by Neil Kearney | Nov 16, 2016 | For Buyers, For Sellers |
One of the most satisfying parts of my career is that I get to work with the nicest people in the world! I get to interact with them consistently over an exciting and emotionally charged and sometimes intense period in their lives. Selling or buying a home means change, sometimes it’s great (yay! new job, new baby…) and sometimes it’s not a change you look forward to (divorce, change in finances…). But through it all I love to bring my best to every situation and provide exactly what my clients need at the time. Sometimes it is a calm voice of reason through the inspection process. Sometimes it’s a cheerleader when your fifth offer just got accepted. Sometimes I’m the one who has to take some bad news and chart a new path to your goal. Sometimes I’m just there for you providing the expertise you need. Sometimes I’m the one who gives you the nudge that points you in the direction that turns out to be the “best” move for you. Regardless of the situation I’m happy to be of service – it’s what has kept me happily going for 25 years now.
So when a client takes the time to write a testimonial for me it’s a much appreciated cherry on top. Here are a few recent testimonials that my clients have posted on my behalf. Aw shucks, you guys are the best!
“We could not have a better agent than Neil Kearney. He was very patient, answering all our questions and addressing all our concerns. He provided all the support we needed, as we are living out of the state by the time we decided to put the house in the market. Something very important: The communication was always very good. We strongly recommend Neil to prospective buyers and sellers. The best!”
“Neil was great to work with! He has a comprehensive knowledge of the market, and was committed to our home search with patience and enthusiasm during a difficult buying process. I highly recommend Neil!”
“Neil did a great job helping us find and purchase our new home. He was always quick to respond, and not only guided us through the process but made it really easy. Thanks Neil!”
“If you’re looking for someone who knows the Boulder market inside and out, Neil is the realtor you want. Honest, reliable, Neil was always available to answer questions or arrange a last minute showings. We can’t recommend him enough.”
“Neil is a fantastic realtor. I have used his family business for several real estate transactions over the years and have always been impressed with his professionalism, competence, and diligence. He was always available to answer questions and he explained the nuances of selling property in today’s market extremely patiently! I recommend him to anyone looking to buy or sell. Thanks Neil!”
To see more testimonials go to this page and this site.
by Neil Kearney | May 25, 2016 | For Buyers, For Sellers, Real Estate 101 |
Do you know what PITI is? If you have a loan on your home you probably know that these are the four elements of a mortgage payment. P stands for principal; the first I stands for Interest; T stands for taxes and I stands for insurance. Together they make up the amount you pay for your home on a monthly basis. If your PITI payment is comfortable for you, you will have extra funds available to pay for all of your living expenses, be able to save some money on a monthly basis and have some left over for some fun. But many times as we consider how much of a house we can afford we key in on the price of a home and the interest rate (these go into determining the ‘P” and first ‘I’) without much considering the ‘T’ and the ‘I’.
Before I get started talking about property taxes I want to make it clear that this is not a comprehensive article on taxation. There are many elements that go into the discussion of total taxation that include income tax, various sales taxes, car registration fees, use fees, transfer taxes, etc., this article just focuses on one element and is therefore not a comprehensive picture. It doesn’t fairly compare apples to apples across states. However, I think it’s an interesting and relevant topic because it comes up often in my discussions when I am showing property.
Corelogic recently did a study ranking the median property tax rate across the country. The highest property tax percentage is in Illinois where taxes are 2.67% of the assessed valuation and lowest in Hawaii where the property tax burden is just .31%. Colorado is ranked 5th from the bottom with .66%, meaning that we have the 5th lowest property tax burden in the United States. Despite the arguments* that there are too many elements not included in this study I think in general it’s true that the cost of ownership in places like Illinois, New York, New Jersey are much higher than they are in Colorado. In Colorado the “T” portion of our payments is much lower than other states and therefore, all things being equal, we can afford more expensive homes with the same payment.
Local Property Tax Comparison
Now let’s get more granular. Within my market area buyers need to look closely at property tax rates within the different localities. Here is a quick comparison of homes currently on the market. I have tried to choose homes that are similar in price and similar in assessed value.
