The best day of the week

Over the years one of the top five most popular topics have been negotiate gambits. Like in the game of chess, an ambit suggests much more than making an initial move; it involves an overall strategy.  This article is about the timing of making an offer. Buyers, are you controlling the day of the week your offers are submitted, and even the time of the day?  Sellers, are you being pressured by the buyers?  Buyers: timing is fundamental to getting a mega-low price.  Experience has shown me sellers are more likely to accept a lower offer mid-week than they will on weekends. And why?  Because sellers are busier during the week and tend to have an attitude of, “Let’s just be done with this,” when they have a lot on their plate. Let’s go through the days of the week. Saturday: Bad day to make an offer, the seller has too much time to think about it.  Sunday: Ditto, and the seller will start searching the web to find reasons the offer is not acceptable.  Monday:  Another bad day. Monday’s are usually too busy. If the seller is overwhelmed with getting things done, their tendency will be to refuse an offer rather than respond.  Tuesday through Thursday: Great days to make offers. Hopefully the seller will be at work successfully making money. A seller who is feeling good is much more likely to consider an offer.  Friday: A bad day for a different reason. The belief is that properties get the most showings on the weekends (not necessarily the case in Summit County). The sellers are hoping they might have a great showing and another offer over the weekend.  In addition, people tend to be busier at work on Fridays.  In general, depending on what I have learned about the  seller, my recommendation is to make offers that reach the seller at about 3 p.m. (seller’s local time) on a Tuesday with an acceptance deadline time for early evening Wednesday.  In today’s world, sellers can sign a contact while waiting in line to enter a show using their touch screen smart phone or tablet.  I have seen sellers sign right before going out to dinner so they can ‘get it off their plate’ and so they can have a reason to celebrate.  When timing your offer, make sure to use the “seller sweet spot” negotiating gambit.  To learn about this gambit, ,go to www.summitdaily.com and in the search spot enter: “sweet spot.”  Your top result will be the Market Insights article that gives you all the details you need.

Market insight for the week

Buyers: make sure to sign a buyer agency agreement with a Realtor who will use negotiation strategies that give you the upper hand. Sellers: be certain your Realtor studies negotiating skills; experience is not enough.

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/orDaniel@YourMountainBroker.com.

Wow!  Last week’s Market Insights column was very popular.  The title was “When will prices go up?”  (read the article at www.summitdaily.com and in the upper right, search for “market insights”).  Here is what I heard from readers over the past week: “Tell us more.” It seems there are a lot of people who want to be able to figure out where the market is going.

So, with the strong desire to learn more about when prices will rise, I have compiled this list of the seven signs that indicate a recovery might be coming to Summit County real estate.

1. Solid recovery of markets across the USA.

This was explained in the last issue with the fly fishing analogy.  In a nutshell, you can expect the market here to rebound after the rest of the country.

2. Major developers break ground.

And what do I mean by “major developers?”  The 800-pound gorillas, and in our market, the most dominate one is Vail Resorts.

3. Inventory balances out.

The amount of inventory varies dramatically based on the segment of the market.  Here are two examples I sent clients in the past week.  Condos in Breckenridge near the ski slopes priced under $250,000: there is about two years of inventory.  At the other end of the spectrum are homes priced over $3,000,000 in Breckenridge.  One sold in the past year, and there are 17 on the market, which means, in theory, seventeen years of inventory.  Based on my involvement as a Resort & Second Home Specialist of the National Association of Realtors, a balanced market is around six months of inventory.

4. Few, if any, bank-owned or short sales on the market

As I wrote about in the January 7, 2012 Market Insights article, distressed properties appear to be on the decline.

5. Shadow inventory dissipates.

Shadow inventory is a term Realtors like to use which refers to the properties that are not on the market, yet the owners want to sell.  In most cases, these sellers are waiting “in the shadow of the market,” and once prices look like they will go up, these people jump on the market. I was quoted in a national real estate magazine on this subject this month.  For more info, email me and I’ll send you the article, which explains shadow inventory in detail.

6. Volume of transactions increases substantially.

History shows us that usually when there is a strong increase in the number of properties selling, this precedes prices going up.  Makes sense to me.  If more properties are selling, that means there are more buyers in the market.

7. Prices increase.

This the last sign for a reason.  I expect to see most of the other signs take place before we see price appreciation.  Too many people wait to see prices going up.  To be ahead of the pack, look for the other signs. 

Market insight for the week.

To know when the market is recovering, just keep reading Market Insights.  I’ll keep you informed.

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.

I am asked this question all day long from everyone.  I hear it when I buy a cup of coffee, in the supermarket line, from both buyers and sellers… And if you are one of a growing number of people, those who read Market Insights each week or study it online at www.summitdaily.com (go to the upper right of the screen and search for “market insights”), you know that I never, ever predict the future.  However, I can answer this question.

I moved to Breckenridge in 1996, which means the only real estate cycle I have seen are prices going up then coming down. I have not seen them go back up again.   So I look to those with a tremendous amount of experience and corresponding wisdom.  One of those people and a mentor for me, is Bob Girvin.  Bob is a Breckenridge icon and a great Realtor® at Coldwell Banker-Rounds and Porter on Main Street, Breckenridge. He made his first real estate sale in 1972.  Listen to this – he sold the land for the development of the Beaver Run complex! He is now 75 and still a very active Realtor®. He is an inspiration for all of us.  Bob has experienced three market slumps.  The first started just after he arrived in Summit County, 1973 to 1977 (four years).  The next one was from 1981 to 1988 (seven years).  And, of course, the one we are in now that started in 2008 (so we are three years into this slump).

