Real Estate Information

The happiest buyers are focused and follow the ten steps below, which are based on my personal experience buying homes and investment properties here and overseas over the past 34 years.

1. Know how much you can afford or are willing to spend.
2. Separate your “needs” from your “wants.”
3. Commit to working with one Realtor®.
4. Define a timeframe.
5. Pick your neighborhood(s).
6. Do you homework.
7. Search on the Internet.
8. View a selection of properties.
9. Negotiate like a pro.
10. Buy.

These steps above are geared specifically toward first-home and second-home buyers, who make up the largest share of buyers in Summit County.  At first glance, this list might appear to be obvious or common sense.  Nope.  Even the most seasoned buyers make mistakes and overlook essential steps.  The order of the steps is chief.  For this week, l’ll elaborate on just the first step.

Know how much you can afford or are willing to spend.

Cash or loan?  How much will you be putting down and how much will you borrow?  What happens if interest rates change; how will that impact your purchase?  If you are borrowing, the first professional with whom to talk is your bank or mortgage broker. I asked Shannon Dahman, a mortgage broker with America’s Mortgage, how much it costs and how much time it takes to determine the loan you can afford.  “About 10-15 minutes over the phone, with a follow-up call within 1 business day with specific details.  A credit report is required for the prequalification process, which can cost up to $35; however, I pay for this.  A full pre-approval takes about 2-3 days after we receive all the required documents from the client.”  Free and quick.  Can’t beat that!

If you are paying cash, it is still to your advantage to define how much you want to spend.  Let’s say you can easily afford a $30 million ranch; however, you are looking for a ski in/out condo.   In Breckenridge alone, there are 96 ski in condos on the market ranging from $219,000 to $2,550,000.  This is enough of a reason to narrow down what you are willing to spend as step one.

Keep reviewing this column over the next few Saturdays as I fill you in on each step.  If you are out of town, go to www.summitdailynews.com and search for “market insights.”

The condo in the photo below is an example of a very affordable property.  It is located in Breckenridge and has two bedrooms, two bathrooms, parking for two cars, was completely remodeled a couple of years ago, and is on the market for $239,000.

Market Insight for the week:

You have heard it before and you will hear it again: be prepared.

Daniel Webster Johnson has earned the national Quality Service Certified® Platinum award in recognition of earning 100% client service satisfaction, as measured by Leading Research Corporation.  He is a Broker Associate at Resort Brokers Real Estate in Breckenridge.  Contact him at (970) 393-3300 and/or Daniel@YourMountainBroker.com.

As kids growing up, each time we donated used items, my parents would reinforce the idiom ‘one man’s trash is another man’s treasure’.  This article is about how this applies in real estate, but in the reverse.

What we say in real estate sales is, “The seller’s treasure is often the buyer’s trash.” Yes, frequently we Realtors® observe what the seller sees as an asset that generates a higher price, the buyer sees as a liability that will cost money to change.  And this is the reason it is never, ever (and I really mean never) a good idea for a seller to be present when property is being shown to buyers.  We all know why.  If the seller is in the house, the buyer will not feel comfortable saying things like, “The first thing we would do is remove that hideous wallpaper, yap, yap, yap.”

One of the most common examples of the asset/liability equation in Summit County is the hot tub.  The seller put in a hot tub specifically to boost rental income.  The work was done without getting the appropriate building approvals at cost of $10,000, which included hiring a crane to place it on the back deck.  The seller sees a property that has an extra treasure that makes it worth at least $10,000 more.

The buyer, who has no intention to rent the house, sees the hot tub as trash because their inspector points out the deck does not look like it was designed for the weight of the tub, that the tub needs maintenance and it is “old.”  In addition, the buyer wants an energy-efficient home with low utility bills.  

The examples are abundant.  Since I like to keep the Market Insights column short, here is just one more.  The seller is a permanent resident who has spent years cultivating a manicured lawn of green grass without a weed it sight.  If you live in Summit County, you appreciate how much work this is.  Of course for the seller, this is seen as an asset they love.  They buyer is from the Front Range and will be using the home only on weekends.  The last thing they want is another lawn.  This means if they purchase the home, they will rip up the lawn and probably seed it with native grass and wildflowers.

