Round Rio Rancho

#3 in a Multi-Part Series…

A family put their home up for sale and left town. I had advised them to do some touch up painting, and to replace the vinyl flooring and carpet in the home, as it was worn. They agreed to the touch up painting, but did not have the funds to replace the flooring. Over the next 4 months, that home had at least a dozen showings each month, and 2 offers. The price was $149,000. Both offers were around $125,000. When we countered them to get the price up, both Buyers had walked away, rather than negotiating further.

I finally found a way to finance the flooring for my clients, and they agreed to have it put in. We spent $2800 to do the entire home. Within 10 days of the new flooring going in, we received another offer. It was for $140,000, and after negotiations, we settled on $145,000!

During the inspections I asked the Buyer what had attracted them to the home. Her response was that on the day she first saw it, it was the last home on a tour with 15 others, and when she walked into it, “it was like a breath of fresh air” compared to all the others. She “could tell that the prior owners had taken great care of it.” Little did she know that the prior owners had actually “ridden the home hard, and put it away wet”. Her reaction to what we had done was exactly what we were striving for.

Next:  Another example of the effect of Preparing a Home For Sale…

#2 in a Multi-Part Series…

When I first walk into a home that a client is thinking about selling, the previously listed items are just some of the first things I look at. The reason is that all of these things make a big impression on potential buyers when they walk through, and they are all cosmetic items. Without exception, if the condition of any of these items is not good to excellent, they should be brought up to that standard prior to the home being put on the market.

Let’s say that the carpet is in poor shape. Very often I get asked by the Seller if they shouldn’t just offer a carpet allowance, rather than pick the color and the type of new carpet for the potential Buyers. The answer is NO! If the carpet (and therefore the home) looks shabby, that assessment is applied by visitors to the entire home. Who wants to buy a shabby home? The result is that very few Buyers will consider buying that home. They cannot imagine what the home would be like with new carpet, so they just move on to the next one. If they DO make an offer, they reduce it by $10,000 AND take the $3,000 carpet allowance you offered. This is rarely a good thing for the Seller, who could have installed an inexpensive grade of new carpet (with good padding) for about $14/sq yd or about $2200 for an average 2000 sq ft home, saved the difference of $10,800, AND probably gotten their home sold a LOT faster.

After working in the Albuquerque / Rio Rancho area for over 12 years, we have developed a list of vendors that are well priced and provide quality products and services. They also show up (unlike a lot of contractors). Our wholesale flooring products supplier usually beats Home Depot or Lowes by 25-35% on identical products.  Putting the carpet on a credit card and paying $75/month until the house sells is a great way to cash flow getting the work done, and make another $10,000 on the home sale. 

The above scenario pretty much applies to anything cosmetic that might need doing in the home. $1000 spent making cosmetic repairs or improvements will usually return a $5000 increase in the sale price, and will DECREASE the time on market. When I advise a client about things to be done, that’s my goal – to get them a 5-to-1 return on any investment. Rarely is it to Seller’s advantage to offer their home “as is”, because they don’t want to deal with its flaws. The result of that decision is that the Buyer makes the 5-to-1 return on their improvements after buying the home at a heavily discounted price.

Occasionally I receive pushback from a Seller who doesn’t want to spend the money on a home they are leaving, or does not have the money to spend until the house sells. They may have also received advice from friends, relatives or even from other Realtors to the contrary of what I advise, but my advice is based upon the examination of hundreds of past home sales, and it works.

Next:  Examples of the effect of Preparing a Home For Sale…

#1 in a Multi-Part Series…

There are 3 pieces to the puzzle of consistently getting a home sold. Although our team works in the Greater Albuquerque / Rio Rancho NM Metro Area, I don’t believe that things are significantly different in any other market…

The first step is to Prepare the Home for Sale:

Almost every home I visit needs some kind of attention. Sellers need to take a look at their home with fresh eyes, as if they were a potential buyer making a ten minute visit to the home during a day of visits to a dozen similar homes with their Realtor. Look for the following items:

1. Examine the paint in every room: Are there scuffs on the walls from pets or children doing what they do? Are there areas where the paint is thin? Are there some dings at the corners which need patching and paint? Are there dents in the walls from a door knob where the doorstop fell off last year? Did someone touchup a wall with semi-gloss paint where the rest of the wall was flat? Are there splotches of colored wall paint on the white ceiling where the paint roller strayed too close? How carefully was the cut-in work done near the ceiling or at a corner where there’s a change of color? Do the baseboards need a fresh coat of paint to cover dings from vacuuming? What’s the condition of the trim paint around all exterior doors, especially the garage door?
2. Is there a clean bead of caulk around every sink, bathtub and shower pan in the house? What’s the condition of the counter grout or tub surround grout?
3. Has the backing on a bathroom mirror started to break down near the bottom edge? 
4. Does the carpet look clean and new throughout, or has it seen better days?
5.  Are the kitchen and bath cabinets dry and pasty-looking, or have they been recently cleaned and oiled to rejuvenate them?
6. How does the house smell when you first walk in? Has the family pet been marking territory in a corner of the living room?
7. If there is vinyl flooring in the kitchen and baths, are there cuts, stains, or dull areas in the flooring? If you have tile, what’s the condition of the grout?
8. Is the yard neat and trimmed? Is it landscaped at all?

Next:  What to do when you’ve answered the above questions …

On April 8, 2010, the Federal Housing and Urban Development Department (HUD) published a decision in the form of Mortgagee Letter 2010-14, wherein they are now accepting digital signatures (e-signatures) on real estate documents, including contracts. DocuSign Inc., a leader in the e-signature field has been leading the charge to get e-signatures accepted by more agencies and for more purposes, including broad usage by real estate brokers.

E-signatures have been legal in the U.S. for over 10 years now, but only recently have they become more commonly used for real estate sales.  The Mark and Sheila Team has been using the DocuSign e-signing system for just under 2 years now. (We were one of the first brokers in the Albuquerque / Rio Rancho Metro Area to adopt it.) Now, getting signatures on time-sensitive real estate sale contracts, disclosures and other contractual agreements is quick, easy and convenient for our clients – especially since about 40% of our clients are living out of the area while they are buying or selling a home with us.

The e-signing process is so quick and simple, anyone with an internet connection and an email account can affix their initials, signatures and dates to a document electronically in about half the time it takes to do so with a pen. A client of ours who used the system for the first time today to sign all the documents needed to list her home, actually said it was “fun” to use. I’ll take that reaction to one of our systems anytime….

Although about 98% of all mortgage lenders, banks, brokerages, title and relocation companies accept e-signatures on real estate sale documents, most lenders still want wet-ink signatures on paper forms to create notes and mortgages. Once they have them, what do most of these companies do with the signed paper documents? They scan them to electronic form. (Insert scratching of head here.) Then they file (lose) the papers in warehouses.

Several companies, including Stewart Title, offer a complete E-Signing Room system for closing of real estate transactions and paperless signing of notes and mortgages. Only a few mortgage lenders, and even fewer New Mexico County Recording offices are prepared to accept electronic filings at this time, but within a couple years we may be able to sell a house without cutting down 3 trees for each transaction.

So you’re buying a home….  Here are some tips you need to know about purchasing homeowners /hazard insurance:

When purchasing a home it’s important to secure your insurance as soon as possible.  This will help you avoid any surprises or last minute decisions.  Even if you’ve found a home you like but it’s not yet under contract you can get a homeowners insurance quote from an agent.   Checking with your current auto insurance company is a good idea but it’s also recommended that you get comparable quotes from other agents.  Not all insurance companies or agents are created equal nor is the coverage they quote.  Remember this is your home we’re talking about don’t risk working with someone you can’t look in the eye and voice your concerns.  You want to find an agent (and staff) you can feel comfortable with because this could be the beginning of a long business relationship.  You’ll want an advocate who is willing to go the extra mile on your behalf.

An insurance agent can also check the claims-filing history of the home you want to buy.  Some insurance agents will give you a copy of the home loss history report, also known as the CLUE report, just for asking.  A claim may increase the premium of your prospective home insurance by up to 30% for as long as three years.  It’s also a good way to find out if there have been any water or roof issues, even if they’ve been repaired.

By: Aprilyn Chavez Geissler, our favorite Albuquerque Area Farmer’s Insurance Agent. For more information you can reach Aprilyn here.

Mortgage interest rates have been at historic lows for years now…. Well, prepare for them to climb for a while. Most consumers are not aware of it, but as part of the economic recovery in the financial market, the Federal Reserve has been purchasing mortgage-backed securities for about a year.  The sub 5% rates we have enjoyed for the past year have been artificially held down by this $1.25 Trillion investment. If market forces had been at work, rates would have been much higher. That program by the Fed has now ended, and every indication points to a steady, protracted rise in mortgage rates.

30 year fixed rates have climbed almost a half point in just over 4 months, and are currently about 5.3%. Projections for the next couple years by the Mortgage Bankers Association predict rates at 5.8% by the end of 2010, 6.3% by the end of 2011, and 6.6% by late 2012.  Other financial authorities are proffering slightly different estimates, but pretty much all of them see significant increases coming.