Here is how Bob describes our market.

“Our market is just like fly fishing. The overall economy is the rod and our tiny little market is the fly on the end of the line. When the rod is moving back the fly is still way out in front of the fisherman. All of a sudden the rod snaps forward; however, at that stage the fly is still heading back. Based on my experience, our market lags the rest of the country going into and coming out of real estate slumps.”

Back in 2007 and early 2008, our prices were still climbing, yet prices in other markets had gone into decline.  We were delayed coming into this slump, and based on history, we will be delayed coming out of it.  How long will the delay be?  There is no exact answer to this question.  Based on my interviews with Bob and others with decades of experience, the guess is about 12 to 18 months.

So, if history repeats itself, the answer to the question is, “Maybe a year or more after the majority of major markets in the USA rebound.”

And what sort or properties might be those be that will rebound first in Summit County?  My guess is those in the best locations with the best amenities.  An example is Mountain Thunder Townhome, #205 shown in these photos.

Market insight for the week.

Accept the current market as it is.  See the current pricing levels and sales volume as ‘the new normal.’  In other words, basing your plans on prices increasing in the very near future is not advised. 

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

On March 18, 2011, the Market Insights article was titled Distressed Properties Increase.  In that article, based on data provided by Stewart Title, I said we could expect the number of distressed properties in 2011 to exceed 2010, which is what happened.  In Summit County, in 2010, we had 104 properties foreclosed upon.  In 2011, that number increased to 145. In one year forecloses jumped almost 40%.  From this perspective, it seems like there must be a ton of opportunities for buyers to get a great deal on a foreclosure.

Now let’s look at the number of foreclosures from another point of view. There are about 31,000 residential properties in Summit County.  That means in 2011, less than 0.5% of properties went back to the lender.  And let’s dig a bit deeper.  In 2011, 316 properties received a Notice of Election and Demand (the first step in the foreclosure process), which is about 1% of properties.  Compared to just about every other market in the USA, this is insignificant.

Statistically it might be insignificant; however, if you are a seller and the house next door to you or another condo in your complex is foreclosed on, then placed back on the market by the lender below the current market value, it is a very, very big deal.  Bank- owned sales push prices down.  No dispute on that one.

Now let’s go back to the buyer point of view.  316 distressed properties in a year makes it sound like there are plenty of great deals out there for astute buyers.  Hold on.  A little more digging into the data is required.  To get the insider info, I talked with the guru of distressed properties in the County, Maggie Dew of Stewart Title. She tracks every foreclosure sale.  She told me, “Just seven, only 4.83% of the foreclosures in 2011, were not purchased by the original lender at the Public Trustee auction.  And of these seven, two purchases were made by an investment group located in Denver.  In other words, the likelihood a buyer will find stellar value by going to Public Trustee auctions is very, very low.”

Maggie has tremendous insight, so I asked her if she was able to predict what’s to come.  She and I share the same attitude, as she said she could not predict the future. However, she did share some insights.  Her comments: “If the trends continue, based on the data I have been tracking since 2008, I am guessing we will have between 50 and 100 foreclosures in 2012.  By 2013, it will probably drop down to the levels we saw back in 2008/9 which was +/- 40 foreclosures a year.

Market insight for the week.

If you are going to buy or sell a distressed property, make sure your Realtor® has the training and experience required.  One of the most well known training programs is called “Certified Distressed Property Expert.” 

Daniel Webster Johnson completed the Certified Distressed Property Expert training in the summer of 2009.  He is a Broker Associate at Resort Brokers Real Estate in Breckenridge.  Contact him at (970) 393-3300 and/or Daniel@YourMountainBroker.com NOTE: all data excludes time shares.

2011 has turned out to be a great year for real estate in Summit County.  And I mean a really great year.  Fantastic is an even better description.  The reason is simple – buyers and sellers of residential real estate are happy.  Yes, I said happy.  At least the folks I have had the honor to serve over the past twelve months are happy.

Before I dive into why they are happy, I want to remind you how easy it is to revisit past Market Insights articles at www.summitdaily.com (in the search box at the upper right type in “market insights.”)  Take the time, and you will learn insights such as:

The top ten trends of second-home buyers.

The five biggest mistakes buyers make.

The five biggest mistakes sellers make.

How to get the deal of a lifetime.

Just about a year ago, in the January 29, 2011 issue of the Summit Daily News, the Market Insights article was titled Welcome to the new normal.  In that article I wrote,

“The title of this article is a direct quote from Realtor® Magazine…The subtitle of the article states, ‘2011 is the first full year of what many economists see as an entrenched period of slow economic growth and high unemployment.’”

Looking back at 2011, the year has turned out to reflect exactly what it was predicted to be.  Our world is different now.  Much different.  And people have accepted it.

Prices peaked here in Summit County in 2008, then fell dramatically in 2009/10.  Over those two years, many of us in the real estate industry were in shock, with a huge percent of the people, especially sellers, in denial.  In our rear view mirror, it is easy to see people just could not grasp how rapidly prices dropped.  We wanted prices to stay at the peak. 

