Buyers Archives - Teton Realty Blog

What You Need to Know About Buying Land!

January 31, 2021 By Tayson Rockefeller Leave a Comment

Though the market has changed throughout my career, the same questions always seem to come up. Here are a list of common Questions and Answers:

Q: Is there a time frame in which I need to build?

A: The short answer is, not that I’m aware of. I have seen special circumstances, however. For example, in the unlikely chance that a homeowners association might allow someone to build a guest house before a main house, they might require a home to be constructed within a certain time frame. The valley has a pretty poor track record of actually following through with these types of agreements, and most homeowners associations have caught on.

Q: Do I need to do anything with the land such as maintain it?

A: In general, not much. Most subdivisions have an active homeowners association. The HOA will typically take care of the road maintenance, fire pond testing, and other similar maintenance requirements and tasks. The most common exception is with respect to noxious weeds. While many developments have an agreement with a farmer for the open space or unused areas of the development, some do not. If you receive notice from the county, you may be required to hire a company to spray the weeds such as musk thistle. Even if you don’t, they will, and can assess your tax bill. Fortunately, the cost of weed spraying is usually pretty affordable.

Q: What are the holding costs like?

A: Here again, usually, pretty affordable. There are two primary categories of expense including property taxes and homeowners association dues with the occasional special assessment or local improvement district (LID) fee. The first two are fairly common and obviously vary depending on the location and amount of amenities within the subdivision. Fortunately, most websites (including ours) display property taxes and HOA dues on the listing detail page. Some properties take advantage of an agriculture tax rate in the event the property is being used for ag purposes (and is over 5 acres), in which case the taxes can be extremely negligible. Other fees such as the aforementioned special assessment, LID or other fees are rare, but can come about for road maintenance, utility improvements or other projects usually related to infrastructure.

Q: What can I do with the property before I build?

A: This depends, but the biggest determining factor is whether or not the property is in a subdivision with covenants and restrictions. A big one that comes up is whether or not you can camp on your property. While some associations may allow it, I would think it should be generally assumed that they do not. For properties outside of a subdivision there are still some regulations. I have written several articles that can be found on my blog website related to what you can do with your property, what it’s like to be part of a homeowner’s association in the area, and more.

Q: Tiny Homes, Rentals, Campers?

A: Here again, the subdivision layer is the first step to research. Most subdivisions have a home size requirement in the range of 1,800 square feet, but I have seen them as small as 0 to 600 SqFt and is large as 2,600 SqFt. HOAs can also restrict short-term rentals via the covenants and restrictions. Though the county’s position is subject to change, smaller homes are generally allowed so long as they are permitted and built in accordance with the current building codes. RVs and campers are always a contentious subject, so make sure to follow up with the county or city on that one. To summarize, It’s always a good idea to find a real estate professional that understands the local market. I’ve heard a number of stories about Buyers that didn’t have the resources, tools or professional insight to make an informed purchase and later discovered that the property or the rights associated with the property were not what was expected. We’ve been selling real estate for a long time in the area and have great resources available to our customers when it comes to information about developments, requirements and subdivision documents and would love to help!

Real Estate themes of 2020

January 4, 2021 By Tayson Rockefeller Leave a Comment

As you might imagine, the common real estate theme for 2020 was the craze of city dwellers looking for a rural escape. 2020 was one of the busiest years on record (if not history) when it came to sales volume, velocity and dollar volume. We didn’t quite hit 700 land sales in Teton Valley and Alta, but it was darn close. That’s a far cry from 281 land sales in 2019. Residential sales likely would have been the same had there been the inventory to promote those sales.

Aside from the market itself, I didn’t hear as much in terms of tiny homes, which I would have easily identified as the “theme” for 2019 and the years leading up to 2019. Interestingly, there wasn’t much talk of tiny homes in 2007 either, the last memorable real estate boom. In fact, most people were going big as opposed to building small.

