Your Realtor's Candor and Cooperation [Critical]

To contact us Click HERE
by Osman Parvez

This morning, I planned to see a commercial property.    I cancelled my appointment with an investor because the listing agent is not responding to phone calls or emails.    The property remains "available" on the MLS but for all intents and purposes, it's now tainted by the listing agent's lack of professionalism.  
Attitude, professionalism, and approach to negotiation matter.    It's an infrequent topic for discussion and leads me to believe that most buyers and sellers are not fully aware of the impact it can have on the transaction.   Choose your realtor carefully.    

Seriously, how did you fix it?

It's not just real estate.   I was on a motorcycle forum the other day, browsing through classifieds, and I came across a situation where a seller was ignoring questions from potential buyers.   The buyers wanted to know how the seller had repaired a problem with the bike.   After the same question had been posted several times and left unanswered, it prompted a discouraged buyer to write the following:   

"I like these bikes a lot and have always wanted one, having just today sold my '06 Dakar. But when one is dealing long distance, the candor and cooperation of a seller is a critical condition precedent to expending any resource in checking out the bike.

Too bad, cuz this looks like a nice one." - Halmc

I've run into the same situation in real estate far too often.  When a seller is less than fully cooperative or tries to hide something, it creates distrust and risks killing the deal.     Buyers get the feeling that something is fishy.   Suddenly, other options look more attractive.    They start to get cold feet.  

I'm an analytical, scientific type of person but when it comes to real estate, fuzzy ideas like energy and atmosphere matter.    The fact is that if it doesn't feel good, many potential buyers will walk away.   The attitude of the seller's agent in negotiation, furnishing due diligence documents, and answering questions about the property is critical.    And seriously, is it really that hard to answer a phone call or respond to an email?     Professionalism matters.

Here's the post if you want to follow along (you'll need to register).   The bike is a desirable model, the price is right, but as of January 9th, the bike remains unsold. 

---Like this analysis?    Subscribe to my research.       Would you like to meet me in person?    Attend a Boulder Real Estate Meetup. 

Please note:  My goal is to provide exceptional service to our clients. The ideas and strategies in this blog post are the opinion of the writer at the time of publication. Careful and complete due diligence is strongly advised before buying or selling real estate or other investments. Consult with your professional advisers before making financial decisions. This article is not intended as legal, tax, or investment advice. Silver Fern Homes will not be held liable for investment choices derived from this article.

Demand Outpaces Supply, It's Not Just Boulder

To contact us Click HERE
by Osman Parvez

Bloomberg is reporting that home prices climbed by the most in six years during November, on a year over year basis.    Here's the video:



 Now, let's take a look at the article:

The S&P/Case-Shiller index of property values increased 5.5 percent from November 2011, the biggest year-over-year gain since August 2006, a report showed today in New York. The median projection of 30 economists surveyed by Bloomberg called for a 5.6 percent advance.

As I wrote repeatedly during the last bubble, there is no national housing market.    Every region and city's housing market is affected by local dynamics.   The most important things to watch are the interplay of supply and demand at various price levels (tranches).    You should also slice the data into traditional detached dwellings (houses) and attached dwellings (condos and town homes).     See the Silver Fern Report for details on the Boulder market.

Don't forget, prices are a lagging indicator. 

Mortgage rates near a record low are propelling demand for real estate that’s outpacing the available supply, a sign prices will keep strengthening. Home-equity gains and an improving job market may help to put a floor under Americans’ confidence and spending, the biggest part of the economy, cushioning the hit from a higher payroll tax that began in January.

It's not just super low mortgage rates.  Here in Boulder, chickens are also coming home to roost from delayed purchase decisions and five years of rising rent.    The job market improving increases professional mobility and take a guess where those people are moving.    The answer is to markets with a high cultural creativity, clusters of capital, talent, and strong job markets.   Sound familiar?

“With inventory of both new and existing homes still very low, prices will likely continue to rise,” Ian Shepherdson, chief economist at Pantheon Macroeconomics Advisors Inc. in White Plains, New York, said in a note to clients. “Each successive price increase adds more weight to the idea that the housing market is recovering, and nothing pulls people into the market faster than the thought that prices will rise further.

 Boulder can't add substantive new inventory without invading our beautiful open space.   Since that will never happen (thankfully), the only way for inventory to substantially increase is for current home owners to move up or out.     I don't see that happening in the immediate future, but if prices increase for two years or more, it will.      Investors will liquidate entry level rentals and owners will move up, improving the market at the mid range and higher (finally!).

Consumer confidence slumped more than forecast in January, reaching the lowest level in more than a year, as higher payroll taxes took a bigger bite out of Americans’ paychecks, another report today showed.

A nice contrarian indicator and good reminder that the recovery might be bumpy.     For more contrarian thoughts, see Shiller's essay in the NYT:   A New Housing Boom? Don't Count On It. . 

---Like this analysis?    Subscribe to my research.       Would you like to meet me in person?    Attend a Boulder Real Estate Meetup. 

Please note:  My goal is to provide exceptional service to our clients. The ideas and strategies in this blog post are the opinion of the writer at the time of publication. Careful and complete due diligence is strongly advised before buying or selling real estate or other investments. Consult with your professional advisers before making financial decisions. This article is not intended as legal, tax, or investment advice. Silver Fern Homes will not be held liable for investment choices derived from this article.

She's My Broker, Right? [Wrong]

To contact us Click HERE
by Osman Parvez
---Let's say you walk into an open house.  You'll get a friendly greeting at the door, but here's something you likely won't get:  a disclosure of agency relationships.  

What's that, you say?     Read on.

The Price of Small Talk

Smart Realtors know better than to be pushy.   So, as you walk around,  you'll hear innocent sounding questions like, "what do you like about the house?"    Maybe she'll ask about your current living situation or how long you've been in Boulder.    Eventually, questions will pop up about other houses you've seen and your price range.    Perhaps she'll inquire about what you do.

The conversation will be warm and friendly.   It will sound like she's trying to help you find the right house, which may actually be true,  but what she hasn't told you is the terms of her engagement by the seller.   If she represents the seller on an exclusive basis (likely), everything you tell her regarding your price range and more will be used against you during a negotiation.   It's not even a choice, it's her fiduciary responsibility under that relationship.   Even if she's on a team with the listing agent and only helping her with an open house, the same rule applies (see:  Send in the C Team).

