Buyer Tips Archives - Page 24 of 25

Should I insure a parcel or building site that I own?

February 17, 2016 By Tayson Rockefeller Leave a Comment

This is an important question that not many people think about. Usually, it’s called land or vacant land insurance. Basically, it is coverage that will cover bodily injury or damage to someone’s property if they have an accident on your property and you are found to be at fault. If that person files a lawsuit, it can help cover legal fees. Not that it comes up often, but injury on your parcel could mean liability for you.

The good news is, this coverage might not cost you anything as long as you bring it up to your current insurance company or agent. In some cases, your separate homeowners or renters policy can be extended to insure your vacant land, but it’s important to check with your insurance provider first. Don’t assume this happens automatically.
If you do not have a homeowners or renters policy that can be extended to your land, you can purchase a land policy through an independent insurer. Normally the deductibles are close to nothing, and the premiums are very affordable.
Another note about vacant land policies – remember that in most cases if there is any sort of structure, even a dilapidated cabin or barn (like many properties in Teton Valley) that hasn’t been used, your land may not be considered vacant, at which point your insurance policy may not cover a claim. It is important that you ask your insurance provider or agent how to protect yourself against claims related to abandoned buildings. It’s only a little bit of work on the front end, and taking these steps to protect yourself can really pay off in the long run!

CC&R’s, what you need to know

December 1, 2015 By Tayson Rockefeller Leave a Comment

CC&R’s, short for covenants, conditions, and restrictions are basically written and recorded rules of the neighborhood or subdivision. It’s important that these rules be recorded to make them binding and enforceable. They should also conform to all laws as well as local government regulations and requirements. When it comes down to a dispute with a lot or homeowner, it’s important for the subdivision to have CC&R’s that have been written and recorded correctly.

The purpose for these restrictions is to ensure conformity in a subdivision. Most of the rules are just long winded ways of saying that you have to keep your lawn mowed and weed free. Some developments have stricter rules than others. Some require certain design aspects when constructing a new home, where you can and can’t park a trailer, and so on. For the most part however, the rules are considered to be for the good of the neighborhood.

When working with Buyers, I often have requests to spefically look at lots without these restrictions. Sometimes it’s only because they want to build a house smaller than what they assume most developments would allow. However, based on that example, there are a number of developments that require a minimum of only 900 square feet, which is pretty minimal. Some developments are even along Ski Hill Road surprisingly. When searching for a home or a piece of land based on your special needs prohibited by most restrictions, it’s important to remember that all CC&R’s are not the same. Some are only a few pages long, with very few restrictions. All of the above considered, don’t rule out being in a subdivision if you can help it. Consult with your agent, most experienced agents have an understanding of the general rules in each development. Another way to explore subdivision opportunities is to take a drive around the development. Usually, if all of the homes have trailers on the side of the house or in the driveway, trailers are allowed. If all of the homes have metal roofs, you might find out if a comp shingle roof can be used. Use caution however, this is not a guaranteed way of understanding what is or isn’t allowed.

You might ask yourself how or who to contact with some of these questions. Our brokerage can usually get you an electronic copy of the CC&Rs for free, any time. If we have it on file, we can also send you contact information for the homeowner’s association (HOA) who would ultimately be responsible for enforcing the restrictions.

To conclude, be advised that CC&R’s are not the only way to restrict uses or enforce rules with a property. Even a piece of land or a home that is not located within a subdivision can still carry deed restrictions which works similarly, though I will cover those in another Ask The Expert” column!

What is the difference between a BPO and appraisal?

October 17, 2015 By Tayson Rockefeller Leave a Comment

First of all, what the heck is a BPO? A BPO is a “broker’s price opinion”. You might also see BOV (broker’s opinion of value) CMA (comparative market analysis) or other forms of the same basic meaning. The broker is usually simply considered a real estate professional with expertise in the area. What is an appraisal then? An appraisal is an appraiser’s opinion of value. (no, I don’t think they usually abbreviate) since we know what a broker is usually defined as, a real estate appraiser is usually defined as a professional who develops an opinion of value on a specific type of property. Sound like the same person? Yes, but it is not.

So, back to the question at hand, what is the difference?

While any old real estate agent can compare recent sales (often called comps or comparables) and develop an opinion of value for someone, it usually cannot be used by a bank or lender to verify a property is worth or what someone is willing to pay for it. In fact, most real estate agents are not even allowed to be compensated for a BPO, usually only the responsible broker of an office can be compensated. However, most good brokerages will provide market analysis and opinions of value for free. (ahem).

On the other hand, a real estate appraiser is obligated by federal law to be state licensed or certified. That involves acting as a trainee for a certain number of hours, (yes, appraisers must train their own future competition) becoming a licensed appraiser, and becoming certified for specific applications. Just like a real estate agent, appraisers are required to complete many hours of education and continuing education for their profession. An appraiser is an unrelated party to a real estate loan, usually in place to protect the lender.
So, can a real estate agent performance appraisal? No! Unless that real estate agent is a licensed appraiser. Can a real estate agent give you an opinion of value for your property? Sure! But it cannot be considered an appraisal.

What do I need to know about the County assessment notice I just received in the mail?

June 17, 2015 By Tayson Rockefeller Leave a Comment

Not long ago I did an article on property taxes, and how they work here in Teton County. In that article I go over levies, taxing districts and so on. Since I won’t go into too much detail on that end of things, feel free to email me, and I will forward you the link to that post. I keep all of the Ask the Expert articles up on the Teton Valley Realty website blog.
Anyway – the county’s primary source of revenue is property tax. The county has to come up with a way for all property owners to share the cost of “operations”, and they accomplished that by prorating each property owner’s share based on the value of their property. They determine that value based on sales prices, construction costs, rents, etc. Whenever a property is sold here in the county, they send the new property owner a letter requesting the details of the sale, including purchase price. ***Note, Idaho is a non-disclosure state, and the new owner is not required to respond to the letter.
Back to your asessment notice. Many of you probably noticed an increase in your assessed value this year. Don’t get excited, this only means that your prorated share of property taxes is going to increase. The increase most of us are seeing is based mostly on real estate recovery. Building costs are up, rents are up, demand is higher than in recent years, and supply is low. It’s important that you understand the accuracy of this letter. If the county is assessing the value of your property too high, you could be unnecessarily paying more than your fair share of property taxes. If the value is too low… well, you decide what to do.
If you read read your notice, you will see instructions on how to “appeal” your property’s assesment. If you only made note of the value and stashed it in your file cabinet, you can find that information on the county’s website under additional information on the assessor page. If you don’t email, you can pick up the information at the county courthouse during normal business hours, or stop by my office and I will print it out for you. IMPORTANT – should you decide that the county is over valuing your property, the deadline for appeal is Monday, June 22nd at 5:00 PM. The county is surprisingly easy to work with regarding the appeal process, but probably less so as we approach the deadline. Those who wait until 4:30PM on Monday the 22nd, might see less cooperation.
Prior to starting the appeal process, it would be a good idea to arm yourself with data supporting your claim that your property is overvalued. If you are a land owner, you might obtain recent sales of lots in your subdivision or nearby. When the county assesses homes, they value the land, then the improvements for a total assessed value. You could obtain sales data for land, or data of recent home sales in your area, as long as they are similar in size. If you have a finished basement and your neighbor doesn’t, that would definitely affect assessed value. A great resource is your favorite real estate agent, who would probably love to send you the information you are looking for.
There is a bit of good news in all of this, our market is improving dramatically. If you missed last month’s article, It’s a good overview of where we are today.

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