Buyer Tips Archives - Page 17 of 25

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.

Will real estate agents become obsolete in the future?

September 5, 2017 By Tayson Rockefeller Leave a Comment

I think there are a couple of important elements associated with this question.

1) the online effect – AKA eBay

2) the for-sale-by-owner effect

3) government regulations

4) convenience

5) local understanding and expertise

6) market trends

Alright – in no particular order:

I’m going to go after local understanding and expertise as well as market trends first. If you have researched this topic online, there are arguments on both sides of the field. Obviously, most real estate agents would argue that their service is needed, and the real estate agent will never become obsolete. If you have a burning hatred for real estate agents (some people do) the information sways the opposite direction. With regards to these two elements, I think there are arguments on both sides of the fence. Starting with market trends, I believe that market trend information is available to those who are not market professionals, it is just a matter of whether that person is able to interpret the information and take the time to research it. With regards to this argument, I think it comes down to whether or not you want to spend the time researching it, or rely on a local professional. As long as it’s someone you can trust, I would personally choose the agent in this regard, but it doesn’t mean everybody should. I personally have better things to do, and frankly don’t have the time to take on any further responsibility or research. Local expertise, however, is something that only exists if you are a local. Presumably, real estate agents our local experts in their local market. I think this can also go both ways. If you are local, you understand local construction methods, background, and history, you might not need an agent for this particular element. If you aren’t local, a good agent is indispensable in this regard.

I touched on convenience a bit with regards to time. Whether it’s something you don’t want to take on because you’re busy making money doing what you do, perhaps you are retired and would rather leave the paperwork to the professional, or maybe you just aren’t experienced and don’t want to take on the liability and responsibility associated with negotiating a real estate transaction, I think there will always be an audience that will work with an agent for these reasons alone. Here again, it doesn’t mean they have to.

Government regulations have always been the “Ace in the Hole” for most arguments I read in favor of the agent never going away. Governments protect consumers with regards to professionals in many ways that you may not realize. For example, an esthetician or hair stylist is required to take the number of education courses to maintain their license to conduct business. Further, they are required to uphold a lifestyle free of unlawful activities, and in many cases they are required to complete ongoing education classes. Real estate licenses are no different, and most governments monitor real estate activities very closely, especially when it comes to protecting the public which is the primary goal. With this comes several requirements including disclosures with regards to agency and real estate itself. Sellers are required (in most cases) to disclose pertinent information about the property being sold, and the agent acts as a liaison to properly communicate this information to any prospective buyer. It’s not just a rubber stamp or signature either. Real estate agents are trained to specifically communicate all elements of real estate to any potential buyer or seller in ways that they can clearly understand, not just signing off on a document that may not be communicated properly. For these reasons, the industry is very intertwined with government regulation, and in many cases they intend to keep it that way. There’s another effect that is closely related to the industry when it comes to other practices historically completed by a professional. Uber and Airbnb are good examples. Trusting some guy with a Honda Civic to take you from Joe’s Seafood Palace to taking your chances on a place to sleep near downtown is a bit different than purchasing a home, but the analogy is still one that comes up frequently.

The last paragraph lends itself to the biggest opportunity for a major shake-up in the industry. That is online retail. This is an area where many sales outlets or even representatives have, or are, becoming obsolete. There are very few things in this world apart from a [new] quality Stihl chainsaw or a Kirby vacuum cleaner that cannot be purchased online. People buy cars and real estate without the help of a professional or even a human online. Online Auctions are a good example. However, While most people are comfortable buying a used camera online and willing to take the risk that the battery isn’t fried, it’s a bit different, again, for most people when comparing the $18.64 camera to the biggest investment of their lives.

So. If you are a savvy investor familiar with local markets and have done your due diligence with regards to local market trends, are comfortable making a major purchase without any human interaction, can find a property of interest of which the owner of said property is not already represented by a professional, is also a local expert familiar with market trends and comfortable selling a property without the assistance of a professional, I would advise the both of you save a few thousand bucks and complete the transaction.

The art of the Referral

August 8, 2017 By Tayson Rockefeller Leave a Comment

It’s funny that I reference art in the same sentence as something that I’m not very good at. That is, the referral.

Oftentimes agents refer to the customers they are working for with different names. The one that gets me is “the client”. Agents will refer to the person they are working with as their client, regardless of whether or not the person may or may not actually be his or her client… “Oh yes, that’s Bob, he’s my client.” Sometimes I wonder if it’s a protective measure for real estate agents marking their territory when speaking to other agents about a person that might be working with either, or both…

I’ve gone way off track here. When it comes to making money in the real estate industry, we usually do so by providing a service within a State of which we are licensed. There is one exception, the referral. If I have “a client” working with me in Idaho or Wyoming, and they decide they would rather purchase in Arizona, they can do their homework and choose

an agent to work with in that State. OR, an agent the client knows or is comfortable with can vet out agents in Arizona and refer them to the agent in Arizona. When doing so, they would ask the Arizona agent for compensation in return for the referral, but usually only if the client completes the purchase in Arizona. In most cases, the agent in Arizona, or the receiving agent will compensate the broker who provided the referral a portion of the compensation they receive. It doesn’t cost the client anything.

While a referral is more accurately described as an act of referring someone for a specific service, you can now see in the real estate industry a referral often time represents a person such as a client or a customer.

So why aren’t I good at referrals? I don’t suppose it’s something that one can really be bad at, I just feel that sometimes it’s not appropriate. With regards to the

circumstance above, sure. There are however a number of agents who ask for referrals when in my opinion, it isn’t appropriate. For example, advertising real estate in an area you are not familiar with then simply referring the client to a local professional is not appropriate in most circumstances, at least in my opinion. There are unfortunately a number of brokerages whose services are dedicated to this sort of tactic. Usually a website will funnel potential buyers and sellers into a location where they receive a recommendation for an agent, even though they know nothing about the agent they are referring. In some cases the receiving agent might just be paying for the service. In this scenario, there’s no research going into the recommendation. Another example would be real estate agents themselves. Real estate agents are notorious for shopping for real estate in areas where they are not licensed, locating an agent, and asking for a referral fee when the transaction closes. I’m probably going to get some flak for this, but in many circumstances I don’t think it’s appropriate.

I believe agents need to be transparent when working with other professionals. If they expect a fee, they need to make that clear before enlisting the services of another professional.

A final note about referrals, they are ONLY paid by brokers to those with a real estate license. Agents can NOT compensate anyone directly, and Brokers can NOT compensate someone who does not hold a real estate license.

So, maybe I just need to get better about asking for a referral. Remember it’s not all about asking another agent for a fee, but it’s broaching the issue with the potential client. The referral can be a useful tool, and a helpful service to the public, as long as they are aware of the situation. I think it would be relatively difficult to refer someone to another agent without them being aware of the situation. So, how would you feel if your agent asked if they could locate another agent for you in hopes of receiving a fee from the receiving agent?

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