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Is a Housing Crash Likely?

One question that I am frequently ask is if the real estate market will undergo a massive correction?  Is a housing crash likely to happen in Northern Colorado? Buyers are particularly concerned about this.  Many buyers can remember the housing crisis that occurred in the mid to late 2000’s.  If the buyers themselves cannot remember that crisis they have parents that can.  Do you need to be concerned about this when considering buying a home?  Here is what you need to know about real estate market corrections.

Contributing Factors

Many of the factors that were present and that contributed to the housing crisis are not present today.  Mortgage loans are not as easy to get today as they were then.  We no longer have the stated income loans.  There also is not the speculation in the market that there was then.  There were a lot of crazy deals happening that contributed to the crisis. Today we have real buyers wanting to buy a home to live in.

Is a Housing Crash Likely? Supply and Demand Matters

How do I know for sure that we will not have a market crash?  I look as several factors.  One thing to look at is to see what supply and demand in the market is like.  We have great demand for homes.  It is not uncommon for a home that comes in the market to have several buyers write offers to buy the home.  Only one buyer can have their offer accepted and purchase the home.  That means that all of the other buyers that wrote contract on that home that did not get accepted are often times continuing to look and trying to buy a home. This is happening due to limited inventory of homes for sale. We do not have enough sellers that are wanting to sell and do not have enough new homes that are being built to meet the demand.

Demand in our market also comes from the desirability of our area to live in.  This has only increased during the pandemic.  The pandemic made it more common for folks to be able to work from home.  If you can work from anywhere, why not live in a place that you want to live.  That brought many people to Northern Colorado to live here and work remotely. Because of this we also had an increase demand.

Long Term Investors

Another factor that can demonstrate the strength of our real estate market is to look at the number of investors that are purchasing homes to use as rentals and the strength of the rental market.  Our rental market remains strong with a vacancy rate of less than 2% and consistently higher rents being charged. This makes Northern Colorado a great place to invest in real estate and this also adds to the demand for real estate to purchase.

Appreciation

One other thing to look at to determine the strength of a market is to look at the appreciation that the market is seeing.  During the housing crisis Fort Collins had one year where we had depreciated values of homes.  Just one year and it was less than one percent.  Appreciation has been in the double digits in recent years and is expected to slow some but remain strong.

So, is a Housing Crash Likely? The real estate market in Northern Colorado is strong and all indicators are that it will remain so. The Council of Residential Specialists also thinks this trend will maintain nationwide.  Don’t wonder when the sky will fall.  Invest in your future and buy a home. Contact Us today to get the ball rolling.

Can You Compete With Cash Buyers

Cash is King! We have all heard this saying but how close to the truth is it?  Do sellers ALWAYS accept cash offers?  Can you compete with Cash Buyers?  Let’s dig into this and find out just how cash is viewed in our market.

What Amount of Home Buyers Pay Cash?

Looking at home sales for the year (2021) in Fort Collins there have been a total of 555 cash sales that were accepted by sellers.  That amounts to 19.2 percent of the market being cash offers. This is an increase over previous years.  Nationally in the spring of 2021, 25 % of home sales were made with cash. That is a notable increase over 15 % in 2019 and 20 % in 2020.  Based on this information from the Council of Residential Specialists, it appears that buyers that have the ability to pay cash for a property are. This has the potential for getting their offers accepted over those buyers that must get financing.  Clearly, there are more cash offers being seen by sellers. 

Advantages of Cash

What are the advantages to a seller to accept a cash offer over an offer that requires financing?  One of the major advantages of an all-cash transaction is speed.  Buyers with cash in hand don’t need to wait for financing that could require about 30 days to close. Cash buyers can also wave some contingencies such as appraisal or the sale of a previous home.  Sellers who want a quick closing may find this very appealing.  Other sellers may feel rushed by this and not find it quite as attractive.  Not having the requirement of an appraisal, may certainly be appealing. Especially if the offer that the seller has received is significantly over asking. 

So Can You Compete With Cash Buyers?

Just because a seller has received a cash offer does not mean that it is the “best” offer.  In working with cash buyers, I often need to remind them not to get cocky.  Remember that proof of funds will need to be provided.  If your funds are tied up in your home and you will need to sell that in order to purchase your offer may not be as attractive as someone who is getting financing.  As a cash buyer you need to understand just how competitive the market is.  Just because you are paying cash does not mean that you will be able to purchase the property for a lower price.  If you plan to pay cash for your purchase it is important to know how liquid the funds are that you will be using to purchase. How long will it take to have that cash in hand? 

