Babs DeLay

Babs DeLay

January 25, 2011

Buyers Are Smarter

2011

A long time ago in a world when there were no mobile phones, internet, wi-fi and cable TV there was a top secret information bank of real estate data called the MLS (multiple listing service). This was where information was stored exclusively for the use of Realtors and shared only with clients. When the 'interwebs' (what my 80 year old friend calls it) became working and assessable for the common human and listings could be had by anyone at the touch of a keyboard, Realtors were convinced that our jobs would disappear. What? Allow the public to see our information? "Oh no, the end is near!".

Long story short, the need for Realtors didn't go away once customers could find homes on the internet. Interestingly enough, the Utah Association of Realtors completed a study earlier this year to find out why people might want to use a Realtor to buy a home. The number one answer from the public poll was simple: to show them homes.

Buyers are smarter because they have access to information. There are over 9,000,000 websites where you can find homes for sale these days. All of my small brokerage's listings are on all the big brokerages websites and visa versa because we all use one data base. Buyers sit in their jammies or at work and cruise listings. If a listing doesn't have a virtual tour they click onto the next property. We Realtors are pretty clever too-us good ones make sure the tours are fantastic so as to entice you to call or email to set up a showing. Basically, it's as if buyers go to the mall to window shop, narrow down their options and then go back later with their wallet to a specific store and purchase something. Think of the Realtor as the salesperson who will be honest with you and help you fine tune your selection, get you the best quality and best priced product, and then give you great service so that you'll come back and shop again. The good salesperson knows that if you don't feel you're getting their full attention and true facts about the product with no B.S. (and especially no 'upselling') you'll move on instantly somewhere else. The salesperson helps educate you about value and pricing so that you can make a purchase within your budget.

The salesperson already knows you've done your research on the web, found deals, read reviews about the market and you could very well know as much about what you're going to buy as the salesperson does!

Buyers rely on Realtors to give them access to their choices and open up other options the buyers may not be aware of or thought of before: from lending ideas to neighborhoods, styles of homes to the fine print of contracts. Also, Realtors still have exclusive rights to sold data, which certainly can help in determining what to offer on a property or how to get a property up for sale by helping to figure out fair market value.

2011

I recently overheard an environmentalist say that Salt Lake City didn't need any more parks because we have enough forest and green spaces within a 20 or 30 minute drive from our fair city that more parks weren't necessary. We really are blessed with a beautiful wild landscape surrounding our valley. On the other hand neighborhood parks do make a lovely place for gatherings, light recreation and relaxation. In the long run, neighborhood parks add a real and intrinsic value to homes. And, if you live in a condo or an apartment building, a park is just a nice place to reconnect with green grass and trees.

The city itself is blessed with three large parks (Liberty, Sugar House and Jordan Park/The International Peace Gardens). and has parts of the 40 mile Jordan River Parkway, along with small and large neighborhood dog parks, tennis courts and ball fields scattered within the street grid.

Liberty Park is not the biggest and oldest public park within our city limits. Sugar House Park (110) acres was created just six years after Brigham arrived here and started as a place to refine sugar beets. The 80 or so acres of Liberty Park were obtained by Brigham Young in 1860. He planted mulberry and cottonwoods trees on what was then called 'Mill Farm', but the name changed over the years to Forest Park and Locust Patch. Salt Lake City bought the acreage from Young in 1881 and renamed it Liberty Park. There are remnants and markers from 100 years ago scattered around the pond there-like a mill stone and The Chase Home as well as some of the original trees.

In the early 1900s Liberty Park displayed a cage of monkeys and people started talking about creating a zoo. In 1912 the Parks Department set up a zoo with a whopping $153 and displayed birds, monkeys and squirrels. Within a few years they had over 100 rabbits, an ostrich and many birds housed in "The Happy Family Building." In 1916 schoolchildren gathered donations of pennies and nickels and helped the city buy an Asian elephant named Princess Alice (after Theodore Roosevelt's daughter, Alice) from a circus. She later had baby pachederms, one being named Prince Utah. Sadly his mother rolled over him and killed him, and local papers reported seeing the mother elephant cry real elephant tears after his death.

