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Stop looking at the list price! It doesn't really matter.

September 3, 2009 by Spencer Barron

Why is it that your typical buyer will always be locked in on the list price. They certainly don’t want to pay more than that, after all, it’s still a buyer’s market right? But the list price has nothing to do with what it is worth. Take the house I listed about a week ago, 1464 S Benton St in Lakewood, CO. It’s not lender owned or a short sale, just a great deal.

1464 S Benton St - FlatGrass Realty

1464 S Benton St - FlatGrass Realty


The property is listed at $119,900. A price designed to attract attention from investors because it has a certain relationship to what it could be worth.

We have had multiple offers at, above and below the list price from investors willing to pay cash. Why? Because investors work from what it could be worth to them rather than the list price. Most of the offers (not all) we received from traditional buyers tended to net a value under the list price. If the traditional buyer did their homework, they would know that the home is worth much more than the list price. The list price was just a tool to attract attention or to get a cash buyer involved. The same home down the block sold earlier this year for around $170,000 and that wasn’t even a full remodel. This home could fetch $175,00-$180,000 with a good remodel.

This home’s value is being held down by a handful of local foreclosures that though comparable on paper, sold in days to investors. Some of which have already been flipped. I’m guessing most agents didn’t take the time to look at what it could be worth, the ‘adjusted retail value’ of the property.
This is just one example, if you want to see lot’s of examples, take a look at the HUD bid statistics that come out each week. You’ll be able to see all the bids. You’ll notice that the vast majority of buyers make a ‘shot in the dark’ approach to their bid rather than considering the actual value of the home. That’s frustrating for me to watch. Whereas I’m working to attract an investor offer, HUD prioritizes owner occupants over investors. This can be a great opportunity for the average buyer to put themselves into a home with a great equity position. If only they (or their agent) would do the math.

Filed Under: Buying a home, Denver Real Estate, Flipping, foreclosures

Update on Renter's rights when rental is foreclosed

September 2, 2009 by Spencer Barron

This isn’t new but you may not have heard about it. It’s especially important if you’re interested in purchasing properties in foreclosure down at the public trustee’s auction. It’s also an update on this post where unknowing renters were being evicted from the property even though they had a lease in place with the owner.

New Federal law effective from August until December 31, 2012 says they can stay through their previous lease as long as they continue to honor the terms of the lease. Alternatively, a 90 day notice is given for the renters to vacate.

You can see more of it here.

Filed Under: Denver Real Estate, Flipping, foreclosures

Strong Summer Sales Deplete Supply of Quality Affordable Homes

August 31, 2009 by Spencer Barron

We haven’t really seen an increase in home sales in Denver but if you are trying to buy a home right now, it sure could seem like it. With the buyer credit set to expire November 30th and interest rates hovering around 5%, many buyers who waited until the last minute to start looking are finding the sales rack looking a bit picked through.
With inventory levels back at 2004 levels and still a large supply of lender owned and short sale properties clogging up the works, the few that are quality affordable homes are selling almost as fast as they come on.
January of this year saw the lowest average sale price for residential homes in the Denver area. A paltry $230,000 compared to the 2007 low of $270,000. The low price levels should have been a strong buy signal to anyone who was thinking of getting in.
Well if you are looking to time the market and you are thinking of selling your home in the under $275,000 range. September will be the month to do it.

Stochastic developed using Denver Real Estate average sale prices in 2009

Stochastic developed using Denver Real Estate average sale prices in 2009


Here’s a chart showing where we are at in the market cycle based off annual pricing movements when compared to the average. We are just passing what will be the peak sales season and entering the slow season after what could be considered stronger than expect spring and summer sales.

Filed Under: Buying a home, Denver Real Estate, Selling a home, statistics

Selling your home? Better Photo’s = Faster sales…

January 30, 2009 by Spencer Barron

Perhaps even a better price…

I’ve always tried to take the best photos possible for my listings. Sometimes it means making multiple trips to the listing just to get the right lighting. Recently though, I began employing new HDR (high dynamic range) photography techniques using my digital SLR camera that have significantly improved both quality of the pictures and the number of showings I get to my listings.

