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Find Problems Before Making An Offer

by The Colorado Springs Group™

Between Jessica and I we've been selling homes for over 20 years. This experience allows us to be able to find potential big problems when showing homes. These problems can include but are not limited to: Roof, Plumbing, Electrical, Permits.

If there happens to be a big problem, that doesn't necessarily mean you shouldn't buy the house. What it does mean is maybe it's in your best interest to factor that into an offer you make. You'll still have the opportunity to inspect the house at a later point in time, but knocking out a big issue up front can eliminate a lot of stress later once you've lost time and money.

Let's use a plumbing issue as an example. You point it out and use it as justification for your offer. During the home inspection it's revealed that not only is there a plumbing issue, but now you're aware there is rotting wood and possibly mold. You have every right to negotiate things further since you've discovered the problem was bigger than anticipated. You should be able to walk away if you choose.

On the flip side, let's say the inspection didn't reveal any additional damage from the plumbing issue you used to help justify your offer that was accepted. Great, you've addressed the issue and can move forward. If additional things were found wrong in other parts of the home you can ask for a credit or things to be fixed. It's all a negotiation at this point, and your level of comfort is part of the negotiation.

I need to disclose that what options you have regarding inspections and negotiations can depend on your realtor and how they approach things. This article is based on how The Colorado Springs Group approaches things.

Investors Flipping In Colorado Springs

by The Colorado Springs Group™

Investors... that simple word throws most Realtors into a frenzy. Often they are cash buyers looking to buy something right away. It can mean 2 transactions... one when they buy it and another when the flip is done and ready to sell. On paper it seems like a great thing, especially if you're looking at flip after flip after flip.

Unless you are a friend or family member, we will no longer work with investors who flip homes. Our time and knowledge is worth more than they can afford to pay. We have tried it before and made some investors a lot of money. We didn't like the situations that were occurring because no matter how fast and accurate we are, the investor has to listen to us to maximize profits. It's easy to hear the $$$ and not the words leading up to the $$$. 

Finding the deals and getting them are the hard part for us as Realtors, but we learn many things over time that give our clients an advantage. It's still a challenge for us when there is a potential profit margin of 19% and we're told to keep looking because the investor would like 20%. I understand it's a business they are running as an investor, but where we will not see eye to eye is when I respond with "I'm running a business too".

The reason we limit flipping to friends and family is because we know they will meet standards of quality we require, and in the process they will listen to our advice. The approach isn't just about the money, it's about providing a buyer with a great home that will last a long time.

The buyers of these homes are happier because we can show them everything that was done and how it was done to justify that comfort they felt in the home. Homes sell in just a few days because we don't try to see if buyers really want certain upgrades or not... we just do them up front. It may cost more, but it's less time on market.

There are close to 3,000 Realtors in our area currently... many of whom did not sell a house last year... and they are craving the chance to work with an investor who flips homes. I'm not sure what kind of advantage they will provide, but if we are their competition I'd bet on it being a not so great advantage.

2014 Third Quarter Sales Activity

by The Colorado Springs Group™

Broken down by area to give a better prospective on the results for the third quarter. Single Family & Patio Homes

Black Forest: 70 Sales for a total dollar volume of $33,172,900

Briargate: 251 Sales for a total dollar volume of $80,137,457

Central: 175 Sales for a total dollar volume of $37,233,776

East: 193 Sales for a total dollar volume of $37,207,370

Fountain Valley: 451 Sales for a total dollar volume of $89,124,593

Falcon - Peyton: 204 Sales for a total dollar volume of $53,969,433

Marksheffel: 58 Sales for a total dollar volume of $15,201,179

Northeast: 263 Sales for a total dollar volume of $64,417,122

Northwest: 120 Sales for a total dollar volume of $41,870,518

Northgate: 112 Sales for a total dollar volume of $42,564,007

Old Colorado City: 72 Sales for a total dollar volume of $14,919,108

Powers: 349 Sales for a total dollar volume of $80,733,934

Southeast: 168 Sales for a total dollar volume of $24,712,137

Southwest: 170 Sales for a total dollar volume of $55,476,538

Tri-Lakes: 176 Sales for a total dollar volume of $69,423,976

West: 69 Sales for a total dollar volume of $19,893,720

"Based on information from the Pikes Peak REALTOR Services Corp. ("RSC"), for the period 7/1/2014 through 9/30/2014.  RSC does not guarantee or is in any way responsible for its accuracy.  Data maintained by RSC may not reflect all real estate activity in the market."