In the 1930's Princess Alice kept escaping out of her caged area in the Park and was seen wandering down 700 East wearing clotheslines full of back yard laundry on her back. Duuuuude, the Drum Circle folks on Sundays would have loved that! Neighbors were scared and outraged by the giant escapee, but the Hogle family came to her rescue and donated land as a new home for all the animals where Hogle Zoo is now located. During the depression volunteers sold flowers to help feed the animals and pay the water bills there.

When you read real estate ads you'll often see verbiage like 'close to a park' or 'within walking distance of a neighborhood park.' City parks do add value to all of our lives-from humans to dogs to caged animals and wildlife.

2011

The weather outside is frightful, but buying a home can be delightful in winter. Why, you ask? If the house is on the market during the holidays there's a likelihood the sellers are seriously motivated to move because usually owners will pull their listings until spring due to the holiday chaos. You may get a better deal than in the spring if you buy during the cold season. Even the Utah Association of Realtors has found that home prices generally fall during winter and rise during the spring.

When shopping for homes in December and January, be aware of some of the extra things to look for besides just good prices:

1) It's more cold than warm in Salt Lake City and I think it's especially telling to look at homes when there's snow on the ground. You can feel the cold air blow through the gaps in the windows and doors. When an agent lists 'extra insulation' on a house flyer, you can tell as soon as you walk in the door if it's fact or fiction. Also know there's a trend for buyers and home owners to get energy audits of properties prior to the closing as part of the buyers due diligence/inspection period. (I can tell you in the future an energy audit will be even more common as 'green' loans become more popular). I usually take a lighter or matches with me when showing vacant homes in the winter. I hold up the flame where we feel it's cold and see where the draft is coming from. No, I haven't caught any homes on fire!

2) If you're buying a vacant or foreclosed on property, have your agent check with the listing agent if the home was 'winterized' prior to the cold weather kicking in. Winterizing is a protection process where a contractor or technician goes into the property and drains the pipes and then shuts down the water from the house to the water main. The heat may be shut off (on purpose) or the thermostat set to a low temperature such as 55 degrees. These actions protect the owner from potential pipes freezing in the winter and causing an expensive disaster in the home.

3) You won't be able to test the air conditioning system of a house you're going to purchase in the winter as inspectors will not even look at the cooling systems if it is colder than 45 degrees outside. Murphy's Law would kick in during the summer when you first crank up the central air and it doesn't work, so always negotiate a home warranty that specifically covers air conditioning systems.

4) If it's a snowy winter, it's often hard for inspectors to get up on a roof and determine condition. If you can't see the roof, but the home is good, you can negotiate that the seller escrow the cost of a new roof at closing to be determined once the snow melts. If the roof turns out to be good and have a life of at least five years, the seller would get their funds back. Otherwise, you'd get a new roof in the spring.

HAPPY HOLIDAYS AND HAPPY WINTER HOUSE SHOPPING!

2011

Owning a condominium can be a less expensive way to be a first time homeowner because, well, condos are often less expensive than homes. And folks who have had a big home, raised kids and now are empty nesters often find the condominium lifestyle to be a great 'lock and leave' alternative because there's no yard work, snow removal and exterior maintenance.

All condo projects have a homeowners association made up of the owners in the project. The point of having an association is so that owners can make decisions about their building, like: when should we paint the hallways and replace the carpets? Does the building need a new roof? Should we allow pets? How many units can be used by owners as rentals? It's a fact that most people don't attend their regular homeowners meetings (which can be monthly, bi-monthly or yearly) but they should. Being involved in the Home Owners Association (HOA) can help in keeping costs down for running the building while focusing on keeping the property updated.