- Boulder – 4616 Talbot Dr. | List Price $574,000 | Assessed Value $423,900 | 2015 Taxes $2,766 | Tax/Assessed .648%
- Louisville – 453 Centennial | List Price $599,900 | Assessed Value $450,200 | 2015 Taxes $2,988 | Tax/Assessed .664%
- Lafayette – 369 Caribou Pass | List price $580,000 | Assessed Value $464,300 | 2015 Taxes $3,180 | Tax/Assessed .685%
- Longmont – 5712 Clover Basin | List Price $575,000 | Assessed Value $409,700 | 2015 Taxes $2,971 | Tax/Assessed .725%
- Superior – 3103 Castle Peak | List Price $599,900 | Assessed Value $464,100 | 2015 Taxes $3,881 | Tax/Assessed .836%
- Erie – 1276 Greening | List Price $560,000 | Assessed Value $399,950 | 2015 Taxes $3,483 | Tax/Assessed .871%
- Broomfield – 4630 Nelson | List Price $569,000 | Assessed Value $466,710 | 2015 Taxes $4,490 | Tax/Assessed .962%
The order listed is ranks the local communities for property tax burden as a percentage of the assessed value of the property. Boulder has the lowest tax rates and Superior, Erie and Broomfield have the highest. If a buyer were to be comparing homes in Boulder and Broomfield, the taxes make a difference. The differential in the monthly payment is around $100 per month, definitely worth looking at.
*Some of the arguments that invalidate this report are: a) Different states base taxes on different amounts. Assessed value vs. actual value. b) Some states give a homestead exemption. c) Some states assessed value doesn’t change until a sale and then it goes to the purchase price. d) The report doesn’t take into account special assessments or the prevalence thereof within states.
by Neil Kearney | Feb 22, 2016 | For Buyers, General Real Estate Advice, Real Estate 101 |
During 2015 43% of all homes sold in the City of Boulder sold for more than asking price (see more context in my year end report) . Presumably most of these homes had multiple buyers making competing offers. So what does it take to be the winner of a multiple bid situation? Here are seven strategies for winning multiple offers. I liken these ideas to a set of arrows in a quiver.
- Price – The most effective way to win the hearts and minds of a seller is to give them the most money. In theory it’s easy give them more than anyone else. In practice, given limited information, it’s very difficult to know what others who are exactly in your position will do. On average in 2015, those homes that sold for a price over asking price sold for 4% above. The range is from just a few hundred dollars over to 20% over. Now that’s using a sharp and effective arrow!
- Escalation Clause – This could be a subheading under price but I think it’s worth giving it top billing. An escalation clause is a paragraph inserted in the contract which states; that the buyers agrees that if their offer isn’t high enough their offer will be automatically increased to beat any competing offers by $X,000 up to a cap price. Some sellers and their agents announce that they will not accept escalation clauses because they view them as a hedge (we are willing to go higher but only if we need to). For a buyer an escalation clause is a good way to state your intentions to the Seller without paying way more than you need to. If a buyer is going to use an escalation clause, I recommend that the contract price be strong as well. If you offer $10,000 lower than asking price but are willing to go up t0 $30,000 above if pushed the seller may not see this as earnest as an offer who offers $25,000 over the asking price right off the bat.
- Financing – Sellers want the most money with the smallest potential of the contract cancelling. It doesn’t do any good to get a great price and then not be able to close. As a buyer you can tie into this fear by making your financing as clean as possible. Cash is king. And it removes many contingencies as well. But if you don’t have cash you can do well by having your financing in order. Get pre-approved not just pre-qualified. Have your lender picked out. Choose a local lender. Make sure your lender is available to answer questions about you.
- Waive the Appraisal – Your lender will require an appraisal but if you are putting enough money down you can still waive the right to object to the appraisal. In a fast appreciating market the appraisal contingency is something sellers worry about and if the appraisal doesn’t match the price as explained in #1 above the transaction has a real chance of not closing. But as a buyer if you are putting enough money down (think at least 25%) you can talk to your lender and see if waiving the appraisal provision is a possibility.
- Inspection – Some buyers come in really strong during the negotiations and then try to re-negotiate during the inspection period. As an earnest buyer you can promise the seller that you will not negotiate after the inspection. To do this we add a clause to the contract that states that the buyer will take the property in as-is condition but that they still retain the right to terminate the contract if they find something big or unexpected during the inspection.
- Personal Letter – Earlier this year I had a listing that received three offers. The two best offers were nearly identical; same price, same escalation clause, closing date within a week of each other, local lenders with the same down payment. There was nothing in either of the contracts that was swaying the seller. The only difference was that one buyer sent with their offer a personal letter that introduced themselves and let the seller know how much they loved their home. Winner, winner chicken dinner!!
