Zillow & Zestimate

The nationwide median error rate for the Zestimate for on-market homes is 1.9%, while the Zestimate for off-market homes has a median error rate of 7.5%.  

Now don’t get me wrong, my calling out of the inaccuracy of Zestimate’s off-market pricing is not a dig at Zillow. I am a big fan of Zillow, it’s marketing capabilities, and the forethought the company has to how real estate will be acquired in the future. As an agent, landlord, buyer and seller I too use Zillow and the innovative tools it offers it’s visitors. Homeowners and buyers have become accustomed to the process of engaging with Zillow before they even think about engaging with a real estate agent or lender. Because of the technology and simplicity Zillow provides, sellers can do their own homework on the potential list price of their property compared to other properties in their neighborhood. Buyers are able to visually see what homes they may be interested in purchasing or not purchasing. These are all actionable steps that help an agent down the road when the listing and buying process beings.

There is a gap though. A gap of about 7.5%. On a $400,000 house that 7.5% error in pricing is $30,000. Would you buy a home that is listed $30,000 more than it’s true value? I would guess not. Data goes like this….. junk in, junk out and Zillow’s data shows just that while they are using the information that is currently available to them. So while Zillow is gathering more accurate input, Zillow is working toward delivering a more accurate output. But until the day comes that Zillow can close that 7.5% gap, it is your real estate agent that is going to get you to a listing price that aligns with the market and your objectives.

When working with my clients, Zillow is always a discussion. I come to the table with my numbers and my sellers comes to the table with their (aka Zestimate’s) numbers. It is my job to help my client see the true value in their home. Zillow only uses data, they don’t take into consideration the amount of funding that is going into your community to build new schools, or the concrete plant that is being built between your million dollar home and that breathtaking mountain view that adds a significant premium to your home’s value. Real estate agents are equipped to advocate for their clients, to do the in-depth research that Zestimate cannot and establish realistic prices. Continue to use Zillow and Zestimate, but know that your agent is necessary in helping you set a fair-market price and navigate the process of negotiating against that price. 


Posted on May 27, 2020 at 8:55 pm
Justine Marx | Posted in Colorado Real Estate Market, Home Facts, Investors, Sellers | Tagged , , , , ,

Cash Flow

There are many key performance indicators that investors use when determining if a property is worth buying or not. However, when running an analysis on any investment property, my standard measurables are Cash Flow and After Annual Tax Yield (a KPI that considers appreciation). I’ll focus in on Cash Flow as it is the primary metric used by most investors in residential real estate. 

Cash Flow, measured on a monthly and annual basis, is a property’s income minus it’s expenses. Obviously, an investor would want a property’s income to outweigh the expenses, so that money can be put in the bank every month and used for future investments.

There is a sizable list that goes into property expenses; which I will cover extensively another time, but understanding and including all expenses in the initial analysis is key to calculating the correct cash flow and keeping you out of a bad deal.

In areas like Windsor, Fort Collins, Greeley, and Loveland, as well as anywhere in and around Denver, home affordability can be challenging. Therefore, rent can be equal to or lessor than that of a mortgage. So what would make it so appealing for an investor to invest in Colorado? Appreciation. Colorado has been on a strong trajectory with home appreciation and when homeowners and/or investors sell their properties they walk away with a generous profit.

Appreciation is just the “icing on the cake”. If your are losing money on your investment every month with a negative cash flow, then your investment isn’t a good one. Therefore, cash flow should be considered over appreciation.

To learn more about Cash Flow and setting expectations for your financial portfolio, please message or contact me  at 970.775.4030 or justine.marx@windermere.com.


Posted on April 27, 2020 at 3:36 pm
Justine Marx | Posted in Investors |

Buyer Tip – Purchasing New Construction

1. Get Your Own Agent – An agent that is knowledgeable about builders and the building process will get you up-to-speed on builders in your area and help you understand their pros and cons, set good expectations and timelines, and be there to negotiate for you.

2. Find a Lender & Get Approved – Builders often partner with lenders to provide buyer incentives. Understand what they are offering and how it can help you accomplish your purchasing goals. Shop around for other lenders as well so you can compare lender offerings.  

3. Set A “Move Date” Goal – When building a new home, a buyer can move in right away or wait weeks or even months for their new homes to be completed. Setting a “Move Date” goal will help you, your agent, and your builders establish realistic timelines.

4. Research & Choose a Builder – Do some of your own research on builders. Do you want a custom built home? Do you want to work with a well-known established community builder? Not all builders are created equal and understanding what builders are most appealing to you, and who is not, will set both you and your agent up for success.

5. Research Communities, HOAs, Metro Districts – New homes in new communities often come with homeowners associations and/or metro district taxes. Understand what the HOA and metro district offers and their costs, as well as the pros and cons of the covenants to be part of the community.

6. Know Customization Options & Costs – Most builders do what they can to accommodate a buyer’s needs. Understand what and how to request customization options from your builder by working with your agent. Don’t be afraid to request what you want. It’s your home and negotiating your needs is something the builder already expects in the process.

7. Understand Your Warranty – This isn’t the warranty on your furnace, this is the warranty in which the builder promises to repair or replace certain elements of the home, if necessary, within a certain time.

8. Get A Home Inspection – Regardless of the builder, I always recommend my buyers to still move forward with an inspection. Any issues found in the inspection can be negotiated and fixed by the builder. Better to buy a $300 inspection and fix issues prior to closing than spending thousands down the road.

These are eight of many points to understand in the purchasing and new home process. Contact me today to start your process to purchasing a new home.