Most new condos have fees that include a monthly bill for water, hazard insurance on the exterior of the property, a tiny part of the property taxes for the common areas (halls, parking area), and monthly yard maintenance (lawns, shrubs), garbage removal and sewer. As an example, a condo complex with 30 units will bill each owner through the HOA fees 1/30's of the cost for water, common area property taxes and maintenance/garbage/sewer. The individual owners' monthly utility bills for gas and electric service are metered separately. Some condos also charge for basic cable or wi/fi.

I live in a condo and my monthly HOA bill includes my power, gas, some dumb TV/cable fee (I don't have television), and my percentage of the water/insurance/garbage/sewer bill. IF my condo project had a pool, tennis courts, spa and other bells and whistles my fee would be a lot higher because the maintenance and insurance of these items costs an HOA more each month. American Towers (downtown) has a pool, meeting rooms, racquetball and a roof patio, plus 24/7 security guards at the front desk.

HOA fees do not cover any loss inside your unit if there was a fire, flood or burglary. If the neighbor upstairs overflowed their bathtub and your ceiling fell in, the HOA would most likely pay for your new ceiling. But they wouldn't pay to replace your all white leather sofa or buy you a new cat. Condo owners are encouraged to get 'content' insurance, similar to renters insurance, to protect personal belongings. There are currently 1100 condos for sale on the MLS in the Salt Lake Valley. With interest rates now at 4% or below-what are you waiting for? Go shopping with a Realtor today and see what options you have in your price range!

January 25, 2011

The Rose of Rose Park

2011

Rose Park is an area located five minutes to downtown Salt Lake City. It's west of I-15, north of 600 north, and east of Redwood Road. There are a few old historic pioneer homesteads still out there but the area is mostly small starter homes built after WWII for the returning veterans who got jobs working for the railroads and in the rail yards nearby. The original developer plotted out the streets in the shapes of several roses, all coming off the main street/stem, called 'American Beauty'. The names of many of the streets are the names of rose varieties and the original roofing shingles to the original homes were either red or green.

I'm always surprised when I list a home out there and find out the sellers didn't know where the 'Rose' of Rose Park came from! I also have to sometimes blindfold people to get them there because so many folks I work with are east side snobs. Upon arriving on American Beauty Drive they are always amazed at how nice a neighborhood it is, with beautiful tree-lined streets and well kept homes. I swear the neighborhood there gets out every night in the summer and had clips their yards with pinking shears to make those lawns looks so beautiful.

Over the years some great things have happened to the area, and there are more in the works: The Jordan River Parkway has been extended and the bike trail is terrific; TRAX is going to be completed in the next 15-24 months to the airport, making Rose Park an extremely transit oriented neighborhood (already has great bus service); a new library and eco-garden; and my favorite, the Rose Park Golf Course and little par three course next door to it. There are also new home subdivisions and ball parks popping up all over now that the freeway was upgraded past 2200 North. Plus, there is a toy airplane field/landing strip hidden out there for kids of all ages.

I think Rose Park is one of the most religiously and ethnically diverse areas in the Salt Lake Valley. Check out the rugby and soccer action at any of the fields out there on the weekends and see what I mean.

Home prices are amazing-you can get a 1200-1800 sq. ft. home on a large lot with a one or two car garage from $145-$175,000 depending on the condition. The newer homes are 10-20% more. No more driving to west Egypt to get a good deal, just start exploring the Rose of Rose Park for a five minute commute to downtown. And there are other great close-in neighborhoods along the Jordan River, like Poplar Grove and Glendale. Living closer to work is a greener alternative and with TRAX being extended to the airport these areas are going to become even more desirable to buyers.

2011

Once upon a time you bought a house with that really hot girlfriend you had for three years. She turned out to be a clone of Lindsay Lohan and well, last you heard she's in rehab at a clinic near Provo. You both qualified for the loan to buy the house, and now you want to move to eastern Tibet to get far far away from her. But you've got to sell your home first. You and Lindsay 2.0 are BOTH the owners listed on the title as 'joint tenants'. Great, just great. Now you have to deal with her and get her to sign the listing and closing papers.

