep into business structure and organization, accounting and legal advice to understand before you get started.  Risk and liability are always present in the world of real estate investing, and this book will help minimize your exposure to both.  Buy it here

After reading all of these you'll begin to notice a common theme:  to be successful as a real estate investor (and entreprenuer for that matter) you'll need to change the way you think about debt, assets and liabilities, you'll need to build a team of people who can take you to the next level, and you've got to become financially literate to understand exactly how you're going to get there.  Application and execution is up to you.  I'm fully available to help you understand your next steps and how to get you down the path to financial freedom through real estate investing.

Tuesday, August 7, 2012

What a Property Manager Can Do for You

To manage, or not to manage...that is the question I've been asked over the past few months.  With savvy investors jumping in to take advantage of record low rates and similarly low prices, landlording has made a comeback.  The all important question is, "Is it worth it to hire a management company or should I just save the cash and do it myself?"  The answer to that question depends on your cash flow, your personal situation, your flexibility and level of effort.  But, if you do want to do down the management route, here are the best reasons to use a property manager:

It's in the name: Property Manager.  It means they're responsible for all facets of your property with very little input required from you.  They'll handle all the rents and deposits.  Managers will have strong, defensible leases that will help legitimize your investment.  A strong lease is probably your best line of defense, and a manager handles it all.

Whatever maintenance needs to be done, the manager takes care of it.  Typically, the only input needed from you will be signing off on the work done or verifying the scope of any individual project.  Managers will either contract with handymen or have staffed contractors  to handle the work.  You will not be called at midnight to unclog a toilet or waste your weekend cleaning out gutters or doing yard work. 

One of the most stressful parts of owning an investment property is finding good, solid tenants.  With their systems and strategies in place, property managers are able to reach more prospects, ultimately getting you a better, more qualified tenant, which in turn will give you a stronger return on investment and leave your property in better shape.  Property managers have pools of prospective tenants (especially in today's rental market) that they will run credit and background checks on before having them sign a lease for your investment.  They abide by fair housing laws and will never discriminate when choosing tenants.  Not only will they have better tenants, but they will get better terms and longer leases, which will positively impact your bottom line.

The best of the best managers are excellent reporters.  They will provide you all the income and expense reports necessary for taxes and accounting. Along with that, your manager may even report your return on investment, and point out places where you could maximize your profit.  Managers will always tell you when they believe it's feasible to raise rents, and should always provide data to back up any changes in the rental market.

Just like folks use a stock broker to manage their stock investments, a good property manager will be on the front line, managing your rentals.  Although there is a varied amount of arrangements, managers work fairly inexpensively, usually commanding about 8-12% of rent payments as a flat fee.  Some charge less, some charge more, and some charge for different specialized services.  Before entering into a contract, make sure you understand all the services provided so there aren't any surprises.  After that point, the most difficult part of being landlord will be taking your check to the bank!

Jared Reimer is a real estate broker with Prudential Rocky Mountain Realtors in Northern Colorado.  Real estate is his passion and he always wants to connect with like-minded and savvy real estate fans.  For more information or to get in touch with Jared, please visit his website at www.ReimerRE.com or email him at JaredReimer@ReimerRE.com

Wednesday, August 1, 2012

MLS Input Mistakes

Take a look at my newest video blog to learn all the ways your Realtor might be selling you short when omitting information from the MLS system.

Jared Reimer is a real estate broker with Prudential Rocky Mountain Realtors in Northern Colorado.  Real estate is his passion and he always wants to connect with like-minded and savvy real estate fans.  For more information or to get in touch with Jared, please visit his website at www.ReimerRE.com or email him at JaredReimer@ReimerRE.com

Tuesday, July 17, 2012

Northern Colorado's Most Amazing Farm Homes

Ever thought about getting a little space out in the country?  The country is closer than you think!  After seeing these homes, you might put on some overalls and take the back roads to check out these farm and ranch gems in Northern Colorado.

1245 N. County Road 29, Loveland, CO 80537
 $1,750,000 - 5 Bed / 4 Bath - 70 Acres

22748 Co. Rd. 3, Berthoud, CO 80513
$725,000 - 5 Bed / 3 Bath - 7.5 Acres

3715 W. Co. Rd. 4, Berthoud, CO 80513
 $725,000 - 3 Bed / 3 Bath - 10 Acres

4736 Rim Rock Ridge Rd, Ft. Collins, CO 80526
 $1,195,000 - 6 Bed / 8 Bath - 40 Acres