The Business Lessons I Learned From My Mom and Dad

The Business Lessons I Learned From My Mom and Dad

John and Jo KearneyMany of you already know. But over the past six months both of my parents, John Kearney and Jo Kearney have passed away. I mention this and post it here, because many of you who will read this have done business with or have had contact with them over the years.  It is a great loss to our community not to have them still around. I was very lucky to have had two great parents. They laid the foundation on which I have built a wonderful life and career.  I worked with them both closely for over twenty years and together they were my steady and consistent mentor.  They taught me mostly by example.  Here are some of the lessons I learned from my parents on how to conduct business.

  • Lead with service. The number one goal is to be of service to each person who comes through the door. Whether it results in a sale or not.
  • Treat everyone well. Not just the people who you think can help you.  It all comes around in the end.
  • Be grateful. Know how lucky we are to be doing what we do. Relish in the opportunity to meet nice and interesting people.
  • Love is reflected with love. It’s amazing how nice everyone is to work with when you don’t take the bait at any point to make it confrontational. The attitude that “everyone is a friend” makes it much easier to make friends. “The Golden Rule” works in all instances.
  • Go the extra mile. Take the time to do something special. Make someone’s day. Do the unexpected. Not only will others notice, you will feel great about yourself.
  • Be Consistent.  Be someone people can count on. Being dependable and doing small things consistently adds up to big things over time.
  • See the best in others. Look for the best in others. Look to compliment, don’t look to criticize.
  • Have compassion for others. Give someone a break. Be kind. Do something unexpectedly nice. Take a chance on someone where others have passed. Use your intuition about people, not always their credit score.
  • Win-win-win negotiations are best. Be the first one to suggest a reasonable solution. Go more than half-way when needed. Take a long view and don’t take negotiations personally.
  • Have an abundance mentality – Be generous. Expect the good to continue and don’t be afraid to share it with others.
  • Do everything with integrity. Honesty, transparency, fairness are always the right things to do. If it seems like it’s in the grey area, it’s probably the wrong thing to do.
  • Don’t burn bridges. Treat everyone with respect. Never leave on a sour note. Don’t take advantage of an opportunity to say “I told you so”.
  • Work hard. Showing up every day and working hard when you are at work ensures longevity.
  • Have fun! Deciding to have fun wherever you are is a great recipe for having a happy life.
  • Set goals. If you can see it and believe it you can achieve it.  Aim high and write them down.
  • Take a long view. Everything that you do should be congruent with the person who you want to become and should be leading you in the direction that you want to go.
  • Smile.  A warm and genuine smile help every situation and it puts people at ease.
  • Take responsibility. Don’t pass the buck. Do more than your share. Be the first to find a solution and the last to place blame.
  • Be loyal. Take care of your clients, your friends and your family.

Obviously I have a wonderful legacy to fulfill and I’m striving every day to embody these principles into my thoughts and actions. In in doing so I remember and honor my parents.

Home prices are rising in Boulder County

Home prices are rising in Boulder County

As I outlined in a previous post the real estate market is really crazy right now. Due to the low inventory and some upward movement in interest rates buyers are swarming new listings as they come available. I am working closely with a number of buyers and as they see listings, I come prepared to give neighborhood sold data. This way if there is interest we can immediately assess whether the home is fairly priced on not. When you look at just one home at a time (quick while it’s still available!) it is hard to get a sense of how a particular home compares with other similar homes.

I have noticed that the market is speaking very quickly at the moment.  If it is well priced it sells right away. If it has been on the market over a week it’s over priced. It is a bit of a game of chicken because I have noticed that some homes which seem to be overpriced are still going very quickly. These sales are then causing the next seller to list their home before. This is the perfect storm for price appreciation.  And we are seeing it throughout Boulder County but especially in Boulder.

The FHFA  recently released their home price index showing home appreciation throughout the country. Boulder County is one of 302 metropolitan statistical areas (MSA) that are tracked using loan data and same house sales.  For the one year period ending December 31st, values in the United States, on average increased by 5.45%.  In Colorado appreciation was measured at 10.69% for the same time frame and Boulder County’s came it at 2.08%.  This ranked us 59th highest out of the 302 MSA’s. The chart below shows the US average and Boulder County’s appreciation over the past four years

The top areas for home appreciation over the past year were:

Bismarck, North Dakota – 13.41% (Fracking)

Phoenix, Arizona – 12.05% (bubble recovery)

Boise, ID – 8.27%

San Jose, CA – 6.86%

Real Estate Statistics November 2012

Real Estate Statistics November 2012

The market continues to be unusually strong.  Real estate sales in Boulder County were up 29% compared to last November. This is really surprising given the fact that inventory of available homes are down 35% from last year.  The combination of these two factors leads to a market filled with tension. Buyers are out ready to buy but there are not many homes to buy.  This type of tension is good for sellers and lead to increased prices.

November is not normally known as a prime selling month.  But this year we have had a great fall and the sales are more like March than November.

Here are some quick market facts:

  • Year-to-date sales are up 23%.
  • Inventory is down 36% from November 2007.
  • 35% of available single family homes in Boulder County were under contract as of November 1st.

For more details view the slideshow below.

Anatomy of a Real Estate Listing Shortage

Anatomy of a Real Estate Listing Shortage

Being a home buyer is Boulder County is challenging right now. All of the indicators say that this is a great time to buy a home, but home hunters are finding that one key component to their plan is missing. That missing element is the perfect home.

