2017 Real Estate Market Heads Strong into the Fall

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This year Colorado Springs real estate market made the list of top 10 cities in the nation for hottest real estate markets, according to Realtor.com, and it's no wonder.  Home prices continue to rise. Home sales are abundant. And there is significantly less inventory (homes for sale) than in years past. Here is a breakdown of what is happening in our little boom town this year.

Single Family Home Sales =  UP 5.6% over last year

Average Price for a Home =  UP 11.2% over last year (currently at $313,652)

Total Homes for Sale =  DOWN 15% from last year

Condo/Townhome Sales = UP 15% over last year

Average Price for a Condo/Townhome = UP 10.5% over last year (currently at $193,564)

Total Condos/Townhomes for Sale = DOWN 25.9% from last year

Supply is low. Demand is high. More buyers are buying and relocating here. And there are less homes for them to choose from. Competition is steep, driving home prices way up. Bidding wars are the norm, especially in the under $500,000 price range. 

I recently had two listings which received multiple offers within 24 hours of going on market. And both ended up selling for above asking price!  We call this a seller's market where homes sell fast and at top dollar.  Buyers, on the other hand, are at a disadvantage. They have less homes to choose from and prices are higher than ever.  The only fortunate thing is interest rates remain low, enabling buyers to qualify for higher amounts.

The big question? Will this trend continue?  And for how long? My belief is we will see this robust market for awhile, and definitely well into next year.  But eventually there will be a correction. History has proven markets like this always correct at some point. If you are looking to buy or sell and want to find out more about the market, give me a call.  

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How Do You Determine Market Value?

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As a Realtor people often ask me how market value is determined. Sellers want to know their market value so they can decide on a fair asking price. Buyers want to know the market value of their home so they can see that the price of the home is justified. Here is the advice that I usually I give them.

Factors that Influence Market Value

Back in school, they taught us that market value is "what a willing buyer will pay and a willing seller will accept". That's definitely true. Here are some factors that influence market value.

1. Inventory - In a competitive market like we're in now, there aren't as many homes for sale. Supply is low and demand is high, creating bidding wars. A willing buyer will pay more for a property now than they would have a few years ago. Many people are desperate to secure the sale and they are willing to pay a higher price to beat out the competition. Market value is redefined each time buyers write an offer.  

2. Home Sales - Recent home sales in the area also influence market value. You may have heard the term "comparable properties". The definition of comparable properties is homes nearby which are similar in size, age and condition to the subject property. These comparable homes will definitely be used to establish a home's market value. Buyers will look to see what homes have been selling for lately and will often base their offers on such. And appraisers will use these comparable sales to justify the current contract price.

Factors that Do NOT Influence Market Value

1. What a seller originally paid for the property does not determine it's current market value. It doesn't matter if they got a screaming deal on it just two years ago. It doesn't matter if they paid a crazy low price when they bought the home. They could have paid five dollars for the property. You are not going to benefit from the great deal they once got.

2. What your relatives in another state think the price "should be" doesn't determine market value. If your parents live in Texas, chances are they paid less for their 4,000 square foot, all brick rancher on 2 acres of land than you're going to pay for that 1,700 square foot 2-story home in Colorado Springs. Conversely, your sister in California paid more for her $925,000 townhome in Santa Barbara than you will pay for a spacious single family home in Colorado. An accurate estimate of market value needs to compare apples to apples, and we all know that home prices can really vary across different regions.

3. The public assessor's site property valuation is not actual market value. I don't know why, but the assessor's estimate is always under market value. And really, that's a good thing. Our property taxes are calculated on this, and if the county assessor thinks a home is worth less, then our property taxes are lower. Hooray!

4. Public internet sites are not always accurate with their valuations. For example, Zillow posts home values on their site and call these valuations "Zestimates". I constantly tell buyers and sellers not to believe the Zillow Zestimate they have seen. They are always low. To prove my point, NBC News recently reported a class action lawsuit was filed against Zillow for undervaluing properties. It turns out they are obtaining these valuations from the county assessors site. Interesting!

Realtors, the Best Resource for Market Value

Anyone can give you an idea of what they think your home will sell for, but they won't always be right, and it won't always be supported by data and facts. The only way to get an accurate determination of the market value of your home is to call a professional. Realtors live and breathe the housing market, and giving homeowners a market value on their home is a regular part of our job. When I meet with a homeowner to do a market value analysis, I will not only give you a value based on data and my many years of experience, but I will tell you how I arrived at the market value and all of the factors that were considered.

