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 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 | Jun 19, 2009 | For Buyers, For Sellers
Starting July 1st, all homes that are offered for sale, transfer or rent need to comply with HB-1091 which was passed this year by the Colorado House of Representatives. The law was written so that more of the citizens of Colorado would be protected from carbon monoxide poisoning. The law was a direct 
response to a family being killed in a high end resort rental. The details of how to comply are outlined below. The information is from the Colorado Association of Realtors.
A Carbon Monoxide Alarm:
Detects Carbon Monoxide and produces a distinct, audible alarm;
Conforms to standards recognized by independent product-safety testing laboratories;
Is battery powered, plugs into a home’s electrical outlet and has a battery backup, or is connected to an electrical system via an electrical panel;
May be combined with a smoke detecting device if the combined device has signals that clearly differentiate between the two hazards.
Carbon Monoxide Alarms must be:
Installed in all homes with a fuel-fired heater or appliance, a fireplace, or an attached garage;
Installed within 15 feet of the entrance to each room lawfully used for sleeping.
What a REALTOR® Needs To Know!
By July 1, 2009, the Real Estate Commission will require each listing contract for residential real property to disclose the requirements specified by HB-1091.
The Contract to Buy and Sell will also have a provision addressing the carbon monoxide alarms if it is a residential property.
No person shall have a claim for relief against a property owner or their authorized agent if a carbon monoxide alarm is installed in accordance with the manufacturer’s published instructions.
A seller of residential real property is responsible for assuring that an operational carbon monoxide alarm is properly installed.
A buyer of residential real property shall have no claim for relief against any REALTOR® for damages resulting from the operation, maintenance, or effectiveness of a carbon monoxide alarm if the REALTOR® complies with the law.
Nothing in the legislation precludes local governments from adopting or enforcing more stringent requirements for the installation and maintenance of carbon monoxide alarms.
by neil kearney | May 2, 2009 | For Sellers, Uncategorized |
If you are like me, you just received your property assessment from the Boulder County Assessors Office. This mailing gives notice of the value that your property taxes will be based upon for the next two years. Each envelope included a cover letter, a 2009 Notice of Valuation, an information sheet and an appeal form.
The assessed value for each property is re-assessed every 2 years and in accordance to state law the values stated reflect the market value as of June 30th of the year directly proceeding the assessment. The timing is not good if you have felt a squeeze in value since last fall as have some neighborhoods. 
The Notice of Valuation page includes the physical details of your property as recorded by the county as well as the three of comparable sales they used to derive their value. Keep in mind that no sales can be used that sold after June 30, 2008.
So what if you feel as if the assessor has valued your house too high? You have the right to appeal. To appeal you must fill in the enclosed form and send, fax or deliver to the assessors office no later than June 1, 2009.
My wife and I own three rental properties in Boulder County so we received four total notices. I plan to appeal two of the notices by providing sold documentation of what I consider to be better comparable sales.
I am happy to provide the information for your appeal, just give me a call or send me email.
For more detailed information go to the assessors website.
by neil kearney | Mar 26, 2009 | For Sellers |
Going green may not only be a good thing to do for the environment it can also end up saving you money. Boulder is an environmentally friendly place, from Climate Smart, to green building regulations, to a new solar array at the water treatment plant, going green is everywhere. With the new energy star tax credits and rebates it makes for everyone to do their part. Here are the details of the program.
What is Energy Star? Energy star is a government backed program established in 1992 that provides an international standard for energy efficient consumer products. Products that have the Energy Star seal meet the requirements set forth by the Environmental Protection Agency and the U.S. Department of Energy. The idea is to promote the use of products that will save energy and therefore the environment.
Rebates:
If you are considering a new appliance, furnace or home electronic go to Energy Star Rebate Center and enter your zip code check what type of product you are interested in and see if there are rebates available. These rebates are offered through the manufacturers.
Tax Credits:
This is a new program. Federal tax credits up to $1,500 are available when some energy efficient home improvements are completed. For details of the program click here. The home improvements must be placed in service between January 1, 2009 and December 31, 2010 and are only available for upgrades done on a principal residence. The tax credit is for 30% of the cost of the qualifying product for up to a total combined maximum of $1,500 per household. I can see this really coming in handy when an inspection calls for a new furnace. Most of the time the seller just wants to put in the basic, cheapest model. These are usually 80% efficient. They have no incentive to pay more money up front because they will not reap the energy savings in the future. Depending upon price, the seller may be able to save a bit of money by putting in a 95% efficient furnace and the buyers will be happy because their energy bills will be lower into the future.
This brings up an important point, energy star rated products tend to be more expensive up front but make up for it in the long run by saving money every month in the form of reduced energy bills.
Additional Resources:
City of Boulder Energy Resource Page
Boulder Water Saving Rebate Program
by neil kearney | Mar 25, 2009 | For Buyers, For Sellers
The real estate market in Boulder County is very interesting to study. On one hand we are doing great when compared to many markets, in its latest report FHFA ranked Boulder 17th in the nation in annual appreciation. I am very grateful! On the other hand sales are down to levels we haven’t seen since 2001. What’s up and what can you do about it. Here is a quick snapshot on how buyers and sellers should be thinking if they are looking to buy or sell a home in or around Boulder. I write a monthly statistics column in the Boulder Area Realtor Association newspaper The Realtor Review. Here is my lest entry. Let’s take a look.
Now is a great time to buy a house*. So why are sales in February down 24% from last year? The answer can be found in the asterisk. It is a great time to buy if:
1. You can buy a house and stay within the conventional or FHA limits.
2. You have a job, great credit, plenty of reserves and a letter from your 6th grade teacher.
3. You have confidence that your job is stable and that eventually everything is going to be okay.
4. You haven’t been scared to the point of inactivity by the images in the media; “Lost Trillions in Equity”, “Modesto Neighborhoods Decimated by Foreclosure”, etc.
5. You haven’t lost all of you savings in the stock market. It is easier to ignore and cope for some people than realize and act.
6. You don’t have a house to sell. See #4.
There are many thoughts running through the minds of our would-be clients and not many are positive. The six scenarios above are just a few of the variables in today’s market. Most of these challenges lead to one answer. Good homes in the lower price ranges are still selling!
There are many reasons why people buy and sell. Many of the reasons don’t wait for a better market. What the public needs now is accurate local information.
For Buyers:
· There are opportunities out there but our market is holding up very well. Sales price to list price ratio is still above 95% so offers at 60% of list price probably are not going to fly.
· Prices are holding steady. If you’re waiting for a big drop in our market you probably won’t see it.
· Take advantage of interest rates while they are low because all indications point toward our area being on the leading edge of the nation wide recovery.
For Sellers:
· Buyer’s have choices so your house needs to be both the best priced and best looking house in its price range. Many homes right now are not selling if they don’t get both just right.
· Now is not the time to put your house on the market at too high a price and wait and see. Be realistic now and save both time and money in the long run.
· Be ready to deal on inspection items. Buyers expect the roof to be in good shape and if there is a puddle under the water heater, replace it – it’s not going to get any better.
· Be patient and vigilant. There may not be many showings, so make each showing count.
The advice here becomes exponentially important as the price range increases. Right now 15% of homes under $500,000 in Boulder County are under contract while only 3% of homes over $1.5 million are under contract. Similarly, the absorption rate for properties under $250K is 4.25 months, between $250 – $500K is 5.71 months, $500 – $750K is 10 months, $750 – $1MM is 14.41 months, $1MM – $1.25MM is 22.73 months and above $1.5MM is 48 months of inventory.
