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Condo and Townhouse HOA Dues Increasing

July 6, 2023 By Tayson Rockefeller Leave a Comment

Most condo and townhouse associations in Teton Valley share the same set of responsibilities which are collectively paid by owners in the community. Usually these include exterior maintenance, exterior insurance, snow removal, lawn care, open space taxes and maintenance and in some events, trash, water and sewer. Not very many communities have additional amenities but those would be included here as well. Another important item includes reserve funds for future repairs. While this line item isn’t generally ignored, it is often overlooked. New communities usually don’t require much maintenance with new siding, new roofs, new parking lot surfaces and so on. However, all of these items (and many others) eventually require maintenance.

It was common with most of these early developments for the developer to have some level of input with respect to establishing the dues. For obvious reasons, it was in the developer’s best interest to keep the dues low. This might be influenced by the developers desire to keep the dues low during their ownership (though this can be structured a number of different ways) but also to keep the dues low to attract new owners in the development. This isn’t necessarily bad practice as these developments simply didn’t require much in the way of maintenance early on.

As units sell in a development there is usually a transition where a board of owners is formed. This process is normally outlined in the subdivision’s documents. Developers often work with management companies or accountants to oversee the process, but admittedly, it can oftentimes be difficult to gain participation. Historically, Idaho has not had a clear guideline with respect to these processes, but the state is beginning to publish some basic requirements. Based on my experience, the dues are often kept at the same developer rate for many years with many new owners resisting an increase, particularly when there is no need for immediate maintenance. The problem is that this mentality perpetuates which ultimately leads to two choices;

1) A drastic increase in dues when it is apparent that the community will lack funds for major maintenance items

2) A “one time” special assessment

Obviously the best path would be a proactive approach considering future maintenance and building reserves. While it is too late for this process in many instances, my personal preference is a combination of the two – a reasonable increase to consider future maintenance items and beginning to build reserves coupled with a special assessment to address immediate concerns. This keeps the dues within reason for resale values, but also addresses all issues.

Today, we are beginning to see many communities employ these tactics not only for maintenance, but also for inflation. The general cost of maintenance has undoubtedly increased. Even at a 2% per year increase for consideration of inflation would result in a significant increase after 10 to 20 years, which many communities have not accounted for. As we all know, recent inflation has been significantly higher than 2%. Similarly, roofs, siding, parking lot surfaces – all of these major maintenance items have a bookmark sometime in the 20-year range, which is fast approaching for most communities developed in the 2005-2007 real estate boom. My advice for community members and associations is clear, but buyers should also consider these imminent increases. Personally, I would be more concerned with a community with low dues when compared with a community with high dues. HOA meeting minutes, budgets and reserve accounts are always available to buyers, and this is something that should be reviewed or at least discussed with an HOA representative.

Deferred Maintenance and its Impact on Value

June 8, 2023 By Tayson Rockefeller Leave a Comment

Homeownership comes with maintenance. In fact, it can oftentimes be one of the key driving factors for one to consider selling a home, particularly in an area subject to second homes, as well as the high maintenance aspects of Teton Valley. From snow removal to home staining and constant deck refinishing, it isn’t always easy.

In past articles I have identified home upgrades that can help with resale value, but one of my most recent articles on the subject was way back in 2015. The cost of remodeling, additions and even maintenance was significantly lower back then. As a result, my (current) advice is typically to sell as-is without major upgrades because the return on investment can be so hard to achieve. In some events, I provide this same advice even for deferred maintenance, because the availability of contractors can be so limited that one might miss an opportune sale window by waiting for contractors.

Because of this, I can’t stress the importance of ongoing maintenance (and repairs) enough. Throughout my career in real estate I have witnessed so many circumstances where a seller concession was so much more than the collective maintenance would have been. The same goes for repairs. A small shower glass leak that continually pools water eventually finds its way to the subfloor, creates mold, requires tile replacement, etc. While this seems obvious, what we tend to forget about is the additional cost of a sales concession to satisfy a concerned buyer. We usually can’t remedy a bathroom overhaul during a contract period. As a result, buyers look for concessions in excess of the cost of repair, which honestly makes sense. They assume the liability of the repair, the risk of unseen damage, the organization and completion of the task and the inconvenience of it all until completed. There was a time through 2021 where sellers didn’t need to make concessions in order to finalize the sale, but the market has shifted, even if it hasn’t been as much with respect to values.

In addition to the concession needed to satisfy a buyer that is so often in excess of the cost of maintenance repair, the other obvious benefit of regular home maintenance and repair is how well a home shows during its time as a real estate listing. It’s amazing how much sooner offers are received, how much more buyers are willing to negotiate, and how fewer days on market accumulate with well-maintained homes in good order. While feng shui and declutter is important, the feeling of a well-maintained home is hard to beat.