A shift took place in 2011; the sort of change that could be called a paradigm shift.  Buyers, sellers, Realtors… have embraced the new normal.  Expectations of real estate as an investment have changed.  Denial has changed to acceptance.  And this adjustment has generated less frustration.  In its place are happy buyers and sellers. And this is critical because emotions have such an impact on residential real estate.  Ask any attorney and you will discover happy people are much less likely to litigate.

This photo is of a home in Breckenridge that went under contract just yesterday.  The buyers are happy because they love the home and feel it was very good value.  The sellers, my clients, are happy because they have sold at a price they are comfortable with.

Market insight for the week.

Together let’s make 2012 an awesome year!!! 

Daniel Webster Johnson was the 2010 National Association of Realtor® RSPS of the year.  He is a Broker Associate at Resort Brokers Real Estate in Breckenridge.  Contact him at (970) 393-3300 and/or Daniel@YourMountainBroker.com.

Are you a seller?  If yes, it is mandatory for you to avoid the five biggest mistakes that sellers make.  The first step in the process is awareness, which is the reason for the current series of Market Insights articles.  To read other articles in the series, go to www.summitdaily.com and in the search box on the upper right type in “market insights.”

So far, we have examined these three mistakes: 1) lack of commitment, 2) poor presentation, and 3) having ‘loose ends.’  Today’s focus is the fourth mistake: hoping for an emotional buyer.  Next week you will examine the final mistake: a lack of urgency.

Hoping a buyer will get wildly emotional and pay above the current market value for a property is the classic seller mistake. My estimation is that well over 95% of sellers, without counseling from an extremely experienced Realtor®, will make this mistake.  I have even worked with seasoned investors who have only stepped foot in their properties once or maybe twice, who still get caught up with unrealistic hopes.

This mistake boils down to thinking that a property will sell for a higher priced because of the love the seller has for the property.  Separating emotions from the reality of the marketplace is tough – gorilla-glue tough.  My counseling starts by reinforcing that what the seller owns is a home with memories, and what I am marketing is a property with features and benefits.  Your home has huge emotional value to you, whereas a property is, in essence, a commodity that the buyer compares directly against all the other properties for sale.

Is it possible there is a buyer out there who will fall in love with your property; so much so they will pay above the market value of your property?  Yes, absolutely and without a doubt it is possible.  Is it probable?  Heck no.  In all my years of experience, just once did I have a circumstance where I looked my client, the buyer, in the eyes and said, “I want you to acknowledge you are paying over the market value for this condo.”  She responded, “That is OK with me because it is fully furnished exactly the way I want it.  I love it and there is not a thing I would change.”   This happened only Once.

And it is that once-in-a-lifetime buyer who causes the dilemma for sellers.  Every experienced Realtor® has seen a buyer pay obviously too much once or twice in their career. And what sort of properties do buyers fall in love with and pay a premium for?  Unique ones; ones that really stand out.  And I know what you are thinking.  You want to know how unique, how special?  An example is the best way to answer this.  This photo shows a two-bedroom, end unit townhome with extra windows and attached garage that is right across the street from ski in/out and just two blocks from Main Street, Breckenridge.  This combination of features is very rare.  In addition, if the renovations match a buyer’s tastes, they just might pay top dollar.

Market insight for the week.

Select an extremely (and I mean mega) experienced Realtor®, then trust in his or her advice. 

Daniel Webster Johnson is the 2010 National Associations of Realtor® RSPS of the year.  He is a Broker Associate at Resort Brokers Real Estate in Breckenridge.  Contact him at (970) 393-3300 and/or Daniel@YourMountainBroker.com .

This week is the third Market Insights in a series about the five biggest mistakes sellers make.  To read other articles in the series, go to www.summitdaily.com and in the search box on the upper right type in “market insights.”

The five mistakes are 1) lack of commitment, 2) poor presentation, 3) having ‘loose ends,’ 4) hoping for an emotional buyer, and 5) lack of urgency.  The third mistake is one I have found sellers need plenty of coaching on.

As a salesperson with nearly 40 years of experience (I started in high school), I know ambiguity means a lower price.  Selling a car?  Try saying, “Oh, well, gee it runs well on a warm day.  I’m not sure what the problem is, but I am sure you will love the cassette player.”  And who will buy this car?  A mechanic.  And what will the price be?  Rock bottom.  If you want the widest possible pool of prospects for your car and the highest price, provide details such as a maintenance log and the phone number of the mechanic who has been working on the car.  What have you done?  Minimize the uncertainty for the buyer.  A buyer who feels comfortable will pay more.

It is exactly the same with the sale of real estate.  Even though Section 10 of the State of Colorado Real Estate Contract gives the buyer the right to inspect the property and request things to be fixed or to terminate the contract, that doesn’t mean it is OK to have your property in anything less than tip-top shape.  The smartest sellers are open, honest and they place prospective buyers at ease.  The way to do this is to have the property inspected by a professional inspector and have issues addressed before the property goes on the market.  Next, provide the inspection report and receipts for the work done to all buyers.  If this is not possible, at least, up front, provide the buyer with quote(s) for the work to be done. 