Market insight for the week

Buyers, when you make an offer for a property, take into consideration which upgrades you view as treasures and which are trash.  Sellers have an open mind. Listen to your Realtor®, because if he or she has experience, he or she will know which upgrades add value and which don’t.

Daniel Webster Johnson has earned the national Quality Service Certified® Platinum award in recognition of earning 100% client service satisfaction, as measured by Leading Research Corporation.  He is a Broker Associate at Resort Brokers Real Estate in Breckenridge.  Contact him at (970) 393-3300 and/or Daniel@YourMountainBroker.com.

Daniel Webster Johnson of Resort Brokers in Breckenridge, CO was awarded the highest level of service achievement in the real estate industry, Quality Service Certified® Platinum.  The award is in recognition of earning 100% client service satisfaction in 2011, as measured by Leading Research Corporation (LRC).

Quality Service Certified (QSC) status is the only award in the real estate industry based on independently validated, measurable service results.  Clients of QSC agents receive a customer satisfaction survey at the end of each transaction.  The surveys are administered and the results are compiled by LRC.

Client feedback from the surveys becomes part of the agent’s credentials.  An overall satisfaction rating is displayed on a consumer website (www.QualityService.org) where sellers and buyers have the ability to select a real estate professional based upon each agent’s validated record of service satisfaction. 

“Nothing is more important to a prospective client in selecting a professional than the service results achieved with past clients,” says Larry D. Romito, President and CEO of QSC.  He adds, “Consumers have greater confidence in service reliability, results and satisfaction with a Quality Service Certified real estate professional because they know that the agent’s service record has been validated by an independent third party.  100% service satisfaction record like Daniel Webster Johnson has achieved is just awesome.”

  Daniel Webster Johnson, Resort Brokers

This home, which sold for $850,000 in January, exemplifies the most popular sale in 2012 single-family homes.

Yes, across the nation, Realtors® are happy.  How do I know?  I have 1,901 “friends” who are Realtors on facebook whom I “talk with” nearly every day.  I have met about 80% of these people at a various national Realtor® conferences.

And the message is clear; residential property is selling.  I trust what my colleagues tell me, as it is first-hand communications, without being filtered by reporters.  Being able to gage what is happening across the country in real time is one of the gazillion benefits of social media.

And the face-to-face conversations I have daily with well-established Realtors® here in Summit County tell me my colleagues are optimistic.  Each Saturday, Chuck Leathers provides us with his wonder charts.  This week, I am breaking down the data to show you why Realtors® who follow the market with an eagle eye are happy.  Here are three of my observations from the first quarter of 2012.

205 Properties Sold

Over two properties sold every day of the week.  Got to love it.  Why?  Because, as I have stated before, property is selling.  Buyers are getting the loans they need.  Sellers are happy to make the sale.

17 of the Above Properties are Vacant Land

17 may not seem like a large number; however, that represents over one sale a week.  And even better, most of these buyers have the intent to build within the foreseeable future.  Summit County loves construction.  Based on my conversations with major general contractors, we can expect a mild boom in building over the next 24 months.

3 Sales were $2,000,000+

Of these three sales, one was over $3,000,000.  The reason these three sales are significant is that none were bank-owned, short-sales or auctioned off by the lender.  In addition, all were on the market for less than one year.  These sales combined together are very positive signs for the market.  In addition, good quality sales at the top end of the market help to boost buyer confidence across the entire market. 

Market insight for the Week

One of the best things that both buyers and sellers can do is track the market weekly.  To receive a weekly market update email, contact me.

Daniel Webster Johnson loves your comments and feedback.  He is a Broker Associate at Resort Brokers Real Estate in Breckenridge.  Contact him at (970) 393-3300 and/or Daniel@YourMountainBroker.com.

March was a very special month for the National Association of Realtors.  On the 18^th to the 20^th, the most dedicated and successful Realtors® from around the country who specialize in resorts came together at Kiawah Island, SC.  It was a meeting like none other. It was the Resort and Second Home Property Specialists Symposium.

