by neil kearney | Sep 22, 2009 | For Sellers, General Real Estate Advice, Real Estate 101
If you are involved in a real estate transaction in the rural or mountain areas of Boulder County, the 
property most likely has a septic system and is not served by a municipal sewer system. When working well, these personal waste systems are mostly out of sight and out of mind. As toilets flush and sinks drain, the waste goes to a tank which holds the solids. The liquids move through the system and are released underground through a leach field. When working correctly there is no smell, no visible liquid and the solids are held in a concrete tank which has some natural bacteria which break down what is held. Every couple of years the tank needs to be pumped out. It is really a good system which in many cases lasts decades and decades without any large expenses.
The downside of this system is what happens when the system does not work correctly. A septic system that is not in good repair is at risk of releasing untreated matter into the environment including the water supply. Much of our mountain building took place between 1960 and 1980. This means that the septic systems for much of housing stock west of town has septic systems that are quickly becoming old. Boulder County decided that it needed some regulation that ensured that wastewater was being handled correctly. Last September their Septic Smart regulation went into effect.
The Septic Smart program requires that each septic system be inspected by a qualified inspector at the time of sale. If the system does not pass inspection a plan for repair or replacement must be negotiated between the buyer and seller and the repairs made within one year. According to the website, here is how the regulations work for buyers:
For Buyers of a Home
- If the permit record for the property shows “NOT APPROVED” in the “Date of Final Approval” field, this means the final permit has not been approved. Potential buyers should ask the homeowner about plans for repairing the OWS. If the buyer is expected to repair the OWS, it will need to be completed within one year of closing. The buyer should ask the seller for recent bids and a definitive “cost of repair.” The buyer may need to acquire the repair permit from Boulder County Public Health, or have the seller provide it.
- Check the onsite wastewater system (OWS) permit record on the house. Make sure that the number of bedrooms listed on the permit equals the number of bedrooms listed on the MLS. (Check permit)
- If the property shows a date in the “Date of Final Approval”, field this means the OWS permit has been approved. Potential buyers should ask for the maintenance history, recent property transfer inspection report, and certificate of operation (valid for four years).
Septic Smart Buyer Brochure
The responsibility of the actual inspection and application with the County falls upon the seller of a property. Here is a guide for the sellers from the Septic Smart website:
For Sellers of a Home
- Check the onsite wastewater system (OWS) permit record of the house for sale. (check permit) Make sure that the number of bedrooms listed on the permit is not less than what exist in the home at the time of sale.
- If the permit record for the property shows “NOT APPROVED” in the “Date of Final Approval” field, this means the final permit has not been approved. Homeowners must apply for a repair permit to verify or repair the unapproved system (permit process).
- If the Date of Final Approval listed on the permit is more than ten years ago, the system requires a Property Transfer inspection. (View Inspector listings). If the Date of Final Approval on the New or Major Repair permit is within the last ten years, the system is exempted from the inspection process. Certain other situations are also exempted.
- In preparation for the inspection, the homeowner must:
- Expose the septic tank lids
- Mark the boundaries of the leach field
- Present OWS maintenance records
- Be present for the inspection
Sellers Septic Smart Brochure
by neil kearney | Sep 17, 2009 | Statistics
|
# New |
Price Drops |
# U/C |
# Sold |
Median $ of Sold |
| 30-Apr |
166 |
142 |
125 |
81 |
$ 317,900 |
| 7-May |
182 |
170 |
141 |
90 |
$ 294,700 |
| 14-May |
211 |
170 |
126 |
46 |
$ 301,950 |
| 21-May |
220 |
169 |
140 |
92 |
$ 275,950 |
| 28-May |
167 |
165 |
137 |
66 |
$ 272,450 |
| 4-Jun |
213 |
204 |
131 |
141 |
$ 324,500 |
| 11-Jun |
210 |
198 |
155 |
74 |
$ 296,400 |
| 18-Jun |
222 |
191 |
125 |
94 |
$ 339,950 |
| 25-Jun |
178 |
223 |
131 |
100 |
$ 339,900 |
| 2-Jul |
163 |
158 |
132 |
150 |
$ 299,000 |
| 9-Jul |
157 |
181 |
102 |
81 |
$ 332,900 |
| 16-Jul |
187 |
197 |
121 |
93 |
$ 289,900 |
| 23-Jul |
166 |
211 |
95 |
92 |
$ 334,450 |
| 30-Jul |
149 |
189 |
109 |
110 |
$ 278,950 |
| 6-Aug |
155 |
197 |
106 |
144 |
$ 312,450 |
| 13-Aug |
161 |
202 |
105 |
84 |
$ 319,975 |
| 20-Aug |
178 |
187 |
120 |
79 |
$ 345,000 |
| 27-Aug |
156 |
163 |
113 |
88 |
$ 317,475 |
| 3-Sep |
138 |
173 |
112 |
103 |
$ 285,000 |
| 10-Sep |
112 |
139 |
100 |
63 |
$ 284,900 |
| 17-Sep |
163 |
159 |
114 |
63 |
$ 317,000 |
I have been doing this since late April and what I find interesting is the comparison between the number of properties that go under contract and the number that actually close. The graph above shows that in most weeks (with the usual exception being around the end of each month) the number of properties that go under contract exceeds the number that close. There is a lag of 30 to 45 days from contract to closing, but eventually the sales should be realized. What the statistics above do not show are the number of properties that go under contract but fall out of contract along the way. I am seeing it in my own business. Buyers are very fickle and to keep a transaction together takes a great amount of work.