Here is the challenge with loose ends.  You have owned the property for years.  The deck railing has always been a little loose and it has never been an issue for you.  So you don’t even see it as an issue.  Hold on.  Image the buyer who steps onto your deck to enjoy the view and who leans against the railing. For a nanosecond, the buyer gets the feeling he or she might fall over.  Not a good impression.  Immediately the buyer turns to their spouse and says, “Gee, what else is wrong with this place?”  Over dinner that night they refer to your home as ‘the one with the wobbly railing.’

Being proactive and taking care of all those loose ends saves sellers a bucket load of money.  It is cheaper to get the work done up front rather than providing credits during the inspection process or having to rush to get things fixed before closing. 

The ski-in condo that is a super easy walk to Main Street, Breckenridge in the photos is owned by a seller who is on the ball.  In the photos you see two things.  First, it is in prime condition and really looks great.  There are no loose ends. None. Second, there are some aspects that could be upgraded.  That is fine, because at $299,000 for a two bedroom, the price reflects this.

Market insight for the week.

Plan ahead with your Realtor®.  You might need a couple of months to get all those loose ends fixed before you hit the market. 

Daniel Webster Johnson is the 2010 National Associations of Realtor® RSPS of the year.  He is a Broker Associate at Resort Brokers Real Estate in Breckenridge.  Contact him at (970) 393-3300 and/or Daniel@YourMountainBroker.com.

I hope you are having a fantastic Thanksgiving vacation. It is such a superb time to be with family and friends enjoying spectacular Summit County!!!

Last week's market insights introduced you to the five mistakes which are:

1) lack of commitment,

2) poor presentation,

3) having ‘loose ends,'

4) hoping for an emotional buyer,

5) lack of urgency. This week we delve into the, hands down, two biggest mistakes. I'd like to start with a fact: in resort communities from Maine to Florida and Nantucket to Coronado real estate is selling for a lot less than at the peak of the market. How do I know? Though the National Association of Realtor I have a network of resort and second-home property specialist colleagues all over the country.

#1. Lack of commitment

Every single seller in the market today must be determined to sell. You cannot be “testing the market,” “thinking about selling” or “willing to sell if I get my price.” Nope. That thinking will not work. It might have worked back in the mid 2000s when prices were climbing. But today, to sell you must be commitment to accepting the current market value of your property.

Did you relate to any of the quotes above? If yes there are two more that I hear far, far too frequently. “We will not give this property away.” “We don't need to sell.” Both are very valid statements which I respect. The easy way to determine if you are committed is simple. Work with a Realtor who will be honest with you and have them tell you, to the very best of their ability, what your property will sell for. Will you sell for that? If not, you are not committed. Easy, isn't it.

Before you read this example please sit down as I don't want you to fall over. The seller of a Summit County condo paid $500,000 on June 23, 2006 and sold last week for $370,000. Ouch, they owned it almost four-and-half years and lost 26 percent. This was not a ‘distressed sale.

#2. Poor presentation

At a recently international Realtor conference I learned this truism: For every seller in this market it is a price war and a beauty competition. I was in the audience and as I typed the words into my iPad I said to myself, “That is exactly what we are experiencing at home.” Based on the example above it is obvious we are experiencing a price war. It was the second half of the statement that really made an impact. Sellers need to feel as if their property is on a stage being compared side by side with all the other competitive properties. Ask yourself, “Would my property win a property beauty contest?” In this case the judges, the panel of experts, are the buyers. And guess what. They are ruthless.

This home at 247 Timber Trail has perfect presentation. Why? The seller contracted a staging firm, Neu Designs, LLC, and it has been worth every penny spent. This home is right on a ski trail on Peak 8 and priced at just $3,290,000. How can I use the word “just?” Because the house across the street is on the market for $6,499,000.

Market insight for the week.

It is mandatory that the people advising you are extremely experienced in Summit County. Search out the very best stager and Realtor you can find.

Daniel Webster Johnson is the 2010 National Associations of Realtor RSPS of the year. He is a broker associate at Resort Brokers Real Estate in Breckenridge. Contact him at (970) 393-3300 or Daniel@YourMountainBroker.com.

*Data provided by the Summit Association of Realtors.

For the final article in this series, the focus is on the last of the mistakes, Winging it.  To read about the first four mistakes - 1.) Forgetting what Dorothy told Toto; 2.) Using a Shotgun; 3.) Cramming for the Exam; and  4.) Being on Vacation) - go to www.summitdaily.com and in the search box on the upper right type in “market insights.”

Years and years ago I owned a consulting firm that provided training in the tourism industry. It was a blast, as I traveled the globe conducting training.  In the process, I learned a dictum that ‘tourists leave their brains at home.’  Since it has been at least a decade since I conducted tourism training, I Googled the phrase.  The first response read, “Truer words have never been spoken.”  All the posts agree this is not a good idea.

And for the buyer of real estate it is a really, really bad idea.  I hope the editor allows me to go a step further to state it is downright stupid.  Yet it happens so frequently, it has made the list of the top five mistakes.  What happens?  Buyers use emotions to make decisions.  Emotions are a great thing.  Without a doubt, you want to fall in love with the residential property you purchase; however, the best decisions are balanced with rational thought. 

If you make statements similar to these phrases, beware: 

“It doesn’t matter, we are buying this place for the long haul.” 

“We will have so much fun skiing into the front door, that offsets the HOA being in debt.”

“Heck, if things don’t work out, we’ll just sell.”