The consequences of accidental disclosure (by you) are anything but warm and friendly.    It could cost you thousands of dollars.

Qualification

One of the first things an experienced salesman tries to do is size you up. This is called qualification.   They want to know if you're a ready, willing, and able buyer.   If it turns out that you're not interested in the particular house and you haven't yet entered a buyer agency agreement with another Realtor, you're also a possible client.  

Getting to know the people who stop by an open house, including soliciting feedback, is an important part of the marketing services a broker provides.   It's not all shenanigans, just be careful what you say when you walk into an open house unaccompanied by your buyer's agent.

She's My Broker, Right?

In the vast majority of cases, the agent hosting the open house represents the seller.     Everything you've told them,  about your rental apartment and when the lease expires, about your job, about how long you've lived in the house, and about your price range will be used against you in negotiation.

OOPS...

The agent could be a Transaction Broker (i.e. neutral) or she might not even have any relationship with the seller.   She could just be another agent in the office who has agreed to host the open house.     It happens all the time, but walking in the door, YOU have no way of telling.

One of the most confusing and misunderstood areas of practicing real estate in Colorado is in regards to agency relationships and the timing of disclosures.    The type of relationship between the Realtor and thier client defines the duties and obligations of the agent, so understanding this is critical.   And by that, I mean it's critical for everyone - buyers, sellers, and Realtors.  I've been in many continuing ed classes where my fellow agents were very confused. Believe me, there are a lot of agents out there who don't understand the rules of engagement much less their fiduciary duties.    I'm glad they don't work for me.  The liability they take is unbelievable.

As a buyer, the smartest thing you can do is to keep quiet.  Instead of stopping by open houses, schedule showings with your buyer's agent.   There won't be a pesky seller's agent at the showing.    If you like the house enough to write an offer, let the seasoned professional who you've carefully vetted do the negotiating on your behalf.     When you're in an agency relationship, your agent has a legal duty to represent your interests and a fiduciary responsibility.   If you've chosen well, your agent can be a very effective hired gun.  And when you set showings through your Buyer's Agent (recommended), you won't find yourself wandering around an open house with a listing agent on your tail, asking you questions which could compromise your negotiating leverage.

Rules Not Meant to be Broken

The Colorado Real Estate Commission takes disclosure of relationships very seriously.   It's why there is a mandatory Definitions of Working Relationships Disclosure.    There's even an official position statement to help clarify (emphasis below is mine):

CP-31:   Position on Acting as a Transaction Broker or Agent in Particular Types of Transactions.

The public may enter into either a Transaction-Broker relationship or an Agency relationship with a Broker. Fundamental among the differences between Agency and Transaction-Brokerage is that an Agent is an advocate with fiduciary duties, while a Transaction-Broker should remain neutral, not advocate. However, in some situations the relationship of the Broker with a particular party or property may make a particular relationship inappropriate or problematic.  

Before acting as a Transaction-Broker in transactions where neutrality is difficult, the Broker should consider whether the Transaction-Brokerage arrangement is suitable, consult with the Broker’s supervising Broker and then make the necessary disclosures. 

[examples redacted] 

An agency relationship between a Broker and a seller or landlord, buyer or tenant, requires a written agency agreement. The duties of an agent go beyond facilitation of the transaction as a neutral party and  require representing the interests of the Broker’s principal over the interests of the other party. In certain circumstances, fulfilling the duties of an Agent including acting as an advocate may be difficult. A Broker who enters into an agency relationship must fulfill the duties of advocacy, fidelity, loyalty and other fiduciary duties associated with a single agency relationship. In circumstances where the Broker may not be able to fulfill the duties imposed on an agent the Broker should consider whether the agency arrangement is appropriate, consult with the Broker’s supervising Broker and act accordingly.  

Unbelievably, the Commission left it up to the agent to decide when to disclose their agency relationship and even if they're too conflicted to be in an agency relationship.   This is why, as a buyer or a seller, you need to be very careful disclosing factors that could affect negotiation.    You should be especially wary of teams.   See Send In The C Team, for more details.

---Note: Our goal is to provide exceptional service to our clients. The ideas and strategies in this blog post are the opinion of the writer at the time of publication. Silver Fern Homes recommends careful and complete due diligence before buying or selling real estate or other investments. Consult with your professional advisers before making financial decisions. This article is not intended as legal, tax, or investment advice. Silver Fern Homes will not be held liable for investment choices derived from this article.---
Like this analysis?    Subscribe to my research.       Would you like to meet me in person?    Attend a Boulder Real Estate Meetup. 

Please note:  My goal is to provide exceptional service to our clients. The ideas and strategies in this blog post are the opinion of the writer at the time of publication. Careful and complete due diligence is strongly advised before buying or selling real estate or other investments. Consult with your professional advisers before making financial decisions. This article is not intended as legal, tax, or investment advice. Silver Fern Homes will not be held liable for investment choices derived from this article.

Fresh Listings, Get 'Em Hot

To contact us Click HERE
by Osman Parvez

Let's take a  look at some fresh listings hitting the market.

Note:   From now through the Summer, the number of listings will continue to rise but if the normal seasonal cycle holds, you'll see sales volume rise at a faster pace.     This means more selection but also more competition between buyers. 

511 W Hackberry - $359,000 (Listing Sheet)

I previewed this house yesterday for one of my buyers.   We liked it enough to call in a contractor to help evaluate.    Key takeaways:    GREAT views and location in a neighborhood that is becoming more owner occupied.  

Here's the bad news.   The house itself needs a lot of cosmetic work.  It has a less than ideal layout, needs flooring, remodeling, and repairs to the concrete patio up front.   However, the house itself has very good bones.    My contractor and I discussed what it would take to add two additional bedrooms over the garage and we agreed it could be done for a reasonable amount.      If you're willing to do the work, this one is worth a look.    I think it's priced a little high for the work that is needed, but the view and location will help support the long term value.     I predict it will be under contract shortly.

3704 Telluride Circle - $420,000 (Listing Sheet) 

I took buyers to see this 3 bedroom condo yesterday and they were ready to write an offer.    That's when we found out it was already under contract.   Too bad.     Only 5 days on market and it was GONE.  