Posted on April 23, 2020 at 5:20 pm
Justine Marx | Posted in Buyers |

COVID-19 Mondays With Matthew April 20, 2020

This Monday’s Topic covers U.S. New Homes:  

  • New Home Sales 
  • Household Formations 
  • Year Over Year Changes in Home Ownership vs Renters 
  • New Home Supply & Demand 
  • Impacts to New Development 
  • Looking Forward –  New Home Development 

How questions or feedback? Email me at justine.marx@windermere.com.


Posted on April 20, 2020 at 8:24 pm
Justine Marx | Posted in Economics, Real Estate Outlook, WHO LOVES STATS | Tagged , , , , ,

COVID-19 Mondays With Matthew April 14, 2020

Matthew shares his thoughts and predictions on how COVID-19 will the mortgage market.

 

This Monday’s Topic covers 30 Year Conventional  Loans: 

  • Mortgage Loans Relation to Bonds 
  • COVID-19 Impacts to Homeowners & Lenders
  • 2020 Mortgage Rates Predictions

Interested in hearing from Matthew on a specific topic? Email me at justine.marx@windermere.com for requests. 


Posted on April 14, 2020 at 12:12 am
Justine Marx | Posted in Buyers | Tagged , , , ,

COVID-19 Mondays With Matthew

Matthew shares his thoughts and predictions on how COVID-19 will the mortgage market.

This Monday’s Topic covers JUMBO LOANS:
– What is a Jumbo Loan 

– COVID-19 Impacts to Jumbo Loans & Bond Holders

– Bond Holder Actions

– Jumbo Loan Predictions Post COVID-19 

Join us next week for Matthew’s thoughts and predictions on the mortgage market as it relates to conventional loans.


Posted on April 6, 2020 at 10:58 pm
Justine Marx | Posted in Economics | Tagged , , , , , ,

Coronavirus Protections for Home Buyers

 

As the situation develops with the COVID-19 pandemic, Windermere Real Estate is dedicated to taking steps to reduce the spread of the virus while continuing to work with home buyers. To help with this process, here are some ways you as a home buyer can keep yourself and others safe during the buying process.

 

WHEN TOURING HOMES

❱ Only tour the property if you feel healthy.

❱ Ask your Windermere agent to show you the property instead of attending an open house.

❱ Drive separately from your agent to the property.

❱ Be considerate of the seller’s home and wash or sanitize your hands before entry, touching as little as necessary. While many sellers will likely provide it, bring your own hand sanitizer and use before and after you tour the home. You might also consider wearing disposable gloves for further safety.

❱ Ask your agent to confirm with the seller’s agent that they have not recently been sick or in contact with someone suspected of having COVID-19.

❱ Sellers often ask you to take off your shoes when you tour their home or wear protective booties that have been provided. Consider bringing your own booties and throwing them away when you’ve finished touring.

❱ Be mindful of how much you touch things in the home and minimize contact with doors and hand railings.

❱ Reduce the amount of time spent with other people in the same room. This “social distancing” practice can curb person-to-person spread.

DO NOT TOUR HOMES IF

❱ If you are currently self-quarantined because of illness or other reasons, you should not tour homes in person. Ask your Windermere agent to video chat with you while they tour the home so you can see it virtually.

❱ Do not view homes when you’re sick, feeling like you’re about to be sick, or getting over an illness.

❱ We do not recommend touring homes after returning from international travel or travel that exposed you to a large group of people in close quarters, like large events.

 

Find our Coronavirus Protections for Home Sellers here:


Posted on April 1, 2020 at 5:58 pm
Justine Marx | Posted in Buyers | Tagged , , , , ,

Mondays with Matthew Gardner, Chief Economist at Windermere

Matthew shares his thoughts and predictions on how COVID-19 will impact the U.S. and our housing market.

This Monday’s Topics:
– Recession
– Health vs. Housing Crisis
– Supply & Demand
– Home Value

 

 

kind words following last week’s video, it makes me so happy

Posted on March 30, 2020 at 7:51 pm
Justine Marx | Posted in Economics | Tagged , , , , , , , , , ,

Support Windsor Businesses

Now is the time to support our local businesses. As of March 26th, below is the status of businesses that are open and will be delivering, open with online order, and businesses that offer gift cards.


Posted on March 27, 2020 at 3:47 pm
Justine Marx | Posted in Uncategorized | Tagged , ,

Staying Productive While Staying Home – Painting

Have you been looking at that living room wall, that front door or maybe the entire house thinking to yourself, “If only I were home long enough to do these painting projects”? Is your home in need of some minor updating before you put it on the market? Well here is your chance! While we will be spending all our time at home over the next few weeks, potentially months, future sellers now have the time to complete their painting projects. Painting is a great return on investment when it comes to selling your home.

A clean look of fresh, neutral paint can make your house more appealing to a wide range of buyers. A good paint job helps show buyers that you care about your property and that it will serve them well in the years to come.

Home Depot remains open to accommodate those in need of essential items such as hot water heaters, refrigerators, cleaning supplies, electrical and plumbing repairs, and harsh weather items. They have processes in place to mitigate the spread of COVID-19 to its employees and visitors. Don’t want to go into the store? Call your local store and request pickup or options for delivery.

Painting is not only good for the sale of your home but will also lessen the feeling of “cabin fever” while you are staying productive while staying home.


Posted on March 26, 2020 at 3:30 pm
Justine Marx | Posted in Sellers | Tagged , , , , , , ,