The solution might not be as obvious as it appears.  The common ideas include taking a step back, bouncing the purchase off others, and sleeping on it.  At times it can take a bit of work to convince buyers the best solution is developing a lifelong partnership with your Realtor.  Yes, be a customer for life.  Don’t wing it and buy through the first Realtor you meet.  There are many attributes to search for when selecting the right Realtor.  In this particular case, the most important is a Realtor who does not need to make a sale.  Yes, one who is pleased if you do not buy.  Why?  If your broker needs to make a sale, that person will fuel your emotions.  Not a good combination.  You need a voice of reason. With virtually every buyer I say, “One of my most important roles is to be here when you sell, so I will point out aspects of properties that will impact the resale.”  That is a partnership.

So what types of properties do buyers fall in love with?  The best properties.  For example, 247 Timber Trail, Breckenridge.  Even the asking price of $3,290,000 is something that is easy to love.  Why? The most expensive house in the neighborhood, just up the street, is $3.2Million more.

Market insight for the week.

Buyers and sellers: the most important relationship you will make in the real estate process is with your Realtor®.  Take your time in the interview process.  Be certain you are working with the best.

Daniel Webster Johnson is the 2010 National Associations of Realtor® RSPS of the year.  He is a Broker Associate at Resort Brokers Real Estate in Breckenridge.  Contact him at (970) 393-3300 and/or Daniel@YourMountainBroker.com .

This is the third in a series of articles stating the biggest mistakes buyers of resort real estate make: 1.) Forgetting what Dorothy told Toto. 2.) Using a shotgun.  3.) Cramming for the exam.  4.) Being on vacation. 5.) Winging it.  For info on the first two mistakes, go to www.summitdaily.com and in the search box on the upper right, type in “Market Insights.”  In this article, my focus is on the third and fourth mistakes as follows:

Cramming for the exam.  We don’t learn or retain nearly as much when we stay up late the night before an exam, cramming.  The buyers who tend to make the best decisions are very well prepared before they arrive.  The number one most important thing is to know what you can afford and what you will be prepared to pay.  If you will be borrowing some of the funds, then talking to a Summit County-based lender well in advanced is mandatory.  Why?  Often lenders need to review all sorts of documents before they can approve a loan and, as a result, the process takes time.

The second most important aspect is that a buyer should not cram on the online search.  In my experience, the diligent buyer will spend from two weeks to two months working with me and searching online.  This saves a huge amount of time that would otherwise be wasted looking at properties that will not suit the buyer.  Buyers who do the work in advance arrive with a focused rifle, not a shotgun (see buyer mistake number 2 in last week’s article).

And what sort of property do people select when they search online before arriving?  Here is good example.  A one-bedroom condo on the slopes, instead of a two-bedroom condo away from the slopes, for the same price.  With time on their side, some buyers will decide a condo such as Mountain Thunder Lodge, #1407, well-priced at $399,000,  on the top floor with vaulted ceilings, can feel as comfortable as a two-bedroom.  The buyer who crams usually has too narrow a focus and misses a great property like this one.

Being on vacation.  At first glance this mistake might not be as evident to you as some of the other mistakes.  You could be wondering, “What’s wrong with being on vacation?”  Nothing.  Vacations are great things.  One of the main reasons I live in Breckenridge is because it is where I would vacation if I lived in Denver.  My point: mixing vacationing and buying might look like a good idea; however, it rarely works.  It is very difficult to do both and enjoy both.  If you are here to ski, and you are dragging kids in and out of condos, that is a recipe for grumpy kids, trust me.

The astute buyers get it.  Coming to Summit County specifically to buy is one of the many reasons why the sales volume is higher in summer and much lower in winter.  In winter, our visitors tend to have rather short vacations packed full of things to do.  What happens is they fall in love and say, “We’ll come back in summer to buy a place.”  It works.  Now don’t get me wrong.  I am not suggesting you don’t have fun when here to buy.  What I recommend is to plan a trip to buy, fit the fun things around the real estate search – not the other way around.

In the next Market Insights column, I will fill you in on the fifth buyer mistake.

Market Insight for the week.

Buyers and sellers: be determined to do ‘your job’ well.  Stay focused and avoid letting your emotions get in the way of rational decision-making.

Daniel Webster Johnson is the 2010 National Associations of Realtor® RSPS of the year.  He is a Broker Associate at Resort Brokers Real Estate in Breckenridge.  Contact him at (970) 393-3300 and/or Daniel@YourMountainBroker.com .

This is the second in a series of articles.  My objective is for you, both buyers and sellers, to learn from the mistakes others make.   Here is a recap of the biggest mistakes buyers of resort real estate make: 1.) Forgetting what Dorothy told Toto. 2.) Using a shotgun.  3.) Cramming for the exam.  4.) Being on vacation. 5.) Winging it.  In this article, my focus is on the first two mistakes.

1.) Forgetting what Dorothy told Toto.   We all know the scene from the classic 1939 movie The Wizard of Oz when Dorothy said, "Toto, I've a feeling we're not in Kansas anymore."  Darn right you are not.  It is critical buyers know they are no longer at home. This is a king-size mistake, and for good reason, it gets the prestigious status of being number one.

