Frequently Asked Questions - Crested Butte Properties and Real Estate
I want to list my home…how do I know what it is worth?
Should I sell my home myself?
Should I wait until the market improves to list?
Should I buy property in a Trust?
Scroll down to read about these subjects, and contact us with additional questions.
I want to list my home…how do I know what it is worth?
The answer here is pretty simple for the seller: make an appointment with your professional real estate broker to have them view your home. They will make note of square footage, number of bed/bathrooms, living spaces, kitchen quality, upgrades, updates, amenities, interior and exterior condition, location, and many other factors that years of experience working with buyers has taught them to include. They will then run a “competitive (or comparative) market analysis” based on recent sales of homes in your area, sometimes called “comps”. This may not be as easy for the agent as it sounds, especially if you own a custom home, or when sales data of similar properties is not available.
Your broker will most likely start by running a search through the Multiple Listing Service, or MLS. This is something only a member of the local real estate board has access to, and it shows all the properties for sale in your area, and what they are listed for. They also have access to the current market data that shows original listing prices and then actually sold for. The broker will then put all this together and review the findings so that you can decide the price point for your home based on hard facts.
Rest assured, we will work diligently to get the highest sales price for your home that the market will allow. If you are thinking of selling your Crested Butte property, call me. We can meet or talk over the phone to discuss the market and your options.
Should I wait until the market improves to list?
Once you have made the decision to sell your home, many factors come in to play as to when to put it on the market. A significant life event, job or locality change may dictate selling it immediately. But if time is not a governing factor, many people will ponder the mood of the real state market. Although the housing market does not move as fast as the stock market, many selling considerations are the same. As with the stock market, one of the biggest mistakes sellers often make is trying to “time the market”. If the market is falling, it is all but impossible to predict when it will rise appreciably. It’s no secret that the economy and the real estate market are in a slump. Prices have declined significantly in the last 18 months, with no real sign of a major recovery on the horizon. Of course, we know the market will eventually recover, it always does, and we all want to sell when prices are high, or rising. So the question really is, how long should we wait?
One of the main considerations you should always have is protecting your equity. Every day that is lost in a falling market, is a day equity shrinks. If you wait too long, there may exist the possibility that you could eventually face the nightmare of your value being less than your mortgage. This is a situation you want to avoid at all costs. Another negative aspect of waiting to sell in a falling market is cash flow. Mortgage payments, insurance, utilities, repairs, taxes, etc … all still have to be paid. The earlier you put your house on the market at a salable price, the better your chances are of selling earlier, and mitigating some of those ongoing expenses … and saving your equity.
In today’s market, the best time to sell is now … not next month. If you are going to wait for the market to fully recover, you might be waiting years. Any equity is better than none. It’s a tough decision.
If you are considering selling your home, call me at your earliest convenience so we may determine your property’s value and discuss your options. You are not alone … your real estate professional is here to help.
Should I sell my home myself?
Every seller has thought about it. We probably all know someone who has done it, and have read web articles and books on how to do it -- it’s a very juicy carrot. But is selling your home yourself really worth the effort, and will it really save money in the long run? Can you get into trouble? Let’s take a closer look at what is involved that might prove problematic for the “For Sale by Owner”, or FSBO.
First, how do you determine your asking price? Your real estate professional has many tools and years of experience in helping determine what a buyer might be willing to pay for your property…and some are pretty good at it. After all, it is their full time job. Owners are emotionally attached to their homes (naturally) and sometimes affix an unrealistically high selling price to them. Today’s buyers are pretty savvy, and will often pass up looking at homes that they think are overpriced. Your agent can help you analyze buyer activity and housing sales in your area, based on active listings and comparable sales. Of course, the FSBO always has the option of paying a professional appraiser $450+ for the same information an agent provides for free.