Here's what we loved.   It was buttoned up with new carpet, fresh paint, and remodeled bathrooms.   The kitchen had new appliances and newer flooring.     The condo had a great layout for roommates or family, plus it was ready to move-in.      The added bonus?   Great views on multiple sides of the house and proximity to open space.   The Skip stops nearby so you have easy access to downtown.    I personally would have bought this one.

Take home lessons:    a)  Snooze you lose.    If you're a buyer, don't wait until the weekend to see new listings.    b)  Buttoned up listings sell faster and for more money.  

---Like this analysis?    Subscribe to my research.       Would you like to meet me in person?    Attend a Boulder Real Estate Meetup. 

Please note:  My goal is to provide exceptional service to our clients. The ideas and strategies in this blog post are the opinion of the writer at the time of publication. Careful and complete due diligence is strongly advised before buying or selling real estate or other investments. Consult with your professional advisers before making financial decisions. This article is not intended as legal, tax, or investment advice. Silver Fern Homes will not be held liable for investment choices derived from this article.

Valentine's Day Flash Mob on Pearl Street

To contact us Click HERE
by Osman Parvez
Last night, as puffy white flakes slowly stopped falling from the darkened sky, something magical happened on Pearl Street.  

It was a Valentine's Day flash mob, part of One Billion Rising, a global movement to raise awareness and stop violence against women.   As the dancers performed, onlookers found themselves drawn in and began dancing themselves.  

A few of my friends participated and I was honored to be invited.   Here's a video.



As I often tell my buyers, one of the trade offs to consider is the quality of your experience living in our community.  As you move further from Boulder, you'll find you get far more house for the money but you'll also be further from the epicenter of a amazing and vibrant community.  That's not to say there aren't great things about outlying cities in Boulder County, but you might find yourself driving to Boulder quite often.

You can read more about One Billion Rising by clicking HERE.
---Like this analysis?    Subscribe to my research.       Would you like to meet me in person?    Attend a Boulder Real Estate Meetup. 

Please note:  My goal is to provide exceptional service to our clients. The ideas and strategies in this blog post are the opinion of the writer at the time of publication. Careful and complete due diligence is strongly advised before buying or selling real estate or other investments. Consult with your professional advisers before making financial decisions. This article is not intended as legal, tax, or investment advice. Silver Fern Homes will not be held liable for investment choices derived from this article.

Fresh Listings, Get 'Em Hot

To contact us Click HERE
by Osman Parvez

Let's take a  look at some fresh listings hitting the market.

Note:   From now through the Summer, the number of listings will continue to rise but if the normal seasonal cycle holds, you'll see sales volume rise at a faster pace.     This means more selection but also more competition between buyers. 

511 W Hackberry - $359,000 (Listing Sheet)

I previewed this house yesterday for one of my buyers.   We liked it enough to call in a contractor to help evaluate.    Key takeaways:    GREAT views and location in a neighborhood that is becoming more owner occupied.  

Here's the bad news.   The house itself needs a lot of cosmetic work.  It has a less than ideal layout, needs flooring, remodeling, and repairs to the concrete patio up front.   However, the house itself has very good bones.    My contractor and I discussed what it would take to add two additional bedrooms over the garage and we agreed it could be done for a reasonable amount.      If you're willing to do the work, this one is worth a look.    I think it's priced a little high for the work that is needed, but the view and location will help support the long term value.     I predict it will be under contract shortly.

3704 Telluride Circle - $420,000 (Listing Sheet) 

I took buyers to see this 3 bedroom condo yesterday and they were ready to write an offer.    That's when we found out it was already under contract.   Too bad.     Only 5 days on market and it was GONE.  

Here's what we loved.   It was buttoned up with new carpet, fresh paint, and remodeled bathrooms.   The kitchen had new appliances and newer flooring.     The condo had a great layout for roommates or family, plus it was ready to move-in.      The added bonus?   Great views on multiple sides of the house and proximity to open space.   The Skip stops nearby so you have easy access to downtown.    I personally would have bought this one.

Take home lessons:    a)  Snooze you lose.    If you're a buyer, don't wait until the weekend to see new listings.    b)  Buttoned up listings sell faster and for more money.  

---Like this analysis?    Subscribe to my research.       Would you like to meet me in person?    Attend a Boulder Real Estate Meetup. 

Please note:  My goal is to provide exceptional service to our clients. The ideas and strategies in this blog post are the opinion of the writer at the time of publication. Careful and complete due diligence is strongly advised before buying or selling real estate or other investments. Consult with your professional advisers before making financial decisions. This article is not intended as legal, tax, or investment advice. Silver Fern Homes will not be held liable for investment choices derived from this article.

Valentine's Day Flash Mob on Pearl Street

To contact us Click HERE
by Osman Parvez
Last night, as puffy white flakes slowly stopped falling from the darkened sky, something magical happened on Pearl Street.  

It was a Valentine's Day flash mob, part of One Billion Rising, a global movement to raise awareness and stop violence against women.   As the dancers performed, onlookers found themselves drawn in and began dancing themselves.  

A few of my friends participated and I was honored to be invited.   Here's a video.



As I often tell my buyers, one of the trade offs to consider is the quality of your experience living in our community.  As you move further from Boulder, you'll find you get far more house for the money but you'll also be further from the epicenter of a amazing and vibrant community.  That's not to say there aren't great things about outlying cities in Boulder County, but you might find yourself driving to Boulder quite often.

You can read more about One Billion Rising by clicking HERE.
---Like this analysis?    Subscribe to my research.       Would you like to meet me in person?    Attend a Boulder Real Estate Meetup. 

Please note:  My goal is to provide exceptional service to our clients. The ideas and strategies in this blog post are the opinion of the writer at the time of publication. Careful and complete due diligence is strongly advised before buying or selling real estate or other investments. Consult with your professional advisers before making financial decisions. This article is not intended as legal, tax, or investment advice. Silver Fern Homes will not be held liable for investment choices derived from this article.