The comments from the buyers who make this mistake almost always start with, “But in Dallas, we can buy a suburban home for the price of this condo.” Or, “But it was easy to get a loan for our home in Denver.”  Each time I agree.  After we agree, I remind the buyers that at home they don’t have ski lifts at their door step or world-class skiing.

The best way to change this thinking is to understand who buys in Summit County.   Our buyers are from all over Colorado, the nation and the world (I have represented buyers from over a dozen countries).  In addition, in Summit County, there is no urban sprawl.  We have islands of private land surrounded by federal land.  Yes, it is a unique market.

2.) Using a shotgun.  Buyers who make this mistake say, “We are looking for a place in the mountains to relax.”  The buyers who really make this mistake continue on, “We would be happy with a small cabin in the woods; however, if you found us a great deal, we could easily purchase a home around $2,000,000.”  No joke.  People say things like this. Two things happen to buyers who are determined to stick with the shotgun approach. They search for years or they never buy.  Neither of those results works for me. Nope.

The solution – become focused, like a rifle.  The process starts with questions.  For example, these three essential questions are the foundation for those considering a single family home.

Do you want your home to be on city sewer and water?

Do you want your community to have rules and regulations?

If we found a property that seemed ideal, yet it was a townhome, would you consider it?

The buyer who says they want city water, a community with rules and regulations and will not consider a townhome might love 55 Buffalo Terrance, in The Highlands, Breckenridge.  This 3,900 sq. ft. home includes wonderful views and a sense of tranquility.  At $1,195,000, it is the lowest-priced home in the immediate neighborhood.

Stay tuned.  In the next Market Insights column, I will continue to delve into the mistakes buyers make.  If you are out of town next week, no worries, go to www.summitdaily.com and in the search box on the upper right type in “Market Insights”.

Market insight for the week.

Buyers and sellers: Make a list of your criteria and discuss these in-depth before you head out to look at properties with your Realtor®.

Daniel Webster Johnson is the 2010 National Associations of Realtor® RSPS of the year.  He is a Broker Associate at Resort Brokers Real Estate in Breckenridge.  Contact him at (970) 393-3300 and/or Daniel@YourMountainBroker.com .

This week I attended the Colorado Association of Realtors Annual Convention.  It was two-and-a-half days jam-packed with educational sessions and networking.  I personally cannot think of a better way to best represent buyers and sellers than to learn from my peers.  This article is the result of a suggestion from another attendee who said to me, “You are probably such a positive person, you don’t write newspaper columns about the mistakes to avoid.”  She was right.

Eleanor Roosevelt (US Diplomat & Reformer 1884 – 1962) summed it up when she said, “Learn from the mistakes of others. You can’t live long enough to make them all yourself.” 

So I started on this article at the conference by asking my colleagues what they felt were the most common real estate buyer mistakes.  I quickly learned something.  The obvious mistakes, from my point of view as a Summit County real estate broker, are not the same as the mistakes buyers make in non-resort markets.  The result of my interviews ended up with over a dozen colleagues asking me to email them the article when completed.

Here they are - the five biggest mistakes that buyers of resort real estate make:

#1: Forgetting what Dorothy told Toto.  The famous quote, directly from the classic movie The Wizard of Oz is, “Toto, I've a feeling we're not in Kansas anymore.”   How accurate.  You are not in Denver or Dallas either. 

#2: Using a shotgun.  Wanting to buy ‘a place in the mountains’ is the shotgun approach.  The happiest buyers have laser-sharp focus.

#3: Cramming for the exam.  You and I know cramming doesn’t work.  My best buyers, hands down, do their homework before they arrive to buy.

#4: Being on vacation.  Arrive to buy. There will be plenty of time to vacation when you are settled into the property you absolutely love.  Your search needs to be both deliberate and determined.

#5: Winging it. This is a big fat mistake.  Resort buyers have a higher propensity to just give it a go and make an offer on real estate as compared to the due diligence they would use at home.  Don’t let emotions drive your decisions.

Opps, I nearly forgot to mention your Realtor®.  Not having a local, full-time, experienced and professional real estate broker who you like and trust represent you would be like rafting the Colorado River without a guide. In a word – dangerous. 

It is easy for buyers to make mistakes or assume to know a property before entering it.  For example, there is a property tucked at the back of 205 Harris Street, Breckenridge, that looks like it could be dark and small.  But as the photo shows, that is not the case whatsoever.  Priced at $379,000, it has two full bathrooms, two bedrooms, a garage and the homeowner association dues are only $369/month.  

Stay tuned.  Over the next few Market Insights columns, I will delve into each of these mistakes.  If you are out of town, just go to www.summitdaily.com and in the search box on the upper right type in “market insights.”

Market Insight for the week.

Buyers and sellers: Search high and low until you find a wonderful Realtor® and stick with him or her.

Daniel Webster Johnson is the 2010 National Association of Realtor® RSPS of the year.  He is a Broker Associate at Resort Brokers Real Estate in Breckenridge.  Contact him at (970) 393-3300 and/or Daniel@YourMountainBroker.com.

Right on schedule, the seller of this Breckenridge property received an offer on the 13th showing. Photo Credit Bob Bloch.

The seller of this Breckenridge property received an offer on the 13th showing. Photo Credit Bob Bloch.

In the Market Insights column last week, I talked about how you can win the tug of war taking place between Summit County buyers and sellers.  In summary, those who win have 1. Confidence; 2. Realistic Expectations; 3. Strength; and 4. Experience.

