Teton Realty Blog

Virtual Tours

March 24, 2020 By Tayson Rockefeller Leave a Comment

Back in July, I started to write an article about virtual tours. I do this frequently, losing interest in the article or saving it in my inbox for another day, probably part of the reason why I always have 50 or more emails in my inbox.

I started thinking about the article again in the midst of the current covid-19 virus. Back when I first started thinking about this, the gist of my article was that while I felt virtual tours could help in many cases, they can also hurt. Virtual tours, high quality photographs, drone footage and even videos can be deceiving. As a seller, I might be concerned that someone may not like my home before they even have a chance to see it. As an agent, I want to showcase the great qualities of a listing that I represent, and when possible, I prefer to do that in person. If you know me, you know that I am not, by any stretch of the word, a pushy salesman. I like to think that I point out good qualities, and try to be proactive about finding ways to work around problems for my listings. I also try to recognize when a potential buyer just isn’t interested in a property, and do my best to find something suitable. More than anything, though, I like meeting people. I like shaking hands, and I like getting to know potential clients as we hit the road to explore the beautiful Teton region.

The above being said, I’m curious to see how the current situation will shape the future of the home-buying process. I think, and hope, that things get back to normal. But I also think that our world is changing. Fortunately, I have a pretty good handle on most of the technology available today. We use a number of tools within the brokerage that help us streamline our transactions and processes. I still think that there’s going to be value and bigger demand for virtual tours and videos, but I also think we’re going to have to be careful about how we present media. Sellers are going to rely on us to sell their property, and buyers are going to rely on us to make travel plans to come look at one piece of property, in many cases across the United States or from another country. I believe there is going to be an ever-evolving balance between accurately expressing real estate through virtual media and doing our best to properly represent all of our customers and clients.

What is going on with the potential County Zone and Code changes?

March 9, 2020 By Tayson Rockefeller Leave a Comment

The county is currently working through a land development code update. They have drafted an initial code, and are currently in the stages of the public review and comment for the draft code. There are some big proposed changes, but what do they mean?

Teton County’s comprehensive plan, zoning, land use and development codes can be a lot to understand. I often have to find ways to articulate information and provide data in an efficient way without being overbearing, similar to situations when I am working with a first-time home buyer. I’m going to try to explain the new proposed zoning changes in this article, saving the development and code changes for another day.

WHAT IS IT NOW?

The County (not City limits) is currently made up of two main types of zoning, A-2.5 and A-20 zones. Most of the areas South of Victor and North or East of State Highway 33 are A-2.5, and most everything else (save for a few areas along the foothills) is A-20. It’s roughly 50-50. What does that mean? It’s pretty simple. A-2.5 has a minimum density requirement of one house & guest house per 2.5 acres, and A-20 is 20 acres. There are a few other zoning categories, mostly related to industrial and commercial use.

WHAT IS PROPOSED?

Aside from the commercial zones, there are five new zoning types proposed. Keeping in mind that the number represents the minimum density requirement per residence, they are as follows: A “Rural Agriculture” 35 acre zone replaces most of what used to be the A-20. A second 35 acre “Wetland” zone is similar, presumably with stricter development guidelines due to its location within wetland areas, mostly in the watershed East of the Teton River. A “Foothill” 10-acre zone encompasses most of the surrounding foothills, which would take the place of the previous 2.5 acres zone in many areas. A rural neighborhood 20 acres zone is built around the areas East of Driggs to accommodate future development, and finally, the highest density zone is a “Rural Neighborhood” 5 acre zone that would encompass the Fox Creek area between Victor and Driggs and the Hastings Lane are between Driggs and Tetonia, both mostly limited to areas East of State Highway 33.

WHAT DOES IT MEAN? This is largely up to interpretation and debate. Unfortunately, it will likely turn into a political debate, but that’s not my purpose here. My interpretation is that it is clear that the density requirements are going to go WAY down. In other words, there will be fewer homes per acre. It will likely decrease the supply of land over time, and increase demand. In theory, this could increase property values in the distant future as existing land is absorbed. At the same token, it will make it challenging for newcomers to the area looking for affordable land. As a property owner, I see both the upside and downside. I do not own any large farm tracts so I am not affected by land development challenges. I also feel that many of our building sites are more affordable than they should be, considering the recreational market status of our community. However, that is mostly attributed to the perception of oversupply (and construction costs), which I have discussed in previous articles, and will discuss further in future ones.

Beauty (and investment) is in the eye of the beholder (or investor)

February 7, 2020 By Tayson Rockefeller Leave a Comment

We can all be easily influenced from time to time, especially when it’s someone that we trust. Our parents, our children, our closest friends, colleagues and co-workers can have an influence on how we live our lives, what we eat, drink, and, how we invest our money.

However, we must remember to rely on the professionals who represent us, or at least hear what they are saying. I trust my attorney with respect to my will, and every time I get a haircut and am asked “What are we doing today?” My response is almost always: “Whatever you think.” Some of you might think that is crazy, but it’s just who I am. We all have a higher priority for certain things in our lives, and some of us really do trust the professionals and their opinion.

I’m working a little bit against the grain with respect to my beliefs in representation and trusting professionals by stating this, but sometimes it can steer us the wrong direction – even if it’s the right choice. That doesn’t make any sense, so here’s an example.