- Clean Contract – Your agent needs to do their part by writing a “clean” offer. This means that the contract is filled out correctly, all required paperwork is attached, all dates in the offer are reasonable and make sense, all negotiable payments like HOA transfer fee and title closing fee are at least split if not. Small things that cost a few hundred dollars can make all the difference when you are competing. Also, if you like working with your agent chances are that the listing agent likes working with them as well. This cooperation is essential and it’s a feather in your cap to work with an agent who has experience and is known as easy to work with. Working with an agent with a tag line of “The Enforcer” (this is made up) may be an indication that they may like to fight and win and not cooperate. When given a choice agents like to work with other cooperative agents.
Good luck out there. These multiple offer strategies have worked well for my buyers over the past couple of years. If you are looking for quality representation please let me know.
by Neil Kearney | Dec 16, 2015 | For Buyers, General Real Estate Advice |
At the beginning of October new guidelines took affect that changed the way that lenders interact with borrowers. The new TRID rules require earlier and supposedly easier to read disclosures to go to borrowers. Both at the beginning and the end of the process. These new disclosure requirements have lengthened the time it takes to close on a loan and now more than ever it’s important to choose your lender wisely.
In the past it was very common for lenders to swoop in to the closing at the last minute with documents and closing figures. Sometimes this happened the day of closing which left the buyer/borrow in limbo wondering how much money they really needed to bring to the closing. Many times buyers were forced to get a cashier’s check for an estimated amount plus a little extra to make sure and then get a refund from the title company. We’ll the good news is that these last minute shenanigans are no longer possible. It is now required that the buyer/borrower view and acknowledge the newly revised closing disclosure three business days in advance of the closing. This eliminates the last minute paperwork on the day of closing but it doesn’t seem to have eliminated the drama. It has just moved it up a few days.
As lenders are getting their act together and setting up systems around these new rules the disparity between good lenders and the not so good ones has become even more apparent. Here is my wishlist for a lender:
- Do a thorough pre-qualification/pre-approval process so that there are no surprises later. This goes beyond checking boxes on a software program. This involves experience and knowledge that anticipates and handles potential stumbling blocks in advance. In my experience a brand new lender working as a part of a team in a bull-pen at a big national lender doesn’t excel here.
- Communication throughout the process should be easy. Having one person who knows what is going on at all times has been the best scenario for me. Having a team or an office that is handling the loan leads to communication gaps that can last days.
- Having someone who takes personal responsibility throughout the process allows things to get done when the chips are down. I have found that a local lender who is looking to build ongoing relationships with both the borrower and the agent will go the extra mile and get it done.
- Having a lender who has a proven track record is, in my opinion more critical that saving an extra 1/8th of a % point on the rate. Many times the advertised rate doesn’t actually make it to the closing table and having a lender who will get the loan done on time is good insurance. Many buyers don’t realize that if their lender doesn’t perform it’s they who are on the hook. The penalties for not closing range from not closing to not closing AND losing their earnest money. The lender will not pay you back the lost $10,000 even though it was their fault.
I’m writing this because I have three bad experiences with out of state lenders this year that added stress to all involved and definitely put the buyers at financial risk. The first one was a big national company who advertises directly to the consumer on sports broadcasts. This lender seemed organized until a day before the appraisal deadline they asked me, the buyers agent for a list of local appraisers. The appraisal should have been ordered at least two weeks previously and they were just now realizing that they didn’t have one in the queue. It turns out that they needed my help because none of the local appraisers wanted to work with them. The appraisers that I talked to said that they were busy enough and didn’t think that this big out of state company would pay them if the property didn’t close. So in the end they found an appraisal company out of Minnesota, I’m in Colorado, to do the appraisal but that it wouldn’t be in until four days after our scheduled closing date! We were able to extend and close two weeks late but it certainly wasn’t convenient and the buyers almost lost a great price on their townhome.
The second and third instances were with the same bank. This out of state bank offered a great deal to physicians. But their processes were so bad that both closings were delayed and it took some major hand holding by myself and the buyers in order to get it closed. One was a week late and the other was three weeks late. In both instances the buyers were able to get an extension (vacant homes) but it cost them on a per-diem basis. The most frustrating thing about this bank was that there was no-body who took personal responsibility and their internal communication between departments was really bad. When the files went to underwriting they would disappear behind the dark side of the moon for days and or weeks with no news leaking. As we were working hard to finally get a closing disclosure signed the person who was working on it sent it to the title company and then left for the day. Of course there were a few mistakes but nobody to fix them. If it didn’t get taken care of that night it would mean that the closing would move from Friday to Monday and the buyer would incur an extra $600 in fees. Luckily at this point the lead lender was able to rouse some after hours people to make the changes and we closed.
