Tracy Shaffer
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The Zing of Zillow

Everybody loves Zillow. I love Zillow. I love how excited it gets buyers and sellers when they see a home they love or what a neighbor’s house is selling for; a useful tool in many ways, for better or worse, it empowers the consumer. I look at Zillow to see what my clients/potential clients are taking as accurate information… and then I do my homework. The #Denver #realestate market is moving so quickly that even agents and appraisers can have a hard time keeping up. Public record algorithms don’t have the ability to distinguish the differences in the quality of one property from the other, upgrades, location, or if there’s a crack house next door. Algorithms don’t call other agents to inquire about that “Coming Soon” sign or have the latest data on solds as it takes some time to record.
The Los Angeles Times recently published an article that lays it out quite clearly. Though a “Zestimate” can have a low margin of error, it can also be alarmingly high. Imagine a scenario where you’re meeting with your perspective agent thinking that your home is worth 26% more than what it will really sell for.
Sellers, armed with the Internet, often have an idea in their heads about their home’s value. When I pull comparable properties, show them what the list vs sold prices are and how many days on market it’s taken those homes to sell, they may find a different story. Sometimes the news is good, based upon my data, their home may be worth more than they think. Other times it can be a let down.
Buyers burn the midnight oil searching Zillow then send me a link to their dream home. When I hit the MLS at 7 a.m. most often I find that this dream home is under contract… or sold three months ago. If you’re looking to buy a home, I’ll send you to REColorado, the consumer website linked to the Denver Matrix MLS I use so we can work together efficiently. It’s updated throughout the day, has great home search capabilities and saves me time looking for your real home, not the one someone’s already moving in to.
All this to point out that you now have access to a lot of information about my business. A lot of it is helpful and a whole lot of fun, but none is as accurate as hiring a professional; one who specializes in finding the right home in the right neighborhood that suits your needs. If you’d like an “Exact-i-mate” about what your home might sell for in today’s Denver market, give me a call I’d be glad to sit down with you and show you your market value and why.

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Tracy Shaffer
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Denver Real Estate News May 2015

What’s new in the Denver Real Estate Market?
The question I’m asked all the time by friends, colleagues and clients who are still renting is whether it’s too late to buy a home. “Are we heading for a big downturn?” and “Are we too deep in the market cycle to buy?” they wonder. For those of you who read my newsletter and know me well the following will sound familiar but it bears repeating: timing the real estate market perfectly is extremely difficult (maybe even impossible) and those who try usually fail. So don’t try to time the market. Instead, look at factors like the ones below to see if homeownership is right for you.

1. You should buy a home when you feel it’s the right time in your life to do so. Don’t try to time the market, instead time your life. Are you getting married? Sick of paying skyrocketing rents? Looking for a bigger place for you and your family? Want your own backyard for the kids to play in? Want to be part of a neighborhood community? Plan on staying in one place for a number of years? Want to build long-term wealth? These are the types of questions you should ask yourself when considering whether you want to own a home. To the extent you say yes, home ownership might be the answer for you.

One important stat to keep in mind is that the average rental household in the U.S. has a total net worth of only $5,500. In contrast, the average homeowner has a net worth of $195,500 — that’s 36 times those who rent! Over the past 15 years, this multiple has ranged from as low as 31 times to as high as 46 times the net worth of renters. You don’t want to try to time the market, but over the long term home ownership is the tried and true path to wealth accumulation and financial security. (So is owning rental property, by the way. Call me if you’d like to learn more about that as well.)

2. Interest rates remain at record lows but this can’t last forever. No one knows when they’re going to rise (remember, you can’t time the market!), but rise they will at some point in the future. Though home prices have gone up the past several years, low interest rates continue to make homes relatively affordable (especially compared to renting). Once interest rates do rise the window of home ownership affordability will truly begin to close for a lot of potential buyers and they will be sorry they didn’t act when interest rates were at 50-year lows.

To illustrate the numbers, assume you are purchasing a $210,000 home with a 5 percent down payment. The Principle + Interest payment at 4 percent interest would be $952 per month. Just a 1 percent interest rate increase to 5 percent would result in a payment of $1,070 per month for a total increase of $128/month and $1,416/year. Now assume that rates tick up to 6 percent. That increase would result in a 21 percent increase in payments from $952 to $1,196. Where you really see the effect of these increases is when you hold the property for the full 30 years. On a $200,000, 30-year fixed-rate mortgage that increases from 4-5 percent, the borrower who obtains the 5 percent loan would pay an additional $42,772 in extra interest as opposed to the borrower who paid just 4 percent interest. That’s 21.4 percent of the total loan amount! This is why a lot of folks who don’t purchase a home while interest rates are near record lows are going to regret it down the road.