Planning to Compete

Sellers do NOT always accept cash offers.  You can write an offer that can be seen as just as attractive to the seller as a cash offer.  It will be important that you are working with a strong, well known, local lender.  You must also recognize the importance of being pre-APPROVED!   There are ways that your lender can have you appear like a cash offer even when you are getting a loan.  There are tricks out there.  Be careful not to misrepresent yourself.  Remember that a good solid offer, well written that is offering an attractive amount, getting a loan from a local lender can get accepted over a cash offer. 

Make sure that your agent finds out what is important to the seller and be sure to include that in your offer.  It may take a tiny bit of luck too, but you can get your offer accepted. Contact Us today so we can work together to create a plan of attack. This will allow you to be in the most competitive position possible regardless of your financing.

Signs You Shouldn’t Sell Your Home Right Now

If you have watched the news even a little lately you know just how wild and crazy the real estate market is. This includes both broadly across the U.S. as well as locally here in Northern Colorado. This being the case you might be thinking it is a great time to sell your home. However, there are a few signs that you shouldn’t sell your home right now. For those people who check enough of these boxes you likely want to wait at least a little bit before you decide to list your home with us.

Purchasing Another Home

One area that might give you pause is if you need to buy another home in a competitive price range in an equally competitive market. This is a bit of a toss up as there are risks both ways. The first is that it is difficult to be competitive when you have a contingent offer. This is one that requires the sale of your current home in order to close.

The other is that you might sell your home before closing on another one. This situation might essentially leave you homeless. Living in temporary housing, or an apartment prior to being able to move into your new home. We have experience getting buyers under contract when they have homes to sell. To do so we use techniques such as bridge loans. It is important to run through the scenarios prior to listing your home for sale. We are happy to undertake this effort with you before rushing to put your home on the market.

You Still Love Your Home

Another time to reconsider selling is when you still love your home. You have likey seen a ridiculous amount of appreciation on your property over the last few years. However, you don’t want to miss out on a great sellers market and leave potential cash on the table. If you still love your home and don’t really want to move you don’t necessarily need to sell in order to realize the benefits of all of this market appreciation.

What you might be interested in is a cash out refinance instead. This allows you to set new loan terms with a lender. The lender will then close the loan with you, allowing you to pull out some of the cash value of your home while you continue to live in and own it.

Let Us Help

Of course these are just a couple of potential scenarios where selling might not be your best option. Every situation is different and we encourage you to Contact Us to talk you through the pros and cons of selling your particular home. We promise not to pressure you into any decision, rather we will provide the facts and let you decide for yourself if there are signs you shouldn’t sell your home right now.

Best of NoCo 2021

We have been sharing with you things that we love about living in Fort Collins and Northern Colorado. Today we want to share with you the results of Best of NoCo 2021.  An annual event that we enjoy every year is the “Best of NoCo.”  This popularity contest is done by survey and the top three businesses are disclosed in the NoCo Style magazine at the end of the year.  The magazine looks at over 200 business categories. The business categories include food, drink, health & beauty, home & garden, pet, recreation and entertainment and services. 

This survey takes almost an entire year to complete and promotes local, hardworking business and gives them the communities seal of approval and appreciation.  Being voted “best” is a high honor and can mean an uptick in business for the next year.  Each year there are new winners and old favorites.  There can even be a few surprises in the voting.

Here are some of the results of the Best of NoCo 2021 survey. 

We are just highlighting a few of the over 200 winners:

Best Mexican Dining…Blue Agave Grill, Fort Collins.

Best Italian Dining…Cacciatore and Heller’s Kitchen.

Best Ice Cream…Walrus Ice Cream, Fort Collins.

Best Barbecue…Nordy’s BBQ and Grill, Loveland.

Best Roofing Services…Anchor Roofing.  In this category my favorite came in second.  That is No Co Roofing.

Best Dog Park…Spring Canyon Park, Fort Collins.

Best Date Night Spot…Social, Fort Collins.

Best Book Store…Old Firehouse Books, Fort Collins.  

Best Hike…Rocky Mountain National Park.

Best Home Décor Store…Coxy Cottage, Fort Collins.

Best Hotel…Elizabeth Hotel, Fort Collins.   Remember this when you have those out-of-town guests.

Best Vegetarian Dining…Tasty Harmony, Fort Collins. Second place must be mentioned in this category because they have been around a long time and serve great food.  They are the Rainbow Restaurant, Fort Collins. 