"’Sales’ is a numbers game." It is an axiom salespeople are taught day one on the job.  Having information and knowing the numbers gives salespeople and real estate sellers confidence.  In the mountains, the most important number for every person selling a property is … (drum roll) … “13.” 13 has been proven over decades. I’m talking about showings.  Sellers, you should be keeping track of the number of showings you receive and, if you reach 13, take prompt action.

Data published by the National Association of Realtors® states that a residential property priced correctly for the market should receive at least one offer for every 10 showings.  Yes, I know that is not 13.  Why?  Resort markets are different.  Buyers in resorts tend to look at 30% more properties before they make an offer.  How do I know this? I interviewed a number of Realtors® who have earned the Resort & Second-Home Property Specialist designation across the USA .  Next, I reviewed data from the sales I have represented over the years.  The conclusion -   in Summit County, for every 13 showings of a property priced “in the flow” (explained in a previous Market Insights column - email me for a copy), the seller should receive one reasonable offer.

There are two more things to take into consideration with the ‘Rule of 13.’  The pace of showings needs to be in line with the season.  For example, most properties I marketed this past summer have two showings a week.  In October, I expect showings to slow down to two or three per property in the month.  If you aren’t having consistent showings, you have a problem that needs to be addressed right away.  Also, know the ‘Rule of 13’ will vary based on the volume of sales taking place in the market.  If the number of sales is way down, you’ll need more showings.  In 2009, when the market was moving at a snail’s pace, the number was 16 or 17.  On the other hand, back when the market was red hot (back in the mid-2000s), the number was down to 9 or 10.

Knowing what to expect builds confidence.  And confidence is a key ingredient for sellers to obtain the highest possible price the market will bear.

Market insight for the week.

Sellers – in this market, if you hit the magic 13 showings without an offer, it is time to lower your price.  Buyers – by the time you have seen 13 properties, you should feel very comfortable about making an offer.

Daniel Webster Johnson is the 2010 National Associations of Realtor® RSPS of the year.  He is a Broker Associate at Resort Brokers Real Estate in Breckenridge.  Contact him at (970) 393-3300 and/or Daniel@YourMountainBroker.com . *Data provided by the Summit Association of Realtors.

Day after day I am in the trenches playing tug of war.  It’s just like on the TV show The Biggest Loser.  The teams are fighting as hard as they possibly can.  They keep pulling on the rope until they haven’t an ounce of energy left and then WHAM: game over.  The only difference between the Summit County real estate tug of war and TV is that our buyers and sellers are using emotion.

I know the strengths and weaknesses of both buyer and seller because, in the morning, I prepare and submit a commitment to purchase (a.k.a. “an offer”) for my client, the buyer.  Turn around, and often that same afternoon, I receive a commitment to purchase from a buyer that I analyze and send to my client, the seller.  Whether you are a buyer or seller, here is what you need to win.

1.  Confidence.  The party who knows the market the most intimately is the most confident.  Study, study, study.  Get to know the market inside and out.

2.  Realistic expectations. The buyer who assumes every property is a distressed property doesn’t win.  Making unrealistically-low offers has not proven to be a fruitful approach in Summit County.  Flip the coin over.  The seller who thinks the market is still at peak prices doesn’t succeed either.   Even crazier is the seller who says, “I know there is a buyer out there who can see the future potential of my property.”  True, there are lots of them; however, they are paying the market value today, not an inflated price that reflects possible appreciation.

3. Strength.  Both of the above contribute to your strength.  The buyer with strength delivers the commitment to purchase and says, “This property is nice; however, if it doesn’t work out, I have three others I like just as much.”  Warning: The buyer who has fallen in love with a particular property and ‘must have it’ (I have seen this happen) doesn’t have an ounce of strength.  A strong seller is the one who has the ability to hold out for the market value, whereas the weak one gives in to the too-low offer too quickly.

4. Experience.  On The Biggest Loser, the players have a personal trainer.  Your Realtor® should have the local experience you need.  Look for a Realtor® who is committed to training.  The best, here in the High Country, have at least these two National Association of Realtors  training designations:

Certified Residential Specialist (CRS)

Resort & Second-Home Property Specialist (RSPS)

Market insight for the week.

Start working out with your real estate personal trainer today.  Commit to working with one Realtor® who knows how to best represent you.

Daniel Webster Johnson is the 2010 National Association of Realtor® RSPS of the year.  He is a Broker Associate at Resort Brokers Real Estate in Breckenridge.  Contact him at (970) 393-3300 and/or Daniel@YourMountainBroker.com.

This is extremely important because it is:

 - the first major residential development to be started in years.

-  mega visible; virtually every person who visits Breckenridge sees it.

Also:

-  a very knowledgeable developer is willing, in this market, to ‘put his money where his mouth is’ and fund the project.

When you add these factors together, confidence is generated in Breckenridge real estate.  And that is a good thing. 

The project in a nutshell:

• Residential only (rumor had it there would be commercial suites on the site).
• A total of 18 duplexes and 4 or 5 single-family homes.
• The infrastructure work will be completed in 2012.
• The first two properties for sale will be duplexes.  They will be ready for occupancy, I was told, “in late 2012.”
  • One will be 1580 sq. ft. and priced “around $900,000.”
  • The other will be 2000 sq. ft. and priced “around $1.2M.”
  • Construction of units will be paced to match the sales.
  • The architect is BHH Partners and the builder is Ken Colvin. They have worked together several times and the end result has always been very high-quality properties that are popular.