Having trouble getting a mortgage? Here's why

To contact us Click HERE
My good friend Rich Moroscak at Southern Trust Mortgage (http://www.southerntrust.com/tysonscorner/richm) shared this great article from Forbes on all the hoops you have to jump through now to get a mortgage:

http://www.forbes.com/sites/moneybuilder/2012/03/09/the-perfect-loan-file-2/

As the article explains banks are now in the default avoidance business rather than the lending business.  It makes sense considering there were 22% default rates on mortgages loans made in 2007.  Nevertheless, the mortgage loan origination and underwriting process has become absurd.  The article is not exaggerating when it says that you will need to document every aspect of your financial life to the banks and then provide them with that information several times throughout the underwriting process.  Every transaction on your bank statements will be scrutinized and will have to be justified.  Good credit and a large down payment are no longer enough.  The underwriters now want the perfect paper file.

To survive this new regime have plenty of patience and grin and bear it when the underwriters ask for the same documents for the 10th time.  It will be worth it when you finally close on the property.

Thomas Jefferson's 10 Rules for Living

To contact us Click HERE

Never put off till tomorrow what you can do to-day.

Never trouble another for what you can do yourself.

Never spend your money before you have it.

Never buy what you do not want, because it is cheap; it will be dear to you.

Pride costs us more than hunger, thirst and cold.

We never repent of having eaten too little.

Nothing is troublesome that we do willingly.

How much pain have cost us the evils which have never happened.

Take things always by their smooth handle.

When angry, count ten, before you speak; if very angry, an hundred.

We Can't All Be Donald Trump - And That's Okay

To contact us Click HERE

When consideringthe many obstacles on the road to success, you might overlook “perfectionism”,but you shouldn’t. This sneaky stumbling block can stop you from even beginningyour journey.Nancy’sColasurdo’s excellent article, “We Can’t All be Shakespeare- And That’s Okay”,takes a look at a ‘defeat mechanism’ that can stop us from even trying toaccomplish our dreams.  And as weall know, if you don’t begin your journey, you certainly won’t get there.As a coachColasurdo has found that clients “often feel that they have to be perfect oraspire to be at the level of someone they feel is at the top of theprofession.” Looking at the end game, some feel that such an achievement isimpossible for them. They forget the many steps that a leader took to achievehis or her goals.  And they alsoforget that each one’s way is individual. How might thisapply to real estate investing? What if a would-be investor chose Donald Trumpas a model, and said, “What’s the point of buying a small rental property, ortwo or even three?  That’s nothingto Donald Trump.”  But just becauseyour journey may be different, that doesn’t mean you shouldn’t take it. Whenlooking at others’ success stories – remember, their starting point may bedifferent, they have a different path to take, but the important factor toemulate is the mindset that looks for opportunities small and big and makes themost of them one by one.Donald Trumplearned the real estate business first hand from his dad, Frederick, asuccessful developer in Queens and Brooklyn.  When ‘the Donald’ wanted to invest in Manhattan, his dadtried to discourage him. But Trump had a vision of what he could accomplish, hefelt he understood the risks, and was determined to go for it.  His mid-70’s transformation of theCommodore Hotel into The Grand Hyatt, not only made him a fortune and set him ona road to tremendous success, but it also completely revitalized a rundown areaof Manhattan.Few of us beginwith Trump’s assets or a dad like his for a mentor. Instead, we have to learn thebusiness on our own from the ground up. But we do have the ability to adopt theTrump mindset – the approach of a champion.  What does itentail? Doing your homework, understanding the finances, taking well-consideredrisks, planning every step, being prepared for challenges and dealing with them,capitalizing on success, learning from failures.  And to quote Winston Churchill, “Never, never, never, never giveup.”And little bylittle, step-by-step you will build your real estate business, write your ownstory, improve neighborhoods and achieve success your way. And you’ll be gladyou didn’t wait to become perfect before beginning your journey.

Your Realtor's Candor and Cooperation [Critical]

To contact us Click HERE
by Osman Parvez

This morning, I planned to see a commercial property.    I cancelled my appointment with an investor because the listing agent is not responding to phone calls or emails.    The property remains "available" on the MLS but for all intents and purposes, it's now tainted by the listing agent's lack of professionalism.  
Attitude, professionalism, and approach to negotiation matter.    It's an infrequent topic for discussion and leads me to believe that most buyers and sellers are not fully aware of the impact it can have on the transaction.   Choose your realtor carefully.    

Seriously, how did you fix it?

It's not just real estate.   I was on a motorcycle forum the other day, browsing through classifieds, and I came across a situation where a seller was ignoring questions from potential buyers.   The buyers wanted to know how the seller had repaired a problem with the bike.   After the same question had been posted several times and left unanswered, it prompted a discouraged buyer to write the following:   

"I like these bikes a lot and have always wanted one, having just today sold my '06 Dakar. But when one is dealing long distance, the candor and cooperation of a seller is a critical condition precedent to expending any resource in checking out the bike.

Too bad, cuz this looks like a nice one." - Halmc

I've run into the same situation in real estate far too often.  When a seller is less than fully cooperative or tries to hide something, it creates distrust and risks killing the deal.     Buyers get the feeling that something is fishy.   Suddenly, other options look more attractive.    They start to get cold feet.  

I'm an analytical, scientific type of person but when it comes to real estate, fuzzy ideas like energy and atmosphere matter.    The fact is that if it doesn't feel good, many potential buyers will walk away.   The attitude of the seller's agent in negotiation, furnishing due diligence documents, and answering questions about the property is critical.    And seriously, is it really that hard to answer a phone call or respond to an email?     Professionalism matters.

Here's the post if you want to follow along (you'll need to register).   The bike is a desirable model, the price is right, but as of January 9th, the bike remains unsold. 

---Like this analysis?    Subscribe to my research.       Would you like to meet me in person?    Attend a Boulder Real Estate Meetup. 

Please note:  My goal is to provide exceptional service to our clients. The ideas and strategies in this blog post are the opinion of the writer at the time of publication. Careful and complete due diligence is strongly advised before buying or selling real estate or other investments. Consult with your professional advisers before making financial decisions. This article is not intended as legal, tax, or investment advice. Silver Fern Homes will not be held liable for investment choices derived from this article.

Demand Outpaces Supply, It's Not Just Boulder

To contact us Click HERE
by Osman Parvez

Bloomberg is reporting that home prices climbed by the most in six years during November, on a year over year basis.    Here's the video:



 Now, let's take a look at the article:

The S&P/Case-Shiller index of property values increased 5.5 percent from November 2011, the biggest year-over-year gain since August 2006, a report showed today in New York. The median projection of 30 economists surveyed by Bloomberg called for a 5.6 percent advance.