The moderate recovery in the real estate market may stall or possibly even reverse somewhat as rates increase. By one estimate, for every 1 point increase in  mortgage rates, 1 Million potential Buyers are priced out of the market. This could mean higher inventories, longer time on market, and additional downward pressure on prices.  For those thinking that they should wait to buy until prices decline further (unless they are paying cash), the increase in interest rates will more than offset any savings in purchase price.  If you’re thinking about a home purchase in the Albuquerque / Rio Rancho Metro area and want to know the specific numbers, give us a call and we’ll do the math for you.

It was a good weekend… 2 contracts successfully negotiated on 2 listings.  The impact of the 1st Timer Buyers Tax Credit is still being felt. Both Rio Rancho homes were in the $140,000 – $165,000 price range. Both homes were only on the market a short time. One for only a few days. Both Buyers are using FHA financing, with little or no downpayment.  This is a fine buying strategy, so long as they stay in the homes long enough to build equity. Too many homeowners have a change of plans long before they overcome the steep costs of selling.

Both of my clients followed the plan – prep the home to be as attractive as possible; price it at market value; let us market the heck out of it.  Great photos are key – that’s why we spend 4 -5 hours or more just on shooting, enhancing, and uploading  still images to the MLS and to various stand alone websites. The goal is to make the home so attractive online that other brokers and buyers will want to see it in person.

Mission accomplished…

This is just an update to a previous blog reporting on Green2V’s new manufacturing facility to be built in Rio Rancho, New Mexico.  Some people did not know where the plant would be located, so we have obtained a photo/map showing the exact location, courtesy of the Rio Rancho Economic Development Corporation.

For parties interested in the outcome of “tax lightning” litigation, your day may be coming. The New Mexico Court of Appeals has put two tax lightning cases onto their calendar for hearing.

If you are unfamiliar with the term, “tax lightning” occurs when someone buys a home, (often thinking that the property tax rate in effect when they purchased will continue) and at the next property tax assessment their home’s taxes are adjusted to a new and often much higher rate based upon their purchase price. On top of their shock when the taxes double or sometimes triple, imagine their indignation when they discover that their neighbors across the street (in the same model of home) are still paying one half or one third of what the new home buyer is now being billed!

Last year there were two rulings in the 2nd Judicial Court in Bernalillo County stating that parts of the property tax laws were unconstitutional. In response to these rulings, the Bernalillo County Assessor put into motion a rollback of some of the skyrocketed assessments – but only in Bernalillo County. The Sandoval County Assessor basically ignored the ruling, as the courts were not in Sandoval County. If the Court of Appeals basically affirms the lower court’s rulings, or made similar rulings of their own, the effect would be statewide.

Over 2000 lawsuits over property tax assessments are pending in Bernalillo County. State legislators are considering whether to attempt a constitutional amendment in the near future to craft a better system. The state legislature has taken up and dropped the ball on tax lightening reforms during the last two sessions. State Senator Mark Boitano has pushed workable plans in both sessions but has been blindsided by the leadership consistently.
 
There is a need for us all to pay taxes to fund public services and infrastructure, but the current property tax assessment system is broken, probably unconstitutional, and is in serious need of reform. Regardless of the outcome of cases before the Court of Appeals, if you agree that the system is broken, share your thoughts with your state representatives now, and when they go back into session.

New Mexico State and Rio Rancho City leaders announced today that Green2V will construct a one million sq foot manufacturing facility in the City of Vision. The company plans to break ground within the month on a 124 acre site to be acquired from the State Land Office.  As with all such transactions, the process is a little complicated – The City of Rio Rancho will buy the land from the State for $6.9 Million. Green2v will supply the land purchase money to the city.  Rio Rancho will speed the project through permitting and approval processes, and will be installing $7.2 Million worth of roads, sewers and other infrastructure.  Part of the facility’s contruction costs will be financed by $500 Million in Industrial Revenue Bonds issued by the city, to be paid off by Green2V over time.  Certain taxes on property and capital equipment will probably be waived for a period of time, as is common to entice a project of this size to locate here.

The construction will be done in phases over a 5 year period. The first phase will hopefully be completed in time to make and ship product by Summer, 2011.  Eventually the plant may employ 1500 workers.

Green2V’s CEO, Bill Sheppard was formerly a Vice President at Intel, and was partly responsible for much of the expansion of that plant in the early 2000’s. The company’s slogan –  “Sand to Kilowatts” refers to the fact that they intend to control all aspects of their product creation, from the raw materials to distribution and installation.