Welcome to Ask the Colorado Dream House Team with your host Dan Polimino!

Today’s Show: What fluctuations you can expect in the market in the coming months. The pitfalls of accepting a contract with a contingency to sell their home. What to do if the sellers were supposed to leave items in the home according to the contract and did not. Whether or not you should accept a contract with a lease to purchase agreement.

All reported sales were not necessarily listed or sold by the broker and are intended only to show trends in the area. 

Full Transcript

00:01                                     Hi everyone and welcome today’s show of Ask the Colorado Dream House Team. I’m your host Dan Polimino coming to you live from Denver Colorado. Happy Thursday everybody and welcome to everything about real estate. The purpose of this show is to help you navigate to buy sell or invest in real estate no matter where you are in the country. You don’t have to be here in sunny Denver Colorado you can be anywhere. Just take the years and years of experience and the thousands of transactions that we’ve done and use them for your own strategy wherever you are. Two things we like to accomplish every show we like to give you some news you can use market information and we like to answer your questions at any time. You’re welcome to leave a comment here on Facebook and leave a question or we’ll use them in the show.

00:47                                     You can call us at the number on the screen behind me or e-mail us at team at Colorado Dreamhouse dot com. If you’re thinking about buying selling or investing in real estate we would be happy to help you. All right let’s get to today’s news you can use and it is simply this What should we expect in the coming winter months for the Denver market. Well generally speaking January February and March are our lowest inventory months. So how low are we talking. Well I would expect that the inventory of resale homes available on the market are going to be hanging around 4000 maybe 4500 somewhere in that neighborhood could be 42 could be 45 could be 47. I don’t think we will get higher than 5000 during the winter months. Traditionally that has not happened. OK so what does this mean for everybody.

01:49                                     Well if it if you’re a buyer it means you’re not going to have a lot of choice. There’s not going to be a lot to pick from. And if you’re not seeing what you’re like on the resale market. Talk to us about what new home communities we can go look at. Like where are the builders building what are the price points. What are the size of the homes what do you get. How about the size of the lots. Location all of that. Let’s go out and look at some new construction. The other thing is if someone if a seller has their home on the market during the winter months chances are they have to sell. The problem is not that they just want to sell because nobody really wants to sell in the dead of winter.

02:31                                     They probably have to sell. So as a buyer if you do find a home on the resell market even though there’s only a few de-leverage may be in your favor. Right. You may have a little bit more negotiating room from somebody who has to sell versus somebody that wants to sell. Also if you wait to spring. Yes a whole bunch of homes are going to come on the market but a whole bunch of other buyers are going to come into the market and you’re probably going to be competing for some of the very best homes. So I’d like winter to actually find a home because you’re not competing against a whole slew of buyers.

03:06                                     You actually might have a little leverage in price. But the downside is there’s not a lot to choose from. So that’s what I would expect coming up in January February and March. Now that can all get thrown out the window with this new tax plan that they’re about to unveil or approve if they sign a new tax reform for the country before the end of the year. You could see a real rapid rise in the economy in January February and March. That could mean more homes come on the market that could also mean prices go up. I don’t know this whole tax plan is a real X Factor. What they’re doing is I talked about on Tuesday with regulation and the CFP. All of this stuff could be a potential game changer in the first quarter of 2018. So pay attention to it closely.

03:55                                     If you’re in the market if you’re if you don’t like paying attention to any of this just rely on us. We’ll help you. All right. So that’s today’s market information and news you can use. Let’s get to the questions dear Colorado. Dream house. What are the pitfalls of accepting a contract with a contingency to sell their home. OK so you’re selling your home. The contract comes in the people buying it want to buy your home but they have to sell their home first. We try to usually discourage this. And the reason why is there’s a lot of variables in kitting real estate deal from contract to close and sometimes the majority of these variables are out of our control. And it’s tough it’s tough to get a house to closing there’s lots of things you got lots of hurdles inspections appraisals title work H-2A issues lots of hurdles to get over to get to closing.

04:48                                     Now take those same hurdles and multiply it times too because the buyers of your property are now trying to jump through those same hurdles with their buyer and the likelihood that it all works out that they close on time and they get their money and you close on time it seems like these days the likelihood of that happening is less and less and less so. Not saying it doesn’t work. It sure does. People do it all the time. But if you can get a contract without a contingency to sell their home do it you might just have to wait a little while longer for that right buyer to come along. But I would encourage it because the contract with the contingency to sell a home can be an absolute nightmare.

05:31                                     All right. The Colorado Dream House team contract stated that the appliances were included. But when we got to the inspection for the house the appliances were gone what do we do. Interesting scenario. Well if the contract clearly states that the appliances were included then you’re owed the appliances. Now the question is who’s going to pay for it. Right. And your agent should be talking to the listing agent saying where are the appliances are they bringing different appliances in or are they buying new appliances. But one way or the other the contract stated for the purchase price they were included. So somebody is going to be paying for it and it’s not out of the realm of possibility that the agent’s going to be buying you some new appliances because we’ve seen that happen.

06:21                                     The sellers have walked with the appliances they have no intention of bringing them back. They’re uncooperative with their agent and the agent or the brokerage firm gets stuck buying the buyers some new appliances but somebody is going to pay. You need to have good representation. The other thing I’ve seen happen is there’s been some compensation trading. So instead the sellers wanted the appliances. They ended up giving X amount of money off the purchase price of the house to the buyers to make up for the fact that they took the appliances or that’s probably the most common way. The other way is that compensation could be used towards pre-paid and closing costs and not off the purchase of the house. But some compensation is going to need to be made. You better have a rock star agent on your side helping to negotiate this along with the power of their firm and potentially an attorney.

07:13                                     All right. Dear Colorado Dream House team do you think we should accept a contract with a lease to purchase once again. This is one of those areas like the in a contract with a contingency. Somebody is going to actually move into your house. They’re going to pay the rent and then sometime thereafter there’s going to be a closing. This rarely works out well. I’ve seen all kinds of disasters in this scenario. Great people moved in had a contract down the house realized they didn’t like the House didn’t like the neighborhood and they want to get out and they’re going to find a way out. Even though you’ve got a contract to purchase real estate with a closing date. Trust me they’re going to find a way to get out or somebody leased the house.

07:57                                     There was an injury in the house or there’s multiple scenarios here or they lease the house and it turns out they don’t have the cash to close or they got turned down for their loan. Lots of lots of problems. I would highly suggest you don’t go the lease purchase route again. Do they do all they do do are some of them successful. You bet. But for the vast majority it doesn’t work out very well. So I’d discourage you from doing that. All right. That’s today’s show. Hope you learn something. Again feel free to send us questions or comments. We’d love to hear from you. Everybody have a great weekend.