Often, HDR techniques are used for an artistic rendered effect but you can often take advantage of the process for difficult shots you would otherwise be unable to get.

Clearly not my photo, much better - you can check out Portal-de-iangel-barcelona-by-Morbcn and other HDR works on Flickr

Before I say how we do it, I just wanted to emphasize why you should. Most agents, take below average to slightly better than average photos. The key word in that sentence was “average”. I don’t want to be average. I want to look like the best. The way listings appear on the internet or on your local MLS will most likely be in the context of other home photos. I want to be the best on that list. I promise you, that even agents can be influenced by the photos. If an agent has 50 possible homes to show and will only have time to show 10-15 in a day (that’s a lot of homes), the agent has to screen out the good ones. Assuming that the homes are fairly similar, it often will come down to having the right photos.

Of course, you could just hire the local Obeo photographer or someone similar who offers a photography and virtual tour service. I use them too. But lots of other agents do too. Besides, don’t you want to do more than the next agent? Being better, especially when it comes to the visuals, will go along way in a listing apointment. But who wants to be slightly better than average? (If you answered “I do”, you should read “The Dip“.)

Think of it like this. When you watch a basketball game and you see the guy dunk over the defender. Just remember, nobody wants to be the guy being dunked over. (Here’s an example if you want to think about it some more) I would rather be the guy that is dunking. I don’t feel bad about it. It’s not my fault if other agents are not doing all they can.

Point is that being average isn’t the goal. More eyes, means more showings, which becomes more sales. I’m not saying that you should alter your photos, rather take use of modern technology that lets you take photos that previously only talented photographers using special film and dark room techniques could achieve.

Here’s what I’m talking about. On the left is the picture from the professional photographer (who I also hire) on the right, my photo.
In the Washington Park neighborhood, 900 S Vine. The professional’s usually do a decent enough job on the inside but usually don’t do anything more than a representational shot for the outside. When I decided to reshoot the front photo, it was winter so the trees didn’t look as nice anymore and the front was enclosed by flower boxes that had vines in them…the vines end up looking like dead twigs. To get around this, I went in close with my wide angle lens and did a long exposure HDR series before the street lights came on and made everything orange. Here’s the difference.

900 S. Vine - Left photo taken by Obeo photographer for virtual tour.  Right photo taken by me is an HDR night shot

Here’s another example of 13706 E Weaver Ave, in Centennial, CO which just went under contract. North facing homes like this can be difficult to get good photo of, especially during the winter. HDR helps you get around that.

13706 E Weaver Ave

You can do the same for your interior photographs as well…

Interior - Kitchen HDR

While everyone is going to have their own ideas about what they think is the better photo, in my experience, it’s really about what is going to ‘jump off the page more’. High dynamic range photography can help you get your properties noticed.

The process is simple, 3 or more exposures (minimum if you’re not shooting ‘in RAW’) bracketed 1 or 2 stops apart to achieve a series of under exposed, correct and over exposed photos (or sim), all from the same location using a tripod.

Example of applying HDR photography

These photos are then merged into one HDR file that will then need to be rendered using a process that controls the ‘development’ process along the same ways photo technicians might ‘burn’ and ‘dodge’ a photo to make darker areas lighter or lighter areas darker. Only with digital, this process can be automated. My current software of choice is PhotoMatix but you can achieve the same results in new versions of Photoshop (CS3+) if that’s what you have.

This isn’t as hard as it looks, you can download the trial version of PhotoMatix and see for yourself. You may just be able to put to use that nice camera you bought.

These shots represent my first and second attempts at this, so I offer my apologies to the truly talented photographers out there as I run afoul their techniques and the execution of their art.

Filed Under: Denver Real Estate, Featured, Selling a home

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