by neil kearney | Sep 16, 2009 | Uncategorized
It has been over a year in the making. The Boulder City Council last night moved one step closer to implementing a new set of regulations designed to prevent overly large homes to be built or remodeled within the city limits. The problem some see is that new large homes are being built that overshadow the rest of the neighborhood and are not built within the scale of the existing neighborhood. The argument has some merit on principle, but the policies proposed are much like setting a house on fire to get rid of a mouse. In my opinion the policies are overkill and too broad based to make sense in every case.
The council has been spending an inordinate amount of time on this issue and last night was no exception. In a meeting that went beyond 11 pm, the council nailed down some principles of the new regulations which could be in place as early as the end of 2009. Here are a few of the details of the proposal which have been all but decided by the Council:
- The footprint of a home shall cover up to but not exceed 35% of a lot.
- The “floor-area ratio”, or total square footage of the home compared to the total size of the lot shall not exceed .45.
- The total square footage figured in the second item above shall include that areas with ceilings above 16 feet be counted as twice the square footage and those areas with ceilings above 26 feet are to be counted as three times the square footage. (so much for vaulted ceilings).
- Two allowances that were conceded were an extra 200 square feet for seniors and people with disabilities and special exemptions for those with very small lots.
These regulations are going to make it very difficult to add any square footage onto an existing home and will make a new home on an existing lot (a scrape and re-build) very difficult to make economically feasible. The net result in the real estate market will to make existing large homes more valuable and make smaller homes that need work or whose highest and best use is a new home on the lot less valuable.
The video below shows members of the grassroots group ‘Leave My Home Alone’ in a peaceful protest outside the council chambers last night.
by neil kearney | Sep 14, 2009 | For Buyers, For Sellers, Real Estate 101 |
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, sell a house 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.
Seller Beware:
The deal can get sour quickly if the buyer cannot perform. The good news is that the Seller ends up with some money but they also have to ask the Buyer to move out and deny the pleas for an extension. The other variable is the condition of the house. If the Buyer can’t make the deal work they won’t necessarily keep the house in great condition. Something to think about.
by neil kearney | Sep 13, 2009 | Uncategorized
Do you remeber the game show that tempted you with what was behind door #3, Let’s Make a Deal? All
summer I have been fielding calls and emails from people who want to move to the Boulder normally a really good thing. But too many of the calls have seemed like the donkey behind door #3, not quite what I was looking for. Between, slow house sales across the nation, tighter credit and people forced to change careers due to unemployment, there are plenty of reasons why people can’t buy a home right now. So instead of calling me to help them find a home, which I specialize in, they call me to help them find a free place to live.
I have received over 10 calls from people looking to be a caretaker for my vacant listings. They all seem very nice and all have a very believable story about how they want to be in Boulder, have a blue ribbon family, the best (non-shedding) pets and how they can fill my vacant listings with their beautiful furniture for very low or no rent. A win-win right? I haven’t had any vacant listings that would benefit from a caretaker so I haven’t been able to help anyone out. I have however kept their names.
Another scenario that has come up a lot is the lease purchase. Buyers want to get settled, but have not sold their current house yet and only want to make one move. They then look for an acceptable vacant house and ask if the seller in interested in a lease purchase. I will re-print a prior post outlining the nuts and bolts of the deal tomorrow.
Last week I got a call from a potential buyer who is looking to trade up to three properties in Florida for a home in Boulder. Now this is a deal that has some moving parts to it. The Boulder owner must be open to a specific property or properties in Florida, have an acceptable property in Boulder and then we must match up the value. Not impossible, but not an easy deal to put together. If anyone is interested give me a call.
