Uncategorized • August 9, 2022

Understanding the Value of Your Home: Market Value vs. Assessed Value and More

by Heather Patel

The math of a home sale is relatively straightforward. Sellers list their home at a certain price, a buyer makes an offer, and eventually the two parties reach a final, agreed-upon price. However, between these two points in the selling process, there are several other figures that go into to setting a home’s value that you should be aware of. Your real estate agent will be your best resource in interpreting the different values associated with your home and what they mean as you prepare to sell.

Understanding the Value of Your Home

Listed Price (Asking Price)

Also known as an asking price, the listing price of a home is the price at which a seller lists their property when it goes on the market. The listing price is a gross price, meaning the costs associated with selling the home are not included. A real estate agent’s Comparative Market Analysis (CMA) will accurately set your home’s listing price, accounting for the various factors that influence home prices including location, condition, seasonality, local market conditions, and more.

The listing price is a starting point for negotiations with buyers. You may receive an offer that matches your asking price, but it’s common for buyers to make offers at other price points. You can either accept, reject, or make a counteroffer in response until you and the buyer reach an agreement.

Whether you’re selling in a buyer’s market or a seller’s market may determine you and your agent’s approach to the listing price of your home. There may be certain pricing tactics you can employ to either drive buyer attention or increase competition, but if your home’s listing price strays too far from its market value (see below), it could stay on the market for longer than you expected.

Market Value

As a seller, you’re interested in what buyers are willing to pay for your home. By taking into account a home’s condition, size, curb appeal, and features, as well as local market conditions and what comparable homes are selling for, a home’s market value reflects the price buyers will pay for a property.

Image Source: Getty Images – Image Credit: damircudic

Appraised Value

A home’s appraised value is determined by a professional appraiser to ensure that the lender is loaning the correct amount of money for the home. Appraisers assess the home’s layout and features, square footage, gross living area (GLA), overall condition inside and out, home updates and remodels, and more. If the appraised value comes in too low or too high, the buyer and seller must renegotiate for the deal to go through. In competitive markets, buyers may include an appraisal gap guarantee in their offer, which states that the buyer will cover the difference between the price of the home and the appraised value.

Sale Price (Purchase Price)

Also known as the purchase price, your home’s sale price is what it ultimately ends up selling for. Once you and the buyer have reached an agreement on the terms of the transaction, the buyer will have the home inspected and final negotiations may occur based on the findings of the inspection. Familiarize yourself with the Common Real Estate Contingencies buyers may include in their offer and what they mean when selling your home.

Net Proceeds

So, how much do you actually make on the sale of your home? After subtracting the total costs of selling from your home’s sale price, you’ll arrive at your net proceeds. This is the amount you walk away with from the transaction.

Assessed Value

Your agent’s CMA is a reliable method of determining your home’s value for its eventual sale, but its assessed value is used for taxation purposes. Employed by local municipal or county entities, an assessor will conduct a review of your property to determine its assessed value. The assessor’s findings are passed to local tax officials, who use that number to calculate the home’s property taxes.

Featured Image Source: Getty Images – Image Credit: kupicoo

Setting Up Your Home Gym

by Heather Patel

With home gyms popping up left and right in recent years, many homeowners have realized the benefits of working out at home. Setting up a home gym is physically beneficial and gives purpose to empty space. In comparison to a gym membership, even with the upfront investment of purchasing equipment, a home gym can deliver savings in the long run. With far-ranging options for fitness gear and equipment online, you can tailor your home gym to your fitness needs.

Setting Up Your Home Gym

Before your first sets of lunges, pushups, and weightlifting can begin, you’ll need to decide where to build your home gym. You’ll want plenty of room for the activities and workouts you have in mind. Rooms with low ceilings or narrow walls are not well-suited for a gym. They will limit your ability to perform any kinds of jumping exercises or workouts with wide-ranging movements. This space is dedicated to physical activity and the environment should support that. If extra space is hard to come by in your home, consider taking your gym outdoors to a patio, multipurpose space, or other less commonly used area.

A space with level, solid flooring like wood, laminate, or tile is the best fit for your gym, especially if you plan on establishing a workout plan based around lifting or cardio. Having spatial awareness at all times is important while working out, so you’ll want plenty of light in your home gym. Mirrors are a common fixture in gyms. Consider adding one to your wall to sharpen your technique.

Image Source: Getty Images – Image Credit: AnVr

Home Gym Equipment

Strength training: Simple workout tools like kettlebells and dumbbells allow you to perform a variety of workouts without taking up much space. Kettlebells are a great tool for incorporating cardio workouts with added weight. Dumbbells at a lower weight are better for toning exercises, while those at heavier weights are better for low-repetition, bulk exercises.
Cardio training: Smaller workout tools such as jump ropes, wrist, and ankle weights will add intensity to your cardio workouts. Yoga mats provide proper support while performing core exercises or other bodyweight circuit workouts during your cardio sessions.
Large equipment: To get the most out of large workout equipment like treadmills, stair climbers, and bikes in your home gym, plan for them to be a significant part of your workouts.
Additional: Applying a layer of gym flooring will help prevent floor damage and provide added support while lifting and exercising. If you prefer music and/or video to accompany your workouts, add speakers and a TV to get the motivational juices flowing.