At this exclusive gathering, we shared experiences and data from resorts ranging from Breckenridge to Hilton Head and every resort type in between.  I learned a huge amount and took so many notes I was concerned my ipad might run out of memory.  I reviewed my notes and distilled them into one word: Dreams. My colleagues from all across the country agreed that as resort Realtors, we are in the business of helping our clients fulfill their dreams.  A phone call yesterday summed it up.

Robert, who owns a printing business which continues to grow and expand, and who has talked with me about buying a Summit County property since mid-2007, phoned.   Over the years, Robert has been telling me about the high-powered investment group he meets with each month and the fact that members of the group have been telling him to hold off buying a mountain home. But I learned much more when he said, “The kids are pushing me; they are tired of waiting. They want to have a place in the mountains now.  Plus Doris and I are not getting any younger.  I have got to stop working so hard and start spending more time in the mountains I love so much.”  In other words, he feels time is running out on turning the dream of a mountain lifestyle into a reality.

This conversation reflects a presentation at the Symposium by the National Association of Realtor’s Chief Economist, Lawrence Yun.  Of the dozens of points he made, three jumped out at me:

1. For the past six years, across the country, purchases of resort properties have been depressed.

2. The typical resort purchaser is getting older and running out of time to buy.

3. These points indicate a pent-up demand for resort real estate.

It was as if Robert was at the presentation waving his hand saying, “Lawrence, you are talking about me.  I am not waiting and longer.  My dream is more important than if this purchase is a great investment or not.”

Are why are you waiting?

Market insight for the week

Buyers sit down and define your priorities.  What is it you want out of a mountain property?  Yes, you can invest the money someplace else and probably obtain a better return.  Ask yourself, “How much joy do those stock certificates sitting with our financial planner provide us with?”  The answer might be what you need to make the decision and join all those who love the Summit County lifestyle.

Daniel Webster Johnson loves your comments and feedback.  He is a Broker Associate at Resort Brokers Real Estate in Breckenridge.  Contact him at (970) 393-3300 and/or Daniel@YourMountainBroker.com

More and more clients are taking advantage of the very low interest rates and low real estate prices to trade up.  In other words, these clients are selling their smaller properties and buying larger ones.  This makes tons of sense, especially if both properties are in Summit County.

Realtors like to call it ‘sell low, buy low.’  Making one of these moves will make even the most prudent banker or advisor happy. 

To know if this idea is right for you, there is just one question to answer: Is this property going to make us happy for two more decades?

If the answer is “No”, keep reading.   If your property is exactly what you want, then read on just for the fun of it.

I’ll illustrate with an example that just took place with clients of mine, Alex and Robert (a real situation - I have changed the names and rounded off the figures).  They sold a two-bedroom condo in Dillon for $300,000, which they were planning to refinance, and bought an extra-large three bedroom home in the Summit Cove area for $600,000.

Here is the logic behind why this was such a smart financial move for them.   At the peak of the market, both properties would have sold for 25% more (a very realistic assumption); the condo for $375,000 and the house for $750,000.  See my point?  The house dropped in value twice as much as the condo.

What I like to call the “affordability factor” is the best it has been in years, and possibly the best it will ever be.  The affordability factor is the total cost of ownership.  The two biggest factors that impact this cost are interest rates and the purchase price.  “This is a perfect time for buyers.  With such low interest rates, they can afford a larger mortgage and with real estate prices so low, owning that ideal home has become within reach for so many more people.” This is what Shannon Dahman with America’s Mortgage, and a 17-year veteran mortgage broker located in Summit County, told me.  

To make this happen, you will need, in most cases, a 20% down payment for the larger property. Most of my clients with growing families have 1) sold their small place, 2) moved into a rental while shopping and/or saving, 3) then bought their dream home, and 4) are as happy as can be now.

If your situation is the opposite and you want to downsize, the math isn’t the same, but it still makes sense.  Once you think about ‘sell low, buy low’ and all of the costs of owning a property that is larger than your needs, you will probably agree with me that trading down is the logical thing to do.

