5904 Coffee Rd - Sweet Deal

I wish I had 25 of this house to sell. This great 2-story is on a nice corner lot in Woodmen Hills, nestled nicely in the neighborhood, but very close to grocery and other convenient shopping. 

The owners have taken great care of it, to include updating main level flooring to a gorgeous wood-laminate with plenty of style! 

 

The living room is vaulted to a small loft niche.... it's also open to the kitchen / dining area with high ceilings, creating a nice feeling of space. The kitchen walks out to a small deck, pavestone patio, and gazebo all in a generous yard... plus there's a dog run. 

 

The upper level includes a master with attached bath, plus 2 additional bedrooms and hall bath. 

For more photos, video and details visit... http://7904coffeeroad.com/  or give Brooke a call at 719-229-8143 

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New, Easier-to-Understand Paperwork for Homebuyers

RESPATILA

For Colorado Springs homebuyers who have been frustrated by all the numbers and descriptions on the Hud-1 and Truth-in-Lending Disclosure Statements, there is good news.

 

Starting October 3, 2015, lenders must issue new documents clearly delineating the costs associated with a home purchase: the Loan Estimate and the Closing Disclosure. Known as TILA/RESPA (for Truth-in-Lending/Real Estate Settlement Procedures Act), the new forms replace the old Truth-in-Lending Disclosure Statement and Good Faith Estimate, and the HUD-1 Settlement Statement. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2011, the Consumer Finance Protection Bureau was established and mandated to replace the old forms with new, easier-to-understand forms. The completed documents must be delivered to the prospective buyer 3 full days before closing the transaction and will be used for the following:

  • Purchase money loans
  • Refinances
  • Loans secured by 25 acres or less
  • Loans secured by vacant land
  • Construction-only loans

Timeshare loans

 

The new forms must be offered in both English and Spanish. The three day lead time gives homebuyers the opportunity to thoroughly review the costs and avoid any last minute “surprises” at the closing table.

Loans that are not covered by the new ruling are:

  • Reverse Mortgages
  • Home Equity Lines of Credit (HELOCs)
  • Mobile Home-Only loans
  • Creditors who originate less than 5 loans in a calendar year

This is a sea-change for both homebuyers and Realtors. To help them understand the new documents and the updated time frames for their distribution, Realtors have the opportunity to take classes for credit on the subject.

For more information about the new loan documentation procedures visit http://www.consumerfinance.gov/learn more/#respa.

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Don't let DOM (Days on Market) Spell DOOM for your bottom line

Many people selling their homes in Colorado Springs are surprised to learn that the number of days the  property has been on the market can affect its ultimate selling price. The ratio is generally an inverse one: the longer your home remains on the market, the lower the price. Conversely, homes on the market for short periods of time tend to command higher prices. So, the moral is, work with a Colorado Springs real estate agent who will help you price your home correctly for the current market AND maximize your net profit.

We have found that the highest net profit for the seller is achieved during the first 30 days on the market in Colorado Springs.  (As a point of reference, DOM, or Days on Market) is the time your property is actively listed on the market up until an offer is accepted. The median DOM indicates the actual central number of days that all homes for sale in the Springs are on the market before accepting an offer. The average DOM may be inaccurate due to a plethora of overpriced homes and builders who sometimes list properties on the MLS before construction is complete. 

Homes that have been on the market for long periods of time raise questions in the minds of potential buyers including:

    • Why hasn’t it sold?
    • Is there something wrong with the house?
    • How low do you think the sellers will go?

None of these are conducive to selling your Colorado Springs home expediently and for the best possible net profit. 

When your home is priced correctly early in the game, potential buyers, who have looked at many homes online and in person, will recognize it as an excellent value and will be more likely to submit an offer close to your asking price.  If you price the home well above its market value, there are a number of possible consequences including

    • Receiving a number of “lowball” offers, with buyers knowing that the property is overpriced
    • Not receiving any offers at all
    • Having the property listed for more than 30 days
    • Needing to eventually drop the price in order to sell the home, often to the market price that would have resulted in a much earlier sale

If, after a substantial time on the market with no results, you decide to take your home off the market to reset the DOM, you must keep it unlisted for 30 days before re-listing it. However, savvy real estate agents may check a property’s history in the MLS and will see that it was previously listed before you put it back on the market.  For these agents’ clients, the property will still seem like “damaged goods.”

Your best bet is to work with a trustworthy Colorado Springs real estate agent who constantly tracks the median sale prices in your neighborhood and will help guide you to a stress-free and profitable sale.

 

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Successful Pricing Takes Market Trends Into Account, Month's Supply of Inventory (MSI)

As discussed in a previous article, determining a baseline value for your home before determining the actual listing price is a good practice. Another good practice is to study and understand the current market conditions before you actually decide on a final listing price.

