Real Estate Information

The current market situation has become a new reality. The days of double digit appreciation are well behind us and we have been paying the price. The reality now in the Durango Area is not as gloomy as some other areas, in fact, we are down right lucky in our area to have had a "softer landing" as a real estate market in general. Unfortunately, there are situations that this market has pushed some people into that leave them with two options: foreclosure or short sale. We have had many transactions with both types of these situations. Alicia wanted to take the extra step to educate herself beyond what most other Realtors know and recieved her CDPE (Certified Distressed Properties Expert) designation. www.cdpe.com

If you are a seller who has encountered a financial hardship and need to sell your home it won't hurt to talk to a Realtor with the CDPE designation in your area.

The market is cyclical and right now the market is also cynical. Why not wait for the market to hit “bottom” before you buy? Like in any market the bottom is never as easy to find as you might think. We have a Buyers paradise right now there are more homes on the market in our area than ever. Foreclosures are currently up from last year’s number of foreclosures (So far this year 84 when compared with all of '07 at 74). Any one can really see the market and have their pick of what is the best fit for them. And consider this article of the shortage of rentals in the Durango Herald: http://www.durangoherald.com/asp-bin/printable_article_generation.asp?article_path=/news/08/news080719_1.htm

Revival of the owner carry or seller financing is definitely in our future. Owner carry loans were virtually non existent during the credit friendly years when you could get a first, second and third loan with adjustable rates on one or all of the above (and why not make a no-doc loan on top of all that) and a home would appreciate over night. If there were ever any financial problems, the house could be sold for a profit. Sure these weird loans were the minority of loans (at least in our area), but all the same the impact of these lending practices have been felt through out the nation.

Credit scoring is tighter these days and higher credit is necessary to qualify for “penalty free” loans your credit has to be up to at least 720. Bankruptcies and tight credit are things that are here for awhile. We have come across many people that are coming in from out of the area that have either been foreclosed on or have had their credit battered by a pre-foreclosure situation or might be looking for a Lease Options (a different scenario) while they wait for their home to sell in an area that they are coming from.  

Sellers need to get creative in this market and be proactive. One way is to be able to offer seller financing if the Seller owns the property out right. A seller could potentially get closer to asking price with seller financing until the Buyers are in good enough standings with their credit to refinance with a conventional loan. Sure there are risks…landlords take risks with every new tenant and sometimes things don’t work out for the best, but for the Seller who might have a financial buffer and who is ready to move into a new home, seller finance might be their ticket forward. 

A rough look at the process is simple:

• The Buyer usually would some cash towards the purchase price (the higher the amount the better).
• Terms are drafted by an attorney the Seller holds the note (like a bank on a conventional loan), so if payment aren’t made then the Seller get the property back.

Any Seller who chooses to go this route would need to speak in depth with a tax accountant. There are some additional taxing strategies out there that might work better one way or the other. But that is the rough idea of it.

Pricing listing these days can be very tricky. The old guidelines have changed to some extent. It was easier in the "old" market when homes were appreciating rapidly. You would look at the most recent comps of other sold properties; take that information and try and interpret value from there. If you were wrong and priced too high, in some cases, the market might catch up. If you were right and priced closer to the best price, it would be under contract in a matter of weeks with a happy Seller and a happy Buyer. I used to be about pushing the price up to stay ahead.   

These days values are holding strong in our market, but when pricing you have to stand out in the crowd of rising inventory. The market is currently very sensitive to price and if you're too high your listing will hear crickets from day one. It's tough because we have a smaller pool of buyers out there in the hunt and rising inventory....so how do you know what is and what is not the right price? Here is a list of some things that I think about when pricing:

• The one of the old rules for showings was "10 showings and no offers; reduce the price" now I believe the number for that rule of thumb should be reduced to five. Prices need to stay ahead of the market. Showings have to speak louder.
• Price it right from the start. Some agents will give you a higher "best guess estimate" in order to get the listing and will bank on price reductions in order to get it to sell...not good. Listing these days need to be price right from the starting gate so that they stand out and get the attention that they need in order to sell.
• Another rule of thumb is "one month and no showings; reduce the price". One month in this market and no showings. Ask yourself, "do I really need to sell now?" if the answer is yes, then reduce the price substantially. Foot traffic is key to any home selling.  
• You have to price for market and not need. Some Sellers will say “I need to make $X amount of money in order to make this amount” which creates a very weak pricing strategy. Buyers don’t care how much Sellers profit, just like Sellers don’t care how much Buyers pay. It is a market and you have to pay attention to what is going on around the market place.
• Think how much time on the market costs (mortgage payments, HOA dues, taxes and utilities) and keep the absorption rate for your neighborhood in mind. The absorption rate = number of listings vs. number of sold over a period of time to determine how long, in months, it would take for the current inventory to be sold at the current rate.

We'll there are surprises around every corner when your in the wilderness. Surprises like bears, elk, turkey, or even just a simple wild flower. You don't really expect to find surprises in your yard. Every now and again you will here a story in Durango about a mountain lion sighting in someone’s yard or the more common (sad sight) of a garbage bear on the hunt for irresponsible home owners' garbage cans...I digress.

Today after work I thought what a great time to get in some quick yard work. I was out trimming off some dead branches from an oak tree when something caught my attention out of the corner of my eye. 2 feet from my face was a crazy looking bug eyed, big eared...what looked like to me a baby Lemur monkey (?)...we had a stare down briefly and I ran to Google to try and figure out what I saw. Turns out it was not a Lemur (surprise), but was a Ringtailed cat. I have never heard of these critters, but I guess that these nocturnal cats are common further south of here. Not too common to see, especially here, but common in the U.S. deserts. 

A suprisingly busy first day for the Farmer's market this year at the First National Bank of Durango's parking lot (May 19th). Their were even some tasty greens on the tables. Our two newfoundlands had a great time along with us as we enjoyed walking around and looking at all of the (mostly edible) goodies.

A suprisingly busy first day for the Farmer's market this year at the First National Bank of Durango's parking lot (May 19th). Their were even some tasty greens on the tables. Our two newfoundlands had a great time along with us as we enjoyed walking around and looking at all of the (mostly edible) goodies.