Sound advice: Tune out the ‘noise’ surrounding selling
If you’ve looked into selling your home, perhaps you’ve heard the rising clamor – the sound of big companies making a move into real estate sales, declaring they can help you list your home at a cut-rate commission. What’s more, some say they’ll buy your home for cash.
A word to the wise: don’t let the noise distract you. By all means, you don’t want to spend more than necessary for any service. But pay heed to the adage “you get what you pay for.”
Let’s take a closer look:
In its annual Profile of Home Buyers and Sellers, the National Association of Realtors tells us that 89 percent of home sellers worked with a professional real estate agent in 2019. Only 8 percent took the “for sale by owner” route – and more than half of those FSBOs were between parties who knew each other. That’s up from 2015, when 15 percent of sales were FSBO.
In fact, more sellers – not less – are turning to real estate professionals, and with good reason. In 2019, the median price of a home sold when listed with a professional was $295,000, compared to just $217,900 without. That’s more than enough to cover the professional agent’s commission (6-7 percent), with a healthy portion left over for the seller.
Some other telling statistics from the NAR report: 67 percent of sellers worked with an agent they had used before, or one who was referred by a friend or family member; only 3 percent of sellers who worked with an agent said the agent’s commission was the chief reason for choosing their listing broker; 83 percent used a firm that provided a full range of services (marketing, escrow services, etc.), while only 9 percent used a limited-service brokerage.
No doubt, in today’s market it’s easy to find a buyer. But getting the best out of your real estate investment can hinge on doing your homework.
Call me to learn more about how to maximize your selling opportunity.
DESPITE PANDEMIC, HOMEOWNERS STILL BUILDING EQUITY
While the past year has put a financial strain on millions of Americans, those fortunate enough to own a home are reaping rewards from their investments.
Home equity across the country soared by approximately $1 trillion during the 12-month period that ended on September 30, 2020, according to CoreLogic’s 2020 3rd Quarter Homeowner Equity Insights report. The average U.S. homeowner saw their equity grow by $17,000 – or 10.8 percent – over that period. As a result, the average household with a mortgage held $194,000 in equity at the time of the report.
In Colorado, average equity growth for the 12-month period was $18,000, No. 17 among all states and slightly above the national average.
The added equity allows homeowners the opportunity to draw on those funds for home repairs and remodeling. Importantly, it gives homeowners who may be struggling with mortgage payments a better position to work out alternatives with lenders, or even the option to sell and take out some equity to buy a more affordable property. The state with the greatest equity growth was Washington, at $36,000 per home. Six of the top 10 states were in the West. North Dakota was at the bottom of the list at $6,000.
LUXURY HOUSING MARKET LOOKING FOR OPTIONS IN 2021
High end. High demand. Low supply.
Local sales of luxury homes – $1 million and above – soared in 2020 (see below, Northern Colorado at a Glance). And many of the factors that fueled the high-end market last year will still drive demand in 2021: low interest rates, relocations for quality of life, and a desire for more space for pandemic living (working, learning, and exercising at home).
But while luxury buyers enjoy more resources, they find themselves on equal footing with other homebuyers in one regard: limited choices. The recent surge has not only taken a bite out of inventory in the area for high-end buyers, there is currently a shortage of available lots for building new custom homes.
“It just takes so long to get a project off the ground,” said Jay Brannen, president and owner of Brannen Design & Construction in Fort Collins. “There’s so much time and risk involved, there aren’t many people out there who want to do it. Unfortunately, you see that across the country.”
One near-term trend that might emerge from the lot shortage is the rise of so-called “scraper” projects, where buyers like the location and decide to overhaul or raze the existing house to build a bigger, high-end home. “That’s going to grab hold here a little bit,” Brannen said. “Especially in Fort Collins, where we’ve kind of reached our growth limits, especially in the southern direction.”
Long-term? Today’s demand will eventually create momentum in the high-end market, as lenders see the value in supporting new developments.
“Money will flow to profit eventually, as risk factors start to make sense,” Brannen predicted. “I think we have a longer runway (period for demand) than people may think. I think rates will continue to stay low for the next to 2-3 years. People will start to say that will make sense to develop.”
FIVE 2021 LUXURY KITCHEN DESIGN TRENDS
With rising demand for high-end homes comes the demand for the latest in custom kitchens.
And with reduced access to dining out, the importance of the kitchen has skyrocketed. More meals are being prepared at home throughout the day – likely at an all-time high – so there is an increased desire for top-of-the line refrigerators, dishwashers, and stoves. And don’t forget the trash compactors!
Inman predicts these luxury kitchen design trends:
1. Custom Stone Throughout
Gorgeous stonework will be incorporated throughout the kitchen, including in backsplashes and countertops.