With the above said, below is a list of home maintenance items I often see overlooked.

Staining!
Nearly every home inspection report comes back with siding maintenance either desperately needed, or recommended. It’s easy to put this one off, year by year – particularly when you contact the local staining company of your choice each Spring, just to learn that they are booked through Fall. Make your appointments in the Winter, and get on the schedule early. The frequency of home staining can vary dramatically. I stain my full wraparound deck every other year, but only need to stain the exterior of my home about every 10 years. My home is mostly shaded, but receives heavy snow load on the decks that I clear after every storm with a snow blower. The lack of direct sunlight and wind-driven moisture provide shelter for my house, but most homes in Teton Valley are subject to high UV sunlight (something we sometimes miss) and wind that both drives moisture and dries siding. Stains with high transparency tend to need more frequent maintenance whereas opaque stains or paints usually don’t need refinishing quite as often. There’s a big argument between oil and water-based stains, but I’m not getting into that with this article. At any rate, once siding loses its protection layer, it doesn’t take long for warping, cupping, cracking and the loosening of fasteners to occur, only adding to the cost of the deferred maintenance.

Decks and Deck Railings
Same comments, above.

Roofs/Ice Dams
There’s no better time to take care of ice dams than in the Summer months when you can stand on your roof! You can read a recent article HERE.

Stone, Metal, Flashing
Stone or brick falling away from chimneys and homes are usually doing so for a reason. Finding the source of a water leak, bad flashing, etc. can save a major overhaul down the line.

Windows
Window seals often fail, and getting glass replaced can take months to find contractors, order glass and install. Waiting until you have a contract on your home puts you in the precarious position I described at the outset of the article. On a related side note, removing window screens during the Winter months is a great way to add longevity to them.

Driveway Sealing and Sidewalks
Sealing concrete is becoming ever more important with Idaho salting roads for Winter safety. This chemical compound rides with your car in the wheel wells and undercarriage, and melts away on your concrete drive creating “spalling”. Simply sealing concrete can help you avoid costly repairs. While asphalt tends to be more resilient in this area, it also requires sealing. Settling concrete walks are also relatively common in the area. Many foam injection companies have moved into the region, offering concrete leveling without the jackhammer. Leveling and sealing sidewalks so that you aren’t worrying about concessions (and trip hazards) down the line is an easy repair and offers great peace of mind.

Hardwood Floors
Hardwood floor refinishing is another one of those services that can vastly improve value, but it requires scheduling far in advance of listing your home for sale.

Lawn & Sprinkler Maintenance
If you’ve ever noticed those hard water deposits on a few of your windows or the white “arcs” on the side of your house, a simple sprinkler adjustment can easily remedy the problem and save thousands in repairs. Similarly, weeding and grounds maintenance is a whole lot easier before it gets out of control.

Rodent and Pest Control
I’ve touched on this and past articles, but rodents and pests can wreak havoc on homes. Field mice can cause significant issues relative to home systems, particularly insulation in crawl spaces. Carpenter ants can do nearly as much damage as termites (which we generally don’t have) in this area, particularly with timber or log homes. Getting a handle on pest control at the outset is a must.

HVAC / Plumbing
Other overlooked maintenance items include furnace filters, house ventilation filters, dryer vent cleaning, electric heater register cleaning, water filtration replacement, HRV filter cleaning and more. If you aren’t capable or interested in maintaining these items, have it noted every time these home systems are serviced by a professional. If you are, a dry erase marker on your HVAC duct is a great indicator as to the last time all of these home systems were serviced. Buyers asking for concessions for these types of services (if they are not obviously maintained) is common.

Tile, Stone and Grout Sealing
Most tile does not require sealing, but stone and granite countertops as well as grout lines usually do. Most stone fabricators will tell you that the initial sealant on granite countertops is good for anywhere from 5 to 10 years, and grout can be sealed more frequently, even as much as annually depending on traffic patterns and use. This isn’t a fun task, but it’s something to consider.

General Cleaning
Easy to forget surfaces such as the tops of cabinets and window tracks are much easier to keep clean if they are cleaned frequently. No, I don’t clean my window tracks every year, but I try to do it every other year if I can.

Each home is different, and each home requires a unique maintenance procedure. Keeping a notepad along with your other house service manuals and getting a feel for your investment can not only save costly repairs down the line, but also pay back in dividends when it comes time to sell.

When is the best time to shop for Real Estate in the Teton Valley?