Best Sandwiches…Snack Attack Specialty Sandwiches, Fort Collins.

If your favorite did not make the list this year

Make sure that you vote next year. You also may not agree with the vote.  If not, make sure you vote next year.  2021 was a challenging year for many of these businesses. They had to learn how to deal with the pandemic and shift to survive.  2021 was a year of turmoil.  Businesses had to deal with supply chain problems and staffing shortages.  All of this and still try to provide us with the great food and service that we expect. We appreciate all of these businesses and special places that make Northern Colorado the great place that it is. Remember to support our local businesses by shopping local! We are always happy to provide local recommendations. Contact Us with your questions.

Counter Tops For Your Remodel

Are you thinking it is time for a remodel of your kitchen, bath or laundry? 

One of the selections that you will more than likely be making is counter tops for your remodel.  Counter tops need to be strong and durable, but we also want them to be beautiful.  Before you invest in new counter tops what is important to know about the options. When I am making home improvements, I have two things that I like to keep in mind. One is what will be the best investment for me to make and the other is what will give me the best return when it comes time to sell.  Most of us do not live in our homes forever, so return on investment is certainly something to keep in mind.  

What selections are available out there for counter tops for your remodel?  Below are a list of options and pros and cons of each.

  1. Quartzite.  Pro of this product is durability.  This is a natural stone formed from quartz.  It is very strong which can translate to higher costs for cutting and insulation.  The con of Quartzite is limited color choices.
  2. Soapstone. Pro of this product is easy daily maintenance. It is heatproof, nonporous and stain resistant. The con of Soapstone is that it is susceptible to chips. 
  3. Marble.  Is a beautiful product that is durable and can last for a long time.  That is one of the pros of the product.  The con of Marble is that it must be sealed and stains easier than other natural stones. 
  4. Concrete is durable and customizable.  It is hard wearing. The cons of Concrete are that it is porous and prone to staining. Sealants help protect from heat, scratches and stains. 
  5. Quarts.  Like quartzite quartz counters are manmade.  It does not require any sealing.  The pro of quartz is low maintenance. It is heat sensitive. 
  6. Granite the product that was the go-to for all upgraded kitchen and baths has fallen out of favor in recent years.  One of the reasons is that it requires regular sealant. It does beautifully resist scratches. It can easily withstand the wear and tear of daily use. 
  7. Butcher block. This product is known for being functional and affordable. They are strong and simple.  The con of butcher block counters is that they require regular upkeep.  Proper care calls for a coat of mineral or tung oil after installation and annually after. 

When making your selections it is important to bring samples home

This will allow you to see how the countertop will complement other design choices in your room. The lighting in your room can change the appearance of your selections.  Remember when making your selections that people typically replace countertops only once every 10 to 15 years.  Make sure your selection will be enjoyable and easy to care for many years to come. If you have any questions we are here to help and can provide recommendations for suppliers or installers should you need. Simply contact us.

Steps To Remodel

You have just bought your home and your plan is to make some changes to make it feel more like you.  Part of making your home yours is a kitchen and/or a bath remodel and there are several steps to remodel that you should follow.  But what does that mean and how do you go about it? 

Here are seven steps to remodel to get you on your way  

Space Constraints

Start with how you will use the space and what is important to you and your family. Is the kitchen missing an island that you wished it had?  Does it not have a pantry that is really important to you?  How many people usually are cooking at the same time?  For that bath remodel do you really need two sinks or is counter top space more important?  Ask the questions to make sure your end product works for you and your family. 

When Considering The Steps to Remodel Remember Style 

Look at inspiration on Houzz and Instagram. Put together a board of what you like.  You will realize that you are putting like things on the board.  The same color scheme, the same style of tile, same color of cabinets.  After you see that you have the fourth white kitchen, I believe that you have made your decision on the color of your cabinets. 

Look for ways to save money 

Moving plumbing is expensive.  If you can work with the same basic layout this will save you money.  Buying tile that can be installed in one-foot sheets will save you money over tile that needs to be installed in individual pieces.  

Make your wish list

What is most important to you?  Is it the quality of the cabinets or are you a tile nut that wants really special tile for the backsplash and floor? Maybe really high-end counter tops are what is most important.  Think about this.  Most of us cannot get high-end everything in our remodel. 

If you decide to use a designer

Be honest about your budget and make sure that you are not pushed above it.  Make sure you are communicating with your designer and give him/her good information so that they are not spending hours guessing what you want.  You will save design time and money in the long run. 