A home is listed for sale at what appears to be a great value. It needs a lot of work, and that is apparent and properly represented. The buyer secures a real estate agent who agrees that the home is a great price despite the issues with the home. The buyer then contacts a home inspector who agrees to perform a home inspection. The home inspector doesn’t know what home values are, but that’s not the inspector’s line of work. No problem here. The inspector performs the inspection and sends a damning report with respect to some of the structural elements of the home. He advises that the buyer withdraw from the contract based on the amount of work required. To be fair, I am not familiar with any home inspectors who would provide advice like this, this is just an example.

The above stated, let’s assume that the home had a fair market value (without any structural problems and a light remodel) of $600,000. The buyer, unbeknownst to the inspector, had a contract secured in the amount of $300,000. The fictitious home inspector’s advice to withdraw from the transaction was based on structural repairs in excess of $100,000, a hefty sum indeed. However, a $300,000 purchase price and even $200,000 worth of structural and aesthetic improvements would leave over $100,000 in potential profit. You can use the same example in different scenarios. Perhaps your friend tells you that they would not advise putting down any more than $1,000 worth of earnest money on a real estate transaction – or they might advise that you offer 20% less than the asking price because that’s what they successfully offered on their home in Oklahoma. Different people have different advice, and all of it should be heard. Just make sure you are paying close attention to the professionals, family or friends with expertise in the specific markets in which you plan to invest. You might make the mistake of withdrawing or losing what might have been an excellent opportunity.

Owner Financing (Information for Sellers)

December 13, 2019 By Tayson Rockefeller Leave a Comment

As usual, I’m including my disclosure up front. The information I am providing is generic information that I believe is accurate. By no means, however, Am I guaranteeing the accuracy of this information, nor am I suggesting that you owner finance property as a buyer or seller without consulting with an attorney.

Back in 2015 I wrote an article about the difficulties of finding someone willing to owner finance their property. Much like today, 2015 was an expanding economy and existing home inventory was low. As a result, I still haven’t run into too many sellers willing to owner finance their home. On the flip side, land inventory is high by comparison (though not as high as some try to lead us to believe) and offering owner financing can be a useful tool to help sell your property if you have the means and interest in doing so.

From the buyer’s perspective, things aren’t all that different than purchasing property with a traditional lender. The seller has the flexibility to offer lower down payment requirements, and usually payments are made to a third-party servicing company who would collect principal, interest, and even property taxes just like a lender would. The buyer and seller negotiate who will pay the servicing fees, but they are very affordable.

That being said, I’m going to focus on how the process will work for the seller of a property, and try to explain some of the risks associated.

Typically, real estate is secured by a promissory note and deed of trust or a mortgage. The mortgage or deed of trust is the contract between the buyer and the lender that creates a lien on the property, and the promissory note is the “IOU” that contains the promise to repay the loan. A mortgage and a deed of trust function differently, and typically mortgages are only used for large agricultural property. A deed of trust has its advantages for the lender, and it’s what we use in almost every circumstance (in Idaho) as mentioned. For that reason, I’ll focus on a promissory note and deed of trust.

Deed of Trust

A deed of trust involves 3 parties. The trustor (borrower or buyer) the beneficiary (lender or seller) and the trustee. The trustee is an independent third-party that would hold the legal title to the property. The trustee also has the ability to sell the property at public auction if the buyer defaults, more on this later.

Once the buyer and seller come to an agreement with respect to the amount financed, interest rate, how much the late fee will be, the loan maturity date and so forth, the terms are written into the promissory note. Additional terms can also be implemented into the promissory note such as language not permitting construction, a due on sale clause in the event the property is transferred, intended use, and so on.

Now that we have a promissory note with the terms, and a deed of trust outlining the parties involved and contract, they closing can take place at which time the buyer becomes the new owner and begins making payments. As mentioned above, an escrow company is usually hired as part of the agreement in order to collect payments and disburse funds.

Loan Payoff

Once the loan is paid off, the trustee releases the deed of trust and files the warranty deed at which time the buyer is the legal owner without a lien on their property (assuming they don’t have any other liens on the property). This is all fine, but what happens if the buyer neglects to make their payments. How does the foreclosure process work?

This is where the biggest benefits of a note and deed of trust come into play. A deed of trust offers a much faster foreclosure process when compared with a mortgage.

Default

Late fees and interest are outlined in the promissory note as mentioned above. Default occurs after the loan becomes more than 30 days past due. Once the trustee is notified, they file the notice of default.

Foreclosure

The foreclosure period begins after the notice of default is filed, and is 120 days. During this time, a number of attempts to collect payment must take place. Usually, the trustee will appoint a “substitution of trustee” (or foreclosure company) who will ensure all of these steps are properly handled. These steps include:

3 attempts must be made to reach the owner within a 7-day period. Additionally, notices must be mailed to all publicly known addresses, as well as any junior lien holders. Finally, notice must be ran for 4 consecutive weeks in the newspaper.

If the trustor brings payments current and pays any applicable late fees and interest, the process ends. If all of these steps are taken and the trustor does not bring payments current to end the process, an affidavit is filed within the first 100 days of the foreclosure period proving that all of the proper steps had been made to contact the owner.

At the end of the 120 days, a public auction is held for the owed amount including late fees, interest and attorney’s fees. The owner may choose to offer the property for less than the owed amount. In the event that the property is sold above the owed amount, and there are no junior lien holders, that amount would go to the seller of the property. If the property is not sold at auction, the property would go back to the original owner.

Cost

Foreclsoure companies usually charge a few thousand dollars to handle this process, but it can vary. In addition a title search called a TSG or Trustees Sale Guarantee must be completed to identify any new liens on the property. This cost is based on the amount of the property, so the fee will be higher for more expensive properties.

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