Joint tenancy is a way to hold title to the property when there is more than one owner. If one of the owners were to die, the property would automatically be owned by the surviving party. Divorces aren't generally pretty for anyone. We real estate agents are used to doing transactions where the parties are either in the process of divorce or getting a divorce. IF the parties aren't divorced yet, the two (or three, or multiple owners) MUST all sign the listing agreement, and the sales contract. Here comes the nasty part: When the property closes, all the owners must agree to how much of the profits each owner gets. If the parties are still speaking, it's usual for the proceeds to be split 50-50.

But what if the divorce has been filed in court? The judge will determine who gets what amount of the profits once the home is sold. What if you put in all the original funds for the down payment and the new kitchen and Lindsay 2.0 didn't provide any money during your stay in the home? Maybe the judge will let you get reimbursed those funds and will take that amount from L 2.0's proceeds...or maybe not. You can still list and sell the home, but the money will sit at the title company after the closing unless there is a written order by the court as to how the proceeds are divvied up.

To even thicken the soup, let's say your dad had to help the two of you buy the home and all three of you are on the deed as joint tenants. Again, if there's not a divorce proceeding underway, the three of you can figure out who gets what percentage of the proceeds and instruct (in writing) how the money is to be split up at closing. If there is a divorce, the judge will have instructions for the title company at closing as to how to split the profits.

It's always much easier and cheaper to agree to sell and agree on how the profits are split before a divorce is filed, if you and your partner(s) in the home are still being civil to each other. The minute a judge gets involved, the costs to sell go up because you all have to hire attorneys to get you what you want in the divorce settlement of assets. I'm not saying DON'T talk to an attorney if there's an impending divorce. Certainly, get all the opinions you can before you sell under emotional duress.

2010

You’ve heard the phrase, “Buy low, sell high” (as in how to make money in the stock and metals markets). The same concept holds true in real estate. You always want to try and buy a home for the lowest amount you can and try someday to sell it for the highest price possible.   Guess what? Home values are low, so why aren’t you buying?

“If you don’t own a home buy one. If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home.” John Paulson, Sept. 28, 2010 .

This guy bet against the sub-prime loan market in 2007 on behalf of his clients and made them billions. Now he’s predicting double digit inflation and gold prices up to $4000 an ounce by 2012. He’s telling everyone to buy buy buy real estate, too.

On the other side of the real estate coin, if you’re selling right now you’re most likely watching your equity erode right before your eyes. Prices have come down in Utah from the peak highs of real estate values in 2007 to between 25-40% less right now.  But if you’re planning to buy after the sale of your home then you get to take advantage of how much lower prices are right now…and the phenomenal mortgage interest rates. Those rates won’t be around if double digit inflation comes to town and goal soars at $4000 an ounce.  My new adage is, “It’s gonna hurt selling in this buyers market but you’re going to make up for your loss on your next purchase because you get to be the buyer. You lose, then you win and it should balance out in the end as your future investment.”

We are being bombarded with data and news these days about real estate every hour on the hour. Here’s a reality check from just two months ago: there were @1800 properties for sale in Park City at the end of the summer, 165 had offers pending, and 350 new properties had been listed in under 30 days.  That’s an increase of almost 20% of inventory in one month. And what is this inventory? Many, many foreclosures and people forced on the market who are facing foreclosure (short sales). 

The odds are right now if you’re thinking of selling, make sure you enter the market with a very aggressive asking price because within weeks there will mostly likely be for sale signs popping up all around you of homes with lower asking prices. Utah is thick in the foreclosure mess and we’re not slowing down in the numbers of people losing their homes. The more foreclosures on the market the less you will be able to get for your own home and that shiny gold luster of your bungalow is going to be permanently tarnished by this market.