Market insight for the week

If this strategy is right for you, don’t wait - get on the phone with your Realtor® right away to talk about the best way to move forward.

Daniel Webster Johnson loves your comments and feedback.  He is a Broker Associate at Resort Brokers Real Estate in Breckenridge.  Contact him at (970) 393-3300 and/or Daniel@YourMountainBroker.com.

The phone has been ringing in 2012 with buyers saying, “I want to buy another one.”  I was so surprised the first time I heard this I nearly said, “Buy another what?”   Luckily I caught myself.  I thought about it. That first client on the phone already owned two condos in the same complex.  I put it together and said, “Seems a good idea if we can snap one up at the right price.”  And guess what, that’s exactly what we did.

So what is the logic behind owning several properties in Summit County?  Here is what my clients have told me in 2012:

1. We have confidence that real estate is cyclical; therefore, buying when prices are depressed makes sense.

2. We are buying for ‘the long haul.’

3. We have confidence in the Summit County real estate market because prices have fallen less here than in the majority of markets across the country.

4. We know from experience the rental income is more consistent than many other types of real estate (ie., owning a vacant commercial building is not a lot of fun). 

5. We find owing vacation rental property easy.  The management company takes care of everything.  We don’t have to take phone calls from tenants with toilets that are backed up…

6. We are getting at least three times more income off our money than leaving it in the bank and we have the chance for long-term appreciation.  In other words, it beats leaving money in the bank.

I want to confirm a couple of things.  The above comments are not mine. I am reporting what actual buyers of Summit County real estate have told me.  The other thing I’d like to say is none of these people has said to me that they think this is the bottom of the market. They don’t seem to care.  And why?  Because they know they are not able to time the market perfectly.  With all that said, you are probably getting an idea about one reason I love being a Realtor®. I learn so much from my clients; information that I can share with other clients.  It’s great.

And I would like to point out one more thing before I head into an example.  Each of the points above alone is not a very good reason to buy now; however, combined together they make sense.

So what am I seeing these investors purchasing?  Smaller condos and even some vacant lots.  In particular, they want great locations (ideally ski-in), solid rental income  and overall low maintenance.

Market insight for the week

Buyers – trying to time it so you find the bottom of the market just doesn’t make sense.  The only way you can really tell prices have bottomed out is by looking back long, long after prices have started to climb again.

Daniel Webster Johnson loves your comments and feedback.  He is a Broker Associate at Resort Brokers Real Estate in Breckenridge.  Contact him at (970) 393-3300 and/or Daniel@YourMountainBroker.com

This recent sale in Breckenridge was popular with investors.

Opening bid?  Where? What?  And why $1.19?

You already know we have very few properties that are sold at the weekly Summit County Public Trustee auction.  In 2011, just seven were purchased by individuals.  All the rest, rather than being sold, became owned by the bank or other lienholder.

In 2012, year-to-date, there has been one property purchased by an individual.   I was the purchaser, so I can explain the process, how much fun I had, and what the $1.19 amount represents. 

The process abbreviated into three steps:

1. Track every single property that goes to auction.  This is an arduous process, to say the least.

2. Be super on top of the market so that you can recognize in an instant if the advertised opening bid is a good value or not.  Of course, this takes an enormous amount of local experience.

3. Show up in person at the auction and bid.  If you are the successful bidder, you will need to get your money (cashier’s check or wire) to the Public Trustee within exactly 120 minutes.  

Three reasons why it is so much fun:

1. If you are the successful bidder, you are getting a great deal, which is a blast.

2. Bill Wallace, our Public Trustee, is a really nice guy and he makes the process enjoyable.

3. You walk out of the Old Court House in Breckenridge, where the auctions are held, punch the sky and holler, “YES!,” which is a great feeling.

The reason for $1.19:

1. The rules require the minimum bid be at least $1.00 over the opening bid.

2. The 19 cents rounded off the purchase to an even number, which Bill likes.

3. The extra 19 cents is just sort of fun.

And, now, an example to put these points into context.  I review every single property that is coming up for auction and advise my clients when I see one that is a great value.  In the week of February 20^th, all the factors came together.  The right property, in the right location, with the right rental income, the right opening bid ($35,000 less than the most recent sale in the complex), and a client with cash in the bank who wanted to buy.

