28 Jun

Is Denver Colorado in a Real Estate Bubble?

Now this may be a somewhat unpopular opinion among realtors – who are often all to eager to cheer the market on (after all, it’s how we make money)  but I think the Denver Colorado real estate market is, in fact, a real estate bubble.   It may not crash down in the same fashion as in 2007, but I think we’re in for some pretty significant price drops in the coming years.  Since my cat decided to go moth hunting at 4 in the morning, I’ve decided to make an article and video on the subject while I’m in that hazy, creative, half awake mode.

Why oh why would I, a real estate agent, suggest such a horrid thing?  Prices are up! The market is hot!  Yes, that all may be true, but I think there are some looming stats that can indicate a potential real estate bubble in the Denver metro area.

I would point you to the following articles that may give you some pause as a buyer in this crazy market .

Real Estate Growth Market Or Impending Bubble? How To Tell The Difference – Forbes, March 2 1017

Is Denver’s real estate market a bubble ready to burst? – Denver 7 Channel

Denver, northern Front Range real estate party ends in late 2019, new forecast predicts – The Denver Post

Here are 9 charts that can help the Fed spot the new housing bubble – Business Insider

Why It May Take Sixteen Years for Denver Millennials to Afford to Buy a Home – Westword

While these articles do make the important distinction that we do not have  a high number of sub prime mortgages (and resulting foreclosures) as we did during the 2007 crash, a major factor in my opinion that the Denver metro could be a real estate bubble is pretty simple-  the prices have soared a lot higher than the wages.   The Westword article above is pretty sobering for us millennial first time home buyers.

Another factor that I see coming that could make Colorado a real estate bubble is something that I don’t hear a lot of other realtors talk about – but I actually just took a class on it – and that’s our marijuana boom and future bust.  You’ll notice that shortly after Colorado ratified amendment 64, which legalized cannabis in the state, the housing prices soon shot up as well.  With  the 2016 election, California, Nevada, Massachusetts and Maine have all joined the ‘legal club’ that is going to cut largely into the influx of out of state Americans flocking to Colorado.

Again, this is just like, my opinion, man.    I do still think it’s a great time if you’re a seller – and selling now could likely put you near the top of the market if it’s a good option for you or you’re planning on moving.   However for buyers, it  may be worth waiting a little longer to see if the prices start to drop as the Denver post articles allude to.  Time will tell!

If you have any real estate questions or want to talk about buying or selling, give me a call at 720 260 0977.

Until next time,

Caleb

16 May

Is your real estate agent tech savvy or a dinosaur?

So, I am not going to lie, I should be paying attention because I am writing this post while sitting in on a class.   Today’s class is a computer class that goes over our local MLS software and how to make CMA’s with the software.   However… it’s getting pretty frustrating to watch.   It just amazes me, actually, when I see how many real estate agents are completely incompetent with technology in the year 2017.   Over half of the agents that are taking this computer class didn’t bring a computer. How are you supposed to learn software if you don’t follow along on your own computer? Prepare for today’s real estate agent rant.

This brings me to my larger gripe in general, is that a lot of real estate agents are dinosaurs when it comes to technology.  With the average age of a realtor being around 57 years old, I would say I might understand that some older people aren’t that tech savvy – but let’s be brutally honest here.  Computers aren’t a new thing.  If you’re 57 years old in 2017, that means you were born in 1960.  The first mass produced Apple computers and PCs came out in around the 80s.  You’ve had enough time to figure these things out.

is your real estate agent tech savvy, or are they a dinosaur?

If your real estate agent can’t navigate software in order to help you search homes, they are doing a disservice to you.  If they can’t properly pull comps from county assessor websites, they are doing a disservice to you.  If it takes them 6 hours to figure out how to draft and send in a virtual contract offer – especially with the speed and competitiveness of the Colorado market – They are doing a disservice to you.  If your real estate agent is truly the professional that they profess to be, they should be able to competently use the tools of the trade.  Back in the day the MLS was actually printed out in a book – but times have changed.

I don’t mean to be a jerk with this post, but I constantly see this through out the real estate industry – the reluctance of many a real estate agent to embrace the rapidly changing technology that has revolutionized real estate (and to be quite honest, puts a lot of real estate agents at risk of becoming irrelevant)  So, ask yourself – is my real estate agent tech savvy, or are they a technological dinosaur?  Along with the agent’s personality, morality and fiduciary commitment to you, their technical ability should be something that you as a buyer or seller consider heavily in your decision to hire them.