3. The main reason the average home owner has so much more personal wealth than the average condo owner is that over time, homes appreciate in value. Over the past 44 years, homes in metro Denver appreciated 6 percent per year, about 1 percent above the inflation rate. If you buy a $200,000 home, you can expect over the long term its value to rise about 6 percent every year. This means you’d make $12,000 in appreciation the first year, an additional $12,720 the second year, another $13,483 in the third year, and on and on. It’s that simple. So if you want to build wealth, your best bet may be to take advantage of these numbers and buy a home for the long term. I can help you do this. Call me and let me show you how.

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Tracy Shaffer
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I Object! How to Handle Your Home Inspection

I object! Often the process of buying or selling a home is so emotional, so stressful, that our every fear is stirred up. That’s why when buying or selling a home, the home inspection is critical. Your home inspection can put you at ease, whether you are purchasing a home you want to feel good about or selling a home you want to feel is safe for the new owner. The home inspection and the resulting INSPECTION OBJECTION and RESOLUTION can be fine points of the negotiation. Of course, the sellers don’t want to reduce their proceeds and the buyers don’t want to take on the extra expense of repairs. So, where’s the middle ground?
hot-wires-carboard
Let’s start with a few basic questions and let the answers guide us to our home inspection answers.
To the Sellers:
1. How motivated are you to sell your home at this time, with these buyers, under the terms of the contract?
2. What is your goal in selling your house? And what effect does this sale have on your life right now? On your future?
3. If I could tell you that the goal you want in question #2 would cost you X amount of dollars, would that seem like a fair price?
4. Is the cost of the repair(s) more or less than the cost of another month, maybe two, of your mortgage payment?
To the Buyers:
1. How would you feel if you let this house go?
2. Are the repairs immediate or can they be reasonably deferred?
3. How many things are you asking the Sellers to repair or credit for? I mean, it’s one thing to ask them to replace the faulty old Zinsco electrical panel or install radon mitigation, quite another to ask for a cracked plastic outlet cover to be changed.
4. Do you feel you are safe in the house without the repairs?

It’s that last question that is the most important. Are the requested repairs, replacements or credit for such, necessary to provide or protect the health and safety of the home buyer? This is where I draw the line. If the home inspection reveals something that would cause any reasonable buyer to feel unsafe they might need to walk away from the transaction. Even if you, Mr. and Mrs. Seller have lived with it for 20 years and nothing has happened, you might as well buck up and agree to make the repairs. You’ll have to disclose the issue to the next buyer if you lose this contract now that you know about it, so the problem isn’t going away.
If the buyers have reasonable expectations of the home’s condition based on its age and understand the responsibilities of home ownership, then health & safety should be your guide. That “honey-do list” the Inspector gave you? That would be yours, not the sellers, but those hot wires or the recalled electrical panel? Definitely calls for the experts. When both parties move away from all emotional or economic considerations and apply fair and equitable logic, the questions answer themselves. Logic, who knew?
Now… back to my clients and that electrical panel.

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Tracy Shaffer
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Denver Real Estate Market Trends

By now you know the Denver real estate market has bounced back, now let’s look at it by the record-setting numbers.
At the end of 2013 there were:
7,275 homes for sale, (down 6%).
67,550 new listings came on the market for the year, (up 12%).
67,429 homes went under contract (↑20%)
54,024 homes closed (up 17%)
The average days on market was 58 days (↓25%)
Average sold price was $306,910 (↑10%) and closed dollar volume was $16.6 Billion (↑29%). If this sounds like Realtor crack, it is.
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But what does it mean for you?
1. Did ya take a look at that map? Go ahead, click on it. Remember when there was a whole lot of pink and red, lots of yellow…? I do. Now the map is predominantly green and the key shows you how much each neighborhood has improved over last year.
(If you’d like more detail about your own neighborhood, shoot me an email.)

Metrolist expert Gary Bauer observes it this way:

The inventory of active listings, homes available for sale, started a downward trend in 2011, which continued through 2013. In March, 2013, the inventory of active listings was 6,682 homes, an all time low. Active Listings continues to be a primary sustainability concern for the home market.
Home affordability declined due to median home price increases. The month’s supply of inventory started and finished the year at 2 months.
Once again, rental rates continue an upward trend and rental availability continues to decline. With declining distressed properties, foreclosures and REO, at less than 10% of the market and low active listings, new home builders will again be an alternate in the housing market. The largest number of Single Family and Condo properties sold in price range of $100,000 to $499,999 for 2013. The largest number of Single Family homes sold in the price range of $200,000 to $299,999. The largest number of Condo homes sold in the price range of $100,000 to $199,999.
Million dollar plus homes closed/sold were up 16% when comparing 2013 versus 2012. Million dollar plus home closings accounted for $1.5 Billion of the $16.6 Billion total 2013 volume.
Mortgage interest rates started to increase and then fluctuated downward to later increase again during the year, with an overall increase of approximately 1%.

