by George R. Harvey, Jr.
2011 Vice Chair, NAR Resort and Second Home Real Estate Committee

Quite often when I go on a listing presentation, the seller tells me at the end of the presentation, “Well, I really don’t have to sell”.  This is after giving them a thorough market analysis, showing them how many properties compete with their property and how many sales have happened in the last 12 to 15 months in their category.  Sometimes I’ll take them out to look at several of the most similar properties to their property in order to give them an idea of what their competition is.  Many times, of course, they say, “My property is better.”  As you might guess, most sellers take that position.  When I give the seller the market analysis, the same exact analysis that every buyer/broker is going to give their buyers and that seller says, “I really don’t have to sell,” the first question that enters my mind is, “So why are you putting your property on the market”?  It takes a terrific amount of effort on the listing broker’s part for showing appointments, marketing materials, and advertising expense to have a successful sale.  And then the seller is going to say, “If I can get my price I might sell my house.”  Let me translate what that means.  If we get a really wealthy person that will pay cash, close quickly, doesn’t do any market research, and is really stupid, and will just pay whatever the asking price is, I’ll sell my house.  What an incredible burden this creates for the listing agent and a setup for disappointment for all parties engaged. 

One of the biggest problems that we have in the Telluride market as well as other markets in the resort and second home niche, is sellers still pricing to the peak of 2006, ’07, and ‘08 markets. 

​Buyers in general are well informed and have done their homework on the internet and always ask for all the market comps.  Sellers often ​say, “Well my property is special or unique or here’s why I bought it”.  All those wonderful things are good points for potential buyers in the future, but every buyer has their own list of dreams and desires and they’re all watching Bloomberg. 

​Not only does a property in this market have to be priced competitively, but it needs to be one or two best values in its market category to even get on the show list.  It also has to be in great condition, because buyers are now looking for every flaw possible and are making objections for the smallest of items.  The end result for sellers that don’t price to the market is following the market all the way down and always being just behind the selling price range rather than just in front of it where they should be.  If you are a property owner in a resort or second home market and truly want to sell, ask you listing broker to do a very thorough market analysis and what it will take to be the first one or two properties shown in that market niche.  It will greatly improve your odds of making a sale and won’t waste your time and your listing agent’s.

You may contact George Harvey at 970-729-0111 or george@TheHarveyTeam.net

by Russell Riggs

On Oct. 4, 2011, Congress extended National Flood Insurance Program (NFIP) authority as part of a broader stopgap government funding measure, the Continuing Appropriations Act (H.R. 2608). This latest extension will run through Nov. 18, 2011.

However, while NAR is urging Congress to use the additional time to complete work on a 5-year NFIP reauthorization and reform bill (H.R. 1309), sources from the Hill say this is anything but a done deal. While long-term reform and reauthorization would provide certainty and avoid further disruption to real estate markets, a tough Washington lobbying fight among America’s insurance companies threatens to delay the long-term renewal of the National Flood Insurance Program later this month. All this may mean the bill, and its other reforms of the flood insurance program, gets kicked down the road. A likely outcome could be another one-year extension included in a final fiscal 2012 spending bill. NAR will continue to push for the 5-year reform and reauthorization bill in order to give confidence to real estate markets nationwide.

Wednesday, June 1, 2011
By Lew Sichelman
Two politically potent housing organizations have called on the Federal Housing Administration to relax its rule regarding condominiums.

The National Association of Realtors and the National Association of Home Builders want the FHA to eliminate the restriction on condo rentals and increase or at least temporarily suspend its limitation on the number of units that can be financed by government-insured loans. They also want relief from a rule that requires a certain number of units must be sold before buyers can qualify for an FHA mortgage.

Under current FHA rules, at least 30% of a condominium community’s total units must be sold before the agency will endorse a mortgage on any unit. But the requirement will become even more onerous when it returns to its previous 50% level on June 30.

In addition, FHA financing is limited to no more than 50% of the condominium’s units, and no less than half the community can be owner-occupied.

Relaxing the rules, the NAR and NAHB said in a letter to acting FHA Commissioner Robert Ryan, would allow more first-time buyers to purchase condos, which tend to be aimed at the first-time buyer market. Often, FHA financing is the only financing for which rookie buyers can qualify, they pointed out.

The two groups, which were joined in the letter by the Community Associations Institute, and the Institute for Real Estate Management, also want the prohibition against investors owning more than 10% of the development’s units raised “to a more appropriate level,” and to increase that part of a mixed-use property’s floor area that can be used for commercial purposes from 25% to 45%.

On the latter proposal, they argued that combining residential and commercial uses helps reduce sprawl and offers residents employment opportunities and easier access to products and services.

Finally, to more accurately reflect current market conditions, the trade groups want the FHA to change its requirement that no more than15% of the owners in any one condo be more than 30 days late on their homeowners association dues to “no greater than 90 days.”