I did hear quite a bit about was vacation rentals. While I believe many of the land sales were simply the usual group that wants to own a piece of Teton Valley, many did ask about the viability of renting in the areas they shopped. This isn’t all that uncommon though. The year started out with what I described, those looking to transition to the area permanently which led to a number of questions related to the school system, hospitals, internet speeds – everyday life in Teton Valley. The last half of the year is where I noticed an influx of second homeowners. Much like those seeing the window close on their opportunity to own a piece of land, it seemed others had a similar feeling when it came to purchasing a home. To justify the increasing costs, and to capitalize on income to offset the cost of ownership, I had quite a few discussions about vacation rentals.

I’ve written articles in the past about short-term rental restriction, mostly a power that only homeowners associations possess. With such a variety of owners and investors in each development, it may become challenging to amend subdivision documents to restrict short-term rentals, but I can foresee that becoming a topic in the years to follow.

2021 will surely be an interesting year in real estate. Most builders are booked out one to two years, and rising construction and material costs haven’t seemed to subside. If the majority of current construction is custom work for individual homeowners, inventory will likely remain low. Property owners that have been waiting in the wings may identify 2021 as the time to sell, if the inventory remains low. I am personally interested to see how National trends and factors impact the market, interest rates and the overall economy can have substantial influence as well. Regardless, I’m looking forward to “normal”, whatever that is.

Pending, Contingent… What’s the Difference?

November 2, 2020 By Tayson Rockefeller Leave a Comment

With the unprecedented number of real estate transactions of late, I seem to be getting the same question quite a bit; what does contingent mean? If it says “Continue to Show”, should we look at it? What is the/a contingency?

First, let’s get “contingency” out of the way. I’m not pulling this out of the dictionary, but in my line of work a contingency usually means that there is an event that needs to take place before the contract can move forward, and provides an opportunity for a Buyer to withdraw from a contract without ramification. Common examples of contingencies include a buyer who has a contingency to obtain financing, or a buyer who has a contingency to complete a home inspection or a due diligence period. Contingencies can also include circumstances where a buyer needs to sell a property before they can close on the subject property, but this is rare in markets that are as busy as ours has been. The reason this is less common is because sellers in hot markets are less inclined to accept major contingencies beyond the common ones I mentioned above.

Moving on…

At the time of this article, there are 3 classifications of properties that are under contract, or in other words, have an accepted offer with another party. These classifications are for the Teton MLS, note that other areas and real estate associations label contingencies or classify properties with an accepted contract differently.

1) Pending

If a property is labeled as “Pending” it usually means that the seller has accepted an offer that has no contingencies. It might be referred to as “Pending”, “Accepted Offer” or “Under Contract” when speaking with an agent. Certain Real Estate websites may also label listings this way.

2) Pending, Contingent

A listing that is labeled as “Pending, Contingent” normally means that there is an accepted offer, but there is some sort of contingency in place. Usually these are common contingencies such as an inspection period or financing as mentioned above. Similar to “Pending” listings, these types of listings are often referred to as “Pending”, “Accepted Offer” or “Under Contract”.

3) Pending, Continue to Show

Properties that are labeled “Pending, Continue to Show” usually indicate that there is a more substantial contingency like an extended inspection period, the Buyer needs to sell a home before closing, or another form of unusual contingency. There’s a caveat to this, it’s common in Jackson for agents to use this label more generally, even if there is not a significant or unusual contingency. Some websites May identify these types of listings as “Continue to Show, but they’re usually just classified as “Pending Contingent” or “Contingent” like other listings that have an accepted offer.

As a final note, agents often don’t change the status of a listing as contingencies are removed. Listings that are under contract and identified as contingent or mention that the property should continue to be shown may not have contingencies at all and the listing classification simply hasn’t been updated. In addition, it may or may not be fruitful to inquire about a listing that is under contract, but it never hurts to ask. It’s easy to follow up with your agent to obtain the status of the contract to see if it’s something that might be coming back to the market or have a contract that is on shaky ground.

What are Homeowners Associations like in Teton Valley?