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3-D Real Estate Tours with Matterport Camera

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Springs Homes just became the first real estate company in Colorado Springs to own “The Matterport Camera”. We have started to use the “Matterport Camera” to create 3-D spaces of our for-sale listings. We are then able to share these spaces online with potential home buyers.

The “Matterport Camera” is a combination camera and measuring device. It scans and measures spaces as it takes pictures. Springs Homes has been at the cutting edge of residential real estate technology from the early days of the internet, 1997 to be exact. We were early adopters of Virtual Tour technology when it was difficult to implement, we jumped into producing videos of our listings when it wasn’t easy to implement either. The “Matterport Camera” changes the game, this technology is very straightforward to use and the results are easy to implement.

The camera weighs 6.5 lbs. and has a rechargeable battery which lasts 8 to 10 hours. A 2,000-square foot residential real estate shoot takes 45 minutes to an hour, so battery life is not an issue. The camera has six lenses and six sensors and sits on a regular tripod. The camera has a small internal motor which allows it to rotate 360 degrees for each scan. You communicate with the camera through a wireless connection to a tablet on the matterport app.

matterport camera

Once the camera is setup and you are shooting, the app walks you through putting the space together. After each scan, the camera sends its data back to the app, which then aligns the scan and displays a photographic representation of the floorplan. If the camera doesn’t have enough information the app shows a black space in those areas where it needs more data.

matterport camera interface

We generally move the camera 5 to 8 feet in between scans. As you are scanning the operator must mark mirrors and windows, this helps the camera understand how to treat these surfaces. This is important because the camera sees through windows, so it tries to incorporate what it sees outside into the 3D model. By marking the windows, the app knows to ignore what it sees outside when compiling the floorplan. We deal with the outside by using 360-degree views.

Once the entire interior space has been scanned, the “Matterport Camera” has a feature called “360-view”. This enables the user to go outside and photograph a 360-degree image of the outdoor spaces, this is done without scanning for walls. This comes in handy during the post-production phase. You can start your tour outside showing the neighborhood or landscaping features. During the post-production phase, we are then able to link back to the indoor space.

Once you finish the entire project, the tablet is disconnected from the camera and re-connected to the internet. At this point, we upload the project to Matterports servers. Once uploaded, the images are processed and the basic tour is produced. It’s important to talk about the quality of the images this camera produces, they are really nice! The camera shoots 7 exposure brackets and turns them into HDR images. This is why the windows are not “blown out” except in extremely bright conditions. The stitching, white balance and color correction are all handled by matterport so the scans look balanced and consistent.

The tour is ready for further editing and or release in a couple of hours after upload. We work in an online app called Matterport Workshop in order to tag our tours as well as build engaging walkthroughs.

Details Page

"The Details Page" is the first place we look when we start to work on creating a finished Matterport Space. Details allows us to add the correct and complete address, our company details, website URL as well as a brief description of the property. “Details” is also where you setup your preferred sharing options as well as get the URL’s and embed codes you’ll need when you’re ready to distribute your tour.

This section is also where you go to see how your space is performing. The “Space Statistics” shows you analytical data like; the number of impressions (An impression is registered when someone views a page containing a 3D Showcase or clicks on a public 3D Showcase link), “Visits” (A visit is registered when a Space loads successfully) and “Unique Visitors” (Number of distinct users who visited this 3D Showcase one or more times).

These statistics become important as you look for the most effective ways to promote your spaces. We would really like to be able to see where the visitors came from and how long they stayed. This feature might exist but we have yet to find it.

Post Production in the Workshop

The real post production work gets done in the "Matterport Workshop". This is a robust web-based editor that allows you to refine the user experience.

The first option available in this app is the ability to set the start location of your 3D model. This is the same image as your "Hero Image"(the image that the user sees before the space loads).

Start positions can consist of the following scenes:

  • Any position in the inside view of the space. This is accomplished by moving to the desired location and selecting the “Update Start Location” button.
  • Dollhouse View-This is the iconic Matterport view (see below).

doll house

  • Floorplan View-This is a flat photograph of the actual floorplan.

floorplan view

  • 360 º View-These are individual 360 º images usually taken of outdoor spaces. You can use these images if you would like to start your tour outside or show backyard spaces as well as landscaping.