As I wrote repeatedly during the last bubble, there is no national housing market.    Every region and city's housing market is affected by local dynamics.   The most important things to watch are the interplay of supply and demand at various price levels (tranches).    You should also slice the data into traditional detached dwellings (houses) and attached dwellings (condos and town homes).     See the Silver Fern Report for details on the Boulder market.

Don't forget, prices are a lagging indicator. 

Mortgage rates near a record low are propelling demand for real estate that’s outpacing the available supply, a sign prices will keep strengthening. Home-equity gains and an improving job market may help to put a floor under Americans’ confidence and spending, the biggest part of the economy, cushioning the hit from a higher payroll tax that began in January.

It's not just super low mortgage rates.  Here in Boulder, chickens are also coming home to roost from delayed purchase decisions and five years of rising rent.    The job market improving increases professional mobility and take a guess where those people are moving.    The answer is to markets with a high cultural creativity, clusters of capital, talent, and strong job markets.   Sound familiar?

“With inventory of both new and existing homes still very low, prices will likely continue to rise,” Ian Shepherdson, chief economist at Pantheon Macroeconomics Advisors Inc. in White Plains, New York, said in a note to clients. “Each successive price increase adds more weight to the idea that the housing market is recovering, and nothing pulls people into the market faster than the thought that prices will rise further.

 Boulder can't add substantive new inventory without invading our beautiful open space.   Since that will never happen (thankfully), the only way for inventory to substantially increase is for current home owners to move up or out.     I don't see that happening in the immediate future, but if prices increase for two years or more, it will.      Investors will liquidate entry level rentals and owners will move up, improving the market at the mid range and higher (finally!).

Consumer confidence slumped more than forecast in January, reaching the lowest level in more than a year, as higher payroll taxes took a bigger bite out of Americans’ paychecks, another report today showed.

A nice contrarian indicator and good reminder that the recovery might be bumpy.     For more contrarian thoughts, see Shiller's essay in the NYT:   A New Housing Boom? Don't Count On It. . 

--- Like this analysis?    Subscribe to my research.       Would you like to meet me in person?    Attend a Boulder Real Estate Meetup. 

Please note:  My goal is to provide exceptional service to our clients. The ideas and strategies in this blog post are the opinion of the writer at the time of publication. Careful and complete due diligence is strongly advised before buying or selling real estate or other investments. Consult with your professional advisers before making financial decisions. This article is not intended as legal, tax, or investment advice. Silver Fern Homes will not be held liable for investment choices derived from this article.

She's My Broker, Right? [Wrong]

To contact us Click HERE
by Osman Parvez
---Let's say you walk into an open house.  You'll get a friendly greeting at the door, but here's something you likely won't get:  a disclosure of agency relationships.  

What's that, you say?     Read on.

The Price of Small Talk

Smart Realtors know better than to be pushy.   So, as you walk around,  you'll hear innocent sounding questions like, "what do you like about the house?"    Maybe she'll ask about your current living situation or how long you've been in Boulder.    Eventually, questions will pop up about other houses you've seen and your price range.    Perhaps she'll inquire about what you do.

The conversation will be warm and friendly.   It will sound like she's trying to help you find the right house, which may actually be true,  but what she hasn't told you is the terms of her engagement by the seller.   If she represents the seller on an exclusive basis (likely), everything you tell her regarding your price range and more will be used against you during a negotiation.   It's not even a choice, it's her fiduciary responsibility under that relationship.   Even if she's on a team with the listing agent and only helping her with an open house, the same rule applies (see:  Send in the C Team).

The consequences of accidental disclosure (by you) are anything but warm and friendly.    It could cost you thousands of dollars.

Qualification

One of the first things an experienced salesman tries to do is size you up. This is called qualification.   They want to know if you're a ready, willing, and able buyer.   If it turns out that you're not interested in the particular house and you haven't yet entered a buyer agency agreement with another Realtor, you're also a possible client.  

Getting to know the people who stop by an open house, including soliciting feedback, is an important part of the marketing services a broker provides.   It's not all shenanigans, just be careful what you say when you walk into an open house unaccompanied by your buyer's agent.

She's My Broker, Right?

In the vast majority of cases, the agent hosting the open house represents the seller.     Everything you've told them,  about your rental apartment and when the lease expires, about your job, about how long you've lived in the house, and about your price range will be used against you in negotiation.

OOPS...

The agent could be a Transaction Broker (i.e. neutral) or she might not even have any relationship with the seller.   She could just be another agent in the office who has agreed to host the open house.     It happens all the time, but walking in the door, YOU have no way of telling.

One of the most confusing and misunderstood areas of practicing real estate in Colorado is in regards to agency relationships and the timing of disclosures.    The type of relationship between the Realtor and thier client defines the duties and obligations of the agent, so understanding this is critical.   And by that, I mean it's critical for everyone - buyers, sellers, and Realtors.  I've been in many continuing ed classes where my fellow agents were very confused. Believe me, there are a lot of agents out there who don't understand the rules of engagement much less their fiduciary duties.    I'm glad they don't work for me.  The liability they take is unbelievable.

As a buyer, the smartest thing you can do is to keep quiet.  Instead of stopping by open houses, schedule showings with your buyer's agent.   There won't be a pesky seller's agent at the showing.    If you like the house enough to write an offer, let the seasoned professional who you've carefully vetted do the negotiating on your behalf.     When you're in an agency relationship, your agent has a legal duty to represent your interests and a fiduciary responsibility.   If you've chosen well, your agent can be a very effective hired gun.  And when you set showings through your Buyer's Agent (recommended), you won't find yourself wandering around an open house with a listing agent on your tail, asking you questions which could compromise your negotiating leverage.

Rules Not Meant to be Broken

The Colorado Real Estate Commission takes disclosure of relationships very seriously.   It's why there is a mandatory Definitions of Working Relationships Disclosure.    There's even an official position statement to help clarify (emphasis below is mine):

CP-31:   Position on Acting as a Transaction Broker or Agent in Particular Types of Transactions.