And that’s good news for all of us!

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Tracy Shaffer
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Why Do I Keep Getting This Newsletter?

amazing soulsAdmit it. This thought has crossed your mind, hasn’t it? You’ve probably even made a mental note to ask me, or worse… unsubscribe. So what makes me send you this monthly missive? The reasons are few, but they’re mighty.
1. Yes, I am in the business of helping people buy and sell homes and I’d like for you to think of me should that thought also cross your mind. Pretty crafty, huh?
2. To keep you up to date with the Denver real estate market, how it’s doing and where it’s headed. Like this little ditty from USA Today.
2. I believe that life is richer when experienced in community, and that a community is empowered by engagement.
3. I believe that real estate is all about story. Every home, every buyer, every seller, comes with a tale to tell, a story to reveal.
4. I have a knack for meeting interesting people who do really cool things and I want to share them with you.
And here comes the mighty…
5. Every month when I send out my newsy little newsletter, chock full o’ tips about home values and market trends, writing of the wonders of a swanky little art space, or the best place to take a burlesque dance class on a Sunday morning, you call me. You reach out via comment, Facebook, phone or email to let me know what you thought, ask me a question, or (best of all) set up some face-time. And I like that. A lot.

Building and deepening relationships, creating dialogue, drinking coffee… whatever I can do to help you put a little bump in your daily grind.

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Tracy Shaffer
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Buying a Home? Find what makes you feel good.

young george If you’re like me, you suffer buyer’s remorse any time you get a new pair of jeans. So what happens when you plunk down a quarter, half or million dollars for a house? Here are some great “homeopathic” remedies to help you avoid (or reverse) that bitter pill.

1. Before you start, imagine your life after you close the deal & move in. What are you trying to accomplish? What lifestyle are you creating by this move and how does it change your daily life? Write down everything that is good and what is changed, including the financial aspect. Write down your wants, needs, musts and deal makers/breakers. The more detailed you are, the more you will have something to compare your actual house to. Does your dream house a reasonable match to these things?
2. Ask yourself “How does this decision make me feel?” This is a highly emotional process, a decision made with head and heart. Approaching it with only reason or emotion might land you somewhere you don’t want to be. Check in with yourself about how the idea of living in a particular home makes you feel. Now ask yourself how you’ll feel when the mortgage is due or the water heater breaks. (I can feel really good about those jeans until I get my Visa bill.)
3. Don’t get caught up in the worry. If you hated renting and can’t wait to be a homeowner, take care of the details (like turning in your paperwork to your lender, finding homeowners insurance, etc.) and relax into the process. If you have a calm real estate agent*, that should rub off on the whole transaction. It is natural to be nervous and “high-center” as you move from contract to close, so practice gratitude. Stay in the remembrance that you are fortunate enough to own your own place on this earth and say lots of thank yous, it really helps. [*Don’t let my vivacious exterior fool you, I’m very calm under pressure.]
4. Stay grounded in reality. Getting lost in the illusory great deal you could have gotten last year doesn’t help you close the good deal you have today. Remember, home-prices are rising but interest rates are still at historic lows and that’s where your real savings lie.
5. Remember Rule #1: There are no stupid questions in real estate. If something doesn’t look right, feel right or seem right on your contract, with the inspection, or you don’t understand the loan paperwork ASK! Then ask again and keep asking, until you understand or it’s fixed. One thing real estate pros can forget is that it maybe perfectly clear to someone who does this all day long, but not for the one who’s doing it once.
6. If you’re planning to remodel, live there for a few months before you go all HGTV on yourself. Unless you know exactly what’s up and you can’t move in until the reno is done, I suggest habitation prior to rehabilitation.
7. Run your numbers and take responsibility for them. Over-spending on your home is as fashionable as acid wash jeans and a scrunchy. Just because I met George Clooney, doesn’t mean he wants to marry me. The best counsel is to find out the most you qualify for and then buy what your monthly payment says is comfortable.
8. If you still have post-purchase regret, try to resolve it systematically. Make a list of what drives you nuts and what you can change and work to change those things. Go back to the list you made in step one, the gratitude you had in step 3… If that doesn’t help, go buy a great pair of jeans. You never know when Clooney’s coming round the corner.

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