 

The space will show a white translucent circle at each point you set the tripod to take a scan. There are times when you may take too many scans in an attempt to get better coverage. The downside to this is your space can end up with a distractingly large number of scan circles. The workshop will let you hide those extra scans, creating a cleaner space. 

The workshop also lets you build a guided tour. These tours move quickly through the property and give the user a good overview of the house. The user can stop the tour and investigate an area at any time by simply clicking and dragging on the space and relaunch the tour by clicking the play button.

Guided tours are built by taking “Snapshots” of the areas you want to include in your tour. Once you have compiled all your desired snapshots, you simply drag them into a “Highlight Reel” in the specific order you want them to appear in your tour. The guided tour automatically moves you through the Highlight Reel by simply pressing play.

Another valuable feature found in the Workshop is the ability to tag things. These are named “Matter Tags”. Matter Tags appear in the space as a small bullseye. When the viewer clicks on the bullseye, they see a description of the tagged item. These tags also allow you to add links to more in-depth information. We think these are really valuable, they allow us to provide as much additional detail as we need without visually cluttering up our tours.

 Floorplans are another feature we find useful. One of the view options in the Matterport viewer is “Floorplan”. This provides an overhead photographic view of each level of the property. The look is admittedly a little rough but the user will certainly get the gist of how the floorplan looks. We have experimented with taking snapshots of floorplans, downloaded a JPEG version of them and then used the image to trace the floorplan in something like Illustrator or Floorplanner.com. We then export or save them as image files and post them to the MLS and our website. If you don’t want to do the floorplan yourself, there is an option to have Matterport create a floorplan for an additional fee.

The workshop has other features that we frankly haven’t had time to tap into like Virtual Reality settings and the ability to measure rooms. We are also experimenting with using the guided tour function to create videos. Look for more on this in future articles.

We have had the Matterport Camera for a couple of weeks now and feel like we are just beginning to tap into its potential. This was a great purchase and we can’t wait to do more with it. To see a collection of our Matterport Tours, visit: https://www.springshomes.com/.

 

 

 

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Selling Your Home: A Little Prep Goes a Long Way!

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 So, you've decided to sell your home. Let the party begin!

Selling your home can stir up a variety of emotions and can affect each family member in different ways. But once you've decided that selling is really going to happen, it takes a bit of mental toughness to dive into those tasks that need to be completed to ensure your home will appeal to the largest number of buyers.

One thing to keep in mind is what I heard Dave Ramsey say in one of his seminars; when you decide to sell your home, you must act as if "You no longer live there!".

Here are some home selling tips that will increase your chances of a selling your home fast.

Think Like a Customer

Just like a retail manager, occasionally you need to step back and assess your environment. Pretend you are looking at your home for the first time. What do you see that needs your attention? Take a good hard look at your home from the street, the backyard and then every room. How does it measure up?

Consider the following hints for staging your home to sell:

What Does Your Home Look Like from the Street?

Buyers can tell quickly if a home shows pride of ownership. Your home may not be the newest one on the block but it can be well maintained. It only takes one glance to form an opinion. Clean out the gutters, trim any overgrown foliage, and prune trees properly. The yard should be mowed regularly in season and edged to give it a sharp appearance including the backyard. Pick up any trash, leaves or debris as soon as it appears and put away the toys. Make sure screens and shutters are in great shape and touch up any faded or peeling paint.

Declutter Your Home

Let's be honest. We all own too much stuff! Go through every room, closet, drawer and cabinet and remove approximately 30-50% of the items. Don't forget the garage, attic and the backyard. Host a yard sale or donate items you no longer need. Even if you just can't part with certain things, box it up and store it off-site. This will create the impression of a more spacious home. And believe me, your buyers are going to look into every area to see if your home will work for them. And they need to be able to inspect plumbing under the sinks and other systems in mechanical closets. You're going to be moving soon anyway, why not let go of those items you aren't using?

The Entryway is the First Impression

A prospective buyer gets a good impression while waiting for their agent to access the lockbox. Remove any cobwebs, add a nice welcome mat, clean the door and light fixtures and touch up the trim. Ornamental items and plants should be kept to a minimum and make sure all the glass sparkles. This is an easy area to maintain and can create an impressive welcome for your guests!

Scale the Furniture to the Room

Remove any over-sized or bulky furniture to open up every room of your home. Don't crowd any windows, doorways or main walking areas. Your home should flow well and feel airy and spacious.