 

2014 September Sales Activity

by The Colorado Springs Group™

Broken down by area to give a better prospective on the results for September. Single Family & Patio Homes

Black Forest: 24 Sales for a total dollar volume of $9,134,100

Briargate: 72 Sales for a total dollar volume of $22,516,676

Central: 48 Sales for a total dollar volume of $10,325,845

East: 54 Sales for a total dollar volume of $10,004,283

Fountain Valley: 140 Sales for a total dollar volume of $27,865,785

Falcon - Peyton: 63 Sales for a total dollar volume of $16,443,943

Marksheffel: 27 Sales for a total dollar volume of $7,480,295

Northeast: 80 Sales for a total dollar volume of $19,470,933

Northwest: 31 Sales for a total dollar volume of $10,435,500

Northgate: 33 Sales for a total dollar volume of $12,465,218

Old Colorado City: 26 Sales for a total dollar volume of $5,086,983

Powers: 106 Sales for a total dollar volume of $23,709,141

Southeast: 57 Sales for a total dollar volume of $7,993,980

Southwest: 55 Sales for a total dollar volume of $17,447,436

Tri-Lakes: 42 Sales for a total dollar volume of $15,129,020

West: 25 Sales for a total dollar volume of $7,390,050

"Based on information from the Pikes Peak REALTOR Services Corp. ("RSC"), for the period 9/1/2014 through 9/30/2014.  RSC does not guarantee or is in any way responsible for its accuracy.  Data maintained by RSC may not reflect all real estate activity in the market."

 

How Much Do I Offer?

by The Colorado Springs Group™

There are a few solutions that combined will help you arrive at the correct answer, but the most important thing to keep in mind is that you are in control of what the answer is. 

On paper: How does the home you are considering compare on paper to other homes? I'm talking about the number of bedrooms, bathrooms, size, lot size, age, garage size, etc. In every area different things can drive price, but no matter the area you have to compare apples to apples.

The Market: What I'm getting at with the market, is whether you are in a buyer's market or a seller's market. If a Realtor tells you it's neutral or stable you've got to believe that it's not in your favor, because if it was they would just tell you. If it's a buyers market and inventory is high you might be able to start with a lower price.

The Terms: I'll make this one simple... if you are a cash buyer who can close in 10 days without any contingencies, you've got a lot of control. If you're using FHA financing and the lender things it could take 60 days to close, those terms might not be very appealing to the seller so something else should be (the price).

Your Instinct: Here's one you rarely hear from a Realtor. Your instinct and/or gut feeling should play a role in what you offer. This is our opinion, but if the offer you make is based somewhat on what you feel the home is worth, you're going to feel much better about it whether it works out or not. You've seen other homes; you know how important getting THIS home is to you and whether or not you're okay if you don't get it. 

 Your realtor: There is nothing wrong with your realtor suggesting a price, as long as you aren't surprised by it. By the time you are ready to make an offer on a home, you should feed educated and confident in what you should offer. Whatever your realtor suggests should be close to what you are already thinking. If it's not, find out why. Maybe there is something you missed, or something the Realtor forgot to mention. 

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The Colorado Springs Group™
6665 Wild Indigo Drive
Colorado Springs CO 80923
(719) 799-3686

Kevin & Jessica
The Colorado Springs Group
6665 Wild Indigo Drive
Colorado Springs, CO 80923
(719) 799-3686