There are several statics, rates and numbers you can look at when trying to determine the health of a specific Real Estate Market but when we price a home for sale we only consider a few. The primary statistic we want to know about as we prepare to put a home on the market is “Months Supply of Inventory” (MSI). This number indicates how long it would take to sell through all of the existing inventory. Since we are trying to price a specific property, we look at MSI as it pertains to a specific area and price niche not the entire market. MSI for the overall market is more useful when answering a question like “How’s the Real Estate Market”, not so helpful when trying to answer the questions “How much can you sell my house for”?

So, for the purpose of listing a home for sale, we want to drill into a specific area, price range and type of home. For the sake of this article let’s say we are selling a:

    • 4 bedroom
    • 3 bath
    • 3 car garage
    • 2,800 square foot
    • Two-Story home
    • Located in the Academy, District #20 attendance area.

The first step to establishing the Months Supply of Inventory is to find the “Absorption Rate”. This is the number of homes that sell in a particular market segment over a specified amount of time (we use one year).

To establish absorption rate, we look at the total number of similar homes that have sold over the past year. Let’s say there have been 225 sales of this particular type of home over the past year.

This means 18.75 homes like this, sell on average each month (225 sales/12 months). If there are currently 42 homes like this for sale on the market, we have a 2.3 Month inventory of that kind of home. We determine this by dividing the number of available homes by the number that sell per month. It is important to note that Absorption Rate is often expressed as a true percentage, especially in the Commercial Real Estate world but for the purpose of establishing MSI, our method is sufficient. For the purists the actual absorption would be 5.33% of the inventory.

absorption


The MSI in our example ends up being 2.3 Months of inventory. This is a very low amount of inventory and constitutes a “Sellers Market”. Common acceptance of a Seller's market is anything less than 5 Months of inventory is considered to be a Sellers Market.

    • An MSI of less than 5 months = Seller’s MarketAn
    • MSI of 5 to 7 months = Balanced Market
    • An MSI of more than 7 months = Buyer’s Market

markettype

An MSI of 2.3 months would certainly encourage us to move higher on our listing price, although there are still a handful of other factors we look at, like: “Days on Market”, “List to Sold Percentage” as well as trends in the appraisal industry.

Months Supply of Inventory is an essential indicator to know and understand whether buying or selling.

 

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Successful Pricing Starts With a Realistic Baseline Value

The first question on the minds of most people getting ready to sell their home is, how much is my home really worth?

Homeowners thinking about selling have usually gotten an estimate from a home valuation site like Zillow or even asked a Realtor what they thought the value might be. It is important to keep in mind that those numbers should only be used as a rough estimate. Zillow freely admits that their zestimates are on average 8% +/- correct. On an median priced home in El Paso County, Colorado that is about a $20,000 delta +/-, pretty significant, in our opinion. The Zestimate was never meant to be the be the final word, just a rough idea of what the home is worth.

When a homeowner becomes serious about selling, they have a couple of options when it comes to getting the price right. First, they can order a Professional Appraisal, this is a great way to find out the “baseline value” of the property. Appraisers don’t take into account market trends or supply conditions, so their price is a true value but not necessarily a market value. Depending on the current market conditions (Buyers Market vs. Seller’s Market) the actual listing price could be quite different.

The second method, and the one we use when putting a home on the market is called a CMA (Comparative Market Analysis), this is a document that helps us determine the baseline value as well as the best actual listing price of a home.

Ideally a professional CMA examines the sales data and characteristics of the most similar homes, located within the closest proximity to the “Subject Property” (the home we are trying to price). Essentially we look for identical matches to the subject property, we call these matches “Comparables” (Comps) since this is not really possible to find “Exact Matches”, we filter through these comps in order to find the closest matches possible.

The “Comps” are then put into a spreadsheet alongside the “Subject” property so we can start to apply debits and credits to the “Subject” property in order to compensate for any differences. These adjustments are based on things like:

    • Location
    • Square Footage
    • Floorplan
    • Number of Bedrooms
    • Number of Bathrooms
    • Garage Size
    • Lot Size
    • Upgrades

These adjustments show us where the “Subject” property should sell when compared to the Comparable Solds. This figure now becomes our baseline, or the number we start from when choosing a listing price.

There are a number of additional factors we consider before deciding on an actual list price, we will examine these in future articles. Until we have a realistic number to work from or a baseline value, any additional considerations are actually counterproductive.

The first step in any Residential Real Estate sale is setting a baseline value to work from.

If you would like to talk to us about the value of your home, please contact us for a no cost, no obligation analysis.  

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