Banks are giving away money, the economy is looking up, Colorado is gaining population, finding a suitable rental property is hard to do and expensive and prices are very similar to what they were five years ago.  People who are paying attention recognize an opportunity that may not come again for a long time. But right now in a county of nearly 300,000 people, there are 1,519 properties available for purchase.  I hate to be the bearer of bad news but not all 1,519 homes are dream homes. In fact, typically a very small number of homes are available for any combination of area / home type / price range.

To illustrate the situation let’s compare the number of active listings (without a contract) now versus the same time five years ago. Right now there are 1,091 single family homes on the market in Boulder County that are ready for purchase.  At the end of October in 2007 there were 1,919. That is a 43% drop! No wonder there feels like a lack of listings to view.  Here is a graph showing single family home inventory at the end of each month over the past five years.

An equation that makes sense to explain the number of houses on the market at any given time is:   unsold active homes + new listings – sales – withdrawn listings = current inventory

I have already shown the answer but let’s break it down a bit more and look into the components that make up inventory.

New Listings

The life blood of a healthy real estate market is new listings. The hope is that a good percentage of those homes are salable; that is well priced, in good condition and in a reasonable location.  I have been tracking weekly data over the past three years and one of the measures I look at is new listings.  Over the first 43 weeks of this year 6,122 new listings have come on the market. This is 4% less than 2011 and 17% fewer than two years ago.  Clearly not all potential sellers have gotten the message that the market has turned. Here’s how this looks graphically.

 

Sold Listings

The main component to our listing shortage right now is the increase in market activity as it is shown by sales and the number of homes that are under contract. Sales for the year are up approximately 25%. This is a welcome gain to a market that had been falling in terms of number of transactions for a number of years. Activity has been strong even into the fall and the competition between buyers has made finding the right home even more difficult. In a normal, healthy market, the number of homes that are under contract compared to the available homes falls in the 15 – 20% range. This year we have spent most of the year with a 40% under contract percentage. This means that at any one time only 60% of the active listings are actually available. When you subtract the overpriced and outdated homes that are listed the inventory that a buyer would actually be interested in shrinks significantly.

This year through the end of October 4,166 homes have gone under contract in Boulder County that is a 23% increase over last year. Here are two graphs that show the increases in the sale side of the equation.

If you are a buyer, I hope this gives you an in depth understanding on why it’s hard to find a home right now. If you are a seller, I hope it gives you the information you need to give you the courage to list your home. Either way, it is a market where you need help to make sure you are getting good information in a timely fashion. If you need a good Realtor who understands the market and works in it every day call me I’m ready to be of assistance.

How To Handle Multiple Offers On A Home

How To Handle Multiple Offers On A Home

Even though we are in a slower time of year, houses are still selling.  All year I have been seeing a shortage of good listings in the market.  Right now there are 15% fewer available homes on the market than last year at this same time.  This means that if a serious buyer is out looking for a nice home the cupboards are fairly empty.  Right now there are many leftover homes on the market.  I define leftover homes as those listings that haven’t sold for a specific reason whether it be price, location or condition.  This shortage leads to heavy activity on those homes that come on the market ready to sell.  Those homes are well priced, in good condition and in a location that doesn’t raise a red flag.  This leads to multiple buyers being interested in the same house at the same time. Here is some advice for handling multiple offers from the buyer and seller perspective.

From The Buyers Perspective:

  • Check to see if you have competition. Your agent will call the listing agent to announce your intention to write an offer. Make sure you know if you are competing with another buyer. At the same time have the agent ask for the sellers preferred closing date and for any items that will be excluded from the offer. All of the information below assumes that there is another offer.
  • Make your decisions quickly. Getting your offer in a day ahead may make a big difference. Ask for a quick acceptance deadline.
  • Do your homework: Check comparable sales and decide the maximum price you will be willing to pay. Also, think about how you would feel if you would lose this house over a couple of thousand of dollars.
  • Do a thorough walk-through: When you see a house you are interested in, take your time. Check on the condition of the house, what would you need to do to make it yours. Are the systems (furnace, roof, windows) in good condition?
  • Prepare a clean offer: Don’t ask for Sellers to pay for appraisal, cleaning, HOA transfer fees etc. When the seller is considering two similar offers, $50 can make a big difference and send a signal that the buyers asking for all of the small stuff will be tougher to work with down the road on inspections etc.
  • Have your financing in place and make sure to include a letter from a lender along with the offer. I prefer to see a local lender who can jump in and make the closing work in a difficult situation rather than somebody who is working a toll free line.
  • A nice touch is to write a personal letter to the seller explaining who you are and why you love their house. The seller has an emotional attachment to the house and wants to sell to someone who will take care of their house.

Consider an escalation clause. When the house is a good value and you know there is competition one effective method is to write in an escalation clause. This clause in the contract automatically raises the bid price if another offer beats theirs financially. For instance it could read “the offer price shall be automatically raised to a price $1,000 above any other bonefide offer, the purchase price shall not exceed $xxx,xxx”. This is where the buyer has to know how much they are willing to pay; is it full price or $5,000 over?

From The Sellers Perspective:

  • If you are attracting more than one offer it shows that you have taken care of your home and priced it correctly.
  • You want to make sure that all interested parties have a chance to submit an offer. Have your agent communicate to each agent who has shown the property recently to gauge interest.
  • When reviewing offers look at these main points: net price to you after all closing costs, dates and terms and buyers ability to pay and close. (more…)
Guide to Boulder Neighborhoods

Guide to Boulder Neighborhoods

Interested in learning about the different neighborhoods in Boulder? In this report I have split Boulder into eleven different areas and present the lifestyle highlights, schools, shopping districts, local recreation and real estate statistics for each area. If you’re interested in learning about where to live in the City of Boulder this is your guide. Click Here to view and download the guide.

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