If you’d like to avoid this type of drama use a good local lender. Yes, I have some recommendations. Just ask.
by Neil Kearney | Mar 17, 2015 | Boulder County Housing Trends, For Buyers, For Sellers |
The Boulder real estate market is currently characterized by low inventory and good buyer demand. It’s a sellers market. Many home buyers are finding that the houses that they are interested in buying are also coveted by other buyers. This leads to a multiple offer situation. A great situation to be in – if you are a seller. But for a buyer it’s a difficult situation. To see some perspectives on multiple offers from both sides, read this article.
In our area, multiple offers are most often handled in this way- the listing agent receives an offer and then lets all other agents who are showing or have showed the house know that they will be presenting the offer at a certain time and day. If another offer does come in, the first offering party is advised of the second offer and is offered the opportunity to revise their offer. For the buyer, the information available is usually only limited to the number of offers that will be looked at and when to expect an answer. This year many homes are being listed knowing that there will be much initial interest. They state clearly in the MLS listing that showings start on Saturday and all offers will be reviewed on Monday. Being the first to show the house or the first to submit an offer doesn’t seem to have any advantage.
This information gap leads to much buyer anxiety. How much should we offer? What are the other offers? Are we crazy to offer $X? Will there be another better house coming down the line that is less hassle and not priced so high? Will it appraise if we go over full price? It goes on and on and each of these questions are rhetorical.
Since I can’t answer these questions for my clients with any clarity. I rely on experience to advise them the best I can and ultimately I leave it up to them to pick a number. Sometimes we use an escalation clause to calm the anxiety a bit and to hedge an overpriced offer. In the end it’s an inexact science and the results favor the bold.
So far this year (through March 16th) there have been approximately 728 sales in Boulder County. In 27% of these transactions the buyer paid more than the listing price for the property. I can only assume that most of these 198 transactions had multiple offers. So in an effort to bring some data to the unanswerable, here are the statistics from those multiple offer situations.
- The average successful offer over all price ranges exceeded the listing price by 3.4%.
- The highest percentage paid over the list price was 44%. It was a foreclosure that was priced “well” below the current market value.
- The average price paid over list in transactions under $250,000 (39% of all transactions) was 4.42%.
- The average price paid over list in transactions between $250,000 and $500,000 (44% of all transactions) was 2.79%.
- The average price paid over list in transactions over $500,000 (17% of all transactions) was 4%.
- In 37 of the 198 transactions the buyer paid $2,000 or less over list price.
- The average premium paid across all price ranges was $13,010.
- The median premium over list price was $6,600.
- In the City of Boulder the average premium paid for those properties that sold above list price was 4.52%.
by Neil Kearney | Feb 2, 2015 | For Buyers, For Sellers |
I just received this letter of recommendation from a recent client. I loved working with them and I’m so happy that they appreciated my efforts and the results. The website for their home that I built is located at www.SunriseRanchHome.com
“Though we find it hard to express how much we appreciate and value Neil Kearney’s professional, ethical, kind and extremely effective representation of our home, it was not difficult for Neil to describe and represent our home in a way that was extraordinary.
From the moment we met Neil, we knew we had found the realtor who was looking out for our interests and advocating a sales plan that would ensure the most for our investment. Neil took extraordinary, professional photographs of our home, and his images and words in a beautiful brochure and amazing website created for our home reflected his passion for his job and for representing his clients in a way that is unsurpassed.
You could not hope to find a more experienced, more professional realtor to get the absolute best value out of your property – but the bonus is that you will undoubtedly find a friend. Our sale and purchase experience were benefited by his calm good humor and his expert eye – pointing out the problematic stucco, or the vacant lot across the street zoned for commercial development. Neil is extraordinary at his profession – skilled, calm and phenomenal – our recommendation is without reservation, and WITH great enthusiasm.”
Brad and Cindy Taylor
Former Director of Consumer Protection for the Boulder County D.A.’s office
I always have the capacity to work with new clients, so if you are looking for the type of service that is described in the letter above please contact me to get started. 303-818-4055 cell or Neil@KearneyRealty.com