The FSBO is responsible for marketing, and the cost can be pretty hefty for wide coverage. Newspaper ads, flyers, signs, etc. can add up to hundreds or even thousands of dollars…and still not get the coverage a professional can achieve through the Multiple Listing Service (MLS) and Realtor.com, which is only available to them. Professional brokers have clients from all over the world. The FSBO usually just advertises locally, missing thousands of potential buyers. Many buyers, usually the ones who are seriously shopping for a house, rely only on their brokers to find properties meeting their criteria. Without access to the Brokers’ network, those buyers, who are typically qualified, motivated, ready buyers, are missed also. Even advertising on the internet can be expensive, cumbersome, time consuming, and still not achieve the intended goal.
Your agent is trained to answer questions professionally over the phone and be readily available to show your property at times convenient to the buyer. The FSBO may not be available (especially if they are currently employed) when the buyer wants to look at it. This can be frustrating on both sides…and the potential buyer will look elsewhere especially when listings are plentiful. Professional brokers are working at their job and therefore are available to show property, and this usually leads to a quicker sale.
The legal paperwork involved in selling a home can be daunting. Has the FSBO ever drawn up a selling contract? Is it complete and does it protect the seller? What if the buyer backs out of the contract? How do you set up escrow? What if there is a problem with an inspection? How much earnest money should you demand? What if there is not clear title? What if the buyer can’t get a loan? Can you spot an unqualified buyer? Your broker has the experience and training to answer all these questions, and anticipate and handle problems that may arise.
As a FSBO, if you make mistakes in the selling of your home, the costs to remedy these mistakes can more than exceed the broker’s professional fee. In the long run, it is cheaper and less stressful to let a professional handle your sale. Do it right the first time.
Should I buy property in a Trust?
First, what is a trust? When you create a trust (in this case for your home), you transfer your property to an entity, person, or persons you “Trust”. You no longer own this property, the “Trust” does. You still have access to all your assets and property while you are alive, and instruct your Trust to carry out all the functions you would normally do as a homeowner. You can put instructions in the Trust as to who has access to it, and who the beneficiaries will be to inherit assets after your death. The Trust can even pay all the bills associated with it. The most attractive element of property in Trust is that when you die, since you don’t own the property (the Trust does), it will not have to go through Probate which might otherwise tie up your estate in court, and eat up assets in fees and court costs…and open it up to unwanted claims. And there may be favorable tax implications also.
You will need to appoint a Trustee to take care of your Trust and follow its’ directions. And believe it or not, you can be your own Trustee…you can be the person responsible for taking care of all the assets; you control them and decide what you want to do with them. After your death, control of the Trust would be passed on to a successor trustee that was named in your original Trust…like a surviving spouse, responsible adult family member, or even a lawyer or bank that you “Trust”. Should you give them the power in your instructions, the trustee can even sell your home while it is in a Trust and distribute the assets according to your wishes. Whomever you appoint as successor must follow the rules of the Trust, and can’t go against your instructions.
Probably the most common reason to put property in Trust (besides tax implications) is to take care of minors…children, grandchildren, etc. When they reach a proper age of your determination, the Trust, or property, can then be turned over to them to run, or dispose of, as they see fit. This is why it is import to choose a successor Trustee carefully…you want someone to run the trust and take care of minors just as you would if you were still alive.
There are two main types of Trusts: Living Trusts, and Irrevocable Trusts. Since the legal and financial implication of each are complicated and vary greatly, your lawyer or financial planner should be consulted on which type is best for your situation. Keep in mind that a Trust is different from a will…and your professional should explain those differences to you.
Should you put property in a Trust? Every person’s situation is different, and the best thing to do is consult a professional for this answer. Have them set one up properly for you should you decide it best fits your needs.
Disclaimer: The above information is presented for discussion purposes only, and should not be taken as an interpretation of the law. Your legal professional must always be consulted on these matters, especially if you decide to take action based on this discussion.
We specialize in real estate and properties for sale in Crested Butte. For answer to your specific questions and to find out about market conditions in your area, contact us. Your privacy is assured and we are happy to help.