Establish a Routine

Your home gym is no good if it gets no use. With zero commute time to account for, arrange a workout routine that suits your daily schedule. Even if you only have 30 minutes, getting into a routine of working out is the key to building up your healthy lifestyle.

Once your home gym is set up, it can be either your individual fitness sanctuary or an opportunity to work out with others. Invite a friend to exercise via video chat and schedule times to feel the burn together. With more virtual fitness classes available now than ever, surf the web to find the classes that best fit your schedule and desired workout intensity.

For more on maximizing the functionality of the spaces in your home, read our guide to upgrading your home office: Upgrading Your Work From Home Space

Featured Image Source: Getty Images – Image Credit: Fly View Productions

Buyers & Sellers • Colorado Housing • Fort Collins Real Estate • Uncategorized • August 5, 2022

Wonder what a recession would mean for real estate?

by Heather Patel

Our clients wonder what a recession would mean for the real estate market.

Many assume it would translate into a downturn in prices.

Some even worry that it would cause values to come crashing down.

We looked back in history, at past recessions, to gain an understanding of what recessions mean for the Front Range market.

We used the extensive data from the Federal Housing Finance Authority to look at home price appreciation during the five recessions dating back to 1981.

What we found was quite interesting.

During the five recessions of 1981, 1990, 2001, 2008 and 2020, home prices along the Front Range went up in all but the 2008 recession.

What was unique about 2008 was that housing led the recession. Whereas the other recessions were triggered by some combination of inflation, oil prices, and stock market issues (plus the pandemic in 2020).

So, if the past is an indicator of the future, a recession is not guaranteed to result in lower real estate prices.

The Front Range real estate market has always demonstrated long-term health and a great resiliency to outside economic events.

See the chart below for the detailed research…

Buyers & Sellers • Fun Facts • Home Pricing • July 29, 2022

Asking Price Drop

by Heather Patel

Data just released by Altos Research shows that 35% of all homes on the market have had to reduce their asking price.

This is the highest this number has been since December of 2019.

This is also an indicator of sellers adjusting to the reality of the new market where overly aggressive pricing is not effective.

Extensive research shows the importance of pricing a home correctly on the first day so that the home sells in an appropriate time frame.

Buyers & Sellers • Colorado Housing • Fort Collins Real Estate • Housing Trends • July 26, 2022

Weeks to Months

by Heather Patel

For the first time in almost two years, there is more than a month’s worth of inventory on the market.

This means that at the current pace of sales, it would take more than a month to sell all of the homes currently for sale.

This is certainly welcome news for buyers who have been craving a less frenzied market.

Since the market took off in the summer of 2020, inventory levels have been measured in terms of weeks.

Two to three weeks of inventory was the typical measurement for the last two years.

Today, inventory levels look like this:

Larimer County = 1.1 months
Weld County = 1.2 months
Metro Denver = 1.2 months

Fort Collins Real Estate • Market Trends • Sellers • July 24, 2022

More Days

by Heather Patel

A stat that we have expected to change is finally changing.

“Days on Market” measures how long it takes for new listings to sell.

Over the last two years this stat plummeted to levels we have never seen before.

In the height of the market frenzy a year ago, properties were taking 7 days or less to sell on average.

Now, with the market cooling, Days on Market is back into double-digits.

Northern Colorado is at 20 days, a 54% increase over last year.

Metro Denver is at 12 days which is a 50% increase.

Fort Collins Real Estate • Fun Facts • Market News • July 22, 2022

Top Three

by Heather Patel

Here are the top three reasons why prices are unlikely to crash even though the market has cooled off:

Inventory – Ultimately, prices are driven by supply and demand. Although supply has increased, it still remains relatively low with less than two months’ supply in most areas.
New Homes – New home construction still lags behind the demand stemming from population growth. New home starts today are roughly 2/3 of what they were in 2005.
Credit – Home buyers today are highly qualified which protects the market from a glut of ‘distressed’ properties hitting the market in an economic downturn. The average credit score of buyers is now 776 which, by definition, is ‘excellent.’ Only 2% of loans today are given to buyers with scores under 640 whereas in 2001 25% of buyers had that low of a score.

Buyers & Sellers • Home life • Homeownership • June 11, 2022

5 Tips for Cutting the Cord: Switching from Cable to Subscription TV

by Heather Patel

“Cutting the cord” can mean something different in every household. For some, it’s a complete abandonment of cable TV and the fees that come with it, while in another household it may be a mix of cable- and subscription-based programming. Regardless of where you are in the spectrum, it’s worth it to audit your household’s TV usage and reassess what package deal delivers the most value. Here are some tips to help you make the transition.