For example, as a seller – what does your real estate agent actually do to market for you?  Do they put the property in MLS, stick a couple of flyers in a box outside, and pray?    Wouldn’t you rather be more comfortable with a real estate agent that has the ability to create videos, a custom website for your listing, and have all the (professionally taken) photos posted not only on the MLS, but on Instagram, Facebook, Twitter and all the other major social networks?

Anyway, I guess I should stop ranting for the day, but I just think it’s something I have had on my mind for a while.

If you’re looking for a tech savvy Realtor in Colorado, feel free to give me a call.
Caleb

720 260 0977

27 Jan

Joint Tenancy vs Tenants in Common in Colorado

Here’s a quick little guide to understanding the various types of tenancy you can take on title when you purchase a home in Colorado.  If you’ve been curious what the difference between joint tenancy vs tenants in common is in Colorado, here’s a good place to start!

When two or more buyers are purchasing a home one of the most important decisions they will make is how they will be vested with the property, either as tenants in common or as joint tenants. Deciding which type of tenancy would be most beneficial to the buyers of a property depends on the circumstances of the purchase (e.g. investment, principal residence, estate planning, etc.) and the relationship of the parties (e.g. married, siblings, parent and children, etc.). It is suggested that potential buyers discuss these matters with an attorney in order to make an informed decision.

Joint Tenancy vs Tenants in Common

Tenancy in Common

“Tenancy in common” in Colorado, is the default tenancy. Tenancy in common is a form of ownership in which each co-tenant owns a separate fractional share of undivided property. Upon the death of one of the tenants in common, there is no transfer of the property. When a tenant in common passes away, that tenant’s interest in the property becomes an asset in the deceased’s estate and may pass to heirs or devisees.
A tenancy in common is generally used when the cotenants are not related, although this is not always the case. For instance, if the buyers are two unrelated investors, they may decide that they will take the property as tenants in common because they would like to have the option to freely convey their interest in the property to third parties.

Joint Tenancy

“Joint tenancy” or “joint tenancy with the right of survivorship” as it is otherwise known, is a tenancy where each joint tenant owns an undivided whole of the joint property, rather than a fractional part of the property. In order to create an estate in joint tenancy with survivorship there must be specific language in the deed to demonstrate the intent to create a joint tenancy. For example, the intent may be manifested through simply stating in the conveyance deed, “as joint tenants”. This can also be accomplished by utilizing such phrases as, “in joint tenancy with the right of survivorship” or “as joint tenants with the right of survivorship”, or the abbreviation “JTWROS”.
Taking as joint tenants is usually done among family members, and also done as part of the family’s estate planning. The property will pass to the joint tenant(s) by law with the death of one of the joint tenants and not subject the property to the probate procedure and the decedent’s estate.

Right of Survivorship

Upon the death of a joint tenant, the surviving tenant(s) become, the sole owner(s) of the property. They take title to the property free from any liens which may have existed on the now extinguished interest of the deceased. This right of survivorship is the distinguishing characteristic for a joint tenancy, as opposed to a tenancy in common. Severance of Joint Tenancy The joint tenancy can be severed by a conveyance from one joint tenant to a third party. The remaining joint tenants become tenants in common with the third party. The severance of a joint tenancy extinguishes the right of survivorship that makes a joint tenancy unique and desirable.
Choosing which tenancy to take title to a property is a complicated and detailed decision for the purchasers. Brokers should be careful not to advise buyers on estate planning or other legal or tax matters. Depending on the tenancy chosen there can be legal and tax consequences that should be taken into consideration. This article is designed to give brokers a basic understanding of the difference between the two tenancies.

Download this information as a PDF 

17 Jan

Building a spec house

Building a spec house: a video summary

Howdy folks.  I just put a little video together after looking through all my pictures that I took over the course of last year while building a spec house in Parker, Colorado.  While this is by no means a full how to tutorial of the process, I hope it gives you a little insight into all the detail and time that goes into a construction project.

 

Are you curious about building a home in Colorado?  Or any other general real estate questions?  Feel free to contact me via phone or the form below.

Contact Caleb Block




 

21 Dec

Denver Property Search

Hey there, are you frustrated with sites the BIG home search sites when you’re trying to do a Denver property search?  I recommend using a Realtor like myself to get access to the real time, live MLS.  I personally use REColorado – which covers the Denver metro area, and shares information with the Boulder county and Colorado Springs MLS as well.

You see, the issue with big aggregation sites is the fact that often times they display inaccurate information.  I know that real estate agents have to personally upload and input their listings into these sites – and often times they forget to update them once they have been sold / expired / etc.  Another issue are the value estimates these big sites give.  Sometimes they are accurate, but sometimes they are WILDLY inaccurate, and can give sellers unrealistic expectations of what they can net from the sale of their home.

