by neil kearney | Jun 1, 2007 | For Buyers, For Sellers
Floods in Boulder?
“If you live, work or play in Boulder you are at risk. The city of Boulder has the greatest potential for loss of life from flash flood of any community in 
Colorado.”
This direct quote from the
City of Boulder website gives us a reason to pause and think about our surroundings when the clouds turn dark and the mountains disappear in the rain. Canyon Blvd. is also known as Water Street. This is not a coincidence. The attached photo shows high water in Boulder in 1906. The statisticians and insurance agents talk about the 100 year flood, my calculations tell me that we are just about due.
Obviously flood water affects real estate, but in Boulder many homes that thought they were out of the floodplain may soon be in it. The City of Boulder recently studied the floodplain of South Boulder Creek and have voted to send their new findings on to FEMA. If the new flood maps are accepted by FEMA 734 homes will be placed into the 100 year flood plain! These homes are mostly in East Boulder and are seemingly a long way from South Boulder Creek. The impacts on these homeowners when enacted by FEMA, would be the requirement for flood insurance. Apparently it takes about a year for the flood maps to be revised and in the meantime potential buyers would need to do their own research through the City of Boulder in order to assess whether flood insurance will be required in the future.
If you are interested in seeing if your property may be included in the designated area you can go to
http://www.southbouldercreek.com and click on ArcIMS. You can also view the entire study when you are there.
by neil kearney | Apr 27, 2007 | For Buyers, For Sellers
– Proposed Boulder County Septic Regulations –
As a Realtor in Boulder County I know that when I show a home to a buyer in the mountains or out on the plains, most likely the house will have an on site waste water system, otherwise known as a septic system. When I write the contract I make sure there 
is specific language that provides for the cleaning and inspection of the septic tank during the inspection period.
Boulder County is getting ready to implement a new regulation regarding septic systems. What is on the table is an inspection/approval process at the county level that would be triggered by a home sale. The regulation may go into effect later this year. I attended a meeting this week outlining the program from two perspectives; the county and a Realtor.
The County’s perspective:
In Boulder County there are 14, 307 septic systems. Of those systems, 9,580 are “approved” systems and 4,727 systems are “unapproved”. The average age of the approved systems is 23 year old and the average age of an unapproved system is 49 years. The average life span of a properly working septic system is 25 years.
The Goal of the Program
- To insure clean water in the Boulder watershed. Contamination from septic systems is a concern because a leaking system can introduce bacteria into ground water, domestic wells and streams.
- Educate homeowners – Many homeowners are not aware of the risks associated with a failing septic system. Out of sight, out of mind. Only when it backs up or when they can smell it do they take action. The county wants to contact and encourage all unapproved systems to get up-to-date.
- Identify unapproved and/or failing systems. The county wants to have all systems “approved” in the next 15 years and figures that most homes will sell during that time.
- Force homeowners to inspect and fix systems at the time of sale. They figure that a transfer in ownership is where the money and motivation to fix are at their peak.
The Realtor Perspective
To me it seems like this is not the best way to accomplish their goals. As I mentioned before, I have never been involved in a transaction involving a septic system that did not involve at least an inspection and a pumping. Most buyers would not accept an “unapproved” or failing system anyway. The county is counting on the average of every family moving every 7 years. It’s true that this is the national average but in the mountains, I submit that this is not the case. Many houses in the mountains are passed down from generation to generation. Many owners in the mountains are through with their move-up cycle. There are not many “starter” homes or neighborhoods in the mountains where the turnover is much less than 7 years.
The proposed regulation will add unneeded bureaucracy and expense to the home buying process. In Jefferson County a similar regulation went into effect in 2004 and Realtors are seeing duplication of multiple inspections (first a seller than a buyer who wants their own inspection).
In my humble opinion I would like to see the county try to start at the oldest systems and work their way forward with an inspection program that will target polluting systems not just the ones who happen to be selling.
For more information go to Boulder County Health’s website .
by neil kearney | Apr 24, 2007 | For Buyers, For Sellers, Real Estate 101
-Multiple Offers-
We are working in a buyers market. The average days-to-offer in our market is around 75 days. It is unusual to have houses go under contract right away. You would think that multiple offers and offers over full price would be non-existent; but they happen. 
When there is a large inventory of houses on the market buyers become very good at spotting a good deal. When after looking at 20 homes, buyers see a new listing that they “know” is a good house for a good price, they tend to jump on it. If they are smart they give a good offer and wrap up the negotiations as quickly as possible. Chances are they are not the only buyers looking in that area and price range. What happens if two buyers decide to write an offer on the same house. Here is some advice 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.
- Try to read between the lines and get a feel for motivation. A buyer who has been transferred and is living in temporary housing is a stronger candidate than an investor who will not be living in the house.
- Try to tie up some of the loose ends now. Use a counterproposal to change dates and terms. You will never again be in a better negotiating position.
- Choose what feels right and be open with your agent .
- Remember, you have a right to choose what offer you accept but you do not have the right to discriminate against a buyer. Choose an offer based upon what is on the paper.
From The Agents Perspective:
- Make sure the communication lines are open. Get a dialog going with the other agents. If all parties feel informed about the process and situation there will be no hard feelings. If a second offer comes in after the first, it is customary to call the first agent and give them a chance to change their offer.
- If you are in an agency position with your client they will lean heavily on an agents advice. Give them good information and let them choose from the possibilities.