Depersonalize and Make Appealing

Remove family photos or special collections and replace them with more generic but tasteful accessories that reflect current trends. Repaint rooms that have extremely unique colors to more neutral tones. Most of the time this can be done without a lot of cost. If you don't know what to do, ask for help from someone who can add that special touch and is not afraid to give you an honest opinion.

Main Focus: Bathrooms/Kitchens

Kitchens and baths sell homes so make them sparkle everyday! After you have cleaned out from under the sinks and thinned out the cabinets, clean all glass, tubs, showers, floors, countertops, baseboards and behind major appliances. Remove bottles and toiletry items from tubs and showers and store them out of site. Eliminate extra items from the counters to make them appear larger. It is a good idea to wipe down the shower or tub after each use so that they are dry when your buyers are visiting.

Free Some Space: Closets and cabinets

Remove about half of the items in these areas. Take all of your off-season clothing and put into storage and clean out extra shoes and clutter from the floor so that the entire closet seems roomy. Cabinets should be neat and well organized so that buyers can see the actual space and not a lot of extra stuff!

Garages Need Love Too

In spite of what most people think, garages are for cars! Not overflow for items you just can't part with. Make sure you can actually park your vehicles inside. This will go a long way in showing the functionality and convenience of your home. Clear out any cobwebs, sweep the floors and clean up any oil or fluid stains. Outdoor tools should be kept at a minimum and be stored neatly into racks so that the floor space and walkways are not blocked. If your breaker box is located in this area be sure there is a clear pathway for access and that nothing is blocking doorways or windows. Make sure that automatic doors are functioning properly.

Hide Your Pets and Their Accessories

Not everyone is a pet lover so you must think like that. Make sure your pets are placed in a secure area that won't hinder your buyer from viewing your property. If possible, take them off-site during showings. Make sure your home is free from pet odor and hair and store feeding bowls and beds out of site.

Miscellaneous – Make sure all lighting is functional so that every room is bright. Doorbells, appliances, smoke detectors and exhaust fans should be in working order. Windows and doors should open and close properly and lubricate those creaky hinges. Check water faucets for drips and repair if needed. Drains should flow freely and the garbage disposal should be in good working order as well. Your buyer is going to order a home inspection in most cases so you may as well address these items on the front end.

While this may seem like a lot of work, you must keep the end goal in mind. And that is to get your home sold as quickly as possible and for the best price. Make your home easy to show and a joy to view. For more home selling tips, check out our selling section, or give me a call. You won't regret the results!

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How Does a Realtor Get Paid, Anyway?

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Ever wonder HOW and HOW MUCH a Realtor gets paid?

Before I bought my first house, I was aware of HOW Realtors got paid. I had the chance to work in the industry earlier in my working career. However, it wasn’t until I started researching how to become a Realtor, and considered becoming a Realtor myself, that I learned more about HOW MUCH a real estate agent gets paid.


I was curious to find out if some of my friends {that had purchased a home} knew how a real estate agent got paid. Or if they knew how much a Realtor makes. So recently I asked some folks if they knew answers to these questions. A small handful knew exactly how and how much. But, most everyone said something like…

"I have no idea!"

"Now that I think about it, I still wonder how much our Realtor got paid."

"That’s a GREAT question. How does a real estate agent get paid?"


So, that boomeranged! The question came right back at me. Huh… Okay… Well, I’d love to answer that question.


Maybe you’ve wondered about this yourself. Maybe you feel uncomfortable asking. Maybe it never crossed your mind to ask. Either way, it’s okay and understandable. Generally speaking, we don’t ask our co-workers or friends what they make at their jobs. So it makes sense that we don’t think about these things. Or if we do, we're uncomfortable.


Asking a real estate agent how they get paid let alone how much money, exactly. Well.... that's awkward!


So, it’s a great question, and absolutely okay to ask!! AND it’s all part of, for most people, the largest transaction you will tackle in your lifetime. And no matter if you’re buying or selling, you are contributing to HOW and HOW MUCH the Realtor makes. I’ll cover this from a VERY high level, bird’s eye view.


Okay, so let’s start with HOW and that will lead us to HOW MUCH…


No Settlement, No Paycheck = 100% Commission


The vast majority of Realtors are only paid if your deal closes. In other words, they get paid via commission from the sale of the house. It’s not about finding a house or putting a sign in your yard, and then agreeing on a final price.


They have to sell a house either for a seller or to a buyer.