If you’re interested in MLS portal access , give me a call today.

720 260 0977

23 Jun

Caleb’s guide to moving to Colorado

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As a native resident of Colorado, it’s been pretty mind blowing to watch how much this state has changed in the last few years.  The influx of people in this state is truly astounding with over a hundred thousand people moving to Colorado in 2015. So far 2016 is showing no signs of slowing down, and we will soon find Colorado to be one of the most popular states in the country. And really, I cannot blame people for things to move here. Colorado is truly a gem natural beauty and a fantastic place to live. So if you’re new to the state or considering moving to Colorado here a couple things you might want to consider.

Denver is only a small part of Colorado

leadvilleI think many people are inclined to immediately to think of Denver, the mile-high City, when the image of Colorado is in their mind.   There is no doubt that Denver is a very fun city – it is much smaller and more accessible than New York or Los Angeles.  But you must keep in mind the Denver metro area, while growing, is just a small sliver the land mass Colorado. Denver slightly to the northeast of the middle of the state leaving a large amount of the state to be explored. To the South you have cities such as Pueblo, Durango, and Telluride. Further north of these is Colorado Springs, home to both the Air Force Academy and NORAD. It’s at least an hour’s Drive from Pueblo to Colorado Springs, and then another hour to get to the southern reaches of the Denver metro area. Further north you have towns like Loveland, Boulder, and the largest city in the northern part of Colorado, Fort Collins. And these are just along the I-25 corridor.

To the east lies the Great Plains and many small farming communities dot the roadways.   Into the Rocky Mountains there are towns both large and small  – Ski towns like Breckenridge or Steamboat Springs, and towns from the boom days of mining such as Leadville and Georgetown.  In short, there’s a TON of places to explore in this state, and while Denver is certainly fun it is just a piece of what Colorado has to offer.

We’re not all rednecks, and we’re not all potheads

It’s been kind of funny watching any sort of national news when it come to Colorado – I think sometimes the media likes to depict residents of this state as either all cowboys, or all stoners.  While we’ve got our fair share of both, any time spent in Colorado will show how diversified the population can be.  What you can generalize Colorado’s residents as:  Lovers of the outdoors, hardworking and down to earth people.

Be ready for some crazy weather

I think that a lot of people that are moving to Colorado do not expect is the somewhat extreme weather we can recieve.  The high country is its own animal – you should never assume that because it’s a nice day on the front range, that it will translate to be the same in the mountains.  Our weather shifts from freezing temperatures and snow flurries (yes, it snows here. Sometimes it snows a lot!)  to 100 degree temperatures complete with lighting storms and large hail.  Despite these sometimes wild weather events, Colorado is generally a very sunny and warm state.  We are commonly quoted as having “300 days of sunshine” (although this has been proven a myth, it’s still pretty sunny out here)

Some parts of Colorado are much more affordable than others

As you’re probably aware, Denver is one of the hottest real estate markets in the United States today.  Due to a mixture of the legalization of cannabis, and Denver becoming a center of the country hub for businesses, rents and housing prices in Denver have skyrocketed.  But fear not! There are many places in this state that are still affordable.  The southern part of Colorado, when compared to the Denver metro is a much thriftier option, as are some areas west of the continental divide (that’s the point in the mountains where water will either flow to the east towards Denver, or to the west toward the state of Utah- Thanks geography class!!!)  So, if affordability is an issue but you still want to live the Rocky Mountain Way, know that there are options.

Are you thinking of moving to Colorado?  Let me help!

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18 Jun

Colorado Horse Property

Colorad-horse-property

To many, Colorado embodies the vision of the old West, complete with our rolling prairies and majestic rocky mountains.  It’s no surprise to you then that we’ve got our fair share of cowboys and cowgirls.  And what do they love more than anything else?  The horse (of course).  I was fortunate enough to get to grow up on Colorado horse property, and with many friends in the equestrian community I’ve had the opportunity to see some breathtaking horse ranches through out the state.

My mother, Nan Galligan, has been riding horses over 30 years – and is also a Realtor who specializes in Colorado horse property. She’s got a keen eye not only for the human dwelling on a property, but the barn as well.  Because, really, a barn is a home for your horses, so their needs need to be taken in to consideration just as much as the human family’s needs.   What then, makes for a good Colorado horse property?

