Buyer Tips Archives - Page 17 of 25

Title insurance on new construction?

March 12, 2018 By Tayson Rockefeller Leave a Comment

won’t go into too much detail on what a title insurance policy is, though you can read the article here: https://tetonrealtyblog.com/what-is-title-insurance/ which might be a good prerequisite to this article.

It dawned on me the other day that while it is common for almost all real estate transactions to be accompanied with some sort of title insurance policy, it’s important to remember that title insurance only covers the initial purchase price of a property. For example, if a claim is made and a defect in the title is found, the claim can only be made for up to the amount of the original purchase price. The next obvious question is, how about when a property is improved or the value of a property is increased?

With all of the new construction we are seeing throughout the area, I figured this was an opportune time to bring this to the attention of home owners and investors. Probably the most common example would be someone building a new home. With low residential home inventory and relatively affordable land costs, it’s becoming increasingly common to see people buying land with savings or home equity lines of credit then preparing to build in the future either with cash or a construction loan. When obtaining a construction loan, the lender will require a lender’s policy for the build (reference previous article), but there usually isn’t a seller involved to pay for a title insurance policy like a regular transaction between a buyer and a seller.

The result of the above scenario would be a home valued at several hundred thousand dollars with a title insurance policy protecting up to the value of the land, in many cases less than $100,000. If a defect is found in the title after the home is constructed, albeit an unlikely worst case scenario, it could be a very expensive proposition for the homeowner with inadequate title insurance.

Being that title insurance is extremely affordable and is only paid one time and is not recurring, this is something that anyone looking to build a home should consider. Fortunately all of our local title companies are experienced with writing these types of policies and can answer any questions that you might have.

Fire Ponds and subdivision compliance

February 13, 2018 By Tayson Rockefeller Leave a Comment

While it may not seem like a big topic to someone in the community not involved with real estate, fire suppression compliance, (or the lack thereof) has recently been a big topic for those in the real estate community.

If you’re familiar with many of the communities in Teton County, you might have noticed that most of the newer communities have beautiful ponds. While these ponds are aesthetically pleasing to most, it wasn’t because the developer was looking to improve the quality of the subdivision, it was usually a result of the requirement for a fire water storage system. Most developers installed these systems, sold out the lots in the community, and moved on. These communities formed homeowners associations for road maintenance and other aspects of neighborhood duties, but many were not privy on the requirement to have these systems tested annually.

The fact that they systems weren’t tested went largely unnoticed for several years due to the slow period of construction. Now that construction is picking up, those filing for building permits are in some cases being told that these systems must be tested for compliance prior to issuance of a permit. Overzealous real estate agents also have a tend to research issues on behalf of customers which sheds some light on these issues now that we are seeing more and more building sites selling per year.

I communicated with Teton County Fire Chief Earle Giles who reports that about 20% of Teton Valley’s subdivisions are out of compliance. Fortunately, it’s a relatively easy process for most homeowners associations to have their systems tested. These ponds are usually accompanied by a nearby hydrant which an engineer or a pump technician can connect to and test the flow which is measured in gallons per minute, or GPM. Earle was also kind enough to provide a couple of contacts for testing, and most of these contractors will be happy to put you on an annual test program to keep things in accordance. It’s affordable, and helps retain values when it’s time to sell!

-Grant Durtstchi – 208-705-7200

-AW Engineering – 208-787-2952

-Wilder System Solutions – 208-456-2287

December ’17 & Year-End Market Stats

January 27, 2018 By Tayson Rockefeller Leave a Comment

Residential Summary:

If you’ve been keeping an eye on market reports and property sales throughout Teton Valley in 2017 when compared with the year prior, you’ll notice that sale prices are on the upswing, the median home price has increased, and the total volume has also increased. This is all great news for our local real estate market, but what are the driving factors?

One statistic that is hard to attain is: How many of these sales are resales that occurred over the last 10 years, or prior to the last market boom? Unfortunately the only way to obtain this information is to look at the history of each listing provided by the Teton Board of Realtors. Most of this is accurate, and a quick run through every residential sale in 2017 shows that approximately 40% of all sales that occurred had also sold within the last decade. That means that all of these sales, likely, were for a profit.

This information would indicate that our market inventory might be less than what we think. If the majority of the resale inventory is behind us, and spec home construction remains slow, we should anticipate much lower supply in the coming year unless something changes. As I’ve mentioned in previous articles, spec home supply is directly tied to construction costs which we know are currently high.

If the supply of residential inventory remains low, the residential market must climb to meet the rising cost of construction. If this occurs, we should anticipate list prices, and presumably sales prices to continue to rise over the coming year.

Building Site Summary:

Building site sale volume has steadily increase since 2012. Total volume for 2012 including Alta Wyoming totaled 89 sales. 2013 increased to 114 sales, 2015 again increased to 206 sales, 2016 increased to 222 sales, and 214 sales occurred in 2017.

2017 saw an average sale price increase from $82,692 in 2016 to $92,980.

The median sales price in 2016 was $66,292 and the median sales price in 2017 was $65,417.

The statistics over the last 2 years would indicate that buyers tend to be opening their wallets for more expensive parcels with an 11% increase in the average sales price. The median sales price along with the number of lots sold over the past two years would indicate that parcels seem to be selling at the same rate, and approximately the same price.

As with 2017, we have determined that the number of sales was 214. If we divide that by 12 months in a year, we come up with 17.83 sales per month. If we divide this by the number of current listings which is 518, we have 29 months worth of listings currently on the market. This is far fewer than projected numbers provided by professionals throughout the market recession. It is, however, anticipated that the number of new listings will meet the approximate number of parcels currently being absorbed into the marketplace as the number of active listings has been similar over the past several years.

Stucco and Teton Valley

October 13, 2017 By Tayson Rockefeller Leave a Comment

We don’t see a ton of stucco in this area, but have seen it installed in years past. It is also becoming a popular accent material. Also, it is a durable material that rarely needs refinished.

Stucco has, however, had it’s share of troubled times. In the 60’s and 70’s, a stucco system called the Exterior Insulation and Finish System, or EIFS, was introduced. EIFS can be a durable system, which as the name indicates, also offers an additional insualtion layer. Basically a foam board is installed followed by a netting, then stucco. In the late 80’s, lawsuits began to surface due to water intrusion. While little to no siding systems are impereable to moisture, the problem with EIFS then was that it did not allow moisture to escape which created mold and other problems.

Today, EIFS systems and manufacturers have drainage systems which can be installed to prevent problems if moisture becomes present. In addition, most manufactuers require that installers are trained and certified. Repair persons should also be certified by the manufacurer.

In addition to EIFS, traditional stucco is still installed today. Unlike EIFS which is a single layer of stucco (actually synthetic stucco) over the netting and foam board, traditional stucco is a 3 layer system consisting of aggregate, a binder, and water, much like concrete.

With all of the new construction we are seeing today, it is important that if installing stucco, and particularly EIFS, that it is done so by a certified installer. In addition, the certificate should be retained for future buyers as well as future repair or warranty work. It would also be a great idea to have your roofing, siding and decking contractors to have a preliminary meeting with the stucco installer. Any items that meet or cover stucco MUST be property flashed so that water is directed away from, or to proper areas so that the drainage systems mentioned above work properly. If the contractor is not local, you or your general contractor should also review potential problem areas for ice damming. Pay special attention to North facing roof valleys and discuss roof ventilation systems which help prevent ice damming, which is often a result of heat loss.

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