The public may enter into either a Transaction-Broker relationship or an Agency relationship with a Broker. Fundamental among the differences between Agency and Transaction-Brokerage is that an Agent is an advocate with fiduciary duties, while a Transaction-Broker should remain neutral, not advocate. However, in some situations the relationship of the Broker with a particular party or property may make a particular relationship inappropriate or problematic.  

Before acting as a Transaction-Broker in transactions where neutrality is difficult, the Broker should consider whether the Transaction-Brokerage arrangement is suitable, consult with the Broker’s supervising Broker and then make the necessary disclosures. 

[examples redacted] 

An agency relationship between a Broker and a seller or landlord, buyer or tenant, requires a written agency agreement. The duties of an agent go beyond facilitation of the transaction as a neutral party and  require representing the interests of the Broker’s principal over the interests of the other party. In certain circumstances, fulfilling the duties of an Agent including acting as an advocate may be difficult. A Broker who enters into an agency relationship must fulfill the duties of advocacy, fidelity, loyalty and other fiduciary duties associated with a single agency relationship. In circumstances where the Broker may not be able to fulfill the duties imposed on an agent the Broker should consider whether the agency arrangement is appropriate, consult with the Broker’s supervising Broker and act accordingly.  

Unbelievably, the Commission left it up to the agent to decide when to disclose their agency relationship and even if they're too conflicted to be in an agency relationship.   This is why, as a buyer or a seller, you need to be very careful disclosing factors that could affect negotiation.    You should be especially wary of teams.   See Send In The C Team, for more details.

---Note: Our goal is to provide exceptional service to our clients. The ideas and strategies in this blog post are the opinion of the writer at the time of publication. Silver Fern Homes recommends careful and complete due diligence before buying or selling real estate or other investments. Consult with your professional advisers before making financial decisions. This article is not intended as legal, tax, or investment advice. Silver Fern Homes will not be held liable for investment choices derived from this article.---
Like this analysis?    Subscribe to my research.       Would you like to meet me in person?    Attend a Boulder Real Estate Meetup. 

Please note:  My goal is to provide exceptional service to our clients. The ideas and strategies in this blog post are the opinion of the writer at the time of publication. Careful and complete due diligence is strongly advised before buying or selling real estate or other investments. Consult with your professional advisers before making financial decisions. This article is not intended as legal, tax, or investment advice. Silver Fern Homes will not be held liable for investment choices derived from this article.

Fresh Listings, Get 'Em Hot

To contact us Click HERE
by Osman Parvez

Let's take a  look at some fresh listings hitting the market.

Note:   From now through the Summer, the number of listings will continue to rise but if the normal seasonal cycle holds, you'll see sales volume rise at a faster pace.     This means more selection but also more competition between buyers. 

511 W Hackberry - $359,000 (Listing Sheet)

I previewed this house yesterday for one of my buyers.   We liked it enough to call in a contractor to help evaluate.    Key takeaways:    GREAT views and location in a neighborhood that is becoming more owner occupied.  

Here's the bad news.   The house itself needs a lot of cosmetic work.  It has a less than ideal layout, needs flooring, remodeling, and repairs to the concrete patio up front.   However, the house itself has very good bones.    My contractor and I discussed what it would take to add two additional bedrooms over the garage and we agreed it could be done for a reasonable amount.      If you're willing to do the work, this one is worth a look.    I think it's priced a little high for the work that is needed, but the view and location will help support the long term value.     I predict it will be under contract shortly.

3704 Telluride Circle - $420,000 (Listing Sheet) 

I took buyers to see this 3 bedroom condo yesterday and they were ready to write an offer.    That's when we found out it was already under contract.   Too bad.     Only 5 days on market and it was GONE.  

Here's what we loved.   It was buttoned up with new carpet, fresh paint, and remodeled bathrooms.   The kitchen had new appliances and newer flooring.     The condo had a great layout for roommates or family, plus it was ready to move-in.      The added bonus?   Great views on multiple sides of the house and proximity to open space.   The Skip stops nearby so you have easy access to downtown.    I personally would have bought this one.

Take home lessons:    a)  Snooze you lose.    If you're a buyer, don't wait until the weekend to see new listings.    b)  Buttoned up listings sell faster and for more money.  

---Like this analysis?    Subscribe to my research.       Would you like to meet me in person?    Attend a Boulder Real Estate Meetup. 

Please note:  My goal is to provide exceptional service to our clients. The ideas and strategies in this blog post are the opinion of the writer at the time of publication. Careful and complete due diligence is strongly advised before buying or selling real estate or other investments. Consult with your professional advisers before making financial decisions. This article is not intended as legal, tax, or investment advice. Silver Fern Homes will not be held liable for investment choices derived from this article.

Valentine's Day Flash Mob on Pearl Street

To contact us Click HERE
by Osman Parvez
Last night, as puffy white flakes slowly stopped falling from the darkened sky, something magical happened on Pearl Street.  

It was a Valentine's Day flash mob, part of One Billion Rising, a global movement to raise awareness and stop violence against women.   As the dancers performed, onlookers found themselves drawn in and began dancing themselves.  

A few of my friends participated and I was honored to be invited.   Here's a video.



As I often tell my buyers, one of the trade offs to consider is the quality of your experience living in our community.  As you move further from Boulder, you'll find you get far more house for the money but you'll also be further from the epicenter of a amazing and vibrant community.  That's not to say there aren't great things about outlying cities in Boulder County, but you might find yourself driving to Boulder quite often.

You can read more about One Billion Rising by clicking HERE.
---Like this analysis?    Subscribe to my research.       Would you like to meet me in person?    Attend a Boulder Real Estate Meetup. 

Please note:  My goal is to provide exceptional service to our clients. The ideas and strategies in this blog post are the opinion of the writer at the time of publication. Careful and complete due diligence is strongly advised before buying or selling real estate or other investments. Consult with your professional advisers before making financial decisions. This article is not intended as legal, tax, or investment advice. Silver Fern Homes will not be held liable for investment choices derived from this article.

Fresh Listings, Get 'Em Hot

To contact us Click HERE
by Osman Parvez

Let's take a  look at some fresh listings hitting the market.

Note:   From now through the Summer, the number of listings will continue to rise but if the normal seasonal cycle holds, you'll see sales volume rise at a faster pace.     This means more selection but also more competition between buyers. 