1.  Acreage that is usable for grazing and pasture.

Nan’s horses Sedona and Missy (the pony)  have been very lucky indeed.  They live on 3 acres of excellent natural Colorado prairie grass that is fenced in, allowing us to let them out of their corral area and graze to their heart’s desires.  Of course, not all acreage is the same – you will want to look at what kind of soil the property has, and if there is currently pasture area growing.  Also, the topography of the terrain is important.  In the mountains you may be looking at a 10 acre property, but how much of it is actually usable, compared to how much is a steep mountainside that a horse can’t traverse?

2. Access to local riding trails

Make sure to scope out the neighborhood if you’re planning on buying a Colorado horse property.  Ask the neighbors with horses if there are any closeby trails – and get ready to make some new friends as they will likely become your new guide on your next horseback ride!

3. Barn amenities

The quality of a barn can vary greatly, with some animals only having a lean to to keep them out of the elements, to gigantic barns with changing rooms for you, showers, air conditioning and heat.   For my preferences, I always like to see that the barn has a water spigot installed – much easier than rolling out a hose every time you need to fill the horse tanks.  As I mentioned, I’ve gotten the opportunity to see a wide variety of Colorado horse property, and some of the barns I have been to are nicer than a lot of the homes I’ve sold to humans!

If you’re in the market for horse properties in Colorado, we would love to be able to assist you in your search.  Happy Trails!nan-galligan-brokers-guild-colorado-horse-property

Caleb Block | Cherry Creek Properties LLC | 720 260 0977

Nan Galligan | Brokers Guild |  303 841 0692

www.nangalligan.com 

13 Jun

Spec House photographs

Here’s a collection of some of the photos that I have taken over the process of building my first spec house.  9910 Falcon Roost point in Parker Colorado is a spec house by Seidel design group and Wayne Block Custom homes.

 

 

9910 Falcon Roost Point Parker Colorado Spec House photographs:

 

The lot looking out when it was only a foundation.

The lot looking out when it was only a foundation.

 

 

 

 

 

 

 

 

 

 

2015-09-14 15.36.42

 

 

 

 

 

 

 

 

 

2015-09-14 15.42.04

13 Jun

How does Real Estate Commission work?

Today, I am going to blog about one of the most despised words in the real estate world.  Hold on, here it comes:  Commission.  EEK!  Egads!  Now, for the few of you that haven’t run out of the room in terror, are you familiar with how a real estate commission works?  After all, we only fear what we don’t understand.  Let me try to demystify this for you so the word doesn’t seem so scary anymore!

Now, let’s define the word commission, I always think providing a definition is a solid starting point.

Simple Definition of commission

  • : a group of people who have been given the official job of finding information about something or controlling something

  • : an amount of money paid to an employee for selling something

  • : the act of committing a crime

Full Definition of commission

  1. 1a:  a formal written warrant granting the power to perform various acts or dutiesb:  a certificate conferring military rank and authority; also:  the rank and authority so conferred

  2. 2:  an authorization or command to act in a prescribed manner or to perform prescribed acts :charge

  3. 3a:  authority to act for, in behalf of, or in place of anotherb:  a task or matter entrusted to one as an agent for another

  4. 4a:  a group of persons directed to perform some dutyb:  a government agency having administrative, legislative, or judicial powersc:  a city council having legislative and executive functions

  5. 5:  an act of committing something <commission of a crime>

  6. 6:  a fee paid to an agent or employee for transacting a piece of business or performing a service; especially:  a percentage of the money received from a total paid to the agent responsible for the business

  7. 7:  an act of entrusting or giving authority

in commission

or

into commission

  1. 1:  under the authority of commissioners

  2. 2of a ship:  ready for active service

  3. 3:  in use or in condition for use

on commission

  1. :  with commission serving as partial or full pay for work done

out of commission

  1. 1:  out of active service or use

  2. 2:  out of working order

Thanks for the definition goes to Merriam Webster online.

 So, as you can see in the orange I’ve highlighted the specific definition we’re referring to here.  (although I am sure some frustrated buyers and sellers saw the crime definition and applied it to their agent!
A fact of life in the real estate industry is that all real estate agents and Realtors work on 100% Commission. Many buyers and sellers are confused by the commission set up and are not sure how it is set and who controls the commission. The reality here is that the seller is the one who sets the Commission in each transaction. The following picture is from the contract  called the exclusive right to buy or right to sell listing contract. This contract is between the buyer or seller and their agent and defines on the listing side how much commission will be paid to both a buyer’s agent, seller’s agent or a transaction broker.
In this contract, the total commission is set at 4%.  2.8% to the buyer's agent, and 1.2% to the listing agent.

In this contract, the total commission is set at 4%. 2.8% to the buyer’s agent, and 1.2% to the listing agent.