October 2, 2020 By Tayson Rockefeller Leave a Comment

Throughout the course of my career I have been struggling to explain the difference between a homeowners association in Teton Valley and what a potential buyer might be used to. There is a huge demand for real estate outside of a subdivision, but I think a lot of that has to do with the perception of what a subdivision usually is in more populated areas. I can distinctly recall many initial conversations to understand a buyer’s wants and needs. Many of them are looking to build a 2400 square foot, 3 bedroom home with a blend of wood siding and mountain moss stone. They’re looking for something with protected views in an area with other similar homes. This is a textbook “preferred design” for many subdivisions that help create building envelopes or guidance on preserving views, yet they don’t want to be in a subdivision. Usually, most buyers warm up to the idea of a rural, Teton Valley subdivision by the time they ultimately pull the trigger on a purchase, particularly when they find out the annual dues simply cover the road plowing and maintenance at a few hundred dollars a year, and everyone is pretty good about minding their own business around here.

To elaborate on subdivision life; there are subdivisions that allow and welcome horses, even a few that allow chickens. Most have a minimum home size between 1200 and 2200 per SqFt. Many subdivisions have landscaping standards, but few abide by them in a strict sense. I’m not aware of any where pets are not welcome, and almost all of allow a privacy fence or dog run. Some have a board of directors, others do not. Some subdivisions have only a few homes where each homeowner takes care of their own snow removal as the development fills out. While I have seen a few circumstances where a landowner has to find a unique way to obtain a view because of the next door neighbor, I have not personally seen a circumstance where a neighbor has deliberately blocked someone’s view. I would guess the average association fee is about $400 per year, and this is usually only to maintain roads and fire ponds. Most subdivisions have the convenience of utilities in the roadway, and a building site that is more or less ready to be built upon. We’ll see if this changes with the influx of buyers, but for the most part, both Teton Valley locals and new members of our community are reasonable, kind, and easy to work with when it comes to resolving issues. Remember that most subdivisions have building sites with an equivalent of two and a half acres or more, but even subdivisions with smaller lots get along all the same from what I can tell. Finally, most subdivisions do not restrict rentals of any kind (at the time of this writing).

Properties that are not within a subdivision can have their downsides, too. If you’re looking to buy 20 acres or more, it usually doesn’t gain you much to be inside (or out) of subdivision. Your neighbors are usually far enough away that the extra few utility trailers they collect won’t bother you much. Regardless, there are a few reasons why being in a subdivision just isn’t going to work out for some:

1) Home Sizes

This is probably the biggest one, and it ties in with the next category. Tiny homes, and in many cases, building guest houses before main houses can be difficult within a subdivision. The concern is making an exception for one person, and setting a precedent. There have also been many circumstances where a guest house is built, but the main house never follows.

2) Manufactured and Modular Homes

This one makes sense. If you invest in an expensive home in a nice development, you would probably like to keep the appearance and value of the homes similar. No, you really won’t find any tract housing in Teton Valley, and values can vary significantly from one street to the other even in the same development, but this is usually where a line is drawn. I should clarify – some modular home companies build an extraordinary product so I would call this case by case with each development.

3) Restriction on Out Buildings

Some developments will be restricted on room, others on that view preservation we talked about earlier. Either way, most subdivisions (even if there is room) would prefer that you don’t convert a potato cellar or quonset into a shop. Many do, however, allow for a barn or detached garage.

4) Conditional Use

Almost all developments restrict commercial use (note that Idaho generally does not recognize rentals as a commercial use) save for an artist studio or in some cases a home business that does not impact the neighborhood. With that said, if you are looking for some sort of conditional use permit for commercial use as viewed by the city or county, you can bet that you aren’t going to get through the homeowners association.

5) Goats, Pigs and Chickens

This one hasn’t been coming up as often as it used to, but with the exception of a few communities, goats, chickens, pigs, cows and other livestock are generally not allowed.

To summarize, it’s best to use your judgment. I understand that there are strict rule followers out there that won’t feel comfortable purchasing in a neighborhood that restricts something, even if everyone else is breaking that rule. With that being said, the drive-by test is the best solution in many cases. Look at each neighborhood. If you’re driving through a golf community and all of the lawns are well manicured, then you are probably going to have to have some sort of landscaping, and you are probably going to have to keep it maintained. If all of the neighbors have horse trailers or campers, you can probably feel comfortable with your camper. You can do the same for building style, building materials, how the neighbors have helped preserve views and so on. Do I know the ramification for breaking the rule(s) when everyone else is doing the same? No, I don’t. Regardless, some people are comfortable with the “cowboy” way of life and unspoken rule of law, and some aren’t.

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