I was surprised how easy it was to do.  Before the auction, I met with Bill, who told me about the extra 19 cents.  He also let me know it is rare to have a bidding war between buyers.  Sure enough, I was the only one at the auction.  I had my client on the phone before the auction started.  They wanted to call me back from a land line.  In the time it took for them to phone me back, I had already purchased the property. 

I have been a real estate broker for a long time.  This is first time all the factors have come together resulting in making a purchase on the steps of the Court House.

Market insight for the week.

Buyers benefit from being patient.  On the other hand, in this market, patience is NOT a virtue for Sellers.  They are best to gear up and plan to sell their property within 90 days of listing.

Daniel Webster Johnson loves your comments and feedback.  He is a Broker Associate at Resort Brokers Real Estate in Breckenridge.  Contact him at (970) 393-3300 and/or Daniel@YourMountainBroker.com.

Everywhere around the county the question is the same.  Everyone from the front desk staff at the recreation center to the wait staff in restaurants wants to know the answer.  The answer: great.  And I say that with all sincerity.

You might be thinking I have taken this positive thinking thing a little too far.  How could it be great when prices have been declining since 2008?  The real estate market in Summit County is great for dozens of reasons.  For today, I only have room to tell you the following three reasons:

1. Sales are taking place.

Since January 1, 2012, there have been 120 residential sales in Summit County; an average of two sales every day of the year (and the real estate community considers the start of the year slow). Compared to extremely high-end markets like Telluride, where only a handful of sales have taken place in 2012, our market is booming.  My point is evident that a market where sales are taking place consistently is a great thing.

2. There are very, very few distressed properties on the market.

This Market Insights column has kept you up-to-date on this topic plenty over the past year.  The fact which amazes people the most is that in all of 2011, only eleven properties were purchased by individuals at the Public Trustee auction held each Friday at 10 am at the Old County Courthouse (208 Lincoln Avenue, Breckenridge).  Yes, just eleven. 

In addition, we have a small handful of bank-owned properties for sale.  There are markets in the USA right now where the majority of sales are bank-owned properties.  Yes, we are very fortunate to be in a market that is, on a relative basis, great.

3. We don’t have any absolute auctions held by creditors.

Now this is a topic I know a ton and a half about.  As an American living in Melbourne, Australia, in the 80s and early 90s, I experienced absolute auctions (no minimum opening bid) often, as it is an extremely common method of marketing and selling all types of real estate in that city.  Of course here in the States, the auctions are usually conducted on behalf of creditors who have one desire - unload the property at any price.

To learn more, I Googled the word “auction,” then resorts such as, “Vail,” “Aspen,” “Telluride”…  The results showed plenty of home auctions and companies that specialize in selling real estate by auction in those markets.  Next, I typed in “Breckenridge, Colorado auction.”  The result was 180 degrees different.  The only auction I could find was the Public Trustee sale mentioned above and the contents of a storage unit being auctioned off.

Residential properties that sell at auction usually sell for a fraction of their original asking price.  As a result, auctions have a very negative impact on their respective markets.  So, no auctions means the Summit County market is great.

Here is an example of the sort of property that is selling: a ski-in, two-bedroom, two- bathroom condo in Breckenridge priced under $300,000.

Market insight for the week.

Buyers and sellers can benefit from following Bobby McFerrin’s 1988 hit “Don’t Worry, Be Happy.”

Daniel Webster Johnson looks forward to your comments and feedback.  He is a Broker Associate at Resort Brokers Real Estate in Breckenridge.  Contact him at (970) 393-3300 and/or Daniel@YourMountainBroker.com.  Data from the Summit Association of Realtors.

This ski-in, two-bedroom, two-bathroom condo in Breckenridge priced under $300,000 is an example of the sort of properties that are selling in Summit County so far this year.

Special to the Daily / Bob Bloch