A very important point to remember if you are entering into an exclusive right to buy all right to sell agreement with an agent is that there is no standard commission percentage or amount that the commission must be. If they tell you otherwise they are not being truthful! Commission is always always always negotiable. Commonly in Colorado what you will see is a 2.8 % Commission for both the buying side agent and the listing agent who works for the seller. That means you were looking at a total commission expense of 5.6%. However this is always like I said, negotiable and you can discuss this with your agent about how much you feel is an appropriate payment. I have seen commissions of anywhere from 1%- 4%, with those higher commission rates often on vacant land that has been on the market for quite some time.

Section 7.2 of the Exclusive right to sell listing contract indicates how much of the total commission will be awarded to a buyer's agent or transaction broker.

Section 7.2 of the Exclusive right to sell listing contract indicates how much of the total commission will be awarded to a buyer’s agent or transaction broker.

 

 

 

 

While it may be beneficial in your mind to offer a very low commission to a buyer’s agent. you must remember that all agents are working solely on commission. While they should be loyal to their clients via a fiduciary duty, many agents may look at a listing that has an extremely low commission for a buyer’s agent and simply not show it to their clients. I advise sellers to at least offer a decent sum of money for a buyer’s agent so they will work hard to bring a buyer to the table. And on the flip side while you may be able to save some money by having your listing agent take a lower commission you should also keep in mind that marketing a property also takes money. Things such as professional photographs, professional staging of a home, gasoline expenses and time spent for open houses advance and other selling techniques are not free. If you find a Savvy agent who is up to speed with technology then you are much better served than somebody who will merely put the home in the MLS for you and then just hope that somebody comes along to buy it.

what-is-real-estate-commissionThus, this is the reason that many people choose to do a for sale by owner. They think they will easily be able to save around 6% of their sale price. And while they may save some money, the easy part is never easy.  Especially if you’re not familiar with the market you are in or how the home-buying/selling process works. I liken this to somebody who decides to fix the transmission on their car by themselves. Sure, you may be able to do it. However,  if you do not have the expertise of a professional, you may find that it is more of a headache and a anxiety-inducing event than you would reckon.  A real estate deal gone bad can carry significant legal and financial liabilities (and for this reason real estate agents carry errors and omissions insurance.)

I do my very best to work with clients and come to a point that we can both agree on in my payment when selling a home. I understand that the equity that you may have saved up through living in your home is very important to you and you do not want to see a single dollar of it lost – who would? This is why I work so hard for clients – because I know their money is means a lot to them, and marketing and selling a home is a full-time job in and of itself. Just remember that you can always negotiate the cost of a real estate commission with your agent to something you are comfortable with!

How can I help you with Colorado real estate?

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08 Jun

Colorado first time home buyers

I am happy to report that my last closing was to help a first time home buyer!  Colorado first time home buyers face a difficult road in getting an offer accepted – here are a few of the tips I recommend.

1.  Offer a little above asking price

In what would be considered a more “normal” real estate climate, this probably wouldn’t come across as very wise advice.  However as you’re probably aware, Colorado is one of the hottest markets in the country.  In my work with my last client, we made 4 offers before we got one accepted.  Many were $10,000 over asking price, and we were still beaten out.  With the market being as hot as it is, a Colorado first time home buyers main goal is to get their offer noticed – especially if they are using an FHA or conventional loan.  Offering listing price with a loan leaves you with a very good chance of being beaten out by a higher (or cash) offer.

2. View properties as soon as they come on the market.

This tip is something we learned the hard way – by the time our scheduled showing slot had arrived, several of the properties were already in “under contract” status.   You want to ensure that your agent is getting you updated on new listings as soon as they hit the market so you can get in to see them early before they get snatched up.

3.  Personalize your offer.

While it may be tradition to have your real estate agent to encourage you to write a personalized card, I do something a bit different.  Using the available technology such as Google Hangouts and Youtube, I was able to create a video introduction with my client that explained who she was and why she liked the property.  This will personalize your offer to the seller and make you seem like a real person, unlike the rest of the pile which are just contracts with numbers.  I really believe this technique helps to get your offer accepted.

 

4.  Expect to place multiple offers.

I read on a real estate website that the average buyer in Colorado has to place 8 offers prior to getting one accepted – so do realize there is a lot of competition in the market  – especially at the lower end (<$400K)  But, keep the course and keep hunting and you can find a home you will love!

 

Also – check out CHFA for first time buyer down payment assistance grants.

How can I assist you with Colorado real estate?  Contact me today.

Contact Caleb Block