2. A Blend of the Natural
Natural materials, such as metals and woods, add a statement and create a natural contrast to polished surfaces. Although wood lost its luster a few years ago, it’s now enjoying a comeback. Look for metal accents for fixtures, sinks, and faucets.
3. Latest and Greatest Appliances
High-end kitchens are being outfitted with the latest-model appliances — all to allow for greater functionality, capacity, high-tech sanitization and more. A luxury refrigerator offers innovative features and state-of-the-art technology. If your wallet permits and your kitchen style demands it, you’re a good candidate for a premium refrigerator. Or perhaps a top-of-the-line wine fridge?
4. Gourmet from Home
With people spending more time cooking together, many are trying to recreate dishes from their favorite restaurants. Preparing foods has become a form of family entertainment. Specialty appliances such as brick pizza ovens and rotisseries – along with features such as a juicing station with high-power electric juicers, and dessert bars with gelato machines – are being incorporated into luxury kitchens. These specialty items allow homeowners to whip up gourmet treats from the comfort of their kitchens.
5. Next-level Storage
In 2021, every luxury kitchen must include a stellar organization system. A custom, oversized pantry - meticulously organized - truly elevates the kitchen experience.
Custom cabinet built-ins (such as hidden pull-out spice racks) allow for a clean, clutter-free environment. Storage spaces and larger cupboards have become status symbols and are fast becoming a top item on high-end kitchen wish lists.
REAL ESTATE BY NUMBERS
123,000. Square footage for a new King Soopers grocery store that’s slated to replace the former Kmart building at 2325 S. College Ave. in Fort Collins. The Kmart building is due for demolition this spring.
0.41. Percentage of Colorado homeowners who are considered to be delinquent on their mortgage loans, the lowest rate in the country.
1,600. Number of housing units proposed on a 226-acre parcel in east Fort Collins. The project, which includes both homes and apartments, would be located northwest of the intersection of East Mulberry Street and Greenfields Court.
884. Total acreage that Larimer County acquired to be a conservation easement. The easement sale was funded by a donation from the Steputis family, which owned the property, and a grant from the Great Outdoors Colorado Laramie Foothills Expansion.
212. Number of apartment units proposed for a seven-acre property in north Fort Collins, located on Jerome Street on the east side of North College Avenue. As planned, the development includes a mix of three-story and four-story buildings and about 3,000 square feet of commercial space.
$548,250. The 2021 limit on conforming loans set by the Federal Housing Finance Agency, up 7.42 percent from 2020. The new limit on FHA loans is $356,362, also up 7.42 percent.
$2.2 million. Price that an investor paid for the Bear’s Den Apartments, a 16-unit complex located 1609-1617 10th Ave. in Greeley.
$885,000. Price paid for a two-acre development site in Loveland. The new owner has disclosed plans to build a 14,500-square-foot industrial building on the site for a future auto body repair facility.
$14.51 million. Price that investors paid for the eight-building, 96-unit Cottonwood apartment complex in Greeley. The apartments are located near Bittersweet Park in central Greeley.
304. Number of apartment units in a development proposed in southeast Fort Collins near the intersection of Harmony Road and Strauss Cabin Road, near the west side of Interstate 25.
$76.9 million. Purchase price for the Union Pointe apartment complex, located at 1605 E. County Line Road in east Longmont, approximately five miles west of Interstate 25. The eight-building, 256-unit development spans 13 acres.
$2 million. Price paid by the city of Fort Collins for 23.6 acres located at 400 Smokey St. in south Fort Collins. The city plans to maintain the land as a natural area.
$3 million. Price paid by investors for a collection of downtown Loveland properties that includes 102-136 W. Fourth St., 305 N. Railroad Ave., and 330 N. Garfield Ave. The new ownership includes operators for the Loveland Aleworks brewery, which is part of the purchase.
$6.26 million. Price paid for a commercial development lot at the Johnstown Plaza, located 4914 Thompson Parkway near the intersection of Interstate 25 and U.S. Highway 34.
1.6 million. Number of residential properties in the United States that were vacant at the end of 2020, according to ATTOM Data Solutions’ fourth-quarter 2020 Vacant Property and Zombie Foreclosure Report.
$4.35 million. Purchase price for a 7-Eleven convenience store and filling station, located at 3500 Colorado Highway 52 in Frederick. The deal includes the 3,500-square-foot store and approximately two acres of ground.
$46.59 million. Unpaid principal and interest that owners of the Foothills Mall in Fort Collins owe to creditors, according to lawsuit filed by MUFG Union Bank N.A. The mall’s original loan was $145 million.