5 Tips for Cutting the Cord: Switching from Cable to Subscription TV

1. Budget for Subscription TV

Start by taking a deep dive into your cable or satellite bill. By breaking down the costs of your contract with your cable company, you’ll get a baseline of what you can afford as you begin to select your subscriptions.

Identify the terms of your contract, whether you’re locked in until a future date, and when the contract terminates so that you can plan the logistics of your transition smoothly. Your cable company may charge an early termination fee for contracts that are broken before the specified date.

2. Prioritize Your Favorite Content

Choosing from the seemingly infinite selection of channels and apps can be overwhelming. When compiling your subscriptions, start by analyzing your viewing habits to determine your most necessary outlets. Whether it’s news, sports, classic movies, new movies, children’s programming, or certain prestige TV shows, choose your must-haves first and fill in your remaining subscriptions around them.

Remember that switching from cable means you’ll have to piece together the channels you previously had access to across a collection of apps and services. This often means that you’ll miss out on seeing certain shows live, but you’ll have unlimited access to a given program’s library of recorded content.

3. The Importance of High-Speed Internet

To truly enjoy your streaming services, you’ll need a strong internet connection. In general, an internet speed of least 25 Mbps (megabits per second) is recommended for streaming multiple channels and apps. As you add more devices and services, something closer to and upwards of 50 Mbps will give you a quality viewing experience.

As you shop around for the right internet service, make comparisons between different providers’ prices, download speeds, and data limits. By cross-referencing these three criteria, you’ll be able to identify which internet package is right for you. Read the fine print regarding data usage. Certain agreements may have extra fees that kick in once a certain amount of data has been surpassed. This could get expensive, especially if there are multiple people in your household watching TV frequently.

4. Purchase Your Hardware

There are a bevy of hardware options for streaming TV, including popular devices from Roku, Google, Amazon, and Apple. These devices typically come either with a remote or with an app that allows you to control your TV from your smartphone. If you prefer less hardware, a smart TV may be the way to go. Smart TVs have many of these streaming services built in and available to download. You may also continue to rent a cable box from your cable company to save on your contract costs. This could be helpful if your cable provider offers a bundling package of TV and Internet subscriptions.

5. Invest in Quality Screens

At the end of the day, your viewing experience is only as good as your screens. Investing in high-quality products will be worth it in the long run. One of the greatest benefits of streaming apps and services is their flexibility, allowing you to watch from multiple screens in multiple locations. Accordingly, it’s not just your TV that matters, but any other devices you plan on watching from, including tablets and smartphones. Fortunately, smart TVs have continued to grow in popularity and are now widely available, meaning you’ll have plenty of options to choose from at whatever price point is affordable to you and your household.

For more information on how to leverage technology in your home, read our short guide to Home Security and Safety.

Sellers • Windermere Real Estate • June 9, 2022

Before You Sell: Affordable Curb Appeal Tips

by Heather Patel

You know that saying, “don’t judge a book by its cover?” Unfortunately for home sellers, most home buyers are quick to judge a house by its exterior. It’s can be one of the quickest ways to weed out homes that are less desirable in the sea of for-sale signs. We don’t want your home to end up on that list, so we have come up with the top tips for upping your curb appeal game, on a budget!

Keep a Well-Maintained Yard

Mowing: the first step to a well-manicured lawn is to mow it regularly. Make sure to not cut it too short, and keep your blade sharp to give it the healthiest appearance.
Weeds: always pull weeds from their roots. After that, mulch over where they used to be to prevent light from getting to the seeds.
Feeding: Without extra nutrients, grass turns pale and thin. Weed seeds and moss thrive in these low nutrient conditions.
Watering: Be careful not to overwater! Most lawns need to be watered once a week.
Flowers: You can quickly and affordably dress up your yard with colorful pre-made flower pots and containers.

Dress Up the Front Porch

Paint: A fresh coat of paint can give your home a well-deserved facelift. Try a bold color to really make it stand out!
House Number: Update your number(s) to something bigger and more creative. Explore options or mix-and-match.
Decor: Windchimes and/or market lights across your front porch give the front of your home an inviting and warm look.
Hardware: Replace any hardware that is outdated or remove rust with a polisher.
Plants: Hanging plants in planters or having them stagger your front steps will make your porch look and feel lively and well-maintained.

Make sprucing up the front of your home a weekend project right before you sell. With a few of these quick and inexpensive changes, the exterior of your home will stand out among the rest.

Fun Facts • Home Pricing • Market News • June 7, 2022

Timber!

by Heather Patel

A positive outcome of the cooling housing market is lower lumber prices.

Lumber is now priced at $605 per thousand board feet. This is a new low for 2022.

Prices for lumber are now down 47% for the year and are well below the 2021 peak of $1,733 per thousand board feet.

What’s causing this? Higher mortgage rates have slowed the pace of new home sales and remodeling projects.

Most experts believe that lumber prices will fall even further during the remainder of the year.