They have to get the entire transaction processed and to the “closing table” to complete the sale. And there are many hurdles and hoops to jump over and go through before you get to that closing table, my friend.


A house could not pass inspection... loans fall through... appraisals fall short of the agreed price... or any of the other hiccups that can occur in the process...


Soooooo...no closing table with everyone signed on the dotted line, then no pay day for that realtor. Bummer huh!?


Like the English language, there are exceptions to this general rule of thumb though. For example, depending on the negotiated contract, there still might be a commission due to the Realtor. And there are brokerage companies that pay their realtors on salary, with an extra commision, bonus structure. Like I said...this is a “typically speaking” overview that will not include all the exceptions. Otherwise, we’d be here all day.


Okay, moving on…


Who Pays the Real Estate Commission: Sellers And Buyers And Brokers, Oh My!


Typically speaking (you’re gonna get tired of me saying that!), the seller pays the commission for the Realtor fees. Which are always negotiated between the seller and their listing agent. And then if there is another agent involved in that transaction, then they share the commission with that Realtor. There are exceptions to this typical process. You may think that’s a bummer for sellers. Yet, when you think about it, usually the sales prices takes Realtor commission or the real estate fees into consideration. So the buyer is contributing through their agreement to that sales price.


As I mentioned above, I’m giving a broad overview. For more info on the HOW a Realtor gets paid, check out this article on Realtor.com.


Now this brings us to HOW MUCH…


Slice of the Pie: Negotiable Commission Rate of the Sale


If the sale of the house is the whole pie, then a Realtor gets a thin slice. Across the country and here in Colorado, the average commission rate agreed upon by sellers and listing agents is a variable percentage of the sales price of the house. This varies based on many factors - market area, market conditions, type of property, negotiated elements of the real estate contract, and the list goes on. Realtors cannot price fix! So, the commission percentage is always negotiable. If there is another agent involved in the transaction on the buying side, then it's shared. And even that is up for discussion.


Myth Buster: Not All Realtors Are Rich!


You have to consider that the majority of Realtors are NOT independent brokers. So what does this mean, you ask? Every state is different. In Colorado, real estate agents must work under the umbrella of a licensed broker for at least two years and are called associate brokers. Generally speaking, most remain with a broker rather than go independent or open their own brokerage. This choice affords them support with their marketing, legitimizes their business with clients, and gives them the opportunity to not carry the brokerage liabilities and responsibilities. And that means these real estate agents are splitting their commission with their employing broker.


After these splits of the commission, your average Colorado Realtor makes $51,240*, which is a bit above the national median salary for a Realtor of $44,090*. And that’s all before you take into consideration business expenses, taxes, and other overhead costs.


*Source: U.S. Department of Labor Bureau of Labor Statistics

 

The Nuts and Bolts: A Basic Example


Due to a job change, a seller is moving out of state and needs a buyer for their house. Realtor A meets with them and signs a contract to be their Listing Agent. Due to the marketing required to sell their home, they agree to a reasonable and appropriate commission rate for the sale of the house. Realtor B brings a buyer to the house. They make an offer. Realtor A and B, on behalf of their seller and buyer, agree on a sales price. They go through all the inspection, appraisal, and loan process. So, let’s take a look at how this will all break down once they get to the closing table...


1. Total Commission (a percentage of the Sales Price of the Home) = $10,000
2. Negotiated agreement of Listing and Buyer Brokerages = 50/50 Split
3. Listing Broker = $5000 commission*, pays $3,000 to Listing Agent
(Broker/Listing Agent are sharing the commission 60/40)
4. Buyer Agent’s Broker = $5000 commission, pays $2500 to the Buyer Agent
(Broker/Buyer Agent are splitting the commission 50/50)

*Remember, no commission is paid to a listing or buyer agent directly. It’s paid to the broker, then distributed to the agent(s) based on the split with the brokerage company.


And don’t forget! This is all before expenses, marketing, taxes, and other costs to run an independent business are taken into consideration.


Sooooo...


I hope this brief overview has helped answers those questions. Bottom line, a Realtor is working for you! Until you get your house purchased or sold, they don’t see a paycheck. If you’d like to understand more or have further questions, . Part of my job is to answer these and any other question you have about real estate. Looking forward to hearing from you.


And remember a Realtor can be a Real Estate Agent, but a Real Estate Agent can’t always be a Realtor. And an Associate Broker can be a…. Well, keep your eye on our real estate blog for that upcoming answer… :)

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