Every situation is different but remember the buyers agent is charged with helping the buyer get the house and the sellers agent or listing agent is charged with getting the best price and terms for their client.
by neil kearney | Apr 16, 2007 | For Buyers, For Sellers
Rent To Own
As I drive around in my market I tend to see homemade signs posted at major intersections with houses advertised as “Rent to Own”. In this 
post I’d like to layout a typical rent to own deal as well as show how the unscrupulous can take advantage of an unsuspecting buyer.
First terminology; rent to own is the same as a lease purchase. It is a combination of a lease and an option to buy a house for a certain price. This type of deal attracts people who are not quite ready to buy but are willing to bet that they will be able to purchase in a relatively short period of time. Most of the time the attracted buyers are either just getting started or are starting over after a bankruptcy or other credit issue.
Here are the main features of the deal:
- Buyer and Seller agree to an option price and the time for which the option is good (usually 3 years or less but is negotiable).
- Buyer pays an non-refundable option fee upfront to Seller (usually 1% – 5% of purchase price) . If they exercise the option the option fee goes toward the purchase price of the house.
- Buyer agrees to pay monthly rent to the Seller. Usually, the buyer pays a premium on the market rate rent and that premium also pays down the option price of the house.
Advantages for Seller:
- Expands the pool of possible buyers to their house. This is especially helpful in a slow market.
- Option money is upfront and payable to the Seller.
- They can usually collect above market rate rent.
Advantages for the Buyer:
- They are able to lock in a sales price on a house.
- They are able to pay down equity each month they pay rent.
- They are given time to accumulate a down payment or repair credit.
Buyer Beware:
There are situations where the Seller is just looking for a victim. There have been many instances where sellers are just looking for the upfront money and premium rent and then find a technicality to evict the buyer/renter before the option can be exercised.
by neil kearney | Apr 12, 2007 | For Buyers, For Sellers
Condition at Closing
or How to Avoid a Mess at Closing
One of the greatest sources of letdown and conflict in a real estate transaction is the condition of the house after the Sellers 
move out. Provisions in the purchase contract allow for the buyer to do a walk through inspection prior to closing. I advise my buyers to do this walkthrough as late as possible so as to see the true condition of the property as it will be left. What to look for in a walkthrough could be its own topic but in summary; we are checking to make sure that the inspection items were completed as agreed upon, the inclusions are still at the house, that there has not been any recent damage to the house and finally to check the cleanliness of the house. The first three items are fairly “cut and dry”, either the refrigerator is in the kitchen or it’s not. I have found that cleanliness is very subjective. What may be very clean to one hurried, harried seller may be “filthy” to the buyer. I try to mitigate this by talking about this subjective divide as we write the agreement and make the language in the contract as plain and literal as possible. Instead of saying carpet cleaning (sellers picture the Bissell in their closet, buyers picture the $500 top of the line pro), I would make it clear that the carpets are to be cleaned by a professional with the receipt provided.
No matter what you try to plan for it is an issue. Sometimes it becomes an outlet for buyer frustration after a particularly tough set of negotiations. Sometimes it is a seller with good intentions but not enough time. Sometimes it is a professional hired who does a less than professional job. All I know is that I have hired cleaners, pitched in with the sellers as we did a last minute shine or have cleaned cupboards and closets myself. Small important details in making the closing day go smoothly and making my clients happy.
So some parting advice:
To Sellers:
- Plan in advance. Closing and moving is a very hectic time and it is not always easy to complete all of those little last minute tasks.
- Bring in help. Hire a cleaning company or better yet family. It is always very hard to go back to the old house to clean while all of your stuff is at the new house.
To Buyers:
- Get it in writing. If you are worried about the condition of the house, set forth your expectations in writing.
- Be realistic. Maybe you have to tidy up a bit when you move in to bring it up to “your” standards. Don’t let it ruin your day.
by neil kearney | Mar 20, 2007 | For Sellers
Electronic Lockboxes — Take 2
Take 1
Back in the late 1990’s almost all of the local Realtors met at a local hotel to trade in the old manual lockboxes for the new electronic version. The adoption was fairly quick but I’m afraid it didn’t stick. You see, I do business on the edge. The edge of two MLS areas, that is. We are included in the Northern Colorado MLS called IRES. The Denver Metro area uses Metrolist. As a result I belong to and use both MLS systems. No problem to find the property but it became a hassle to have our listings shown. All subscribers to the new electronic lockboxes were given an electronic key pad to plug into each box. Without the key pad you were not able to open the lockboxes. Agents as close as Broomfield were not able to show our listings without us having to meet them at the property, a definite hassle and time warp back to the days way before computers. So what happened is that we began buying back manual lockboxes and placing two lockboxes on each property. This was not efficient at all and the new electronic lockboxes went out of favor. There were also other problems such as freezing in the winter and an annoying pause between giving your code and the box opening. The old boxes definitely made us Realtors more religious. Please let the box open, please let the box open! As an aside there is about a 95% adoption rate of these electronic boxes in Ft. Collins and many other parts of the country.
Take 2
This month IRES’s contract with Supra, our old lockbox provider expired. Instead of renewing with Supra they contracted with Sentrilock, a company owned by the National Association of 
Realtors. This new box looks pretty slick and I picked up my three boxes and a smart card last week at the board office. The box is enabled to give out secure, one-time codes to those who do not have a smart card. This, if it works well will solve our main problem with the old boxes. They will provide more safety, better reporting and allow all agents to show the property. So far it looks like a slower adoption. Many people picked up the boxes and the cards but as of yet I haven’t placed a box on one of my listings or had to use the smart card to show a property yet. We’ll see how it goes this time. It seems like a no brainer to track the access to a sellers house.
Colorado.”