When Going Through the Steps to Remodel Don’t Forget About Budget 

It is VERY important to have a budget on what you plan to spend on the project.  You can also be detailed and break the budget down into how much you are willing to spend on the various parts of the project.  This is not something to keep a secret.  Share it with the people that you are working with. Remember to take into account what you can recoup in the sale when it is time to move on from your home.  

Right People

Lastly and perhaps most importantly work with the right people.  Make sure that you get recommendations from people that have done a remodel recently.  Meet with a couple of contractors before making a decision. Make sure that you understand the scope of the work that contractor will do and the charges before you agree.  You will be spending a lot of time with this person.  Make sure that you can communicate well with them. This key to having a successful project. 

Following these steps to remodel as your guide can help you have a successful remodel project and make those dreams of your new kitchen or bath come true. Contact Us and we can put you in touch with the right people or help you to decide what areas will give you the most bang for your buck.  

What Are The Predictions For Real Estate In 2022?

One of the things that has been realized during the last few years is just how difficult the real estate market is to predict.  Many people thought that during the height of the pandemic we would experience a housing-induced recession.  Instead, we had a boom in demand that we had not seen since the mid 2000’s.  We have seen double digit home appreciation and low mortgage rates in 2021. Will we see a repeat in 2022, and what are the predictions for real estate in 2022? 

The Crystal Ball

What are the predictions from the real estate experts and economists for the 2022 market?  Will it be hot or cold?  Most are saying that the real estate market will remain strong.  We will continue to have strong demand that will be tempered some what by the problem of affordability.  There will be slower growth and appreciation but still positive growth.  There will be more inventory on the market and with mortgage interest rates predicted to remain low, but rising somewhat.  Unlike the low interest rates around 3% they are predicted to remain low but move up over 3 and closer to 4%.  There are predictions that we will continue to see rising employment and growing demand in the market which could see home prices rise in the high single digits rather than the double digit increases that we have seen.  

New Construction

What is expected in home building?  Strong demand for new construction is predicted to continue in 2022.  It is predicted to continue to be a of a shortage of construction materials and problems in the supply chain.  The lumber costs which sky rocked 250% in 2020 and caused problems of affordability in new home construction is predicted to see prices dropping, but volatility in the supply chain continuing.  

Boon For Buyers

What does all this mean for home buyers in 2022?  The real estate market is predicted to not be as difficult for buyers as it has been the last 12 to 18 months.  It is not going to be a walk in the park but not as difficult. Buyers should still expect to have to compete with other buyers, but not to the extent that they have had to.  Rather than sellers receiving 10 or more offers on a home, the seller may see 2 or 3 offers. This still means that buyers need to make sure that they are pre-approved with a reputable lender and in the strongest situation possible.  

Still A Strong Market For Sellers

What does 2022 look like for seller’s?  Predictions are that sellers will have fewer offers and homes could stay on the market a bit longer.  If you are planning on selling your home in 2022 how should you prepare for the market?  Make sure that your home is price right!  Make sure that your home looks its best.  Work on curb appeal now.  Contact Lestel now to get ideas on little things that you can do to get ready. 

In the End

No one knows for sure what will happen in 2022 but predictions from the professionals make it sound like it is going to be a good year!

How to Sell Your Home in the Winter

When you sell your home in the winter you are going to have to deal with shorter days, colder temperatures, possible snow and some dreary skies even in sunny Colorado.  So how do you turn this around to make these things positive for you?  Try to play up the season and the cold.  Build a snowman to greet your buyers.  Serve hot cider or hot chocolate for showings. Make sure to add some warm throws, extra pillows and place some rugs on the hardwood floors to add a touch coziness.  A candle burning with a winter scent can also add some warmth.

Sell Your Home in the Winter by Being Welcoming Despite the Weather

Make sure that your sidewalks are shoveled. Anywhere that might be icy be sure to deice so you’re your home is welcoming as well as safe.  Once the buyers are inside it is a good idea to have some space by the front door for people to take off coats, hats and boots.  Place a chair by front door so that people can sit down to remove their shoes.  Have a place to wipe snowy boots to avoid the wet footprints, if the buyers choose to leave their boots on as they walk through your home. 

Remember Extra Light

Make sure that your home is light and bright.  That is in the daytime and for those after dark showings that happen because days are shorter.  Add a bit of extra wattage in your lighting so that your buyers can see for safety and to fall in love with your home.  Light and bright is very desirable for buyers. Make sure that landscape lighting is working too so that the outdoor space can be appreciated. 