May 2, 2023 By Tayson Rockefeller Leave a Comment

The best time to shop for real estate in the Teton Valley is totally dependent on a number of factors, as well as the context of the question. When do we typically see most new inventory come to the market? When are sellers usually most inclined to negotiate? I’ll do my best to break these questions down by the numbers using historical data, but I have to first clarify; The best time to purchase real estate in the Teton Valley is when the property you are looking for comes available. I can’t stress enough in our small market the lack of inventory and new listings at any given time. Choices are always limited, particularly when it comes to specialty properties like those with property features like creeks, streams or rolling terrain – as well as homes with guest homes, unique features, or special locations. Buyer should always be in the habit of monitoring the market closely, and jumping on opportunities when they meet one’s needs. That does not mean that buyers need to jump on the first thing that they see, however.

Land

Historical data has been fairly consistent. May and June have been the biggest months for new listings every year looking back to 2018 (and beyond) with the exception of 2020, which I’ll toss out as a result of The pandemic. Listings almost always begin to ramp up in April, and numbers for new listings begin falling in September. Here again, it doesn’t mean that one should not pursue a purchase during any given month. If a listing comes available that meets a specific set of criteria that has been difficult to find, it should be pursued if the price is right and you intend to close on a property within a set timeline. When it comes to the listing / sales price ratio, the data isn’t quite as definitive. However, it seems to point to sellers being more negotiable during the off-season months, particularly October, November and December. Usually an increase in supply decreases demand, but Teton Valley’s peak tourism season is the Summer months, effectively increasing the demand along with the new supply.

Homes

Residential trends seem to trail land trends by about 1 month. Most new listings come to market late Spring and early Summer, with June and July historically being the peak months for the greatest number of new listings coming to market. New inventory once again dwindles during the off-season months, particularly late Fall and early Winter. Historic trends have shown that new listings tend to pick up once again through the Winter peak season, though new listings are far fewer than Spring/Summer. Once again, the data is not as conclusive when it comes to the listing price / sales price ratio with residential properties, but there does seem to be a trend that shows more negotiation during the offseason months, like we were able to see with land sales.

Summary
The data points to more options and greater inventory during the Spring and early Summer months, with more opportunity for negotiation during the offseason, particularly late Fall and early Winter in both market sectors. Source: Teton Board of Realtors – Teton Valley, ID & Alta, WY

Fields and Fields… of Fields

April 10, 2023 By Tayson Rockefeller Leave a Comment

No, I’m not talking about all of the so-called empty subdivisions better known as “fields”. Today, I am talking about form fields.

When a real estate agent gets a new listing the agent usually enters the listing data into the local MLS which includes all of the property information, uploads photos and documents, then clicks the magical submit button which syndicates the listings to various marketing platforms like Trulia, Zillow, and brokerage websites like TetonValleyRealty.com. When a consumer views a listing on one of these various marketing platforms, they can see the data entered by the real estate agent. The data is usually entered into predefined fields within the agent’s MLS software.

Most local agents spent quite a bit of time and entering these listings to make sure that we are not misrepresenting the data displayed to the public. Almost all of the form fields require some sort of input before the listing can be submitted. If an agent doesn’t know the answer (or in some events think they know the answer), this data is sometimes inadvertently misrepresented. I would like to think I know my way around local real estate, but even I have been guilty of this.

Because of this, there are many circumstances when I find myself arguing with a prospective Buyer about certain amenities that a property does, or does not have. Some of these are obvious, such as the view. If the listing says it has a Teton view when it in fact does not, it’s a pretty easy argument. Some, however, take a bit more time to research. I have seen listings state that water systems are available when they are not, and vice versa. These amenities (or lack of amenities) can have a significant impact on the perceived value of the property.

In the event of an advertisement error or misrepresentation, what recourse would a Buyer or Seller have? The answer (in my opinion, and depending on the situation) is; not much. Not only does the MLS and most of the advertising platforms have a disclaimer with respect to information being “reliable, but not guaranteed”, but the real estate purchase forms also have statements advising a buyer to perform their own home inspections and verify issues related to the home, including the square footage.

Sellers
My advice to Sellers in these situations is simple, closely review the data entered by your real estate agent to verify its accuracy.

Buyers
My advice to Buyers would be to query your agent and perform your own inspections to the best of your ability, and watch out for things that might be too good to be true. Most agents (particularly local agents) will not only normally have a sense as to the overall accuracy, but will also know what resources and contacts to provide for this research. I mentioned water systems above because it’s an easy box to check or not to check with respect to an available public water system or connections. Other common errors include miscalculating square footage, homeowners association dues, whether or not short-term rentals are allowed, if propane tanks are leased or owned, the allowance of horses, and connectivity for hi-speed internet.

It’s also important to remember that some things are negotiable. If a listing says that the furnishings are included, but your agent does not include the furnishings or a bill of sale for the furnishings in the offer, you may be left without them. The same goes for appliances, and other personal property.

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