Please have a look at these two illustrations provided by BHH Partners.  Please contact me with any questions.

Daniel Webster Johnson
Your Mountain Broker
cell/text (970) 393 -3300 or office (970) 547-8000
daniel@YourMountainBroker.com
Broker Associate
Resort Brokers Real Estate
PO Box 1 (100 S Main) Breckenridge, CO

This 756-square-foot condo has new carpet, was recently painted and is being offered for under $200,000. Signs that a property’s owners are motivated to sell include a recent price drop and the property being vacant.  Photo Credits, Bob Bloch.

This article is not going to make me too many friends. The phone calls from my colleagues will probably sound like this, “Daniel, what in the heck are you doing? You shouldn’t be giving away this sort of insider information; at least don’t put it in print.”

My mother taught me to tell the truth.  My clients know that I will always be brutally honest with them.  And those of you who are regular Market Insights readers tell me you appreciate hearing exactly what is going on in the market.

So why is now a great time to buy? Simple: sales slow down in autumn.  The peak sales season is summer.  After the Labor Day long weekend, the trend is for showings to reduce.  This makes the sellers nervous, which results in additional price reductions.

Buyers, you have about two months to get that deal.  Many of those people who really want to sell are thinking, “Darn it.  The summer is over and my place has not sold.  I don’t want to deal with another winter.  If it is not sold by the end of October, I’ll lease it out for the winter and start again next spring.”

Here are some of the ‘red flags’ that indicate the seller wants an offer.

• Phrases such as “motivated seller” and “bring all offers.”
• The property has been on and off the market two or three times.
• The property is vacant.
•  A recent price drop.

Right now in Summit County, based on my analysis, there are 31 properties ranging from $129,900 to $2,200,000 that are advertising, in print, “motivated seller.”  Of these, my favorite is a 756 sq. ft. condo built in 2001 that is in excellent condition.  You can tell from the photos nobody is living there; a really good sign this seller wants an offer.  Other indicators are the unit has recently been painted and has brand new carpet; all for under $200,000.  The right buyer will be very happy with this purchase.

Market insight for the week.

If you are serious about buying, make sure you have a top notch Realtor® who has years of experience and knows the local market trends representing you.   In addition to this advice, I encourage sellers to be prepared for an offer by asking your Realtor® to prepare a current price analysis of your property.

Daniel Webster Johnson is a Broker Associate at Resort Brokers Real Estate in Breckenridge.  He can be reached at (970) 393-3300 and/or Daniel@YourMountainBroker.com . *Data provided by the Summit Association of Realtors.

This lot located at 643 Highfield Trail is on the market for about half off the peak of the market and is a prime example of the bargains that can be currently had on properties with great views.

Over the years, in the Market Insights column, I have talked about the value of views.  Let me summarize: Summit County buyers want classic Rocky Mountain views and they are willing to pay for them.  Without a doubt, if there are two similar properties in a condo complex, and one has a great view, it will sell first and at a premium.  How much more?  There is no set amount.  My calculations indicate a great view can be worth 10 percent.

Right now there is one segment of the market that is practically giving away views. Is it homes, condos, townhomes or vacant land?  To figure this out, I reviewed each segment.  I discovered that vacant land is your best bet to obtain a view at a bargain price.  Why?  Supply and demand.  There are a ton of lots on the market and only a handfull are selling.

Here are all the reasons that now is a good time to buy a lot and build a home:

1. Prices are way, way down as the two examples below show.

2. Construction costs are low.  I asked Chris Renner, owner of Pinnacle Mountain Homes, a dominate force in custom home construction in the county.  He said, “Prices are down 15 to 20 percent in the past two years.”

3. Money is cheap and easy to borrow for well-qualified purchasers.

4. The homes with commanding views are selling at a premium.

Views for Sale - Example 1: Prime Ten Mile Range.  At the current time, there are 48 lots for sale in The Highlands at Breckenridge and only 12 have sold in the past year.  The lack of sales is pushing prices down. The lot located at 643 Highfield Trail is on the market for about 50 percent off the peak of the market and even at that price, $249,000, the seller has said, “Bring all offers.”  Check out the photo above.

Views for Sale - Example 2: Breckenridge Town and Ski Resort.  There is a tiny area of Breckenridge that is both an easy walk to town and has stellar views.  This area includes the Sunbeam and Gold Flake subdivisions.  Over the past year, five homes have sold and five more are under contract right now, yet not one lot has sold, not one.  In this area, the lot at 201 S. Pine Street in Gold Flake is an absolute bargain.  The price was dropped today to $439,000.  It has the postcard view every buyer expects (sorry, no photo available).

Market insight for the week.

Buyers are best to have a broad view of the market.  Do NOT rule out buying a lot and building.  It could be the best value possible.  If you are selling a lot, make sure you are using the secret tool for attracting home buyers (too Top Secret to put in print).

Daniel Webster Johnson is a Broker Associate at Resort Brokers Real Estate in Breckenridge.  He can be reached at (970) 393-3300 and/or Daniel@YourMountainBroker.com . *Data provided by the Summit Association of Realtors.