Consider the Cold

Winter cold can highlight negatives such as a furnace problems, draftiness and poor insulation.  Before a buyer ever sees your home make sure that your HVAC system is working at its best. Check for drafts and correct if you can. If your home will be vacant for showings, it is a good idea to go ahead and winterize to avoid plumbing issues.  

Marketing Should Match the Season

It is important to use current photos that match the season.  Out of season pictures may have the buyers thinking that the home has been on the market a long time.  Other photos of the home in different seasons can be displayed in the home. However, for marketing the photos should match the time of year that the home is being sold. 

There are motivated buyers that have to buy no matter what the weather and no matter what the date on the calendar. Make your home safe and inviting and your home can sell even when it is cold outside and the weather is dreary. Contact Us for more information on how sell your home in the winter and make it a successful process.

What is an Appraisal Gap?

Bridging the Appraisal Gap

So what is an appraisal gap? In today’s hot real estate market buyers often write a contract for more than asking price. They do so in hopes of having their offer be the highest and best offer that a seller receives on their home.  The buyers love the home and want to ensure that they get to move into this home that is the home of their dreams.  So instead of offering the asking price of the home which is $425,000 they instead offer $450,000.  The seller accepts the offer and the buyer and seller are under contract. 

How Value is Determined

During the under-contract period the lender, for the buyer, will order an appraisal.  The appraiser will come view the property and complete a report that compares the subject. They will also look for under contract properties. Finally, they will compare these with other homes that have recently sold in the area. All of this takes place to arrive at an appraised value for the property.

Making Sure the Seller Gets Their Money

The appraisal gap occurs if the appraiser appraises the value of the home as less than the contract price that the buyer and seller have agreed up on.  So, let’s say that the property is under contract at $450,000 and the appraisal comes in at a value of $430,000.  There is a gap of $20,000 in this example.  This means that the buyer and seller have to renegotiate the price of the home or the buyer needs to bring an additional $20,000 to closing that was not a part of their down payment or reserves.  Sometimes, in today’s hot real estate market, buyers say that they will cover the appraisal gap. That means that they will pay the contract price for the property no matter what the appraisal comes in at and there will be no need for the buyer and seller to renegotiate the price of the property. 

Sometimes an Appraisal Gap Falls Short

Other times a buyer’s contract will state that the buyer will cover a certain amount of gap.  For example, the buyer says that if the property does not appraise, they will bring an additional $10,000 to closing.  Let’s use the property that was under contract at $450,000 and appraised at $430,000. The buyer would bring $10,000 to closing and that would make up only $10,000 of the $20,000 gap between the appraisal and the contract price.  The buyer and seller would have to agree what would happen with the $10,000 difference. 

Make it Appealing

A contract that is written covering any appraisal gap can be a huge benefit to a seller.  They do not have to worry about what the appraiser says the value of the home will be.  The seller has peace of mind that the contract price is what the buyer will pay no matter what. For a buyer that really wants a particular home it might be wise to include appraisal gap verbiage in the contract. This gives the seller that peace of mind. It also makes the buyer’s offer as attractive as possible to the seller. 

If you have any questions about how to make your offer the most competitive in today’s market contact us. We would love to help you navigate the intricacies of the real estate process.

What are the Stages of New Construction

When you purchase a new construction home your weekends may be spent driving past the site of your new home. Often this is to check on the progress being made. However, you might be asking yourself what is actually going on. This is because at some points in the process there might appear to be slowdowns in the work. Are the construction employees off for the week or is there something else going on. Let’s break down the stages of the new construction process so that you can better understand what is taking place.

The first stages of the new construction process is the foundation phase. During this phase the basement of the home is dug out under the footprint of the house. Then rebar will be laid for structural stability. Following this step the concrete for the foundation will be poured into a mold. This is allowed to harden over the course of several days. Afterwards the forms are removed and you are left with something that looks like the image above.

The next stages of the new construction process is the framing step. During this step the most work will appear to be completed. It isn’t hard to nail up a few 2×4’s and plywood sheets and make things look substantially different. Typically, this will also be the fastest phase for the home builder to complete. The main shape of the home will begin to form. Rooms and stairways will also be placed. During this phase the plumbing, electrical, and HVAC will also be installed.

The final stages of the new construction process is interior finishes. There is a traditional saying that the home will be complete 45 days after the exterior is finished. This includes items like drywall texture and paint as well as flooring, light fixtures and appliances. It is important to wait until the building envelope is secure before this phase in order to keep the home as clean as possible.

If you have any questions about purchasing a new construction home Contact Us. Let’s get started working together today.