511 W Hackberry - $359,000 (Listing Sheet)

I previewed this house yesterday for one of my buyers.   We liked it enough to call in a contractor to help evaluate.    Key takeaways:    GREAT views and location in a neighborhood that is becoming more owner occupied.  

Here's the bad news.   The house itself needs a lot of cosmetic work.  It has a less than ideal layout, needs flooring, remodeling, and repairs to the concrete patio up front.   However, the house itself has very good bones.    My contractor and I discussed what it would take to add two additional bedrooms over the garage and we agreed it could be done for a reasonable amount.      If you're willing to do the work, this one is worth a look.    I think it's priced a little high for the work that is needed, but the view and location will help support the long term value.     I predict it will be under contract shortly.

3704 Telluride Circle - $420,000 (Listing Sheet) 

I took buyers to see this 3 bedroom condo yesterday and they were ready to write an offer.    That's when we found out it was already under contract.   Too bad.     Only 5 days on market and it was GONE.  

Here's what we loved.   It was buttoned up with new carpet, fresh paint, and remodeled bathrooms.   The kitchen had new appliances and newer flooring.     The condo had a great layout for roommates or family, plus it was ready to move-in.      The added bonus?   Great views on multiple sides of the house and proximity to open space.   The Skip stops nearby so you have easy access to downtown.    I personally would have bought this one.

Take home lessons:    a)  Snooze you lose.    If you're a buyer, don't wait until the weekend to see new listings.    b)  Buttoned up listings sell faster and for more money.  

---Like this analysis?    Subscribe to my research.       Would you like to meet me in person?    Attend a Boulder Real Estate Meetup. 

Please note:  My goal is to provide exceptional service to our clients. The ideas and strategies in this blog post are the opinion of the writer at the time of publication. Careful and complete due diligence is strongly advised before buying or selling real estate or other investments. Consult with your professional advisers before making financial decisions. This article is not intended as legal, tax, or investment advice. Silver Fern Homes will not be held liable for investment choices derived from this article.

Valentine's Day Flash Mob on Pearl Street

To contact us Click HERE
by Osman Parvez
Last night, as puffy white flakes slowly stopped falling from the darkened sky, something magical happened on Pearl Street.  

It was a Valentine's Day flash mob, part of One Billion Rising, a global movement to raise awareness and stop violence against women.   As the dancers performed, onlookers found themselves drawn in and began dancing themselves.  

A few of my friends participated and I was honored to be invited.   Here's a video.



As I often tell my buyers, one of the trade offs to consider is the quality of your experience living in our community.  As you move further from Boulder, you'll find you get far more house for the money but you'll also be further from the epicenter of a amazing and vibrant community.  That's not to say there aren't great things about outlying cities in Boulder County, but you might find yourself driving to Boulder quite often.

You can read more about One Billion Rising by clicking HERE.
---Like this analysis?    Subscribe to my research.       Would you like to meet me in person?    Attend a Boulder Real Estate Meetup. 

Please note:  My goal is to provide exceptional service to our clients. The ideas and strategies in this blog post are the opinion of the writer at the time of publication. Careful and complete due diligence is strongly advised before buying or selling real estate or other investments. Consult with your professional advisers before making financial decisions. This article is not intended as legal, tax, or investment advice. Silver Fern Homes will not be held liable for investment choices derived from this article.

Having trouble getting a mortgage? Here's why

To contact us Click HERE
My good friend Rich Moroscak at Southern Trust Mortgage (http://www.southerntrust.com/tysonscorner/richm) shared this great article from Forbes on all the hoops you have to jump through now to get a mortgage:

http://www.forbes.com/sites/moneybuilder/2012/03/09/the-perfect-loan-file-2/

As the article explains banks are now in the default avoidance business rather than the lending business.  It makes sense considering there were 22% default rates on mortgages loans made in 2007.  Nevertheless, the mortgage loan origination and underwriting process has become absurd.  The article is not exaggerating when it says that you will need to document every aspect of your financial life to the banks and then provide them with that information several times throughout the underwriting process.  Every transaction on your bank statements will be scrutinized and will have to be justified.  Good credit and a large down payment are no longer enough.  The underwriters now want the perfect paper file.

To survive this new regime have plenty of patience and grin and bear it when the underwriters ask for the same documents for the 10th time.  It will be worth it when you finally close on the property.

Thomas Jefferson's 10 Rules for Living

To contact us Click HERE

Never put off till tomorrow what you can do to-day.

Never trouble another for what you can do yourself.

Never spend your money before you have it.

Never buy what you do not want, because it is cheap; it will be dear to you.

Pride costs us more than hunger, thirst and cold.

We never repent of having eaten too little.

Nothing is troublesome that we do willingly.

How much pain have cost us the evils which have never happened.

Take things always by their smooth handle.

When angry, count ten, before you speak; if very angry, an hundred.

We Can't All Be Donald Trump - And That's Okay

To contact us Click HERE

When consideringthe many obstacles on the road to success, you might overlook “perfectionism”,but you shouldn’t. This sneaky stumbling block can stop you from even beginningyour journey.Nancy’sColasurdo’s excellent article, “We Can’t All be Shakespeare- And That’s Okay”,takes a look at a ‘defeat mechanism’ that can stop us from even trying toaccomplish our dreams.  And as weall know, if you don’t begin your journey, you certainly won’t get there.As a coachColasurdo has found that clients “often feel that they have to be perfect oraspire to be at the level of someone they feel is at the top of theprofession.” Looking at the end game, some feel that such an achievement isimpossible for them. They forget the many steps that a leader took to achievehis or her goals.  And they alsoforget that each one’s way is individual. How might thisapply to real estate investing? What if a would-be investor chose Donald Trumpas a model, and said, “What’s the point of buying a small rental property, ortwo or even three?  That’s nothingto Donald Trump.”  But just becauseyour journey may be different, that doesn’t mean you shouldn’t take it. Whenlooking at others’ success stories – remember, their starting point may bedifferent, they have a different path to take, but the important factor toemulate is the mindset that looks for opportunities small and big and makes themost of them one by one.Donald Trumplearned the real estate business first hand from his dad, Frederick, asuccessful developer in Queens and Brooklyn.  When ‘the Donald’ wanted to invest in Manhattan, his dadtried to discourage him. But Trump had a vision of what he could accomplish, hefelt he understood the risks, and was determined to go for it.  His mid-70’s transformation of theCommodore Hotel into The Grand Hyatt, not only made him a fortune and set him ona road to tremendous success, but it also completely revitalized a rundown areaof Manhattan.Few of us beginwith Trump’s assets or a dad like his for a mentor. Instead, we have to learn thebusiness on our own from the ground up. But we do have the ability to adopt theTrump mindset – the approach of a champion.  What does itentail? Doing your homework, understanding the finances, taking well-consideredrisks, planning every step, being prepared for challenges and dealing with them,capitalizing on success, learning from failures.  And to quote Winston Churchill, “Never, never, never, never giveup.”And little bylittle, step-by-step you will build your real estate business, write your ownstory, improve neighborhoods and achieve success your way. And you’ll be gladyou didn’t wait to become perfect before beginning your journey.

Your Realtor's Candor and Cooperation [Critical]

To contact us Click HERE
by Osman Parvez

This morning, I planned to see a commercial property.    I cancelled my appointment with an investor because the listing agent is not responding to phone calls or emails.    The property remains "available" on the MLS but for all intents and purposes, it's now tainted by the listing agent's lack of professionalism.  
Attitude, professionalism, and approach to negotiation matter.    It's an infrequent topic for discussion and leads me to believe that most buyers and sellers are not fully aware of the impact it can have on the transaction.   Choose your realtor carefully.    

Seriously, how did you fix it?

It's not just real estate.   I was on a motorcycle forum the other day, browsing through classifieds, and I came across a situation where a seller was ignoring questions from potential buyers.   The buyers wanted to know how the seller had repaired a problem with the bike.   After the same question had been posted several times and left unanswered, it prompted a discouraged buyer to write the following:   

"I like these bikes a lot and have always wanted one, having just today sold my '06 Dakar. But when one is dealing long distance, the candor and cooperation of a seller is a critical condition precedent to expending any resource in checking out the bike.

Too bad, cuz this looks like a nice one." - Halmc

I've run into the same situation in real estate far too often.  When a seller is less than fully cooperative or tries to hide something, it creates distrust and risks killing the deal.     Buyers get the feeling that something is fishy.   Suddenly, other options look more attractive.    They start to get cold feet.  

I'm an analytical, scientific type of person but when it comes to real estate, fuzzy ideas like energy and atmosphere matter.    The fact is that if it doesn't feel good, many potential buyers will walk away.   The attitude of the seller's agent in negotiation, furnishing due diligence documents, and answering questions about the property is critical.    And seriously, is it really that hard to answer a phone call or respond to an email?     Professionalism matters.

Here's the post if you want to follow along (you'll need to register).   The bike is a desirable model, the price is right, but as of January 9th, the bike remains unsold. 

---Like this analysis?    Subscribe to my research.       Would you like to meet me in person?    Attend a Boulder Real Estate Meetup. 

Please note:  My goal is to provide exceptional service to our clients. The ideas and strategies in this blog post are the opinion of the writer at the time of publication. Careful and complete due diligence is strongly advised before buying or selling real estate or other investments. Consult with your professional advisers before making financial decisions. This article is not intended as legal, tax, or investment advice. Silver Fern Homes will not be held liable for investment choices derived from this article.

Demand Outpaces Supply, It's Not Just Boulder

To contact us Click HERE
by Osman Parvez

Bloomberg is reporting that home prices climbed by the most in six years during November, on a year over year basis.    Here's the video:



 Now, let's take a look at the article:

The S&P/Case-Shiller index of property values increased 5.5 percent from November 2011, the biggest year-over-year gain since August 2006, a report showed today in New York. The median projection of 30 economists surveyed by Bloomberg called for a 5.6 percent advance.

As I wrote repeatedly during the last bubble, there is no national housing market.    Every region and city's housing market is affected by local dynamics.   The most important things to watch are the interplay of supply and demand at various price levels (tranches).    You should also slice the data into traditional detached dwellings (houses) and attached dwellings (condos and town homes).     See the Silver Fern Report for details on the Boulder market.

Don't forget, prices are a lagging indicator. 

Mortgage rates near a record low are propelling demand for real estate that’s outpacing the available supply, a sign prices will keep strengthening. Home-equity gains and an improving job market may help to put a floor under Americans’ confidence and spending, the biggest part of the economy, cushioning the hit from a higher payroll tax that began in January.

It's not just super low mortgage rates.  Here in Boulder, chickens are also coming home to roost from delayed purchase decisions and five years of rising rent.    The job market improving increases professional mobility and take a guess where those people are moving.    The answer is to markets with a high cultural creativity, clusters of capital, talent, and strong job markets.   Sound familiar?

“With inventory of both new and existing homes still very low, prices will likely continue to rise,” Ian Shepherdson, chief economist at Pantheon Macroeconomics Advisors Inc. in White Plains, New York, said in a note to clients. “Each successive price increase adds more weight to the idea that the housing market is recovering, and nothing pulls people into the market faster than the thought that prices will rise further.

 Boulder can't add substantive new inventory without invading our beautiful open space.   Since that will never happen (thankfully), the only way for inventory to substantially increase is for current home owners to move up or out.     I don't see that happening in the immediate future, but if prices increase for two years or more, it will.      Investors will liquidate entry level rentals and owners will move up, improving the market at the mid range and higher (finally!).

Consumer confidence slumped more than forecast in January, reaching the lowest level in more than a year, as higher payroll taxes took a bigger bite out of Americans’ paychecks, another report today showed.

A nice contrarian indicator and good reminder that the recovery might be bumpy.     For more contrarian thoughts, see Shiller's essay in the NYT:   A New Housing Boom? Don't Count On It. . 

---Like this analysis?    Subscribe to my research.       Would you like to meet me in person?    Attend a Boulder Real Estate Meetup. 

Please note:  My goal is to provide exceptional service to our clients. The ideas and strategies in this blog post are the opinion of the writer at the time of publication. Careful and complete due diligence is strongly advised before buying or selling real estate or other investments. Consult with your professional advisers before making financial decisions. This article is not intended as legal, tax, or investment advice. Silver Fern Homes will not be held liable for investment choices derived from this article.